The oil price crash in the COVID-19 pandemic has created a challenging environment for the oil and gas industry. The current crisis brings uncertainty about investments in the sector in the near term as oil prices languish at their lowest levels in several years.
Although imminent exploration and production (E&P) investments have been slashed amid the major uncertainties about market recovery, oil and gas operators and contractors have one certain investment in any price environment. This is to maintain the asset integrity of their facilities and operations in order to ensure safe, reliable, and efficient workflow and production at times of social distancing and market uncertainties.
Regardless of the price of oil and gas, producers and their supply chain providers work 24/7 to ensure the asset integrity of oil and gas platforms, pipelines, and refineries.
Asset integrity management (AIM) and asset integrity management systems (AIMS) are indispensable parts of every operation in the energy sector, securing the safe and efficient work of the assets during their lifetime, and the safe decommissioning after that.
Maintenance, inspection, and monitoring of operational facilities onshore and offshore continue even if the drilling of new wells has grounded to a halt as E&P firms pull back on capital expenditure (CapEx) to weather the oil price rout.
Asset integrity management doesn’t receive much media attention, pushed back by headline-grabbing ‘unprecedented’, ‘crisis’, ‘crash’, ‘slash’, and other nouns, adjectives, and verbs to describe the ongoing challenges in the oil and gas sector.
But asset integrity is the most important part of every producing and/or operating asset in the energy sector—asset integrity management makes sure that platforms, refineries, or pipelines are designed, built, installed, operated, maintained, and inspected according to the highest industry standards, for safe and reliable operations.
During the oil price crash, oilfield services firms with large exposure to maintenance and inspection are some of the least impacted in terms of share prices and market capitalisation, even if the oilfield services industry was hit the worst by the price collapse and the pandemic, Rystad Energy said in an analysis in May.
“In a nutshell, our analysis indicates that companies with exposure to EPCI, facility leasing, maintenance and inspection services, SURF or subsea equipment have been less punished by investors, who have prioritised limiting their exposure to well services, drillers, acquisition contract seismic and the North American market,“ Rystad Energy senior energy service analyst Binny Bagga said.
Regardless of where oil and gas prices are, asset integrity and asset management continue to be firm commitments by asset operators and their contractors.
Inspection, risk assessment, process and people safety, safety-critical maintenance, and asset performance optimisation continue to be on every company’s priority list during these challenging times for the industry and for the world as a whole.
Even before the pandemic, the oil and gas sector had started to embrace digitalisation as a means to protect people in harsh environments and help asset management and integrity. Major oil firms in the world have already adopted digital twins to monitor and control offshore assets in remote areas while workers are safely using virtual reality, augmented reality, or dynamic 3D printed models superimposed on the actual platform or other facility to perform the checks and see if everything runs and works as smoothly as planned.
Norway’s Equinor, for example, uses digital twin technology in the construction of Johan Sverdrup Phase 2—one of the largest projects on the Norwegian Continental Shelf (NCS) which is expected to produce around 25% of Norway’s total oil output once it reaches peak production.
“We have invested in digital solutions, and these new ways of working are already saving months in the execution stage,” says Anders Opedal, Executive Vice President for Technology, Projects and Drilling (TPD) at Equinor.
Like Equinor, UK’s BP is also using digital twin technology to optimise production, connect people and data, and, crucially, save precious engineering time. BP first rolled out the APEX digital twin at its operations in the North Sea, because some of the supermajor’s most complex production systems are offshore the UK. After the pilot in the North Sea, BP’s production teams in other parts of the world have also started using the digital twin technology.
Italy’s Eni has a digital transformation plan, whose goals include improving the safety of people and increasing asset security and integrity, alongside improving efficiency and increasing decarbonisation efforts.
“Eni’s digital transformation is currently based fundamentally on asset integrity and security, which is why innovation and digitalisation play a key role in our business model and help us to look to the future with our sights more firmly set on a circular economy-based model,” Eni’s Chief Digital Officer, Luigi Lusuriello, says.
“Digital transformation is a virtuous circle: people improve technologies and technologies improve people’s performance,’’ Lusuriello notes.
Most recently, Wood and National Energy Resources Australia (NERA) announced in early May a new partnership to develop and deliver an AI-based solution for the inspection of critical industrial equipment, particularly for subsea oil and gas infrastructure.
“It is fantastic to see that the energy industry is embracing new ways of solving problems,” said Azad Hessamodini, strategy and development president of Wood’s Technical Consulting Solutions business.
In the COVID-19 pandemic, demand for remote inspection of offshore oil and gas assets has surged, according to testing, inspection, and certification services provider Bureau Veritas, which reported a 900% surge in demand for remote inspection of offshore assets.
“Since the start of this year demand has greatly increased. It is no longer a want but a need,” says Paul Shrieve, Vice President Offshore & Services at Bureau Veritas.
Over the next five years, digitalisation and the use of the Internet of Things (IoT) in the energy sector is set to jump.
According to a May 2020 report from MarketsandMarkets, the global market of the Internet of Things (IoT) in the energy industry is expected to jump to US$35.2 billion by 2025, up from US$20.2 billion in 2020, at a compound annual growth rate (CAGR) of 11.8% over the next five years.
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