Asgeir Drøivoldsmo, program committee chairman of the 2016 SPE Intelligent Energy (SPE IE) international conference and exhibition, was interviewed by Mark Thomas, E&P’s editor-in-chief.

E&P: The SPE IE 2016 conference theme is “New Horizons: Intelligent Energy in a Changing World.” What would you say those new horizons are, and how have they been impacted by the changing world of ‘lower for longer’ oil prices?

Drøivoldsmo: The situation in the petroleum industry is challenging. At the same time as new oil and gas fields are more difficult to access for recovery, the competition from alternative energy sources is tougher. Looking only at the percentages of energy production might not give the full picture. There is an equally important battle over the political agenda, where the incentives for R&D and facilitation of opportunities seem to go more in the direction of alternative energy sources than earlier.

The way to cope with these challenges is through the development of cleaner, smarter, safer and more efficient technology. In addition, the time from development to implementation of the current and future technologies will have to be significantly reduced.
In the end, the ‘lower-for-longer’ oil price is building a sense of urgency where automation and efficient use of digitalization is the obvious solution for getting control of costs and increasing productivity compared to other mature industries.

E&P: Has the downturn damaged the industry’s drive toward implementation of intelligent energy and digital oilfield solutions, or has it enhanced the reasons why it needs to be done?

Drøivoldsmo: The industry sees technology as a central part of the solution to the current challenges. The industry must send clear and unambiguous signals that intelligent energy solutions have a bright future. There is no doubt that the downturn in itself should be a very good reason for more and smarter use of data and new technology. The data gathering and analytics capabilities developed are in many areas well established in the industry.

Another question is whether the petroleum industry itself is able to send the right signals to the world about the way forward. Political and economic support for renewables is massive, and it is crucial for the oil and gas sector to avoid short-term panic and a reputation for instability.

Recent numbers from Norway show that the number of students applying for petroleum-related lower degree studies is rapidly declining. The specialization of well technology, for example, has 67% fewer applicants than in 2015 and 87% fewer than in 2014. Bachelor degree programs and the five-year master’s [degree] in petroleum and offshore experienced a sharp decline in last year’s number of applicants. It is now more pressing than ever to ensure that academic institutions and professionals with the digital skills needed see an industry that is robust and that can offer a prolonged career.

The message that new technology and green developments in oil and gas are one of the best contributors for the environment must be communicated more clearly. We need to show that making the sector more technologically advanced has a positive effect. The fact that intelligent energy knowledge developed in petroleum already is searching for new markets in other sectors is a natural development, but strengthening the petroleum sector as a stronghold for digital development is a key factor for its future development.

E&P: Intelligent energy, ‘smart’ digital oil fields and integrated operations—this topic area has had many titles applied to it. How would you describe the status of ‘intelligent energy’ today? How has it evolved from its early days, and how large a part of the global upstream industry’s day-to-day operations is it now?

Drøivoldsmo: The digital oil field is mature and plays a central role in how things get done. From the early networked reservoir models of 30 to 40 years ago until today, the digital oil field has evolved into the perfect arena for collaborative environments, communication, data collection, reporting, monitoring and information exchange. On this journey there have been many areas that needed maturation to make the necessary building blocks for the development to happen. Business process models and workflow automation, technology and methodology to enhance the use of global and more cross-discipline teams have been major contributors to enabling better, more informed decisions to take appropriate actions across the enterprise in real time and when needed. In the current situation there is less uncertainty over where to go and a much better understanding of the need for digitalization.

E&P: The E&P industry is heavily focused on increasing productivity, improving efficiency, implementing better standardization and reducing costs. How can intelligent energy solutions help to deliver on these?

Drøivoldsmo: Intelligent energy solutions are already a big contributor to all these areas and in many different ways, for example, the systems for supporting decision-making in an environment characterized by high uncertainties. But before we can get the full effect, we need to see a shift in the mindset from building to operation of oil fields. There must be holistic thinking in the way we address the technology, organization, competence and processes at all levels.

E&P: How are digital solutions improving oil and gas safety, and what still needs to be done?

Drøivoldsmo: Digital solutions are improving safety both with regard to major accident risk and controlling hazards in day-to-day operations. Between 10 and 15 years of integrated operations characterized by the use of digital communication; access to real-time production data; remote surveillance of production equipment; and increased cooperation, independent of location; have revealed a wide range of areas where digital solutions are central for improved safety. For offshore installations, for example, reduced helicopter transportation of personnel out to the platforms is reducing risk of accidents, condition monitoring is reducing unnecessary intervention with process equipment on installations, advanced monitoring systems are preventing dangerous conditions in drilling, and improved techniques for dynamic assessment of risk are using integrated operations and integrating advanced techniques of hazard identification and risk assessment.

E&P: Can you give any ‘blue sky’ examples of where you believe potentially game-changing advances might occur that could be of major future benefit to the industry?

Drøivoldsmo: The capabilities the industry has built in sensor technology, applications, standards, data handling, and analytics and monitoring will be used for improved organizational and human performance. As in many other industries, the technology and processes for remote control is well proven and operational. This is telling us that as soon as we have sufficient automation of new and existing installations, the development will continue to go further into full digitalization. For operations this will result in large operation centers handling multiple unmanned installations covering more and more functions and disciplines in the organization.

The ‘game changer’ will be the ability to develop a fully integrated model. Digitalization will not eliminate the human in the loop, but it will help the human to improve control and the steering of the processes. We need to look at the complete picture rather than just a portion of it. The projects will have to think competence, organization and processes in combination with the technology decisions.

E&P: Is there a sector of the E&P industry that you feel still has most to benefit from the full application and integration of intelligent energy solutions?

Drøivoldsmo: More and improved methods, visualizations and application support for dynamic risk assessment have a big potential for improved safety, at the same time allowing more efficient operations. Current practices for planning and maintenance of facilities are established with clear and secure safety margins. This does not mean that ‘time on tool’ could not be better. Active use of monitoring of nontechnical barriers, detection of weak risk signals and active use of this information at all levels of planning and execution can have a big impact on an organization’s ability to operate and maintain facilities.

E&P: The oil and gas industry is regularly said to be behind other industries (usually aviation, defense, space and automotive) when it comes to remote monitoring, sensors, automation and so on. Is it closing that gap?

Drøivoldsmo: The pace of development has been much higher in the petroleum sector than any of the other industries mentioned above for many years. Development is not the problem; it is the lack of implementation. At the same time as development in a diverse and varied industry with a high degree of competition between companies does not always enable the clearest path forward, that diversity also can be the advantage. The reason remote monitoring has been lagging in some areas is, in my opinion, due to lack of incentives for implementation. For the last decade the exceptionally high oil price has effectively hindered the big steps in changing the way operations are performed. New installations have been built with a high degree of instrumentation, but the benefit of the investments has never been harvested due to the way the installations have been run.

Hart Energy’s E&P is the official media partner for the 2016 SPE Intelligent Energy event (intelligentenergyevent.com) to be held Sept. 6-8 in Aberdeen, Scotland.

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