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Innovation and TOTEX: optimising the subsea supply chain in an uncertain world - part two

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Oilfield Technology,

In the second part of this two-part article, Graham Gillies, Baker Hughes, explains the three layers of technology innovation that, if adopted by the subsea supply chain, could overcome many of the challenges created by the current economic situation.

The technology layers

These new collaborative relationships between operators and suppliers provide the necessary foundation on which new approaches to technology can be developed and then built in to the supply chain. Today, a significant part of this involves developing low carbon elements or processes that make up these components.

There are three layers of technology innovation that are relevant to the subsea supply chain. The first is the equipment, technology and systems that are used in the field. The second is the technology associated with the manufacturing of equipment, its transportation and logistics. Finally, the third layer is enabling technology: the digitalisation, robotics, machine learning and artificial intelligence (AI).

In practice, this three-layered approach leads to significant advances in the development and delivery of vital equipment. Take flexible pipe as an example. There is a limit to what can be achieved simply by making everything smaller and lighter – although this is a useful first step, it is more sustainable to look at the inherent design. An example of this might be bringing in a new hybrid-composite material from the aerospace industry, and looking again at the flow path in the pipes so that they require fewer valves with smaller valve blocks, reducing the physical footprint but also optimising the erosion life of the system.

Those new materials and equipment specs make it easier to manufacture the product. That in turn, reduces complexity in the machinery, wells and cladding which further reduces the amount of investment required and increases the opportunities for automation. It also makes deployment and installation easier, streamlines logistics and transport and reduces quality issues – all of which further strengthen the TOTEX case.

Whereas previous versions of complex subsea equipment would require plenty of hands-on processes to build, robotics can now take further cost out of the whole process. Finally, by digitally enabling manufacturing facilities, suppliers learn from every iteration. Every time the same component is made, analytics and machine learning makes the process a bit smarter and a bit faster – increasing quality consistency, productivity and on-time delivery.

From complexity to sustainability

The three-layer approach to technology innovation when looked at through the TOTEX lens overcomes many of the challenges created by the current economic situation. But they also create a more sustainable ecosystem that enables suppliers to deliver the right technology at the right cost so that more projects can be financially viable. That has bigger consequences in the long-term. The oil and gas industry regards itself as one of extreme complexity and difficult challenges. Although true, this way of thinking can also become a self-fulfilling prophecy. The kinds of innovations discussed in this article can help break this cycle: not only can projects come in at lower cost, but projects in harsher environments can be simplified. Materials and metallurgies need not be as complex as previously thought.

What started out as a process driven by cost dynamics has convinced operators that simpler and more optimised equipment is not just possible, but something that governing bodies like American Petroleum Institute (API) and International Organization for Standardization (ISO) can support. In this case, innovation is a rising tide that lifts all ships – and creates a more sustainable industry that continues to create employment and job opportunities at a time when that industry is facing unprecedented economic, social and political pressures.

The industry sectors that continue to thrive are those that innovate and evolve. This has not necessarily always been a strength in some areas of oil and gas. There is no transformative equivalent to the iPhone, for example, in the sector. But what the industry has learned from 2015, and as well as a macro-push for sustainability, is that it needs to understand where innovation is not just possible but necessary, and that early adoption can work in its favour.

There comes a point where innovative suppliers will no longer be able to iterate costs out, and will plateau at the bottom of the cost cycle. But they are a long way from that point now. In the meantime, it is expected that the connection between the oil price and project TOTEX will weaken, and more projects will become financially sustainable regardless of the pervading macro-economics and geopolitics.

Author: Graham Gillies, Baker Hughes

This is part two of a two-part article. Part one is available to read here.

Read the article online at:

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