Working smarter in an era of constrained capex and rigorous opex control demands full contributions from technology, resource planning, collaboration and, where possible, standardisation.
So said Martin Tiffen, speaking as MD of Total E&P Norge, the French international oil and gas group’s Norwegian subsidiary, shortly before becoming the second in command at Total’s global development function in Paris.
“The whole industry is under the same pressures,” he told PERSPECTIVES. “There is a flat perspective in hydrocarbon pricing, costs are rising 8%–10% a year and governments are tending to take more (in revenues). We cannot control some factors, so we have to be smarter about the ones we can control.”
Norwegian field leads the way
Total has invested around USD2 billion per annum on the Norwegian Continental Shelf (NCS) in the last five years. The 240,000 barrels of oil equivalent that it produced on the NCS in 2013 will be boosted by projects including the Martin Linge oil and gas field, which is due to start up in 2016.
Martin Linge is being developed through a standalone platform, taking electrical power from shore, together with a floating storage and offloading unit. The platform integrates a wellhead, production and living quarters. Drilling will be by a separate, heavy duty, jack-up rig.
The project lays down a marker for the industry in the way the field is being operated and controlled. At Total’s main office onshore in Stavanger, a central control room duplicates the one offshore on Martin Linge. Operating the field will involve 22 people, some working on the traditional two-on four-off offshore cycle, and some spending six months each year working in the onshore control room. With a classical offshore-only operation, an offshore workforce of around 70 people would have been required.
“All data being generated offshore will be sent back in real-time onshore through fibre optic cable. Platforms are no longer autonomous islands. If you have all the data onshore, you can use onshore competence to process the data. This both reduces costs and shifts more tasks back on land,” Tiffen explained.
“This operating philosophy was incorporated into the design and build stages of the project, allowing minimal manning for reasons of economics and safety. For Total, it is the first time remote operation control has been pushed so far. This has been possible because we have been able to build it into platform design, which would not be easy if it were a retrofit.”
Continual improvements in information technology and sensors also deliver benefits to operational performance, Tiffen added. For example, equipment, drilling and subsurface parameters can be made available in real-time and may be sent anywhere in the world, including to external partners.
“If you need expertise or diagnostic capacity, you can get it onshore without necessarily flying someone offshore to the platform or rig. This allows you to make better decisions in a shorter timeframe, which is important when yo are racking up rig and well costs. We are seeking to push the boundaries in many domains. But the proof of the pudding is in the eating: I don’t want to overpromise, and it will take a lot of work to deliver our vision.”
It is this kind of thinking around technology solutions that Total values as it embarks on a three-year cost containment drive across the group’s global operations. The aim is to boost returns from its substantial investment programme of recent years.
High predictability creates efficiencies in all parts of the supply chain. It is vital to avoid logistical jams and higher costs that could be caused by late contracting for equipment, vessels and services in capacity constrained markets, Tiffen observed in discussing how collaboration can contribute to being smart.
“We need to anticipate and liaise closely with suppliers and contractors in good time. Contractual relationships are part of working smarter. This is work in progress because what works in one part of the world, or over time, varies.
"So, you have to be flexible and work with contractors with good knowledge of the local environment and work in partnership to deliver.”
Scope for standardisation
Standardisation is a regular item on the industry checklist when cost containment is being debated, though it can pull in a different direction to technology development. “One size does not fit all, but there is tremendous scope for standardisation and simplification,” Tiffen commented.
He offers the example of subsea Xmas trees. Oil companies each had their own requirements for forgings used in subsea Xmas trees, with no standard requirement for metallurgy or inspection during fabrication. So a tree manufacturer could not have a set of forgings ‘on the shelf’.
Following a joint industry project led by DNV GL, there is now a common standard that should bring shorter lead times and more standardisation without sacrificing quality.
Standards require effort
Tiffen believes that Total’s company standards and the lessons it has learned provide a good platform for smarter working.
“But you have to go further than that. You can have a relaxation or waiver and that also helps standards to evolve. Could we have more common standards with ExxonMobil, Statoil or whoever? I kind of think we should, but even that involves more effort than you might imagine.
"It is ultimately desirable to evolve the API or other standards so everyone can use them, but it is permanently a work in progress.”
Others standards relating to aspects of Xmas trees include the recently issued DNVGL-ST-0035:2014-08 covering subsea equipment and components.
Look beyond the sector
“Oil and gas also needs to look outside the industry for examples of smarter working,” he said. Citing a talk by the mayor of Houston, US, at the ONS Conference and Exhibition in Stavanger, Norway this year, Tiffen noted how th American city’s key sectors – oil and gas, aerospace and medical – all use valves, fibre optics and remote monitoring. “Some crossover in how technologies are applied is possible if you can see it.”
He also raised a question about the way consumer orientated businesses offer continuous improvements without necessarily increasing costs. “Look at aviation. It still costs maybe USD1,000 to fly from Europe to Singapore; but compared with 20 years ago, the plane are bigger and better, the food is improved, there is in-flight video and so on.”
Contrasting this with what happens in oil and gas, he added: “Take drilling, we do not seem to improve our well durations at the same rate. We need to ask why we are an industry that cannot improve as fast as others.”
That said, his 10-year view of where things are headed suggests that oil and gas will continue to benefit from incremental and step-change advances in its technological capabilities.
“Imaging technology has dramatically improved both in terms of acquisition and processing,” he said by way of illustration. On Martin Linge, three seismic surveys were conducted within 10 years to reflect advances in this technique. "Each one was an order of magnitude better than before, in the same way that I saw ultrasonic scans getting clearer each time one of my daughters was on the way!”