The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksBP Share News (BP.)

Share Price Information for BP (BP.)

London Stock Exchange
Share Price is delayed by 15 minutes
Get Live Data
Share Price: 505.10
Bid: 505.10
Ask: 505.20
Change: -5.30 (-1.04%)
Spread: 0.10 (0.02%)
Open: 506.40
High: 515.30
Low: 503.40
Prev. Close: 510.40
BP. Live PriceLast checked at -

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

RPT-INSIGHT-Oil majors experiment with technology to weather crisis

Mon, 17th Oct 2016 06:00

(Repeats story published on Sunday)

* Drones, drill design, data software, robot cleaners

* Among technologies oil majors using to make savings

* More cost cuts to come as companies shield dividends

* Graphic on industry investment: http://tmsnrt.rs/2cG4Dj9

By Karolin Schaps and Jessica Jaganathan

LONDON/OSLO, Oct 16 (Reuters) - Oil majors includingStatoil, Shell and Chevron are experimenting with varioustechnologies, from drones and drill design to data management,to drive down costs and weather a deep downturn.

Crude prices have more than halved since mid-2014, forcingcompanies to cut billions of dollars in costs. Determined toshield dividends and preserve the infrastructure that will allowthem to compete and grow if the market recovers, they areincreasingly looking to smarter tech and design to make savings.

French oil and gas major Total said it was nowusing drones to carry out detailed inspections on some of itsoil fields following a trial at one of its Elgin/Franklinplatforms in the North Sea.

Cyberhawk, the drone company that led the trial, said thiskind of work was previously carried out by engineers whosuspended themselves from ropes at dizzying heights. It said themanned inspection used to take seven separate two-week tripswith a 12-man team that had to be flown in and accommodated onsite.

The drones do the work in two days and at about a tenth ofthe cost, according to the Britain-based firm's founder MalcolmConnolly, who said it had also worked with ExxonMobil,Shell, ConocoPhillips and BP.

Total declined to comment on how long the manned or droneinspections took, or specify how much money was saved.

Statoil's giant Johan Sverdrup field, the largestNorth Sea oil find in three decades which is due to startproduction in 2019, is a leading industry case study for cuttingcosts in the era of cheap oil.

The Norwegian company has cut its development costs for thefirst stage of the project by a fifth compared with estimatesgiven in early 2015, to 99 billion crowns ($12.2 billion).

The savings have largely been made by focusing on the mostefficient technology and designs from the beginning, Statoil'shead of technology Margareth Oevrum told Reuters in aninterview.

Executives say the growing attention on technologies thathave been around for some time shows how wasteful the globalindustry had been in the years before the downturn when - withcrude at above $100 a barrel delivering bumper profits - oilcompanies' had little incentive to develop fields efficiently.

For example, simply finding a more efficient route for theoil pipeline that would carry the crude from the Sverdrup fieldto the onshore refinery cut 1 billion crowns, Statoil said.

ROBOTS, FOAM

Statoil has also developed a drilling "template" that isacting as a guide for the first eight wells to be drilled at thefield. It said it had reduced the overall drilling time by morethan 50 days, saving about 150 million crowns per productionwell compared with what it would have cost with 2013 techniques.

"By far the biggest driver (of savings) has beensimplification," said Oevrum. "To think much simpler and startfrom the bottom, or the bare bone, and then rather add to that,instead of starting very big."

The company could not give a figure for its group savingsmade from improved technology and design. But it said that,partly because of such innovations, projects set to startproduction by 2022 would be able to make a profit with an oilprice at $41 a barrel, down from $70 in 2013.

Global upstream - exploration and production - oil and gasspending has fallen by more than $300 billion across theindustry in 2015-16, according to the International EnergyAgency (IEA), roughly equivalent to the annual GDP of SouthAfrica. Around two-thirds comes from cost cuts, rather thancancelling or shelving projects, it said.

Shell, for example, has developed a new type of pipe, calleda steel lazy wave riser, to carry oil and gas from its deepwaterStones field in the Gulf of Mexico for processing. It bends toabsorb the motion of the sea and the floating platform, whichthe company says boosts production at extreme depths.

