SPE/IADC keynote: Driving change toward a digital, low- carbon future

By Craig Fleming, Technical Editor on 3/10/2021
Equinor’s Executive Vice President of Technology, Arne Sigve Nylund.
Equinor’s Executive Vice President of Technology, Arne Sigve Nylund.

The SPE/IADC virtual international drilling conference and exhibition kicked off on Tuesday morning, March 9, with a keynote speech by Equinor’s Executive Vice President, Technology, Arne Sigve Nylund. His talk was entitled, “Driving change towards a digital and low carbon future.” Joining him as moderator was Equinor’s Senior Vice President, Drilling, Erik G. Kirkemo

The presentation started when Nylund reminded the audience that the SPE/IADC drilling conference, which stared in 1989, has a long tradition of presenting new drilling technologies and value-added services. This year’s virtual event will offer forward-looking strategies to help operators adjust to the serious global outbreak of Covid-19.

“Overall, the industry’s senior management has done a good job of coping with the pandemic,” said Nylund. “This leadership is due largely to joint efforts by all industry players that have cooperated remarkably well in these extraordinary conditions. I am happy to report our industry has done its part, helping to reduce the spread of the virus and that it does not stop us from sharing important information in virtual conferences. The link between competencies will remain important to improve together. And we need improvements, as the world keeps changing, and we need to change with it. The market has become more difficult and the margins lower, and safety and increased efficiencies are key to succeed.”

“At the same time,” continued Nylund, “we understand the industry is under political pressure from office-holding authorities and special interest groups, who want us to slow down on oil and gas activities, or change focus entirely to renewables. We cannot ignore this pressure, or the serious threat of climate change. Hereto, we must do our part to lower emissions from our business substantially. But drawing on the topic of the scheduled panel discussion, there is usually a way to turn challenges into opportunities.”

Safety and learning. “Here is how I like to approach this challenge,” Nylund stated. “We are going to use logical advancements to renew ourselves and next-level capabilities for our industry. Equinor’s strategy stays firm—always safe, high-value and low carbon. Our vision for safe is zero harm—this is the way we think and work. Our safety culture starts with each individual’s commitment and mindset. Our safety expectation is the foundation in our effort to enhance our safety culture and drive improvements in safe behavior. Safety is the basis of all improvement work—safety in well design, and in execution, to proactively avoid harm to people and ensure no major accidents.”

He noted that a key enabler to reduce risk by design is to apply technology. “Technology enables Equinor to identify risk, mitigate incidents, and not least, learn from them,” explained Nylund. “I must say, learning is one of the most important aspects, yet it is one of the more challenging ones we face. It is crucial that we, as an industry, work closely together. A few weeks ago, Equinor met with several of our key suppliers and contractors to commit to safety collaboration to 2025. We have set ambitions together to reach zero harm, while looking forward to our common journey to reach these goals and ensure everyone returns home safely from our operations.”

MISSION STATEMENT/SOLUTIONS

Equinor’s purpose is to turn natural resources into energy for people and progress for society, Nylund continued. “When we talk about high value, we are referring to our strong focus on process improvement, while increasing efficiencies and competitiveness. Technology and innovation are key enablers to achieve these goals.”

The keynote speaker said that Equinor wants to be a leading company in the energy transition, and its ambition is to become a net zero energy company by 2050. “Our low-carbon strategy demands that we do more and faster. We are accelerating our development as a growing energy company by leveraging strong synergies between oil, gas, renewables, carbon capture, and last but not least, hydrogen,” he emphasized. Equinor’s low-carbon strategy is thus divided into three focus areas.

The first strategy is to reduce emissions from oil and gas production, while the transition to a low-carbon society requires strong growth in renewable energy. “However, even in the most optimistic forecast scenarios for the green shift, our economy will still be dependent on oil and gas for a long time to come,” noted Nylund. “It’s therefore essential that producing the oil and gas the world needs is [done] in as low-carbon footprint as possible.” Since 2017, he explained, Equinor has implemented technical measures with rig owners to reduce emissions from mobile drilling units by more than 74,000 tons of CO2 annually. “We are also working with many service companies to implement awareness systems that drive focus on efficiency, and technological solutions that reduce energy consumption during production operations.  

Another substantial contribution, Nylund said, is efficient execution of a well program that gives reduced emissions per well and increases the number of wells that can be delivered from a drilling unit. “These are all key to addressing the entire well lifecycle. But we acknowledge we need to step up our efforts to reach the bold targets we have set. Going forward, we will set stronger requirements for emission reductions in new rig contracts. We need to capture the ongoing opportunity with electrification efforts on the Norwegian Continental Shelf by connecting our installations to the grid, where this is economically viable. And we need to explore opportunities to support green initiatives, including hydrogen and ammonium.”

