The Energy Question Episode 57: Innovative Decarbonization Solutions for FPSOs

 

David Blackmon [00:00:03] Okay, guys, here we go. Hey, welcome to the energy question with David Blackmon. I’m your host, David Blackman. And with me today are two very special guests, Greg Trost, oil industry development manager for Rockwell Systems, and Matt Muhajir, digital program manager with SLB. Gentlemen, how are you today?

Greg Trostle [00:00:24] Very good. Thanks for having us.

Matt Mohajer [00:00:26] Thank you.

David Blackmon [00:00:27] Well, thank you for being here, Greg. And our viewers are key managers in a partnership between four technology companies Rockwell, SLB, Cynthia LLP, and Cognizant to develop digital solutions designed to help decarbonize. FPSOs are floating production, storage, and offloading facilities.

David Blackmon [00:00:48] And if you’re not familiar with what those are, these are giant, highly complex floating facilities that play a major role in the development of offshore oil and gas resources all over the world, with the offshore provinces like West Africa, Guyana and Suriname, Brazil and even the Gulf of Mexico in a growing boom status right now, as the industry tries to develop new resources to meet global demand, which keeps rising the decarbonization of these big platforms, it has become a higher priority.

David Blackmon [00:01:23] So these four companies are engaged in a consortium to collaborate, to develop these solutions, to improve, improve the reliability, availability, safety, and efficiency of these critical assets. So, guys, thank you again for being here. Let’s get this discussion going first for Matt. Let’s talk about how this partnership came about. You know, because we don’t see this a lot for different technology companies collaborating in this way on a major project like this. So did it take a long time to reach an agreement on how to move ahead with this project?

Matt Mohajer [00:02:03] Yeah. Thanks, David. Yeah, absolutely. I mean, as you just mentioned, if you so the market has been always a sizable market within the energy sector, but currently this market is going through a lot, you know, quite a bit of an unprecedented expansion.

David Blackmon [00:02:23] Yeah.

Matt Mohajer [00:02:24] And there is a lot of, you know, surge in the construction and also the operation of this. Yeah. So and as you also know, this is a long-term commitment. Most of these sources remain in operation for a few decades and they play a major role in the industry. Having said that, they are quite complex, they’re very dynamic. So, you know, it takes quite a few moving parts to come together to make sure they work efficiently.

Matt Mohajer [00:02:52] So that was the reasoning behind forming this coalition across, as you mentioned, Sentia coordinates Rock Road and SLB. And as you can also imagine, it takes a bit of time to make sure we are all aligned and committed to going forward. Everyone was so excited from day one, but it was probably a couple of years before the official announcement and it’s just just past me in Houston. And to give you a bit of a flavor of, you know, what’s this about and why these four companies. Right.

Matt Mohajer [00:03:25] And as you know, Rockwell is known or synonymous with automation across many industries. And also they have quite a bit of extensive expertise in overall power systems and within the context of FTA. So they are the leading OEM module of automation. So they bring a lot of expertise across automation, but also specifically around here. So Sentia, which is actually a joint venture between SLB and Rockwell, was created specifically to unify the concept of sensing intelligence and action within the oil and gas facilities.

Matt Mohajer [00:04:10] So as you can imagine, there is a lot going on there and obviously collecting more data, making our system smarter, and also taking action. So that’s the contribution of Sentia to this coalition cognate, which is actually a partner with both SLB and Rockwell separately. So they are known for empowering companies with the contextualization of the data, making sure the data is always available, and trustworthy, and actually making sure that unites the engineering type of data i.t and operation data into one system to make sure that actually, the entire system works together.

Matt Mohajer [00:04:51] And lastly, and hopefully not the least, SLB brings the fun foundation of their production expertise. They know how of the operation and also manufacture a lot of equipment that actually did go on. This is so and on the top of that, you know, brings a bit of expertise from the subsurface subsea and making sure not only while we are focusing on the top side and so but we take to icon what’s happening upstream up there. So and overall we are super excited to come together. As you mentioned, there are not a lot of examples like this in our industry, but I think we are very happy to be one of the very first few to make this happen. I think actually we do need more of this collaboration to make the industry a lot more efficient and actually make sure our customer performs to the maximum. I’ll stop here.