The Anglo-Dutch major could not say how much the pipescontributed to increased efficiency, but said innovations atStones had played a significant part in cost savings of $1.8billion in its projects and technology division last year -equivalent to the 2015 core profits in its upstream division.

The fall in oil prices has led to the introduction of othernew engineering and maintenance techniques.

Chevron is using a robotic device to clean and check theinside of pipelines on their Erskine field in the North Sea morequickly. The improvement has helped raise the field's dailyproduction rate to the highest in two years.

Oil services firm Amec Foster Wheeler, working forBG Group which is now part of Shell, has applied a new techniqueto remove the pillars of an old platform, a procedure that isoften dangerous because corroded elements can slip off.

It pumped in expanding foam to hold the pillar's elementstogether, allowing workers to safely cut the metal away. Thiswork took just over seven weeks instead of the 22 weekstypically needed using traditional methods.

Alex Brooks, oil and gas equity analyst at CanaccordGenuity, said tech innovation in the industry was about "100tiny things", adding: "The bottom line is you end up with a muchlower cost."

The downturn has presented opportunities for some servicesfirms that can offer cost-saving innovations. Inspection dronefirm Cyberhawk, for instance, said its revenue from oil and gashad doubled from mid-2014 to mid-2016, while the widerinspection market had shrunk.

VAST DATA

Another way oil companies are looking to cut costs is byusing their vast amounts of data to better predict their needs.

Since the price slump, companies including Shell, ExxonMobiland Statoil have started using software that can better managetheir data to cut wastage in the ordering of constructionmaterials.

Stuck with excess material, some companies suffered hugelosses because the resale value was much lower and in some casesthey even took to burying unwanted material, according toIntergraph, a unit of Swedish tech firm Hexagon thatdevelops such systems for oil industry clients.

"Previously, it was industry standard to order 3-5 percentmore materials than needed, which in a billion-dollar project isa lot of money," said Patrick Holcomb, executive vice presidentat Intergraph.

Better managing data has helped oil firms understand exactlyhow much material is needed and when it will be delivered,cutting excess to one or two tenths of a percent, he added.

Gunnar Presthus, Nordic energy lead at consultancyAccenture, who advises oil majors and national oil companies,said the downturn had led to the industry waking up to thepotential of the data they store.

"The oil industry, to some extent, is one of the mostdigitalised industries," he said. "Companies are now able to usethis wealth of data to make changes that will save money."

($1 = 8.0919 Norwegian crowns)

(Additional reporting by Stine Jacobsen and Gwladys Fouche inOslo; Writing by Karolin Schaps and Gwladys Fouche; Editing byPravin Char)

More News
Today 12:00

LONDON MARKET MIDDAY: Stocks buoyed by local data, strong US equities

(Alliance News) - Stock prices in London were up at midday on Tuesday, boosted by positive local economic data and tracking European equities that were buoyed by strong US stocks performance on Monday.

Read more
Today 10:14

BP profit slides by 40% as refinery outage offsets higher output

First-quarter underlying profit $2.7 bln vs forecast $2.87 bln

*

Read more
Today 09:09

LONDON MARKET OPEN: Stocks track global equities rise while BP falls

(Alliance News) - Stock prices in London opened up on Tuesday, tracking European markets in reaction to New York stocks extending their rally on weaker US jobs data, while markets reopened in London after a bank holiday on Monday.

Read more
Today 08:51

TOP NEWS: BP keeps up pace of share buybacks despite profit decline

(Alliance News) - BP PLC on Tuesday launched a fresh share buyback, despite a drop in first-quarter profit due to lower oil and gas prices and weaker fuels margins.

Read more
Today 07:02

BP in $1.75bn buyback as Q1 profits fall on weaker prices, margins

(Sharecast News) - BP reported a worse-than-expected fall in first-quarter profit on the back of lower oil and gas prices, an outage at a US refinery and "significantly weaker" fuels margins as it also started a $1.75bn share buyback.

Read more
6 May 2024 15:01

Shell to exit South Africa's downstream businesses

CAPE TOWN, May 6 (Reuters) - Oil major Shell will divest its majority shareholding from a local South African downstream unit after a comprehensive review of its businesses across all regions, it said on Monday.

