Creating the future is a thankless task. Millions try and many fail – but true innovation inspires us, and even though we don’t always get it right, each step we take collectively as an industry is a step forward for us all.
The crucible of innovation within offshore energy has always been the oil and gas sector. With high budgets and great margins on one side of the scales and arduous conditions and significant consequences of failure on the other - this high risk/high reward environment has been many a successful entrepreneurs’ playground for decades.
In 2020, the market shift has been dramatic. None of us foresaw the combined impact that the shale industry and COVID would have on the price of a barrel of oil, nor the shift of capital from oil & gas to offshore wind which resulted.
The offshore oil & gas industry has been hit particularly hard by the downturn, but despite that, innovation persists and takes the sector forward. The Subsea sector, in particular, has always been quick to embrace technology and innovation, so what innovations do we see coming into the market, are they disruptive and can they support the energy transition?
The first disruptive subsea technology I’d like to consider comes from a stable with an impressive pedigree for innovation. When Schilling launched the 150HP HD in 2007, the industry took note immediately. Designed from the off to be a truly modular system, this was the first ROV system capable of 60-minute maintenance. Rather than repair a component on an ROV, a whole module was simply and quickly swapped out. In 2013 this design was scaled up to 250 HP, in the form of the UHD III, and for the first time, an ROV had the integrated capability to close a BOP without having to rely on an underslung skid.
The UHD III didn’t just find favour in oil and gas. Its massive thrust and impressive station keep facility meant that it soon found its way into vessels working in the Offshore Wind industry – not least onboard the industry-flagship Grand Canyon and NKT Victoria vessels.
Seven years later the Schilling team – now part of TechnipFMC – have launched Gemini, a system with truly innovative features. Gemini builds on the technologies of the HD and UHD III, but crucially the system needs no human involvement to launch, recover or maintain. What’s more, an integrated carousel holds 30 tools, selected as required by automated manipulators using Machine Vision.
This is designed to avoid pilot error and dead time while the ROV is launched and recovered for reconfiguration (which, in deep water, can take hours), and is designed for dives of up to 30 days at a time.
As well as technical innovation, it’s also interesting to note the commercial basis on which Schilling ROV’s are now available. Previously available for sale to ROV service and subsea contractors only, the technology is now being provided direct to the end-user as a service, with Shell being the launch client in the Gulf of Mexico, and other deepwater producers sure to follow. Given the lack of demand for newbuild ROVs in the market, and the fact that TechnipFMC must be an approved supplier to every offshore oil & gas producer, this surely came about out of necessity – and to safeguard that ability to innovate for the future.
TechnipFMC isn’t the only major contractor which has been producing some spectacular innovation of late. Just a few years back, Oceaneering gave the impression that they weren’t really interested in anything but the low-tech support of offshore drilling (and, to a lesser extent, offshore oil & gas contractors) with their fleet of powerful but unspectacular work-class vehicles.
Whether was necessary to counter the potential loss of market share to newcomers, or as a way to differentiate itself from the crowd, the reinvention of Oceaneering has been as dramatic as it has been impressive, with the launch of two innovative subsea systems in as many years.
The first of these was ‘Liberty’, a battery-powered, electric Work Class ROV in a box. Lowered to the seabed and left there, detached from the vessel, the system uses a tether to a surface buoy to enable communication to & from the vehicle, which can be remotely piloted from shore.
The second was ‘Freedom’, a hybrid AUV / ROV, which incorporates the streamlined design typical of an AUV but with the vectored horizontal thrusters and vertical thrusters more commonly found in a work class ROV. Operating from a subsea base station, the goal is for ‘Freedom’ to be automated, through use of autonomous pipeline recognition software, however it can also be remotely piloted - but this time with no cable to its subsea base station, which is used to recharge the vehicle. Unlike AUV’s, ‘Freedom’ can deploy subsea tooling and has tooling change-out ports front and aft.