David Blackmon [00:05:43]  So yeah, I mean, throughout the whole energy space, you have these incredibly complex systems. So I agree with you. You know, when I saw the announcement of this partnership, I thought, man, this is the kind of thing that’s probably going to have to happen, you know, more and more as time goes along in the energy space. So Greg, I mean, obviously, each company has its own as we just heard from Matt, each area of expertise and you know it was going to be you know focusing on specific aspects of this overall integration project. But is one company going to be taking the lead on the global integration?

Greg Trostle [00:06:24] Yeah, I think the idea is that as we go through this digitalization evolution within the industry, we have to have the experiences and the expertise come from so many different directions to make sure that the systems are implemented correctly, that we get the right solution mix. The short answer to your question is it will depend on the situation as to which company of the coalition might take the lead for different phases of the project or different projects of their own. But ultimately the plan is that we will use the resources and expertise from the entire coalition to get that done.

Greg Trostle [00:07:08] And one of the interesting aspects of the Coalition as well that I think is really important is that we talk about openness of the coalition a lot and really there’s kind of two main areas of openness that we mean. The first is that the coalition itself is not meant to be a static group of four or companies, right? We would openly welcome the involvement of other companies and other folks that have expertise in different areas to join and again, to kind of create that sense of a vision that we’re bringing to life within an FPSO, with a second meaning of openness is technically from within the architecture and automation itself is that we want to advance and adopt and promote the open movements within automation so that there aren’t these proprietary closed systems.

Greg Trostle [00:08:04] You’re not locked into a vendor or supplier for the 25-year life of a vessel, and you have to do whatever they tell you. No, it shouldn’t be that way. It should be much more open. We should be able to communicate between systems a lot easier. And so I think that the openness concept is important on both levels. And for us as a coalition, it’s really all around, and especially when we’re talking about digitalization, it’s around the flow of data, the easy flow of data that the best use of that data.

Greg Trostle [00:08:39] And so that’s why companies like Sentia and Cognate are so important to the coalition because they bring in that area of expertise. In addition, of course, to what SLB develops, what Rockwell develops, so that that area of data is really, really important. But we’re not at promoting the idea of a data reconstruction project that takes years and thousands and thousands of hours. Right. What we’re talking about is the implementation of an architecture that allows for quick implementation of digital solutions that we have a handle on the data pretty much immediately we know what to do with it. If there are gaps, of course, that has to be addressed. But we’re looking to make it easy and quick to adopt digital solutions.

Greg Trostle [00:09:30] And really we’re focused on kind of three main pillars for that, for those solutions. It’s around the project design and construction phase of a new vessel. It’s around the operation, the operational life of the vessel itself. Matt mentioned 20, 25, or 30 years of operation, and that applies to new projects as well as to the existing fleet. And then around and then specifically around sustainability. What are the sustainability applications that are best promoted within an RFP? So and those those sustainability pieces can apply both to the project and to the operations. So and so it’s kind of we’ve built everything kind of around those three pillars.

David Blackmon [00:10:15] So Matt. I mean, you know what some people are going to ask and you probably have been already asked this question since it’s been a couple of months since said she made the announcement of this project. We’re talking about a big major project here that’s focused on these efforts to try to lower emissions from a pretty discrete set. I mean, there are a lot of episodes around the world, but it’s a pretty discrete subset of the overall picture. And, you know, just, you know, how big can the carbon footprint print be from these facilities like this? So what do you say to people when they ask you, well, why such a big project focused on this aspect of the industry?

Matt Mohajer [00:11:00] No, David, you’re right. I mean, that’s a very much asked question, a very valid question. As Greg just mentioned, I mean, within the context of circulation, we are focused on three pillars. One is on the project cycle. One is an operation and one is the sustainability and sustainability which goes across the other two. Right.

