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GE OIL & GAS Technology Solutions for the Seabed March 2016
GE OIL & GAS
Technology Solutions for the Seabed March 2016
© 2016 General Electric Company - All rights reserved
International Energy Agency Market Report - January 2015 EXXONMOBIL - The Outlook for Energy: A View to 2040
3B GROWTH IN
GLOBAL POPULATION BY 2050
65% GROWTH IN
GLOBAL GAS DEMAND FROM 2010 TO 2040
40+ YEAR AGING
INFRASTRUCTURE IN MANY MARKETS
50% OF DEMAND FOR
NATURAL GAS WILL BE
MET BY
LNG IMPORTS
OR LOCAL PRODUCTION OF UNCONVENTIONAL GAS BY 2040
GE OIL & GAS POSITIONED TO SUPPORT GLOBAL NEED FOR ENERGY
Global trends
© 2016 General Electric Company - All rights reserved
© 2016 General Electric Company - All rights reserved
RELIABILITY
Increase availability and longer asset life
COST REDUCTION
Lower operating costs with
greater efficiencies
RISK MITIGATION
Lower operations and
financial risk
PROFITABLE GROWTH
Increase production for
market advancement
Price Volatility
Workforce Turnover
Operational Islands
Safety Risks
Margin Productivity
Single Source of Truth
Talent Continuity
Risk Mitigation
TOUGH CHALLENGES
SO YOU NEED
TO HELP DRIVE:
How can you be operationally fit for $40/bbl?
3
© 2016 General Electric Company - All rights reserved
© 2015 General Electric Company - All rights reserved
4
Long-term industry fundamentals are solid
Tree awards profile
Brazil
Rest of the world
100%
80%
60%
40%
20%
0%
12 13 14 15E 16E 17E
Deepwater game changers
Front End Design Collaboration
Product Structuring
Standard ITP & materials
Supply Chain Efficiency
Enhanced Recovery
Life of Field Services
Source: Quest
Shale Heavy Oil Deepwater Conventional LNG
500
250
Pre sanctioned development pipelines. Source: IHS CERA, Citigroup, Rystad Energy, Jeffries, GE Analysis
IOCs heavily vested in offshore & subsea
GE Oil & Gas | June 2015 © 2015 General Electric Company
of future production additions expected from offshore and subsea >50%
Capex increases are driven by escalation in input cost prices and greater project complexity
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Annual capex1,2; USD bln
Project characteristics
Technical PM
Skills
31
Portfolio composition
2012 capex
132
Input prices
Raw Materials Labour
Local Content
40
5
Reserves under development3
3
2005 capex
59
1: Upstream development capex 2: BG, BP, Chevron, ConocoPhillips, Eni, ExxonMobil, Shell, Statoil, Total 3: 3-year average; 04-06, 11-13
Source: Wood Mackenzie; Company filings; McKinsey analysis
How to improve capital productivity
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Standardisation/modularisation
Design to value
Supplier ecosystem
Project management
Execution
insight
• Specification • Interfaces • Documentation
• Avoiding feature creep • Reduced R&D time and Investment • Work with customer to expand on pilot projects or not
• Performance management • Structure
• Supply chain processes
• Capabilities • Workforce availability
• Digital tools • Virtual environments
7
Example of effective modularisation
Backup Standardisation/modularisation
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Same technology applied in O&G can result in ~7x increase in engineering hours
Typical Mech Drive Scope
O&G Scope
Project Name Commercial Off The Shelf (COTS) UK IOC project
Scope 7EA GT Mechanical Drive - Flange to flange only
7EA Mechanical Drive Gas Turbine, Flange to Flange only
GT Base Hours 5,400 5,400
GT Special Adders hours 0 3,650
GT Special Adder Scope IECx Compliance (1700+), Pressure Vessel codes (1500+), CDM, Special Piping Reqs
P&W GT Total Project Hours 5,400 9,050
GE O&G Project Specific Adders -
28,000
Total Hours (1st Unit) 5,400 37,050
Excessive project specific customisation …
Backup
9
Typical Subsea Contract
280 Client Documents Presented for Review
175 Documents screened out as not relevant to trees / engineering scope.
105 Documents Subject to Detail Review
Reviewed by Project Engineering team with support from materials group on eleven documents.
