Resilience in the regionAugust 6, 2020
Ghassan Mirdad, president of the eastern Middle East region at Schlumberger, talks to The Energy Year about the resiliency of the Middle Eastern oil and gas industry and how digital technologies are being embraced during the Covid-19 crisis. Schlumberger provides technology for reservoir characterisation, drilling, production and processing to the oil and gas industry.
How have your activities been affected by the Covid-19 outbreak?
The market is still strong in the MEA region, despite Covid-19 making business more challenging. Independents and small players, in particular, have been significantly impacted. The common factor amongst oil and gas companies has been the strong actions taken to protect the health and safety of their employees, partners and contractors. Particularly, I need to commend the decisive actions taken in the UAE, where effective strategies were deployed quickly to balance the Covid-19 risk against the operations demand.
Inevitably, some projects and activities have been delayed; however, these projects and activities will soon be restarted with the positive results from the successful implementation of our Covid-19 business continuity plan in the UAE.
A strong example of the resilience in the region, and particularly in the UAE, is the recent announcement made by H.E. Dr. Sultan Ahmed Al Jaber, UAE minister of state and ADNOC group CEO, of the USD 20.7-billion pipeline deal. This announcement showcases the international confidence in the potential of the upstream oil and gas market in the UAE.
An example of resilience in the region can be seen in Iraq, with the recent commencement of drilling operations in the Majnoon project with Basra Oil Company (BOC). Initiated about two months ago, the project implementation phase presented significant challenges due to security restrictions in general, and the necessary Covid-19 control actions taken by the government. Despite these challenges, and in order to keep our personnel safe whilst meeting the BOC timeline, the team implemented a comprehensive logistics plan to mitigate the spread of the virus by creating a Covid-19 safe zone for Schlumberger operations within the Majnoon field.
How have E&P companies embraced digitalisation in the region?
The digital space is the future of the industry and that future is now. At Schlumberger, our ambition is to be the performance partner of choice for our customers and the industry. We believe that by focusing on performance, we can help usher in a new era for the energy industry.
Digital is key to make the leap in performance that our customers need to deliver energy in today’s competitive environment.
As an example, last month we took the lead on holding an online global conference for our customers and partners. This first-ever event was a true success, with thousands of virtual attendees from across the globe. We created a virtual environment that provided easy access and engagement with domain experts—including breakout rooms, live chat and technology launches.
This digital transition is happening now, and Schlumberger is best positioned to partner with our customers to leverage the opportunities and benefits associated with this transition.
More than a decade ago, we became the first to establish remote Operations Support Centers, which were used to manage rig operations and control drilling operations from the office, with the support of subject matter experts. These centres aided in reducing the number of workers required at a rig, thus minimising HSE exposure.
Customers’ adoption of digital technology and its applications varies, especially with some customers taking a conservative approach to embracing new ways of working. However, after the 2008 crisis – when a lot of experienced professionals retired – and then the boom that followed in 2011, many operators began to realise the value of digital and began implementing digital strategies of their own.
We can now drill more wells with a substantially reduced team of experts, while maintaining top-notch service delivery and operational integrity. Customers have seen the efficiency and the high level of support that the remote operations strategy enables for their drilling operations, in addition to other domains from reservoir characterisation to oil and gas production facilities.
While the US shale operators have traditionally led in this domain, especially considering that efficiency and cost reduction are key drivers, our region has now narrowed the gap with the US in terms of wells managed via remote operations. Today, approximately 50% of our directional drilling jobs in the UAE are performed using remote operations.
This demonstrates that customers in the UAE, specifically ADNOC, are open to digitalisation and embracing a new way of working. In Oman, we have even reached 60% of jobs performed via remote operations.
Of course, Covid-19 is accelerating the adoption of digital technologies.
Today, customers are more open to digital enablement as the business has become very competitive. With recent oil price fluctuations, companies want to be able to operate in the safest, most sustainable and cost-efficient means possible.
What kind of new data technologies has Schlumberger worked on?
We have developed the DELFI cognitive E&P environment, which is largely focused on the E&P value chain, and we are promptly accelerating the commercialisation of new digital solutions built within the DELFI environment – spanning exploration, development, and production from office to field operations – each of which leverages the scalability and cognitive features of the DELFI environment.
We are committed to promoting an open source data ecosystem to enable and accelerate industry adoption of game-changing digital technologies. In July 2019, we contributed all our work done in five years to set data standards for our DELFI environment, equivalent to 200 man years of development, to the Open Subsurface Data Universe (OSDU) Forum.
