“Minimising costs to remain competitive remains a major challenge for oil and gas operators. At the root of this challenge is the double-edged combination of dwindling oil reserves in mature sites and fluctuating international prices,” says Bryan Christiansen, founder and CEO of mobile software firm Limble CMMS.
Where oil and gas are concerned, public discussion of the impact invariably focuses on upstream or the domestic consumer. Rather less often does it consider the implications for the downstream oil and gas industry.
Yet, to a large degree, it is here that solutions to the imbalance between supply and consumption demand will have to be found. As access to resources is restricted and existing markets become less dependable, the need to find cost savings from improved processes and new revenue streams will grow.
Where then are oil and gas businesses, especially downstream, focused in terms of challenges and solutions?
For an indication of where and how present problems are influencing current and future thinking, there are few better places to start than some of the sector’s key annual events.
They must optimise the performance of these assets and the personnel in a manner that keeps the systems dependable with minimal to zero unplanned downtime
Bryan Christiansen, founder & CEO, Limble CMMS
June sees two of these taking place: the massive Downstream 2019 exhibition and conference in Houston and Future Oil & Gas in Aberdeen (with the associated Future Downstream show taking place in December).
A scan of their respective agendas displays recurring concerns that might be categorised in terms of performance, safety, culture and strategic development.
For performance, read those top quartile behaviours – reliability, efficiency and enhancement; ie, doing more and doing it better. Safety encompasses a wider remit than the term usually implies – relating not only to maintaining and improving the situation of people but also environmental priorities and cyber-security.
Culture is about striking the right balance between legacy and change and assessing the degree to which both factors need to adapt to one another. How much can or must a business work with the people and assets it has? And in the event of change, how can this be done while making best use of resources – human, financial or technological?
Lastly, focus on the strategic development of downstream coalesces around three things: sector integration (whether upstream and downstream or refineries and petrochemical); adaptation of resources to perceived market demand; and digitalisation.
Nothing to chance
To outsiders, the oil and gas industry’s uneven embrace of change may appear half-hearted but this perception ignores the constraints under which firms operate.
Christiansen sums up the multiple challenges thus: “The facilities and assets used in the oil and gas sector are mostly complex, extremely expensive, and difficult to repair/replace. Added to that is a workforce typically made up of multiple third-party personnel with varying education and skill levels .
“They must optimise the performance of these assets and the personnel in a manner that keeps the systems dependable with minimal to zero unplanned downtime. This is critical to survival and breaking even.”
Damien Valdenaire – science executive, refinery technology at Concawe and a speaker at the forthcoming Aberdeen conference – outlined recently in a Future Oil & Gas interview the considerations that downstream in particular faces: “It may take longer to develop and evolve than in other sectors for refineries operate in a highly secure and regulated environment. Every new technology needs to be proven with 100% reliability and must improve the risk matrix of the refinery.
“Every scenario must be tested with new technologies, in an environment with potentially explosive atmosphere with heat and fire. Safety of the operator is always the first priority.”
Another conference speaker, Intoware CTO and co-founder James Woodall, cited the heavy burden of auditing and compliance which surrounds downstream activities. All of it necessary but, traditionally, a substantial burden in terms of time and human resource and one that has made it hard for firms to respond to situations with the necessary agility.
Digitalisation clearly has the ability to transform this situation; tracking can be done in real time by workers at all levels so that an audit query which once took a day to answer is reduced to seconds, says Woodall.
The benefits are fundamental. Combining automation with connectivity aided by sensor technology opens the door to data collection on a massive scale. Data analytics and improved algorithm enable higher levels of predictive analysis leading to more sophisticated machine learning and the programming of machines and products to calculate risk with previously unmatched degrees of accuracy.
Lloyd’s Register report Predictive analytics in oil & gas: the future in focus cites the wide body of knowledge to be garnered from health diagnostics, aerospace, logistics, insurance and retail. Within downstream, says Lloyd’s, refineries and maintenance have led the way with predictive analytics and the application of a connected 4.0 approach.
ABB, Fluenta and FLIR Systems have recently unveiled emission and detection products. ABB’s Dynamic QR code assistance tool for continuous emissions analysers represents a step forward over static predecessors.
