Oil ma­jors ex­per­i­ment with tech­nol­ogy to weather cri­sis

Kuwait Times - - BUSINESS -

Oil ma­jors in­clud­ing Sta­toil, Shell and Chevron are ex­per­i­ment­ing with var­i­ous tech­nolo­gies, from drones and drill de­sign to data man­age­ment, to drive down costs and weather a deep down­turn.

Crude prices have more than halved since mid-2014, forc­ing com­pa­nies to cut bil­lions of dol­lars in costs. De­ter­mined to shield div­i­dends and pre­serve the in­fra­struc­ture that will al­low them to com­pete and grow if the mar­ket re­cov­ers, they are in­creas­ingly look­ing to smarter tech and de­sign to make sav­ings. French oil and gas ma­jor To­tal said it was now us­ing drones to carry out de­tailed in­spec­tions on some of its oil fields fol­low­ing a trial at one of its El­gin/Franklin plat­forms in the North Sea. Cy­ber­hawk, the drone com­pany that led the trial, said this kind of work was pre­vi­ously car­ried out by en­gi­neers who sus­pended them­selves from ropes at dizzy­ing heights. It said the manned in­spec­tion used to take seven sep­a­rate two-week trips with a 12-man team that had to be flown in and ac­com­mo­dated on site.

The drones do the work in two days and at about a tenth of the cost, ac­cord­ing to the Bri­tain-based firm’s founder Mal­colm Con­nolly, who said it had also worked with ExxonMo­bil, Shell, Cono­coPhillips and BP.

To­tal de­clined to com­ment on how long the manned or drone in­spec­tions took, or spec­ify how much money was saved. Sta­toil’s gi­ant Jo­han Sver­drup field, the largest North Sea oil find in three decades which is due to start production in 2019, is a lead­ing in­dus­try case study for cut­ting costs in the era of cheap oil.

The Nor­we­gian com­pany has cut its devel­op­ment costs for the first stage of the project by a fifth compared with es­ti­mates given in early 2015, to 99 bil­lion crowns ($12.2 bil­lion). The sav­ings have largely been made by fo­cus­ing on the most ef­fi­cient tech­nol­ogy and de­signs from the be­gin­ning, Sta­toil’s head of tech­nol­ogy Mar­gareth Oevrum told Reuters in an in­ter­view.

Ex­ec­u­tives say the grow­ing at­ten­tion on tech­nolo­gies that have been around for some time shows how waste­ful the global in­dus­try had been in the years be­fore the down­turn when - with crude at above $100 a barrel de­liv­er­ing bumper prof­its - oil com­pa­nies’ had lit­tle in­cen­tive to de­velop fields ef­fi­ciently. For ex­am­ple, sim­ply find­ing a more ef­fi­cient route for the oil pipe­line that would carry the crude from the Sver­drup field to the on­shore re­fin­ery cut 1 bil­lion crowns, Sta­toil said.

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Sta­toil has also de­vel­oped a drilling “tem­plate” that is act­ing as a guide for the first eight wells to be drilled at the field. It said it had re­duced the over­all drilling time by more than 50 days, sav­ing about 150 mil­lion crowns per production well compared with what it would have cost with 2013 tech­niques. “By far the big­gest driver (of sav­ings) has been sim­pli­fi­ca­tion,” said Oevrum. “To think much sim­pler and start from the bot­tom, or the bare bone, and then rather add to that, in­stead of start­ing very big.” The com­pany could not give a fig­ure for its group sav­ings made from im­proved tech­nol­ogy and de­sign. But it said that, partly be­cause of such in­no­va­tions, projects set to start production by 2022 would be able to make a profit with an oil price at $41 a barrel, down from $70 in 2013. — Reuters

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