The OSDU, the industry first initiative, will help to drive a more connected, collaborative E&P industry built on shared ambitions.
We also recently launched the Gaia Exchange data marketplace. This is the industry’s first digital E&P data marketplace where technical entrepreneurs can build their company profile, create custom datasets, engage with potential customers and even collaborate with other content providers to co-develop data derivatives.
Powered by the DELFI cognitive E&P environment, the marketplace is open to content providers across all phases of exploration and production, without restriction or exclusivity
In 2019, Schlumberger announced the formation of the Sensia joint venture with Rockwell Automation. This joint venture represents the unification of sensing, intelligence and action. Sensia brings together the best of the best: the pioneering process automation, real-time control and IoT technologies of Rockwell Automation, combined with the unmatched measurement and instrumentation, software and analytics capabilities of Schlumberger. Sensia is further strengthened by the oil and gas domain expertise and artificial lift experience shared by Rockwell Automation and Schlumberger.
Sensia will play an important role in the digital transformation of our industry and create value for our customers through its comprehensive solution that can forecast, track, report, and resolve hydrocarbon production and transportation challenges.
Also launched this year is our Performance Live digitally connective service. Performance Live delivers remote operations as a full-service package, thus enabling operations to be performed from anywhere. As previously explained, internally we have greatly built upon our remote operations capabilities first introduced more than a decade ago, and now we are partnering with our customers to further enable remote operations, which is integral to ensuring business continuity through challenging times such as those we are encountering due to the global pandemic.
Another recent digitalisation milestone to highlight is smart rig technology, i.e. digital drilling, where we categorise and digitise all the movements that can happen on a rig. We have created thousands of profiles for every movement.
Today in North America land, we are drilling wells using the latest digital advances, including the DrillPlan coherent well construction planning solution and the DrillOps on-target well delivery solution, both of which reside within the DELFI E&P environment. These solutions deliver a step change in well construction by combining domain expertise and advanced digital technologies, thus enabling a new approach to drilling engineering and planning.
The DrillPlan solution guides collaboration and responsibilities across teams and drives planning procedural adherence. Additionally, DrillPlan offers an open environment that brings together all involved in drilling operations to ensure that all have access to the same information at the same time, which enables enhanced collaboration and decision-making.
With the DrillPlan solution, the latest drilling programme is always available in the cloud. Whether called up during a design review, team briefing, or on the drilling manager’s tablet on location, DrillPlan ensures all participants can collaborate with the most timely and consistent data available.
The DrillOps solution integrates planning and operations, while automating well construction tasks, to ensure the rig operates at peak performance throughout the execution of the drilling plan.
How has Schlumberger supported local content through hiring and training?
First of all, I am very proud to say that this year marks the 70th anniversary of Schlumberger in the UAE. Our anniversary is a clear statement of resilience and commitment. We are hoping to be able to celebrate this very important milestone with our employees and customers later this year when the health situation improves.
We have been in Iraq for 82 years, in Pakistan for 73 years and in Oman for 60 years. We consider ourselves more local than international in the places where we work. Engrained within our DNA is the drive to hire and develop talent from the communities in which we live and work. For example, our managing director for Oman – the highest management level within the country – is Omani.
Last year we signed a memorandum of understanding with H.E. Dr. Sultan Al Jaber of ADNOC to align their In-Country Value (ICV) programme with our hiring practices, which also highlights our ambition to hire 1,000 Emiratis within five years.
How are we going to do it? The recruiting, training and development of Schlumberger employees is a unique non-stop engine within our organisation, which is also facilitated through cross-training and multi-skilling underpinned by mobility. Our goal is to have more future leaders in Schlumberger who are Emiratis.
In addition, Cameron, a Schlumberger company, will build a state-of-the-art manufacturing centre in Abu Dhabi. This manufacturing centre will strongly support our goal of hiring 1,000 Emiratis, serving as a key catalyst to employ, train and develop local talent. Through this new centre, we will support and enable superior performance for ADNOC operations by elevating operational execution and efficiency through the deployment of new technologies and best practices.
This centre will manufacture, assemble, test and repair a full suite of Cameron oilfield equipment, designed to support ADNOC’s projects. Additionally, the facility is designed with inherent flexibility to meet ADNOC’s future needs, while increasing local content and Emiratisation.