While traditional QR codes display a limited amount of predefined, hard-coded information, DQR codes record the real-time status of the device. Software pulls updated data and status information from a central unit, which can be in control of several separate ABB gas analyser modules.
Sophisticated detection technology is a boon for a sector whose focus on safety has left it vulnerable to shutdowns.
“False alarms and failure signals force on-site inspections and result in costly personnel time, with control centres required to file a report,” says Fluenta marketing director Alex Keys.
“By optimising detection technology to manage specific types of risk, operators can achieve the most reliable and rapid detection of actual hazards without initiating a high number of false alarms.”
It can also be useful in the event of gas flaring – a regular solution method of handling gas that arrives as an unwanted part of an oil production stream.”
For Fluenta, this has involved harnessing ultrasonic technology suitable for fast, reliable flare gas measurement.
Reduction in fuel consumption and carbon emissions are crucial to environmental responsibility
Mike Watson, CEO, Tube Tech International
“The technology tolerates some condensed liquid, is not affected by gas composition and endures fluctuations in pressure and temperature. By deploying ultrasonic flare gas measurement, the oil and gas industry is better positioned to manage process upsets and prevent disruption, saving millions in potential lost revenue.”
FLIR Systems’ GF-Series optical gas imaging (OGI) cameras offer another means to limit the use of flaring and can quantitively measure methane emissions to create a datum point for future calculations.
Drone technology too enhances emissions and inspection technology for both cameras but also sensors. Finnish company Aeromon recently announced that its bh12 drone sensors, capable of distinguishing between 70 different gases, had moved into production phase after a pilot project in the midstream focused on maritime fuel oil use.
Expensive ‘housekeeping’ is another target. British company Tube Tech International has won EU grants valued at €5 million for its pioneering robotic technology cleaning techniques for heat exchanger fouling removal. Fouling buildup impacts performance, energy use, environmental impact, profit and product quality, leading to asset replacement, high expenditure and revenue losses.
CEO Mike Watson [pictured above] comments: “Clients frequently comment on the quick return on investment after our team have been in, not only are they able to instantly increase their profit, but reduction in fuel consumption and carbon emissions are crucial to environmental responsibility.”
As Lloyd’s notes, advances in refinery and maintenance are ripe for extension into other aspects of downstream businesses – safety, risk assessment, decision making and behavioural prediction, for example. Some aspects are immediately obvious – wearable sensors will be as intrinsic to industry as drone-based ones, with the additional benefit that they monitor staff health and efficiency as well as that of plants and processes.
Then there are the security and auditing features, the former borrowing from the experience of the defence industry, the latter from the financial world’s experience with blockchain and extending far along supply chains.
Further ahead still is MIT’s experiment with the further reaches of machine learning. Its engineers have developed an algorithm that programs AUVs operating in the upstream industry to take calculated decisions after assessing reward (the likelihood of an oil seep) versus risk (the possibility of the machine becoming stuck).
The more clearly quantifiable this and other risks are rendered by technological advances, the more certain the adoption of new products and processes downstream.
Clearly the pressure will increase for companies to be more agile in their responses. Within the downstream environment there is more prospect for petrochemical expansion than in the refineries market, with the driving force being a growing middle class in the developed world fuelling consumer demand.
Industry leaders believe this will require more integrated processes, the better connecting of upstream and downstream, refining and petrochem, and in the context of cyber–security, IT and OT. Christiansen cites the digital oilfield as an example of proactive tools enhancing operational visibility that “aid the decision-making process from oilfield to refinery – optimising production and reducing environmental, health and safety risk”.
One of the ironies of digitalisation and automation is that it is likely to create a shortage rather than a surplus of labour and skills. Industry body OPITO cites data analytics, robotics and remote operations, to which one might add metrology, hardware production, technological and safety expertise.
Expect too to see more UK companies developing revenue streams from training and consultancy. The inroads by Aberdeen-based Norwell EDGE, which recently signed an agreement with Tanzania’s Dar es Salaam University [see image above] and the British Safety Council in India demonstrate the potential of this market.