Nylund said he wanted to mention the Northern Lights Project, where Equinor is working with Total and Shell. “Together, we are developing an offshore subsea CO2 storage facility, initially for selected Norwegian factories, in a groundbreaking government-backed project. We are also going to build the world’s first special-purpose, low-emission vessels designed for bulk transport of CO2 tostorage facilities. And for the drillers around the world using wells for CO2 storage, this means a need for new wells and new technologies to support this growing need. Our contribution to developing low-carbon value chains has a clear link to our operations and regional experience from oil and gas operations.”

The second strategy of Equinor’s low-carbon initiative is about growth in renewables and becoming a major offshore wind player. Within renewables, Equinor has passed important milestones and captured value from its position as a leader in offshore wind, said Nylund. A few examples include:

  • Empire offshore wind project in New York, where Equinor is working with BP to provide generation, with a capacity of 3.3 gigawatts of power to the state.
  • The Dogger Bank project in the UK, where Equinor is cooperating with SSE Renewables, to create approximately  3.6 gigawatts of power.

“As we accelerate within renewables, our ability to create and capture value will be even more important,” explained the keynote speaker. “We see great opportunities to cooperate with new and existing suppliers, as we continue to grow in this very important area. We are also creating the world’s first floating wind farmto power offshore oil and  gas installations at our Snøhvit development and other fields on the Norwegian Continental Shelf. This exciting project will create synergies between our renewables and oil and gas portfolio.”

The third area of Equinor’s low-carbon strategy is about accelerating the development of low-carbon solutions. “We believe our customers will care more about carbon intensity of the products they purchase,” stated Nylund. “And hence, how we produce energy will really matter going forward. We consider that carbon capture and utilization and storage—and hydrogen—will play a crucial role going forward. Not just in meeting Equinor’s climate mission, but also in ensuring the longevity of the oil and gas industry, which is a major source of economic output and employment. Our climate roadmap is aggressive, and we cannot achieve our goals alone,” Nylund reiterated. “The plan includes the entire supply-chain. And I am really confident there will be plenty of new opportunities for this industry ahead for us. But let’s not forget, oil and gas are still important commodities in the energy mix going forward. It is, therefore, very important to continue to drive significant investments for development during the energy transition,” Nylund emphatically stated.

“And it’s really exciting to see all the innovative developments being launched and developed in this segment of our industry, and I will elaborate on this topic,” he said. Through digital well delivery, Equinor addresses the totality, from well design to execution, using enabling technologies, artificial intelligence and robotics, working in collaboration with various engineers. “Our ambition,” he continued, “is to close the gap toward autonomous operations, where the current building blocks are automated drilling control, digital well planning, and operations support. These improvement projects will enable us to improve safety and ensure closed-loop learning, while standardizing best practices to drive performance improvements to close the gap to deliver a ‘perfect well,’ which we are all hunting for continuously,” Nylund mused with a smile. “To achieve this goal, additional automation is required. For example, automated drilling control is making good progress. The systems use a set of real-time technological data—from rig sensors to automated iterative improvements—that provide early warning about typical drilling issues before they occur. We have implemented the technology in partnership with our drilling contractors on 14 rigs to date.”

Digital strategy. He moved on to his final point, noting that digital well planning is about automating the well planning process, including the “smart use” of data. “The key is for the computer to support the engineer with data and smart systems, so the engineer can focus [his] time on relevant engineering tasks and continuous improvements, and other activities related to planning the perfect well and optimizing safety and efficiency. This process is superior to the way we worked previously, working on time-consuming tasks, like handing large amounts of data. By improving our well construction process, and combining this with smarter engineering software, we believe we can reduce the time spent planning a well by 50%,” said Nylund.

“Operations support and management are also an important pillar supporting Equinor’s well delivery improvement process,” he continued. “Planning and operation centers are now piloted within Equinor. Additionally, we have a bold ambition for our digital improvement projects. The technology gap to autonomous operations is relatively aggressive, compared to the industry standard, but the possibilities are very exciting and give me energy. It is exactly these types of challenges that make this line of work so interesting. Our industry has so many remarkable, groundbreaking achievements [that got] us to where we are today. And there is no reason why we can’t continue to discover new paths and adapt to changing realities.”

The industry was built overcoming these types of challenges. “Equinor wants to be a leading company in the energy transition, but we need your help to achieve this goal,” summarized Nylund. “So, let’s come together as an industry to keep advancing together—to discover and implement new technologies and possibilities—and do what we do best—safely. This is what we are made for, this is our mission,” Nylund concluded.

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