Reducing costs with digitalized solutions

Sept. 14, 2017
When oil prices dropped in June 2014, the oil and gas industry braced itself for another rollercoaster ride that would produce that familiar lurch in the stomach until the price hit bottom and then, as always, a collective intake of breath as it began another climb.

When oil prices dropped in June 2014, the oil and gas industry braced itself for another rollercoaster ride that would produce that familiar lurch in the stomach until the price hit bottom and then, as always, a collective intake of breath as it began another climb.

But that is not what happened.

The lower-for-longer oil price scenario that has persisted since that precipitous drop three years ago has had a profound impact on the industry.

Not surprisingly, the first reaction for many companies was to slash costs. Between 2014 and 2016, oil and gas companies worldwide cut capital expenditures by about 40%. Despite drastic measures - that for many companies meant a significant reduction in the workforce - the industry has not yet achieved a comfortable level of stability.

The new “normal” is forcing industry to step back and take a more critical look at business models and to reassess what constitutes “business as usual.”

It has become apparent that business models need to change. Today, having re-evaluated those business models, companies recognize that it is time for a departure from traditional approaches to doing business, and many are looking at innovations that will help them achieve efficiency and reduce operational costs without compromising their ability to effectively maintain safety and manage operational risk.

Doing more with less is now the norm. Finding ways to leverage technology to improve productivity is critical in the new low-oil-price environment, and efforts continue to go toward advancing cost reduction strategies to achieve a competitive edge. Innovation is essential to realizing that goal because technology can positively effect changes in operations and move industry into a new era.

One of the ways companies have found to succeed in the face of constrained resources is to make the most of the work force through virtual collaboration that allows experts in different parts of the world to solve problems together. Working remotely has proven its value, allowing companies to capitalize on collective intelligence to produce solutions in a short period of time.

Realizing that industry needs to find ways to benefit from the ability to work remotely, DNV GL is taking steps to deliver remote monitoring solutions. One of the most recent of these is a remote surveillance service for subsea equipment manufacturing. The drivers for developing and piloting this alternative were the desire to help vendors and end users reduce costs, improve safety for personnel, increase flexibility on testing schedules, and expand the ready availability of experts in an environment that provides transparency for all stakeholders.

This is a tall order, but it was achievable in part by looking at the maritime industry and recognizing a technology that could be transferred to broader areas of application. Referred to as “remote witnessing,” this technology allows surveys and inspections to be carried out in a novel way.

In some cases, remote witnessing is achieved by equipping a technician with hardware (typically a camera) and software to provide remote support. In others - for example for a specific test or to focus on critical points - a standalone camera can be installed. In both cases, the camera transmits live to a local office, where a surveyor is connected to the onsite technician or camera. This new project execution model can provide substantial cost savings and efficiency by eliminating travel as well as time a surveyor on site would be idle -- for example, while a test is being set up or modified.

A global team of researchers has been working on this solution for three years, evaluating camera systems and software programs to arrive at the remote witnessing solution. Understanding the challenges with connectivity, a contractor was selected to provide a signal to allow direct communication with the camera without having to use the operator’s network.

In several pilots, specific protocols were developed, and efforts were made to optimize the camera and software interface. This has helped to ensure that the remote surveyor can deliver the same level of quality as if he or she were on site.

Piloting the service was necessary to identify gaps and fine tune the new service line protocol. The pilots show clearly that remote witnessing is an acceptable tool for independent surveillance when suitable conditions are met.

This is an area where digitalization can be coupled with existing processes to provide lean verification services that are cost-effective and safe, and it adds an extra layer of transparency. With remote witnessing, operators purchasing subsea equipment can now observe vendor tests as they happen, to be sure the products they receive will work as anticipated when installed. Where previously, operators might have left the tests to a third-party observer, they now can watch the tests themselves.

Solutions like this are part of a broader program aimed at digitalizing services for improved economics and safety. Eventually, a full range of offerings spanning the complete life cycle of offshore assets will be offered in a digital format, delivering quantifiable savings.

Martha Viteri

Head of Section Subsea and Well Systems,


Photo 209679774 © Evgenii Mitroshin |
Oil Prices Dreamstime L 209679774
Photo 42833780 © Vlad Georgescu |
Uk Tax
Photo 120426320 © Artem Egorov |
Oil Barrels Dreamstime M 120426320