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Industry Looks To Technology To Solve Offshore Drilling Woes

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When a pipe gets clogged under 1,000 feet of water, things quickly get expensive.

Drillers can’t tell exactly where the pipe is blocked or what’s stopping the flow of oil and gas, which makes it difficult to come up with a fix. And shutting down to find out can mean halting production – a costly move for producers already hurt by low oil and gas prices.

Enter Tracerco, a British company that invented a 4-foot ring containing a scanner that clamps on the outside of the pipe and provides an image of what’s going on inside. Introduced in 2014, the undersea MRI is already keeping pipes flowing in the Gulf of Mexico.

Tracero’s device is just one of many new technologies showcased at this week’s Offshore Technology Conference as oil and gas companies seek new ways to become more efficient, cut expenses, and compete with lower-cost shale drillers during a period of cheap oil and gas.

The oil industry – both onshore and offshore – cut spending by $220 billion last year and is projected to slice another $139 billion this year, according to Lars Eirik Nicolaisen, a partner at consultancy Rystad Energy in Oslo.

Offshore drilling has taken the hardest hits. Only 24 rigs were at work in the Gulf of Mexico last week, according to oil service company Baker Hughes, down from 33 in the same week last year. Further declines are expected.

The offshore industry needs oil prices to rise to $50 a barrel to make money, said Martijn Dekker, a vice president with global oil energy company Royal Dutch Shell. But with prices hovering between $40 and $45 a barrel recently, Dekker said, “we probably want to go lower,” he said.

Closing that gap means lowering the costs of drilling. And many companies view technology as the way to get there.

Nearly three out of four OTC attendees considered technology issues as the most pressing facing the industry, according to a survey by British business services group Lloyd’s Register. Those priorities were reflected in booths in the exhibit halls. Most featured large digital displays. The hottest new gadget: virtual reality goggles.

“It’s a natural evolution,” OTC chairman Joe Fowler said. “It’s kind of like how we didn’t use to do email or texting. Those are much more efficient than calling on the phone and leaving a message.”

Not all of the high-tech gadgets were small, though. At GE Oil & Gas, a manufacturer of high-tech equipment for undersea drillers, engineers won recognition from OTC for a new undersea control system. The control system, about 20 feet high, is a collection of valves and levers that regulate fluids that flow through the blowout preventer and other equipment stacked on the sea floor.

Traditionally, these control valves are a cash-consuming problem for producers. When they fail, they have to be pulled to the surface, bringing production to a halt. The cost of a repair can be as much as $10 million in downtime and other expenses, money that offshore drillers can ill afford to spend when oil prices are so low.

GE’s engineers attacked the problem by building backups into the system, so if one value stops working, another takes over so the control system doesn’t have to be pulled to the surface, said David Kindt, an engineer at GE Oil & Gas. The controls they’ve designed fail only one-third as often as the industry average, Kindt said.

“We’re trying to reduce downtime as much as possible,” he said, to save offshore producers time and money.


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