Matt Mohajer [00:11:22] There is a big underlay sub-project for carbon footprint emission. So from if you zoom out, yes, the estimates are around like if you so market probably is around 4% contribution toward the global upstream oil and gas emission. So it’s a small percentage in that sense. But within this context, there is not a small percentage, right?

Matt Mohajer [00:11:46] So it’s important to be tackled and all the coalition parties are very committed to reducing or minimizing this as much as possible. And to the point for some of the new ones, we probably we are even discussing the options for no flaring at all. And there are a lot of new technological advances in how much work we can do remotely. So less travel, less footprint, and leveraging the resources globally.

Matt Mohajer [00:12:14] So there is a lot more than just the carbon footprint, but carbon footprint is a very important part of this. And also, again, as I mentioned at the beginning, there is not a small percentage here, right? So any carbon footprint is big and needs to be delivered. Right. Within a while, I’m talking about this subject and within the context of sustainability. Right.

Matt Mohajer [00:12:34] Obviously, one is reducing our footprint. One is doing more remotely, which has also not only efficiency but also the notion of, you know, reduction on the footprint. There is a lot we are looking into regarding the detail of the water and chemical management aspect of this. So as you know, these are vessels that are in operation for a long time. They have access to a lot of water uses. They are their requirement is water. So water management is a very important part of that. So we are looking into the detail of that. As I mentioned, flaring is also another pillar of this which directly has an impact on the carbon footprint. So and as we go forward, I’m pretty sure there would be a lot more clarity on what is the sustainability within this context and what it really means for not only us within the partner’s ship of this coalition, but also for our customer and the industry as a whole?

David Blackmon [00:13:29] Greg, You know what it is? Again, there’s a limited number of these things, but is the is fleet increasing, has it been increasing in recent years? And do we think it’ll continue in that direction going forward?

Greg Trostle [00:13:44] Yeah, our research I think the industry research is showing that the FPSO market is really the hottest area of oil and gas development right now, certainly offshore oil and gas development. If you think about an existing fleet of upwards of 200 vessels that are active, you know, some are always down for four different time periods but say roughly 200 active vessels, we’ve got at least 20, a little bit more than 20 that are 20 projects that are in development right now. If we take a snapshot of where we are today and the estimates are 30, 40, 50 new vessels by the end of the decade.

Greg Trostle [00:14:27] So we’re talking about, you know, a 30% increase in the worldwide fleet. Just from that little snapshot and it kind of ties into what Matt was saying around emissions is that, yeah, even if it’s just 4% of the total, well, it’s about to be more than that just because more vessels are coming online. And what can we do to make the new vessels as clean and emission-free as possible? And what can we do to retrofit the existing 200? To make them operate cleaner.

Greg Trostle [00:15:00] And, you know, we get the question a lot to read. You know, why all the attention is on oil and gas? I thought that that industry is dying. Right. Well, I think the from the U.S. market. That’s right. It’s definitely not dying. And we know we’ve got fossil fuels around for however many decades you want to argue. And so the point is still the same. If they’re going to be around in their part of the energy transition mix anyway, which of course they’re going to be, then, then let’s do our best to make them as clean and clean as possible. So that’s really what we’re focused on.

David Blackmon [00:15:38] Yeah. Just as an aside for viewers, I interviewed the CEO of one of the big offshore drilling companies last week, and not for this podcast, but just a standard interview. And I mean, he said, look, we think we’re going to be a growing business in 2050. Yeah. You know, so, I mean, the companies are not planning to be out of business in ten years. I guess it is the point.

Greg Trostle [00:16:04] This is despite what you may read here. Right.

David Blackmon [00:16:06] Right. And just as a point of curiosity for my benefit, where are these things being built? Right. Where are the facilities where these enormous pieces I mean, these vessels are being built? Is it in Singapore or I mean, obviously, they’re probably not being built in the United States, right?