63 documents classed as No comment/Info only.
42 Documents Commented
480 Comments and clarifications raised for PM action.
Approximately 4200 pages of detailed requirements reviewed 12 man weeks of engineering to
screen/review and compile comments
• A “typical” contract encompasses ~ 700 standards…
Contract Execution
Client assessment treat all components of equal importance
GE has ~100 inspection visits per week. Usually matched by clients Third Party Inspectors
Quality drivers increase part numbers, lead times, costs
Multiple requirements, quality inspected in …
Note: MRB – Master review Board
10
Aviation: Roles, practices & collaboration
Regulatory Bodies – FAA, EASA …
Harmonized Requirements
Airlines Airplane OEM’s Engine OEM’s Airline purchase a “standard” product with options and
standard interfaces
Airplane OEMs provide requirements,
weight, thrust, etc; interfaces agreed.
“Approves” design, manufacture, maintenance, operation. Does not tell the operators or OEM how to do it, sets requirements
Safety Bodies – CAST, NTSB, AAIB
Global data sharing – Industry and Regulators
Safety data shared to ensure continuous improvement in the industry. Trends support effectiveness of approach
Engine OEM’s design to their own “design practices” not industry standards. Industry data shared to ensure
continued improvement in reliability/safety.
Fewer
standards, set
by professional
engineering
bodies not
industry
participants
Designs certified
under previous
versions still
valid when new
revisions created
Note: FAA Federal Aviation Authority; EASA European Aviation Safety Agency; NTSB
National Transportation Safety Board; CAST (Commercial Aviation Safety Team; AAIB
Air Accidents Investigation Branch
Operator & contractor relationships: how can the supplier ecosystem be improved?
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Reliance on sub-contractors
Supply chain innovation
Planned innovation
Partnering for joint operations
• Natural evolution as industries mature • Slow adoption of increased contractor involvement in Oil & Gas
• Full engagement of suppliers at concept stage to allow innovation to be incorporated upfront
• Key advances in components from supply chain • Examples include aerospace, automotive, telephony (50% of Toyota
innovation from suppliers, e.g. ABS, Audio, GPS, heating seats…)
• Once demands are known, time from discovery to FID to execution allows fit for purpose technology development
• Remote monitoring of assets (e.g. jet engine in aviation) • Planning service requirements at beginning of field lifecycle • Incorporating field data to enhance future product design
Already present in O&G but maturity and implementation not to same
extent as other industries
The evolution of more than 50 years of increased oil recovery
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Challenging market dynamics for technology investment
Nr of subsea trees installed [Quest]
0
150
300
450
600
1960 1980 2000 2020
20 years to adopt
Subsea boosting is in tree year ~1981
0
50
100
150
0 10 20 30 40
Subsea boosting just reaching the
20 year mark
? Can we use the past to
predict the
future?
TURBO MACHINERY Pumps and compressor technology
SOFTWARE CENTER Smart BOP and advanced controls
MEASUREMENT & CONTROL Leak detection and multiphase flow measurement
HEALTHCARE Diagnostic software imaging
AVIATION Valve coatings and advanced materials
GLOBAL RESEARCH CENTER Flow assurance and advanced riser technology
ENERGY MANAGEMENT Power transmission and distribution
POWER & WATER Water injection and processing
USING THE ENTIRE COMPANY TOOLKIT … SOLUTIONS FOR CUSTOMERS
SUBSEA SYSTEMS Subsea production equipment and services
GE “Store” for Technology – a look at Subsea
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Major trends of the next industrial era
INDUSTRIAL INTERNET
ADVANCED MANUFACTURING
OPEN INNOVATION WITH CUSTOMERS AND COLLABORATION
ECOSYSTEM … TECHNOLOGY ACCELERATION
• Industrial data growing at 2x other data
• Most complex data set
• New paradigm = manufacturing technology + material innovation
• Digital thread
DOMAIN KNOWLEDGE
ADVANCED ANALYTICS
SOFTWARE PLATFORM
(PREDIX)
DESIGN INNOVATION
MANUFACTURING
INNOVATION MATERIALS
INNOVATION
OP
ER
AT
ION
AL
EX
CE
LLE
NC
E
© 2016 General Electric Company - All rights reserved
© 2015 General Electric Company - All rights reserved