In 2019, under the auspices of H.E. Dr. Mohammed bin Hamad Al Rumhy, the Omani minister of oil and gas, Schlumberger, in collaboration with Petroleum Development Oman, celebrated the inauguration of the state-of-the art Oman Assembly, Repair and Testing Centre in Nizwa. Operations at this new facility will include manufacturing of electric submersible pumps.
In line with the Schlumberger commitment to Omanisation, 80% of employees at the facility are Omani. The goal is for the centre to be 100% employed by Omanis within the coming years.
Do you see the current crisis affecting expertise?
We should not forget that with the last downturn, we lost a lot of people and expertise in the industry. And now, with the effect of Covid-19 on the entire industry, we are seeing more cuts. This will be a challenge.
When personal computers became commonplace, many assumed that people-run jobs would be displaced. This was largely untrue. And we believe the same today. In Schlumberger, we believe that our people are one of our greatest strengths, and that our people are essential to our business. With that said, this new environment and proliferation of digital capabilities will call on people to learn and/or evolve their skills and competencies.
In the past, where 10 drillers were required to drill 10 wells, today you can drill the same 10 wells with a fraction of the number of drillers. This comes down to having the right digital workflows, tools and expertise. However, the pendulum is moving towards having more data scientist and data analytics expertise, which is a new domain of growth in our industry.
The ability to train and develop the people will be even more critical in this context.
As a technology company, our success has been founded on our people and their technical knowledge. Consistently investing in training and development, we have matured our learning strategy over the years to adapt to a changing world and evolving technologies.
The ongoing crisis has challenged us and demonstrated that investing in learning and a new centralised model allowed us to continue developing capabilities under extreme circumstances. We accelerated the adoption of blended learning with robust virtual instructor-led training sessions. Going forward, our learning centres – like the one we have in Abu Dhabi – will continuously evolve as we adopt some of these virtual methodologies in our structured training programmes.
Going forward, how do you see the operating environment post-Covid-19 and the transition to a low-carbon economy?
In terms of decarbonisation, countries in this region are investing to be self-sufficient in gas to meet their industries’ requirements and growth. Also, we have seen important investments in renewables in the region. However, oil production will remain the key driver to keep societies moving in the near future.
With this in mind, a key step towards reducing our environmental footprint as an industry is to pursue more sustainable methods of oil and gas production, and specifically to minimise greenhouse gas emissions (GHG) associated with oil and gas production.
For Schlumberger, an example of this effort is the announcement we made in December of 2019, in which we became the first company in upstream E&P services to commit to science-based targets in emissions reduction. The target will align Schlumberger with the goals of the Paris Agreement to reduce climate change. Schlumberger’s commitment has been submitted to the Science Based Targets initiative (SBTi) and, in line with the defined criteria, Schlumberger will define its reduction target by 2021. This commitment is part of the company’s thought leadership and focus on environmental and social sustainability through its industry-leading Global Stewardship programme.
Schlumberger is committed to contributing to environmental stewardship ambitions of our industry and supporting our customers’ objectives towards environmental, social and governance (ESG) targets.
Accordingly, our CEO, Olivier Le Peuch, established The Schlumberger New Energy organisation in February 2020. This new organisation is responsible for the deployment of differentiated technologies and practices to decarbonise E&P operations as well as the development of new avenues of growth in emerging markets with carbon-neutral technologies.
To showcase how this plays out regionally, we have a few examples that we can highlight:
In Oman, Schlumberger developed a fit-for-basin solution for BP Oman to achieve a significant reduction in CO2 emissions and to clean up and produce gas from the Khazzan field after fracturing. In 2019, our solution was applied to 10 wells for flowback to clean up for production and reservoir testing. The result is a reduction in CO2 emissions of more than 80,000 tonnes, equivalent to removing 18,000 cars from the road for one year.
In the UAE, the Schlumberger team created a solution to reduce the emissions of our wireline logging trucks. This new design eliminates the continuous requirement of a six-cylinder diesel engine in the standard logging truck and replaces it with a uniquely designed electric motor. This electric motor is still able to provide the required high power for production logging operations but eliminates the CO2 emissions from our standard diesel engines. This has reduced the total CO2 emissions of our production logging trucks by 60%. This solution was done locally, contributing to our ICV as all parts were sourced locally.
Also, we are working with our suppliers to do replacement by solar power for all the electrical requirements in our facilities.