COVID-19 has been a significant catalyst for change, both on and offshore. The collapse in the price of oil hit an industry already dealing with the multiple challenges of declining production, ageing infrastructure, and decommissioning.
The supply chain was hit particularly badly – expected to contend with the triple challenges of lower levels of business, at lower margins, while maintaining safety and service levels.
Just as things were looking really tricky, along came the pandemic to pile multiple challenges and costs onto an already struggling industry.
The full impact will only be known once the furlough scheme ends, but it is clear that thousands of personnel have been lost to the industry, through redundancy and early retirement. Many of those who have lost their jobs will find new careers – perhaps not paying quite so well, but in stable growth industries such as offshore wind. Experience and expertise gained over a generation of offshore production is being lost – and the next challenge as the industry recovers will be how to get it back, and how to do without it if it can’t.
Under these conditions, the industry has no choice but to explore new ways of working. One way to preserve knowledge, achieve safe and low-cost production with fewer personnel is through digitalisation.
The concept of digitalisation has been getting a lot of attention around the industry over the last few years - but what is it? The answer is not as obvious as it may seem.
We have all seen them, marketing posts and promotional materials championing digitalisation as being anything from the simple transcription of analogue data into a cloud-hosted database for digital and trend analysis, to the digital automation of business processes, the remote monitoring of offshore operations or even full automation.
In truth, digitalisation can be all these things. The essence though is on providing data to drive effective decision making and this is an area in which companies both small and large are contributing to dramatic change and improvement.
Internal Business Digitalisation
A great starting place for many businesses looking to improve their effectiveness and competitiveness in the market is with the digitalisation and integration of internal management systems. After all, decision making is easy once the team responsible for making them has access to the right information.
I have experienced and evaluated several such systems, from providers as diverse as multi-billion-dollar software houses looking to charge eye-watering amounts for their service packages down to small innovative specialists looking to make a difference. The best I have seen and used is undoubtedly Caiman IQ by Aberdeen-headquartered SME Caiman Software.
Caiman IQ is a simple, integrated software tool used by offshore and technology businesses to digitally capture integrate, automate and report information, decision making and workflow seamlessly from throughout the organisation.
During challenging business conditions, its ability to efficiently and quickly enable decision making based on real time information from across the HSEQ, HR, Supply Chain, Commercial, Engineering and Operations functions is unparalleled and of huge value to any technology manufacturer or offshore service business.
Once a company’s internal processes are aligned, it’s important to look at how it provides its service to customers, and whether quality or cost improvements can be made there.
A ‘Digital Twin’ is a virtual replica of a physical installation, process, product or system. It can include an intuitive, visual model of an asset which enables integrated, multi-layered contextualised data to be accessed securely by users from anywhere in the world.
Typically, these tools integrate 3D scanning or photography of an asset to generate a digital walkthrough of an asset, which is overlayed with visual engineering, process and integrity data. There are many providers in this area, not least Wood, Askelos, Eserv and GDI.
More than a training and orientation or dashboard tool, an effective twin can be accessed from onshore or offshore, enabling interrogation of maintenance and production data to be stored and accessed to enable collaborative working with deep and broad information shared across an organisation.
One challenge with populating digital twins – particularly in the oil & gas industry – is that instrumentation levels tend to be low. Either instrumentation was never specified and fitted, or in some cases it was too expensive to replace when it failed.
This aspect is one in which retrofit Internet of Things (IoT) devices have a role to play in improving knowledge (and therefore decision making) in our offshore assets.
Designed to monitor parameters as diverse as flow, vibration / fatigue, pressure, temperature, and metal thickness, retrofit devices can be installed either topsides or subsea. Wireless installation is preferred due to the elimination of leak paths within the device, coupled with reduced cost and complexity. A wireless Internet of Things (IoT) device is simply one which connects to a network and can take measurements and transmit data. Each device is considered a ‘node’ on the network.
