Ahead of the Underwater Technology Conference (UTC) in Bergen this June, Elaine Maslin spoke with program chairman Nils Arne Sølvik and Statoil’s Chief Engineer Subsea Technology & Operations, Rune Mode Ramberg, about some of the topics likely to come up.
A panel discussion at UTC 2016. Photo from UTC Bergen.
While there are signs oil and gas investment might be on the rise, the subsea industry still faces multiple challenges – not least retaining its focus on simplification and cost reduction, facing growing emissions reduction targets and ensuring that there’s a sustainable business going forward.
One answer to all of these challenges could be technology. Subsea production, all-electric and remote operations could help reduce costs and carbon emissions. On the other hand, business and contracting models need to change to achieve and sustain the cost reductions and simplification the industry has been striving toward.
“When the oil price comes back up and projects start to get sanctioned, will we then go back to the normal oil industry capacity frenzy and cost escalation,” asks Nils Arne Sølvik, chair UTC 2017 program committee/president, OneSubsea processing systems. “What do we do now to avoid that? One of the things we are focusing on is all-electric, which could be, I think, an important cost reduction technology. We just need to make sure that when interest picks up that we stay focused on benefiting from these technologies, otherwise we will go backwards and we will be back on the cost wagon.”
Rune Mode Ramberg, chief engineer subsea technology and operations, Statoil, who is also on the UTC program committee, adds: “The current challenge is a lot about simplifying the system. Going all-electric is a way to remove hydraulics and simplify the system.”
This push, as well as a growing emphasis on CO2 reduction, reducing chemical leakages, enabling flexible systems, and all-electric becoming more competitive, is driving momentum in this space. He says there will be much more development and much more installation of all-electric in a couple of years.
All-electric also feeds into the digitalization space, enabling more information to be sourced from the seafloor.
“The first parts of the system are already out there working,” Ramberg says. “Electric actuators are available and in operation. Åsgard subsea compression is an electric system.” Statoil is planning a DCFO (direct current fiber-optic) combined cable for power and controls for its Johan Castberg floating production development (OE: August 2016), providing power to valves and communication. “DCFO technology is an important step going forward, in digital and electrification. I believe in simplicity, I believe simple solutions will survive,” Ramberg says. The next step is high voltage power distribution, he adds.
Subsea field remote operation is another strong topic at UTC. Statoil is playing in this space, too. The firm has an e-ROV concept that envisions a remotely operated vehicle (ROV) stationed in the field and operated from shore, with fiber-optic communications and power from control system power. This would remove the need for ROV support vessels. Initial trials of such a system have been ongoing and this summer Oceaneering is contracted to provide an ROV for the e-ROV project as part of a trial. With this kind of future in mind, Statoil is starting to design projects with fiber infrastructure already installed, Ramberg says.
Johan Castberg floating production vessel. Image from Statoil.
But, the future of the industry is not just about technology. Could contracting models shift from procurement practices that drive price and capacity heat to more performance-based contracts, asks Sølvik.
“The traditional set-up is high-quality, installed and delivered on time,” he says. “The contractor has a focus on executing project delivery and hardware and then lets the operator run it. If it is a performance-based structure, the contractor knows they have to live with what they deliver. If they don’t deliver high-quality, there is risk to their reputation and the next job and you hit the value stream and cash flow.
“Instead, the end client could look at how much oil we get out and then pay for the production. Or maybe the focus could be on performance, in terms of availability requirements,” Sølvik says. Indeed, in the offshore renewables market, contractors have increasingly been taking equity stakes in projects, as well as acting as lead contractors, aligning the project’s performance with their own goals. TechnipFMC’s SVP in Norway has noted that the company is considering doing something similar in the oil business. Indeed, floating production system providers already also work on production-based contracts. The airline industry has also been through such a change, going from having their own huge internal engineering teams, to their jet engines now being owned and maintained by the likes of GE, points out Sølvik. “We might need such a shift as well. Contractors will have to take greater responsibility,” he says.
“If we shift to take responsibility for supplier-led solutions – the performance of it – then we make more in depth decisions about what kind of hardware we deliver and be able to optimize and analyze it, for maintenance in a life of field scenario and in a very efficient way,” Sølvik says.
They’ll also have to digitize, he says. “When you tie a change in business model in with digitalization and surveillance, condition-based monitoring, production optimization, production management… you will need to have a platform to achieve these things. You need a digital twin. We need digital responsibility of all our kit.”
Pressure on the industry will also come in the form of carbon emissions reductions, Sølvik says. “It is going to grow in force.” To achieve climate targets set by the 2015 Paris agreement, CO2 emissions need to go down dramatically, impacting sales and how firms operate.
“That will have an impact on oil consumption, but gas will still need to grow,” Sølvik says. “And the focus on gas is important for us, and means using technology that can reduce emissions. I think subsea has a major role to play in that picture. The efficiency budget for a platform-based development with old fashioned artificial lift methods is much worse than a complete subsea tieback to infrastructure or to shore. Using modern artificial lift methods – boosting, compression, downhole boosting – that’s much more efficient than a traditional water injection system or gas-lift system. Those are also topics that will be important.”
Ramberg says communication is also important, across companies – oil companies and the supply chain – to find a “win-win” situation. Subsea is also a part of a bigger system and how the entire value chain fits together needs to be understand more, he says.
“It’s a very interesting program this year, especially focusing on electric,” he adds. “It’s really bringing a lot of new ideas to the table and not just traditional subsea hardware. This is time for electricians to go to a subsea forum as well.”