Read more
3 May 2024 13:47

British regulator awards more North Sea oil and gas licences

NSTA awards 31 new licences aimed at boosting output

*

Read more
2 May 2024 12:02

LONDON MARKET MIDDAY: FTSE 100 shines but "mixed feelings" after Fed

(Alliance News) - London's FTSE 100 was solidly higher on Thursday, outperforming European peers, as earnings from the likes of Shell and Standard Chartered impressed.

Read more
1 May 2024 18:30

Sector movers: Oil, Autos drag on FTSE 350

(Sharecast News) - Weakness in the oil patch and among select cyclicals dragged on the FTSE 350 in the middle of the week.

Read more
30 Apr 2024 14:38

UK earnings, trading statements calendar - next 7 days

Wednesday 1 May 
Anexo Group PLCFull Year Results
Cambridge Cognition Holdings PLCFull Year Results
Computacenter PLCTrading Statement
Georgia Capital PLCQ1 Results
GSK PLCQ1 Results
Haleon PLCTrading Statement
HSS Hire Group PLCFull Year Results
Intelligent Ultrasound Group PLCFull Year Results
Maintel Holdings PLCFull Year Results
Next PLCTrading Statement
Smith & Nephew PLCTrading Statement
Thursday 2 May 
Endeavour Mining PLCQ1 Results
First Tin PLCTrading Statement
Hiscox LtdTrading Statement
International Personal Finance PLCTrading Statement
Kerry Group PLCTrading Statement
Lancashire Holdings LtdTrading Statement
Melrose Industries PLCTrading Statement
NAHL Group PLCFull Year Results
Reach PLCTrading Statement
Shell PLCQ1 Results
Smiths News PLCHalf Year Results
Smurfit Kappa Group PLCTrading Statement
Spectris PLCTrading Statement
Standard Chartered PLCQ1 Results
TI Fluid Systems PLCQ1 Results
Friday 3 May 
InterContinental Hotels Group PLCTrading Statement
Mondi PLCTrading Statement
Trainline PLCFull Year Results
Monday 6 May 
no events scheduled 
Tuesday 7 May 
Arecor Therapeutics PLCFull Year Results
BP PLCQ1 Results
Ebiquity PLCFull Year Results
IWG PLCTrading Statement
Kosmos Energy LtdQ1 Results
MaxCyte IncQ1 Results
Trident Royalties PLCTrading Statement
Vaalco Energy IncQ1 Results
  
Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

Read more
29 Apr 2024 14:21

Norway's wealth fund falls short on climate ambitions, NGO says

OSLO, April 29 (Reuters) - Norway's $1.6 trillion sovereign wealth fund, the world's largest, is falling short on its climate ambitions by failing to back multiple shareholder proposals pushing oil companies to cut their greenhouse gas emissions, a non-governmental organization said in a report said on Monday.

Read more
24 Apr 2024 19:30

Trans Mountain oil shippers raise concerns about risk of delay to full service

April 23 (Reuters) - Some shippers on Canada's Trans Mountain expansion project are raising concerns that the long-delayed oil pipeline will not be fully in service by its projected start date of May 1, according to a letter to the Canada Energy Regulator on Tuesday.

Read more
24 Apr 2024 13:24

Pressure on gas and LNG prices to help switch from coal, says J.P. Morgan

LONDON, April 24 (Reuters) - Global natural gas prices will come under pressure through the end of the decade as supply and shipping infrastructure grow rapidly, particularly in Qatar and the U.S., J.P. Morgan said in a report.

Read more
24 Apr 2024 09:58

Aker BP Q1 beats forecast as costs fall, Tyrving to start sooner

OSLO, April 24 (Reuters) - Norwegian independent oil company Aker BP on Wednesday posted higher-than-expected net profit for the first quarter as costs fell, and said its Tyrving field development could start production sooner than previously planned.

Read more
24 Apr 2024 05:38

Aker BP Q1 beats forecast on record output, lower cost

OSLO, April 24 (Reuters) - Norwegian independent oil company Aker BP on Wednesday posted a higher-than-expected net profit for the first quarter as production hit a record while costs fell.

Read more

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.