Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.

Less Ads, More Data, More Tools Register for FREE
Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO
Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPOView Video
Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant
Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plantView Video

Latest Share Chat

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: 500.40
Bid: 500.30
Ask: 500.50
Change: -10.00 (-1.96%)
Spread: 0.20 (0.04%)
Open: 506.40
High: 515.30
Low: 499.60
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
14 Mar 2024 10:19

BP picks up Ashford site to boost electric charging scope for trucks

(Alliance News) - BP PLC on Thursday stepped up plans to increase its electric charging capacity for heavy goods vehicles by buying one of the largest truck stops in Europe.

Read more
8 Mar 2024 13:42

BP appoints Aviva boss Amanda Blanc as senior independent director

(Sharecast News) - Oil giant BP said on Friday that it has appointed Aviva chief executive Amanda Blanc as senior independent director with effect from after the annual meeting on 25 April.

Read more
8 Mar 2024 12:20

IN BRIEF: BP promotes Aviva chief executive officer to senior director

BP PLC - London-based oil major - Non-Executive Director Amanda Blanc will be appointed as a senior independent director, effective from April 25 at the conclusion of BP's annual general meeting. Blanc joined BP's board in September 2022. She has been group chief executive officer of Aviva PLC since July 2020. Company also says Senior Independent Director Paula Reynolds will retire at the AGM's conclusion, having served on the board for nine years. Non-Executive Director John Sawers will also be retiring.

Read more
8 Mar 2024 10:33

BP pays Auchincloss £8m in 2023, claws back £1.8m from Looney

(Sharecast News) - BP chief executive officer Martin Auchincloss was paid £8m for his services in a particularly prosperous year, it was revealed on Friday, as it managed to claw back a further £1.8m from its former head Bernard Looney.

Read more
4 Mar 2024 15:29

London close: Stocks languish ahead of Wednesday's Budget

(Sharecast News) - London's stock markets finished in the red on Monday, reflecting investor apprehension ahead of the impending Spring Budget.

Read more
4 Mar 2024 10:43

Jefferies upgrades BP to 'buy'

(Sharecast News) - Jefferies upgraded BP on Monday to 'buy' from 'hold' and lifted the price target to 570p from 520p.

Read more
4 Mar 2024 08:59

LONDON BROKER RATINGS: Jefferies says buy BP; UBS says buy Compass

(Alliance News) - The following London-listed shares received analyst recommendations Monday morning:

Read more
4 Mar 2024 08:55

LONDON MARKET OPEN: Review cuts Hipgnosis Songs Fund valuation

(Alliance News) - Stock prices in London opened mostly lower on Monday, as investor attention remained primarily on the release of the UK Spring budget on Wednesday.

Read more
4 Mar 2024 07:41

LONDON BRIEFING: Stocks called down; attention on UK's spring budget

(Alliance News) - Stocks in London are called to open lower, ahead of a busy week of economic news.

Read more
22 Feb 2024 09:49

LONDON BROKER RATINGS: Berenberg raises Moneysupermarket.com to 'buy'

(Alliance News) - The following London-listed shares received analyst recommendations Thursday morning and Wednesday:

Read more
15 Feb 2024 16:52

LONDON MARKET CLOSE: Stocks in green despite UK hit by recession

(Alliance News) - Stock prices in London closed higher on Thursday, after data showed that the UK economy slipped into recession in the final quarter of 2023, buoying hopes for interest rate cuts from the Bank of England.

Read more
15 Feb 2024 14:55

London close: Stocks manage gains despite UK recession news

(Sharecast News) - London markets had a mixed but ultimately positive day of trading on Thursday, despite news that the UK fell into a technical recession at the end of 2023.

Read more
15 Feb 2024 12:02

LONDON MARKET MIDDAY: FTSE 100 flat as strong start fades

(Alliance News) - The FTSE 100 tread water on Thursday afternoon, as share price declines for some of London's heavyweights offset a strong start for the index, which got a boost from Bank of England rate cut hopes.

Read more
15 Feb 2024 09:17

BP hails arrival of LNG vessel at project off Senegal and Mauritania

(Alliance News) - BP PLC on Thursday celebrated the arrival of a gas vessel offshore west Africa, which it called a "major milestone" for its project there.

Read more
14 Feb 2024 12:01

BP and Adnoc form gas joint venture in Egypt to boost capabilities

(Alliance News) - BP PLC on Wednesday said it will form a joint venture with Abu Dhabi National Oil Co in Egypt, under which BP will contribute its interests in three development concessions.

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.