Greg Trostle [00:16:28] Yeah, that’s right. It’s very much a global industry. I think you mentioned the in the intro, you know, there are certainly the hottest spots where they’re being implemented, right? Where the final destination is. And of course, it’s enough to know. Right. It doesn’t have to be a final destination. You can move it around if you want to. But the big spot, 40% of the market is Brazil. But then if you look outside of Brazil, we’ve seen a significant interest and development in Guyana and Suriname.

Greg Trostle [00:16:59] In South America, you slide over and you look at the west coast of Africa. It’s going to be certainly a very key area of development and expansion for FPSOs, even the east side of Africa, depending on what they decide to do with the gas on that side. Asia Pacific has always been a pretty strong market offshore Australia and then you have little pieces of growth. If you look at the North Sea and maybe even the North Atlantic when it comes to building the vessels predominantly dominated by the Asia-Pacific region. You’re looking at Singapore, Korea, and China as the major construction zones, I guess for these things. And of course these days, you know, we’re talking about each asset now is upwards of $3 billion. Right. These are not small projects.

David Blackmon [00:17:47] So it’s like building a new refinery almost.

Greg Trostle [00:17:51] It is, yeah.

David Blackmon [00:17:54] So, you know, one of the questions that occur to me, Matt, is that you know, you’re working on these developing these solutions for this specific, you know, part of the energy business. But I’m assuming a lot of the applications you guys are going to be working on in this project will have applicability to other industries in other parts of the business sector, right?

Matt Mohajer [00:18:16] Absolutely. David, as we discussed so far, these are you can consider them like a floating facility. Right. So if you come with that in mind, then there are a lot of solution workflows that are common that are applicable for any sort of topside facility. So to name a few. Right. So for example, one of the key and probably the hottest topics the in our industry is asset performance management, how that’s being paired with digital twin and how that impacts not only the equipment, health and reliability, and availability, but also looking at the overall system and system optimization, overall throughput optimization.

Matt Mohajer [00:18:57] So from that sense, you know, some of this process equipment that they go on to FDA so are very similar to the one that they are actually on land or on a different type of topside facility. So once again, from the OEM perspective, when we create, you know, those algorithms to look to the equipment, health, and uptime and are very applicable across the industry between different types of the top site, for example, another example is, you know, remote operation, the concept of remote operation. And these days, more and more autonomous operation is been in our industry for decades, right?

Matt Mohajer [00:19:38] So there are a lot of remote operation centers being built and that they are centrally located looking at different assets. And in this case, you know, this so could be seen as one that is being remotely not only operated but actually interacted with. Right. And there is a lot of requirement coming from our customers that there are actually some of these new vessels or the vessel of future and no personnel on board. Right. That’s during the normal operating condition. No personnel onboard. Right.

Matt Mohajer [00:20:10] So that’s very similar to land facility or topside facility where we want to actually operate externally. Having said that, there are a lot of things that are very unique to the office. So and we are taking that in mind. There is a certain condition that needs to be met and there is not always a, you know, a secure connectivity. So there is a lot of, you know, in terms of the data transmission, etc. So yes, for most of those applications that we are working on, they are very applicable across the different types of topside. But at the same time, we are making sure they are very much addressing the needs of their folks on the challenges around it. So and from a design perspective, sustainability and also operation.

David Blackmon [00:20:58] So we’ve mentioned Brazil a couple of times here in this interview and I know, Matt, that SLB was just awarded a contract with Petrobras, a very important contract with them as well. Talk about that.

Matt Mohajer [00:21:13] Absolutely. I mean, they are so excited about this. This was announced late last year or awarded late last year, announced early this year. This is a contract that actually we are working very closely with Petrobras to develop and implement a control system and a dynamic process simulation solution for them. And this is very much around a multipurpose dynamics simulation solution, which is very much into, you know, collaboration with one of the key members of the coalition, which is NCR, especially Rockwell. But also, as Greg mentioned, that, you know, our coalition is open for this specific requirement.

