Oil & Gas Operational Technology Highlight of OTC

Overview

Several ARC Advisory Group analysts and client managers attended the Offshore Technology Conference (OTC) last week at NRG Park in Houston.  With continued low oil prices (Brent Crude was at about $50 at the time we wrote this, and fortunately going up) the attendance and overall vendor presence was more muted, with much of the talk about Oil & Gas Operational Technology. 

Attendance according to the OTC organizers was around 68,000 people, down significantly from previous years.  But despite a slow Monday, foot traffic really appeared to pick up on both Tuesday and Wednesday.  The large oilfield equipment suppliers like FMC, Halliburton, Subsea 7, and others still had a huge presence at the show, and there was a lot of talk about how the dynamics of the industry are changing as owner/operators are becoming even more cost conscious than before and are looking for new, cost-effective ways to execute projects and reduce spending.

All of the major process automation suppliers were present at OTC and it remains one of the only shows where you can see all these suppliers in one place.  ARC visited with ABB, Emerson, Honeywell, Rockwell Automation, Schneider Electric, Siemens, and Yokogawa.  ABB was the only major supplier that had a press conference at OTC, where they announced their new partnership with Aker Solutions. 

Major Technology Trends Gain Momentum as Focus Shifts to Operational Excellence

Given the plunge in new projects for upstream oil & gas, the focus has naturally turned to operational efficiency, risk management, lowering costs, and reducing unplanned downtime in upstream operations.  The focus on operational excellence is a good fit for emerging technologies like the Cloud and Internet of Things.  We are really starting to see how automation suppliers are taking these new technologies and applying them to solve real-world problems in the oil & gas industry. 

We have had intelligent field devices and actuators for some time, but the IoT age is ushering in intelligence and network connectivity to a much wider range of equipment and assets, from motors and electrical products to blowout preventers and subsea equipment.  Automation suppliers are clearly seeking more expertise and diagnostics capability for pieces of plant equipment to improve their reliability, safety, and uptime and implement predictive maintenance strategies. 

The other major shift involves the “digital fingerprint” concept of integrated engineering from the conceptual phase of plant or facility construction through engineering and design, installation, and operations.  The industry is driving toward a single dynamic engineering model that changes as the design or state of the plant changes.  These sophisticated models can be used to develop better, more cost-effective simulation environments and ease both the system configuration and management of change processes. 

Supplier Highlights

ABB and Aker Solutions announced recently an agreement to build on their combined strengths in subsea, power, and automation technologies to develop solutions that will improve oil and gas production for the global energy industry. The cooperation will integrate ABB’s leading technologies in subsea power and automation and Aker Solutions’ pioneering subsea capabilities to bring customers more effective, reliable, and flexible oil and gas production solutions. The partnership will enhance how production equipment on the seafloor is powered and controlled by applications on shore or platforms, lowering costs and enabling economically viable production at fields far from existing infrastructure.  ABB also had its new Smart Sensor on display that provides wireless condition monitoring data for low-voltage motors.

Another major press conference attended by ARC was for offshore oil development in Nova Scotia.  Several Canadian government officials were on hand to discuss deepwater oilfield developments.  Shell has four deepwater parcels in Nova Scotia, and BP and Statoil have significant holdings as well.  ConocoPhillips and SunCor are partners on the Shell project, while Hess and Woodside are partners with BP.  Overall, there are over CAD $2 billion in commitments for work in Nova Scotia.

For the automation suppliers, unlike last year, OTC 2016 was not a big year overall for brand new product or application introductions.  The focus overall was more about how suppliers could provide value and solve some specific industry problems.  Emerson also had a big presence at the show, combining its instruments, valves, and control offerings to demonstrate their solutions capabilities in specific applications ranging from separation to downhole measurement and custody transfer.  The booth had an overall focus on reliability and you can see the increased attention to the reliability side of the equation through Emerson’s MRG acquisition.

Rockwell Automation once again had a partner booth with leading field device supplier Endress+Hauser.  Rockwell Automation displayed the latest version of its PlantPAx process automation system as well as the OptiSIS prepackaged process safety instrumented system.  OptiSIS is designed to provide a low-cost solution for replacing relay panels in outdated installations. OptiSIS features simple configuration screens with cause-and-effect charts and pre-built screens for alarms and events.  Both Rockwell Automation and Endress+Hauser demonstrated their jointly developed terminal management solution.

Honeywell showed an Experion workstation from Honeywell Process Solutions and pressure sensors and fire and gas detection products.  Schneider Electric demonstrated a 3D augmented reality virtual tour of their E-House solution, which is also known as the PemSet solution. 

Siemens had a large booth including Dresser-Rand right next door.  Similar to last year, the company showcased the company’s entire solutions capability for the upstream and offshore oil & gas industry, from automation to Totally Integrated Power, e-houses, drives, and COMOS applications including WalkInside 3-D simulation.  Yokogawa showed a SIL-4 logic solver for high-integrity pressure protection systems (HIPPS).  The company has already installed many of these HIPPS systems into subsea control modules manufactured by companies like Kvaerner. 

Recommendations

Despite the downturn in the oil & gas market, OTC remains a viable and important trade show, and is still one of the best automation-related trade shows in the world.  The increased focus on OpEx is driving a lot of activity on the new technology front.  IoT, analytics, cloud, digitalization, and more intelligent assets are clearly starting to find their place in the world of operational technology for oil and gas.  The highly distributed nature of oil and gas applications, combined with their frequent location in remote and harsh environments, provide a lot of good use cases for these technologies. 

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Keywords: OTC, Oil & Gas, IIoT, ABB, Emerson, GE, Honeywell Process Solutions, Rockwell Automation, Schneider Electric, Siemens, Yokogawa, ARC Advisory Group.