SUBSEA VALLEY CONFERENCE: The subsea oil & gas industry is affected by escalating costs, especially in producing aftermarket subsea vells. But the Norwegian government will under no sircumstance accept reduced utilization of reservoirs. – It is not a viable option for cutting costs, said the PM Erna Solberg to members of the Subsea Valley cluster gathered at Telenor Arena.
The need for new and smarter technology, not least in terms of costs, is the big subsea challenge. One after another keynote speaker on the Subsea Valley Conference, April 2 and 3, 2014 stressed the urgent need for innovation to reduce costs in the subsea industry.
The conference gathered over 300 delegates attending a conference program focusing on technology, competence and comptetitiveness.
A proud conference host, Mr Preben Strøm, CEO at the Subsea Valley cluster, welcomed the delegates to a program of international speakers from various companies and various industries.
– The conference is about technology across industries, competence as a driving force no matter what we do and competitiveness as a key to survive in a global market, said Mr. Strøm.
Cost gap between old and new
Astrid Sørensen, senior vice president for joint operations in development and production at Statoil, showed the Conference delegates that there is an increasing gap in costs between old and new subsea vells. Costs in new projects show a flatter curve than the steeper curve on cost development of Statoil subsea equipment for aftermarket projects.
Now 80 per cent of Statoil’s 520 subsea wells started production more than 10 years ago. Problems are piling up and so does cost. It is several technology leaps, many generations of equipment and several system suppliers.
– Subsea is the key in Statoil’s growth strategy. We are going longer, deeper and colder, says Astrid Sørensen, presenting av slide with technological steps the next five years and beyond – from next years opening of the Åsgard & Gullfaks subsea compression to the Statoil Subsea Factory consept in 2020.
The Norwegian Prime Minister called on the subsea industry community to reduce costs.
– Standardisation and industrialisation will be important measures in this context. However, reduced utilisation of reservoirs is not a viable option for cutting costs, PM Erna Solberg said in her keynote speech.
To put any doubt aside, she concluded that the oil and gas industry is, and will remain, the cornerstone of Norwegian economy for decades to come.
– A strong oil and gas sector does not undermine the development of new profitable industries; rather it is a prerequisite for coming up with new ideas for sustainable business, Mrs. Solberg said.
Mr Arild Selvig, director of Sales and Marketing at FMC Technologies, said there is still a lot of room for innovations in a reasonable complex subsea services value chain. Selvig stressed that the experiences for the Norwegian Continental Shelf also in the future will be a key factor for internation success of Norwegian suppliers.
At the same time one should be aware that globalization requires differentiated opproaches to every new market due to local conditions.
– Our key success criteria for international competitiveness are following: Keep control of core technology and compentence, guard and transfer standards and IP, develop competence locally and export knowhow from home base, adapt to local requirements and devolop local staff, said Mr Selvig who finally emphasized the importance of always securing access to “the smartest heads” on all locations.
FMC Technologies sees Brasil and Africa as the companies most important future growth market.
The myriad of standards
Dr. ing. Torkild R. Reinertsen, owner of Reinertsen pointed at the myriad of standards in the subsea technology universe. According to him this is cost drivers in the subsea business: Operators insisting on company-indvidual specifications, complex specifications that are interpreted differently for each projects and often change of spec’s and requirements during project execution.
– This results in significant increase in cost, lead time, project risk and tehnical risk, said Reinertsen in his keynote speech at Subsea Valley Conference.
He also pointed at the lack of common interface standards. This allows system suppliers to lock in their products with proprietary interface configuration. This means that operators are forced to buy all from one product provider, and sponsor qualification of all relevant functions for each product provider. Mr Reinertsen will turn-around this cost driving industry tradition:
– We shall be a product independent main-contractor for subsea projects, first in Norway and later globally.