Matt Mohajer [00:22:00] We work very closely with another company called in process and leveraging their expertise within this topic. Long story short, this is we are looking at, you know, how we are leveraging original equipment manufacturer, OEM expertise, and offshore know-how, pairing that with, you know, the digital twin and a capability in terms of the operator changing simulation and control that different parts it brings to the air to a specific project to form a kind of an immersive digital twin environment where we can look at the dynamical challenges of this overall RFP. So we are quite excited about this opportunity and the work is just started.

David Blackmon [00:22:46] And there’s so much going on. There’s just so much I can’t keep up, I really can. It’s crazy. And we talk. About some of the high growth areas around the world for FPSOs. But I just wonder, you know, are there other areas that we haven’t talked about? I mean, we mentioned Brazil and, you know, the northern coast of South America. West Coast.

Greg Trostle [00:23:09] Yeah. David, I think part of the answer is in addition to kind of where the, where the vessels are put into production and where they’re built. It’s such an international market because if you think about where all of the production modules are built, that’s really all over the world, including North America and Europe. If you look at the different key systems, whether it be automation or power or whatever the systems might be. Again, those are kind of produced by experts all over the world.

Greg Trostle [00:23:47] So it does tend to be a very very international business. And that’s why, you know, it’s important to have companies involved in the coalition that have a lot of international reach. And we have, you know, combined resources pretty much everywhere in the world to be able to work with any of the vendors, any of the suppliers and kind of, you know, kind of pull these global projects together. One of the important value proposition points that we bring as a coalition also is helping to standardize these projects when you have suppliers from all over the world.

Greg Trostle [00:24:28] It’s really important to get everyone using the same hardware and software for their individual modules because when these things are placed onto the top side of a vessel during the construction phase of the project, all these modules need to be able to talk to each other and to the main systems across the vessel. So we have a term for that that we call OEM, MCC, or OEM main automation contractor. And the idea there is that you have that consistency there so that when you get to the yard, everything plugs in place.  if you have to you know, the kind of the rule of thumb is, you know, if it costs a dollar to make a change in the engineering office, by the time you get to the field, it’s going to cost $10.

Greg Trostle [00:25:09] That same change, by the time you get the to the implementation site, it’s going to cost $100. So, you know, do what you can early during the engineering phase of the project, get that consistency in place so that it really helps keep the cost in the schedule down for the project and it helps up the startup. So yeah, international business, but you really need that, that consistency and standardization as well.

David Blackmon [00:25:36] Well, gentlemen, this is just fascinating to me. We’re running up against time. But before we close out, where can people go to find more information about this project just for the websites, for your companies? Or is there a central project website that they could find online?

Greg Trostle [00:25:54] So, David, we have a website that is SLB.com/FBA, so that’s a coalition website. So you will see a majority of the information there. Obviously, there is a link to all the partners of the Coalition website there. So you can find the right link to Rockville Cook Night and also sends you from there. There’s also a series of recordings, a lot of them as Greg and I, if the audience is not tired of us, they can go. I saw the other recording there as well. But also there are other experts across the different value chains of this. So they are discussing some of these topics. So probably that’s a good starting point. And of course, myself and Greg are available to be contacted as needed.

David Blackmon [00:26:43] Oh, man, you shouldn’t throw that out, boy.

Greg Trostle [00:26:47] I guess I accept most LinkedIn invitations.

David Blackmon [00:26:50] Yeah, we will include their personal phone numbers in the show notes. I’m kidding. I’m kidding. Anyway, guys, thank you so much. This has been great. I really look forward to following this project and the results you guys achieve for companies like this can’t help but have good results. And I really appreciate you taking the time to be with us today.

Greg Trostle [00:27:12] Thank you very much. That is.

David Blackmon [00:27:13] Great. Thank you. Thank you to our producer, Eric Parel of the Sandstone Group for hosting our podcast and to the U.S. Oil and Gas Association for being our sponsor on David Blackmon. And that is all for now.

 

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