The 2014 oil price downturn spurred the global oil and gas industry to focus on maximizing productivity and reducing operating costs while maintaining operational flexibility. This trend is behind GE Oil & Gas’s contractual service agreement (CSA) signed late last year with drilling rig contractor Transocean Inc.
Through the $180 million agreement, GE will provide condition-based monitoring and maintenance services for pressure control equipment on seven of Transocean’s rigs over the next 10 to 12 years, GE said in a Jan. 11 press statement. The agreement will leverage GE’s digital capabilities to shift from event and calendar-based maintenance to condition-based monitoring and maintenance.
Working with GE on parts forecasting and service scheduling will allow Transocean to optimize operations by proactively planning and minimizing between-well maintenance, GE Oil & Gas said.
“When cost and risk are at the top of operators’ minds, we share the responsibility by investing in equipment uptime and performance,” Lorenzo Simonelli, president and CEO of GE Oil & Gas, stated in the release. “We are evolving our business and enhancing our digital offerings to match the needs of our customers. Digitization truly is the single largest step change for the industry and the foundation for its future.”
In February 2016, GE and Diamond Offshore Drilling Inc. inked an agreement through which GE would buy back blowout preventers (BOP) from Diamond Offshore, then rent them back to Diamond. The CSA agreement shifted all maintenance and repair tasks to GE, which would assume responsibility for ensuring the BOPs worked properly to prevent well blowouts and oil spills.
Using condition-based maintenance powered by digital technology allows machines and equipment to operate longer, and produce more power by increasing uptime through predictive, rather than reactive maintenance, and optimize controls to improve efficiency and/or operating range and capability, Chuck Chauviere, GE’s president of drilling systems, told Rigzone in an email statement.
According to Chauviere, condition-based maintenance supported by digital technology can create a one percent improvement in efficiency in the oil and gas industry, which could add up to $90 billion in savings over 15 years. Big data analytics also could help oil and gas companies improve production by 6 percent to 8 percent.
“If the Industrial Internet achieves just a one percent efficiency improvement, then the results are substantial,” Chauviere said. “The average world oil recovery rate is approximately 35 percent. If we can figure out through the Industrial Internet how to improve the rate from 35 to 36 percent, that’s the equivalent of about three years of global oil production, or more than 80 billion barrels of expanded conventional oil reserves.”
Condition-based maintenance also could reduce the 10 percent downtime that the oil and gas industry currently faces, Chauviere said. This average is higher than the U.S. industrial average of 3 to 5 percent, indicating a chance for oil and gas companies to boost the reliability and maintenance of facilities, equipment and processes. The estimated average annual cost of unplanned downtime at a mid-size liquefied natural gas facility is $150 million. An offshore well out of commission can cost an operator $7 million a day in lost revenue.
Last year, Rigzone reported that condition-based maintenance could potentially help oil and gas companies reduce costs while driving efficiency and productivity. But market penetration of the technology in oil and gas has been slow due to high initial costs.
Chauviere also believes that 3D printing, or additive manufacturing, could be used to print parts needed offshore. This technology can create new accelerations in supply chain and response, as well as better planning.
“Additive manufacturing gives us an on-demand response opportunity as well, and GE has made some big investments in that space, so this is an area of great opportunity,” Chauviere stated.
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