There has been considerable investment in retrofit IoT monitoring in the industry, spearheaded by operators such as BP, Shell and CNR, and organisations such as the OGTC.
In areas where real-time communication is not possible, the retrofit of monitoring devices still makes sense. Business transformation through digitalisation does not have to be a grand, binary project or a huge investment. Simple, well proven devices from manufacturers such as Aquatec are being used to monitor wave-induced pressure variations in the monitoring of subsea platform integrity.
While not necessarily networked for real time information on asset condition, they do provide the essential first starting point – long-term datasets, which can be modelled and extrapolated for the making of asset and production critical decisions.
Once installed, monitoring devices enable the harnessing and analysis of big data sets, enabling precious maintenance and intervention budgets to be targeted on the most deserving areas.
As with all new technologies, there are challenges, not least the potential presence of lithium-containing batteries, and the fact that many North Sea platforms don’t even have Wi-Fi coverage with which to facilitate connections between nodes.
Communications and Machine Learning
If we overcome topside restrictions and network the devices, we not only improve real time information, but we open up the potential of machine learning. This is increasingly being used in industry to create ‘Intelligent infrastructure’ which can take over routine operations and predict the requirement for intervention in real time and providing better data for the design of future installations.
So wireless communication between nodes on the surface is a challenge due to limitations of existing infrastructure – but it is even more complex subsea due to the complexities of intellectual property.
To make real progress in the subsea arena, there needs to be standardisation of communication protocols between all devices above or below water. This is an area where the Subsea Wireless Group (SWiG) should be encouraged as they promote interoperability for subsea wireless communications (Radio frequency, acoustic, free-space optic, inductive power, hybrid). While SWiG has made great strides in some areas of the oil & gas industry, it will only succeed in its mission once it has the participation of all the holders of relevant intellectual property – and their involvement will only come about when stimulated by the operators.
With the increasing importance of offshore wind developers to the development of subsea technologies, the remit of SWiG also needs to be broadened to embrace and include offshore energy producers of all types, including offshore wind and tidal generation.
The promise of digitalisation goes further than improving knowledge of asset and process conditions, as it could potentially reduce the size of teams offshore.
If we further develop the concepts of a digital twin populated with retrofit devices to monitor, condition and process in real time, combined with remote monitoring of the site from onshore, it is not a huge stretch to see that many assets could ultimately be automated.
Certainly, the claims are impressive. Among the champions of upstream digital transformation are Siemens, whose offering promises not only to significantly lower operating cost through reducing manpower by 80% but also increasing production by 15% and extending asset life – all with a claimed payback on investment of 5 years.
Are we seeing the inevitable dawn of digitalisation?
Change is inevitable, and COVID-19 has accelerated the necessity for change. Digitalisation promises much for our industry and the effect it has can be revolutionary – but the process of getting there is not a revolution. Digital change does not have to be all-encompassing. It can be achieved in discreet, iterative steps and we can begin with looking at our own businesses and facilities for improvement.
Whether or not the real-life benefits match the claims made by its promoters - the benefits to health, safety and the environment, cannot be overlooked, nor can the essential cost and carbon footprint reductions or the potential to extend asset life, achieved through better decision making.
Today the oil & gas industry is struggling with the complex challenges of late-life assets, depressed demand for hydrocarbons, a higher cost of production due to COVID-19 and all combined with the shareholder pressure to refocus capex on the emerging energy transition. Business efficiency, risk reduction and cost base differentiation are more important than ever – and digitalisation has a central role to play in each.
Whatever their perceived role in the supply chain, modernisation and the adoption of digital technology is essential and inevitable - not just for the survival of our businesses, but for the future of our industry.
The author is an independent consultant. He is not a shareholder, employee or consultant of or for any of the businesses mentioned in this article. Opinions are his own and can be challenged at www.linkedin.com/in/moray-melhuish-aa883614
Read the latest issue of the OGV Energy magazine HERE.