The drive for efficiency

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Frank Mollerop, vice president, SAS Institute – Global Oil & Gas Division.

What is the biggest challenge facing the industry?

The top priority for me is this region meeting its responsibility in delivering the hydrocarbons the world needs. Around that topic there are several interesting challenges.

Today we have a perceived low oil price, but the industry needs to keep investing in its supply chain. The biggest challenge is not a lack of hydrocarbons, but the threat of a real supply crunch.

How quickly could that supply shortage materialise?

If the industry stops investing in building production capacity, then in just a few years we'll have a serious supply problem. World demand will keep growing by at least a percent each year, so in 25 to 30 years demand will have grown from around 85 million barrels a day to over 120 million barrels.

So current regional production would fall well short?

Much of that future supply needs to come from the Middle East, so there's no doubt that the region has a special responsibility to meet that capacity. We see a lot of issues around that topic which must urgently be addressed.

These include improving uptime and efficiency, especially on the oil side. The industry is already suffering from sloppy engineering procedures. This means that assets are being run at less than 90%, which is really poor.

So why has it not been addressed?

The oil and gas companies could absorb this because of the massive margins in 2007 and 2008, but those days are probably gone. Furthermore we see a renewed interest in the Middle East for integrated operations, or 'smart-fields'.

This concept should apply from the reservoir to distribution. Norway has been the leading environment where this integrated operations concept has made significant improvements and they have achieved staggering results, which I'm now showcasing in the Middle East.

How staggering?

An example is with ConocoPhillips in the North Sea. Through our partnership with them, one facility has seen a production increase of around three to five percent, and that is on a platform that was already among the most efficient operating in the world today.

This is what we are discussing with companies in the Middle East, based on benchmarks we've set in proven operations.

What is the company's pedigree with upstream work?

We've been working in this integrated operations space for the last seven years so we have a lot of accumulated knowledge, and we're sharing this with the supermajors in America, and the oil sands companies in Canada.

Last year we signed a contract with Petrobras, and we're in discussions ongoing with PEMEX, so the industry is really receptive to what we have to say.

We've already had some very interesting dialogue with Saudi Aramco regarding their oilfield initiatives and we have started working with them officially now.

How do you roll out a predictive analytics overhaul?

We start with a small piece of the operation and then roll out the solutions across the company. This is easier to manage for both sides - it's not like a big bang when we arrive.

The abilities we provide are mainly allowing the customer to take better decisions about what to do. We do that by providing them with the detailed analytics or by optimising procedures.

Where would the benefits be seen first?

Predictive analytics on turbines and other rotating equipment is a good example. When they fail it's a huge problem because you are unable to produce while it's down.

So one of the things we can do is allow for and provide preventative maintenance. By collating historical data and current data we can forecast or predict what will happen to components and machinery over a certain time horizon.

Do you mainly fix plants, or help at the design stage?

We cover both brownfield and greenfield projects. Brownfields require a slightly different approach, because the asset may be ageing, or it may have already reached a production plateau, or it is faced with decline.

With greenfield sites we would ideally be involved two to three years beforehand, so that the equipment and software is ready to go on day one, and in doing so it means better decisions can be made right from the go.

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