The true disruption in all these systems is in their ability to reduce manning and vessel time offshore. The IMCA guidance for ROV personnel requires six crew offshore for 24-hour Work Class ROV operations. If we look at the ROV crew alone, by my calculation that’s a potential saving of £132,000 a month in crew costs. If we factor in the vessel, as the ROVSV is no longer required to be on site during operations, that is a potential saving of almost £1.5 Million a month to the project. There are also other more important savings to be had here – by reducing the number of personnel offshore, human risk and carbon footprint are also minimised.
Some interesting commercial questions arise from these unmanned systems. As with all innovation, with every opportunity there are challenges to be overcome. Innovation must be funded and rewarded with work or it will die – but the subsea business model needs to change for it to be a success. Can the clients for subsea services get their heads around paying for a service to be performed, rather than paying for the vehicle & crew day rates as well as personnel and equipment mobilisations and demobilisations?
It will be interesting too, to see the commercial basis on which these vehicles are offered – how much of the cost savings are passed to the client in a bid for market share, and how much is retained as a reward for innovation – but that will be a corporate and commercial decision for each player.
Of equal interest is how IMCA (International Marine Contractors Association) will treat the issue of remotely piloted vehicles which are operated from shore rather than from the vessel. The minimum crewing levels for Work Class ROVs are there to protect safety and cannot be reduced without serious consideration. Perhaps a new category of system is required in the guidance, for a Remotely Piloted ROV?
The response of other manufactures and owners of ‘Traditional’ ROV’s will be interesting too. Will we see a market for the retrofit of automated piloting to these systems and will these be provided by the manufacturers, or as a third-party upgrade?
Once these technologies gain a foothold in the market – and I believe they will, in oil & gas at least - there will eventually be a structural change in the market for industry personnel, with lower demand for ROV crew, training, competence and transportation just being the tip of the iceberg.
It is not all bleak for ROV personnel though. The innovations in subsea vehicles, as impressive as they are, would seem to be designed to improve future economics in deep water oil & gas rather than transforming growth markets such as offshore wind. As highlighted by Rystad, CAPEX in Offshore Wind is set to overtake that of Oil & Gas in Europe by 2022 and Bloomberg NEF now predicts that Offshore Wind is set for a combined annual growth rate of 16% until 2030. The potential of this already booming market is causing many energy companies and their supply chains to refocus on renewables.
But the Oil & Gas and Offshore Wind markets are not the same. There are always exceptions, but the typical Offshore Wind environment is shallower, with more turbulent flow, lower visibility and higher current than in Oil & Gas. At many sites where ROV’s are used the vehicle is only just subsea, with the vehicle also having to contend with wave action as it works.
Such subsea environmental conditions are draining on batteries. For offshore wind tasks, energy sapping dredge pumps and high bandwidth communications are often required too, particularly when the work scope requires multiple high spec imaging sonars - for example during Unexploded Ordinance (“UXO”) dredging operations or trenching. How a system with no umbilical to the surface would deal with the demands for power and bandwidth in such conditions remains to be seen. What’s more, the typically shallow conditions mean that launch and recovery times are much less than in deep water, so the benefits of having all tooling sub-sea are greatly reduced.
Given the level of investment in the energy transition however, I have no doubt that the offshore wind market will be in the cross hairs of companies like TechnipFMC and Oceaneering for future innovation. It will not be long before we see features originally developed for these deep-water oil & gas systems migrating into renewables, reducing not only the cost of deep-water oil & gas production, but the cost of Offshore Wind too.
These disruptive technologies promise a future with fewer workers offshore, lower project costs, lower risk and with a reduced carbon footprint, whichever industry they are applied to. The businesses which have created them should be applauded, encouraged, and supported as they perfect the technologies required.
We all hope that the oil price recovery comes soon, but in the meantime it is essential for businesses, whether it’s the technology developers or their E&P sponsors, to continue to demonstrate innovation and leadership and to overcome the challenges faced by the industry and improve the future - for all associated with the offshore energy market.
The author is an independent consultant. He is not a shareholder, employee or consultant of or for any of the businesses mentioned in this article. Opinions are his own and can be challenged at www.linkedin.com/in/moray-melhuish-aa883614
Read the latest issue of the OGV Energy magazine HERE.
Subsea Innovation and the Energy Transition - By Moray Melhuish
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