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Standardisation is the new innovation

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Through innovation and collaboration, Statoil aims to develop the elements for a subsea factory by 2020. In a wide-ranging interview with PERSPECTIVES, Margareth Øvrum, executive vice president, explains how standardisation and fast tracking are vital to the process

With responsibility for developing efficient projects, and research and innovation, Margareth Øvrum, EVP for technology, projects and drilling at Statoil, has a clear view of the future for the international energy company’s approach to subsea.

While new technology is important, the company is also set on widening the use of technology and achieving standardisation faster. Øvrum said: “There is no contradiction between developing new technology on the one hand, and standardising technologies on the other. Multi-lateral wells on Troll (a gas field offshore Norway) are among our more complex wells, but they are the most efficient because we repeat the same process over and over. We work hard at standardisation and we can see that the company is getting better and better at delivering on standardisation.”

Half of Statoil’s current production comes from more than 500 subsea wells and the company has an ambitious target: to deploy the oil and gas industry’s first complete subsea factory – a fully functioning process plant on the seafloor – by the end of the decade.

There are a number of drivers of Statoil’s subsea commitment, Øvrum explained.

“Cost is one of them. For example, we would not have been able to develop the Tyrihans field economically through a platform solution.” Tyrihans is an entirely subsea solution, tied back to installations and infrastructure in the Kristin and Åsgard fields. Another key driver is to exploit the full potential of field reservoirs quickly. The fast-tracking of Statoil’s subsea technologies has reduced time from discovery to production from about five to two years, which significantly reduces costs, Øvrum said.

Subsea also contributes to the life extension of offshore platforms because it allows for tie-ins. In addition, subsea has improved energy efficiency and enabled field developments that could not otherwise have been achieved.

“When fields are in deeper and colder waters, with more complex reservoirs in more remote areas, subsea is often the only solution,” Øvrum said. Snøhvit in the Barents Sea is one example of how subsea can solve issues that surface installations cannot. Statoil needed an installation invisible from shore and that allowed fishing boats to trawl unhindered.

“There are health, safety and environmental benefits too,” she added. “People-free operations lead to no health risks. A small gas leakage is a lot less dangerous on the seabed than on the topside where you can get an explosive mix. When I was a platform manager (on Gullfaks) the thing in the front of my mind was to avoid gas leaks! Subsea is also positive for climate change as energy efficiency increases.

“Subsea installations reduce maintenance and risk, and weather is not an issue either. As long as you have stringent inspection and asset integrity programmes in place – in addition to constantly monitoring critical parameters such as corrosion – you are unlikely to see any issues. We have developed 520 subsea wells and have not really experienced any problems."

Journey to 2020

Øvrum explains that Statoil will need to take a phased approach to creating a fully-functional subsea factory by the end of the decade.

“You cannot achieve the ultimate solution in one step. We knew that to achieve subsea compression we needed to develop a number of different elements and we did so over a 10- to 15-year period,” she said. Statoil’s first subsea installations were in 1986 at Gullfaks. It now has subsea compressors on Gullfaks and Åsgard. “I often describe the latter as a paradigm shift,” Øvrum said.

Even with long-term experience in developing subsea solutions, Statoil’s goal to create a complete subsea factory by 2020 is nevertheless ambitious. Less complex is the brownfield factory where a compressor is tied to an existing platform. “Then you can go a bit further afield, where you gather subsea templates into a hub that is also on the seabed, rather than on the topside of a platform,” Øvrum explained.

“If you go even further offshore, then you need technology to transport oil and gas over much longer distances than we operate today. Electrical power is also an issue. Longer distances require high voltage electrical supply, and to operate a subsea factory, you must separate out more water from oil and gas than today, and you need seafloor storage.

“All of this is achievable, but you need to prove the technology. We cannot test out a number of new components in one go, so we need to take a stepwise approach. We also need our partners at the different fields to be willing to test out new technologies. I would not call this a hurdle, but it is important to obtain.

“We have a very structured roadmap for what elements we need to develop stepwise today to be able to achieve different types of subsea factories in 2020 and beyond. Subsea factories are taking the technology further and further for each field development. Ultimately, we will be able to develop fields under ice; but an Arctic subsea factory will take much longer than 2020 to achieve.”

Cooperating for success

The history of innovation has many examples of trailblazers that took the risks and cost of being first movers or adopters, but Statoil sees the advantages.

Øvrum said: “The number one advantage is that it gives broader and deeper competence. You gain much more being part of the development of new technology and implementing the first tests, rather than just deploying proven technology five years down the road.

“It is not by accident that Statoil has many wells and much equipment on the seafloor. It allows us to develop competence faster than the competition, and to use the technology more broadly, for applications other than those originally intended.”

Statoil involves its suppliers in the development of new technology and solutions, as does DNV GL through joint industry projects.

“It is a big advantage to work together with the supplier industry as it helps us bring innovation faster to the market. We have complementary skills and the relationship is symbiotic. We would not succeed without our suppliers’ contribution to our innovation activities, and they would not succeed without our willingness to put new solutions to the test,” Øvrum explained. Extensive dealings with academia and a strong relationship with the Norwegian government have also helped, she said.

“The Norwegian authorities have been a driver for more environmentally friendly solutions – there is a fantastic demo laboratory on the Norwegian Continental Shelf (NCS). The globally competitive subsea supply industry that Norway has today stems from the fact that we have been allowed to test out new solutions. The authorities have been both supportive and demanding, which has driven the industry forward.”

The threat of rising costs

Research published by DNV GL this year has forecast a period of capital expenditure belt-tightening, as industry operating costs continue to rise. Standardisation and industrialisation are important elements in tackling chronic rising costs, according to Øvrum.

“We tend to make things complex,” she said. “There are more regulations than ever before and we ask for more documentation, which drives up engineering hours. Statoil itself has comprehensive technical requirements. The supply chain has things to improve on, as do we. And there is certainly potential to improve how we manage the interfaces between all parties as well.

“We are working in more remote areas and in deeper waters than before. An increase in cost is to be expected, but we have to turn this trend around. If we don’t, the subsea industry will be priced out of the game.”

Åsgard subsea installation
Margareth Øvrum, executive vice president, Statoil