July 2016 /// Vol 237 No. 7

Columns

Executive viewpoint

The industry’s future will be digital

Lisa Davis, Siemens AG

The oil and gas industry is experiencing troubling times. Low oil prices have reduced CAPEX significantly, and companies are taking a long-overdue, critical look at their operations. As with any industry, crises are not just a time to tighten one’s belt, but also an opportunity to improve existing processes and explore new ideas to maximize dollars spent.

Driven by this situation, oil and gas companies are focused on cutting costs and looking to optimize areas that simply got overlooked in $100-plus oil pricing. Our customers are much more open to suggestions and eager to partner in solving operational challenges. And there are plenty of opportunities to upgrade processes, increase efficiencies, and create value out of the products and technologies that we already have. Our common goal is clear: Meet higher safety standards and increase productivity, while lowering investment costs.

Most other industries have gone through various development stages over the past decades. As they moved from electrification to automation to digitalization, they implemented new technologies to optimize operations and boost profits. Facing an extended low-oil-price cycle, our industry is taking a closer look at the benefits offered by other industries and adopting the technologies that have proven themselves.

Let’s begin with electrification, where equipment, such as pumps and compressors, is shifted from mechanical to electrical operation, along all stages of the value chain. This change offers the immediate advantages of increasing efficiency, improving operational flexibility and reducing energy consumption—all critical, as pressure grows to cut costs and improve environmental protection.

Looking at automation, we see the industry applying this technology increasingly across its production chain. Automated solutions make operations more efficient and safer. The automation technology that we bring to customers also simplifies operations, which, in turn, requires fewer onsite personnel. This is particularly important for remote production locations.

Finally, digitalization is penetrating the industry and will revolutionize business processes. The industry can, and should, learn from other sectors and adapt helpful applications. By collecting data and knowing how to analyze it, we can translate huge quantities of information into better operational decisions, and do it faster. This capability requires both extensive domain know-how and expertise in complex analytics. In the end, such digital support can be applied in all processes, from planning production installations to optimizing services. The more data that the system generates, the more possibilities that we have to influence and improve individual processes. This results in safer processes with lower production costs, as well as faster, more efficient and reliable operations.

Operators are turning to various digitalization applications, such as software solutions COMOS and COMOS Walkinside. Using these tools, an exact, 3D depiction of an oil and gas installation can be experienced without ever setting foot in it. Total E&P used the immersive training simulator COMOS Walkinside to train field operators for its Pazflor FPSO. While Pazflor made the three-month journey from a shipyard in South Korea to an oil field 150 km off the Angolan coast, its future crew was being trained onshore. And once Pazflor arrived on site, the crew was ready to begin work from day one. The Pazflor project was such a success, that Total decided to take COMOS Walkinside to the next level and add another phase for a subsequent project, the CLOV FPSO. For this project, applications will cover additional operational and safety procedures.

In another example, digitalization supports integrated operations for offshore platforms. For the Ivar Aasen project in the North Sea, operator Det Norske wanted to keep the platform crew as small as possible, while monitoring and controlling operations primarily from land. Our solution was to provide an onshore remote operations center with fully integrated electrical, automation and digital solutions for critical equipment monitoring, and expert support, based on real-time big data processing and analytics.

In the service sector, digitalization can provide seamless monitoring of real-time conditions at an installation. In Lublin, Germany, for example, a power plant was built to warm cold natural gas arriving onshore from the Baltic Sea via the Nord Stream Pipeline, before being transferred to Germany’s pipeline network. The job is handled by a gas turbine that was designed in 3D, using software to achieve high efficiency, as well as reduce maintenance downtimes. Critical rotating parts can now be monitored continually online, so that the unit’s servicing is based on actual need, not a fixed schedule.

All three applications—“walk-inside” simulations, remote operation of offshore platforms, and remote monitoring and diagnostics of key plant components—rely on collected, evaluated and applied data. There is still potential for improvement in the industry, when it comes to adopting new digitalization possibilities, but the know-how and experience gained from digitalization in other industries can be applied readily in nearly all processes.

Digitalization marks one further step into a new age for the oil and gas industry, and a huge stride toward greater networking and efficiency. Low oil prices are an opportunity to focus on a key success factor: Optimizing efficiency and safety. Companies that increase their productivity this way will be the winners when the price of oil rises again. In short, oil and gas production will remain an attractive business for those who opt to keep up with the times and operate “smartly.” wo-box_blue.gif

The Authors ///

Lisa Davis is a member of the Managing Board of Siemens AG. Appointed to the board in August 2014, she is responsible for the company’s Oil & Gas, Power Generation and Power Services businesses, as well as the North America and South America region. After earning a degree in chemical engineering, she joined Exxon Corporation in 1986 and subsequently moved to Texaco in 1988, working there until 1998. Then, Davis joined Royal Dutch Shell, where she held executive positions of increasing responsibility.

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