Data fuels the future of oil and gas
In the treacherous North Sea, 180 kilometers off Norway‘s coast, the future of the world’s oil and gas industry towers over icy waters 110 meters deep. It’s Aker BP’s newest production platform, where Siemens Energy is turning Industrie 4.0 concepts into Topsides 4.0 — a transformational lifecycle approach for digitalizing oil and gas operations.
By Katrin Lange
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With Siemens Energy’s help, the Aker BP platform, which draws 60,000 barrels-a-day from the North Sea’s Ivar Aasen field, is one of the world’s most technologically advanced. It shows how digitalization and intelligent use of data can cut upstream exploration and production (E&P) costs yet boost safety, visibility, and decision support. Midstream and downstream operators can realize similar benefits, too.
After two severe pricing shocks in under a decade, the cyclical, capital-intensive oil and gas industry has suffered enough. Today’s E&P operators want to push costs as low as possible to stay profitable in future downturns. But instead of squeezing supplier costs as before, they’re using digitalization to significantly improve the safety and competitiveness of their operations.
They recall 2014 when Brent crude fell over 18 months from $115 a barrel to under $30 —their average production costs. At the time, they had to increase oil production to maximize cash flow while negotiating supplier concessions. But the increased supply, pushed prices down further. Even then, as punishing as this 18-month, $85-price drop was, it was much less than the six-month, $109 price drop experienced during 2008’s global financial crisis.[IBID]
Today, despite Brent crude prices now above $60 a barrel, North Sea producers haven’t lost their drive to cut costs. At least one major E&P operator in that region has pushed its current all-in per barrel production costs to under $15 and aims for less than $12 by 2020.[IBID] And, last year, Aker BP announced an even more ambitious target—$6 per barrel—using digitalization to achieve that goal.
Monitoring topsides equipment data in real time from 1,000 km away
The company’s Ivar Aasen platform is a giant step in that direction. With a fully integrated Siemens Energy package of standardized electrical, instrumentation, control and telecom (EICT) functionality aboard, equipment data is monitored in real time from an onshore control room 1,000 km away in Trondheim, Norway. Ultimately, Aker BP envisions deploying completely unmanned platforms to be operated remotely.
Analysis of equipment data helps detect issues before costly production disruptions. This condition-based maintenance (CBM) model—instead of a schedule-based one—saves Aker BP labor and spare parts. It also helps shrink the platform’s topsides crew size, saving transportation and live-aboard costs while reducing safety risks. Importantly, CBM provides greater operating visibility and better decision-making when equipment issues must be addressed.
" Digitalization will accelerate in coming years, as it becomes a competitive imperative with benefits too compelling to ignore. "Jesus Pacheco, Executive Vice President of Technology & Innovation at Siemens’ Dresser-Rand business
Topsides 4.0, how Siemens Energy will change how E&P gets done
According to Jesus Pacheco, executive vice president of Technology & Innovation at Siemens’ Dresser-Rand business, Aker BP’s digitalization approach illustrates just a fraction of the huge industry game-changer it’s destined to be. “Digitalization will accelerate in coming years, as it becomes a competitive imperative with benefits too compelling to ignore,” he says.
Siemens Energy card in that game is Topsides 4.0. It provides a digital lifecycle solution to offshore production platforms, underpinned by secure communications and integrating compression, power generation, power distribution, and automation modules.
“In effect, Topsides 4.0 provides a virtual proxy for any facility,” Pacheco says. “Starting in the conceptual and design phase of an offshore project, we can now run numerous design cases for the major rotating equipment, e-houses, and automation system until the desired capex/opex balance is reached, and do so in a much shorter time. In combination with digital manufacturing and virtual testing and commissioning, we create a ‘digital twin’ of the topsides facility that shortens time to first oil and continues to deliver value during the operations phase of the asset.”
Pacheco notes that the Siemens Energy concept helps operators prioritize lifecycle costs over initial capital expenses, the latter being a traditional driver for investment decisions. He estimates, for example, that a digitalized approach like Topsides 4.0 can help offshore platform operators to:
- Cut design-and-build cycle times by 6–9 months
- Shrink project capital expenses by $10–15 million
- Reduce operating expenses over a 10-year period by $100 million
Pacheco adds that digitalization’s benefits aren’t limited to offshore platforms, but can also help onshore upstream, midstream transmission, downstream refining, and distribution operations: “It’s much more than technology solutions supplied by the traditional tender and vendor process. It requires true partnerships between operators, engineering, procurement, and construction (EPC) companies, and technology providers with oil and gas domain expertise, like Siemens.”
Pipelines 4.0, extending the concept to midstream operators
Siemens Energy is extending the Topsides 4.0 model to the midstream oil and gas industry, with Pipelines 4.0. By providing fully integrated, pretested, ready-to-install pumping/compression solutions, it can better manage the complexity of building pumping and compression stations to reduce the time, costs, and risks of bringing much-needed, next-generation pipeline capacity.
In all cases, digitalization is a game changer in the highly cyclical oil and gas industry. It will help operators sustain profitability through cycles including inevitable market downturns.
Apr 14, 2018
Katrin Lange is a freelance writer based in Erlangen, Germany.
Combined picture credits: Siemens