Interview: BP leveraging digital pathways to improve efficiencies

BP is harnessing digital technologies to improve efficiencies and drive down costs across its upstream and downstream divisions, according to David Eyton, group head of technology at the oil and gas giant.

With the oil price having plummeted by over 45% since June 2014, using Brent as the global proxy benchmark, and BP preparing itself to handle an average price level of $60 a barrel for the next two to three fiscal years; the company is stepping up the deployment of its innovative solutions – including a “digital oilfield” concept.

Speaking exclusively to Sharecast, Eyton said digital deployment is part of a progressive journey. “Cost is ‘a’ driver, not the only driver. Our journey might be coming through to fruition during a leaner period for our industry, but its 25 years in the making. The digital solutions you see deployed at the moment were conceived in 2000, and have undergone 15 years of improvement, enhancement and remodelling.”

BP has invested heavily in fibre communications and established what it calls “Advanced Collaborative Environments”; monitoring centres based onshore that enable experts to work directly with offshore operators using real-time information.

The company is using sophisticated 4D seismic imaging to find oil and gas in remote locations and, once in production, track movement through reservoir formations over time. Eyton, a civil engineer by qualification who has held several upstream division roles within BP, said the oil major had reached a point where considering whether to drill or not was inconceivable without digital tools.

“Digital has been a massive enabler for our business. Seismic has been the subject of better and better computing, analogue traces going digital representing the march forward of computing power. It would be fair to say that when we began that journey, we did not imagine the time and cost savings we make right now.”

While Eyton would not comment on the direction of the oil price, the tools at BP’s disposal are very “helpful whatever the circumstances”.

“I would attach a caveat. Efficiencies are the critical point in technology but it is worth saying that our company is fairly routed in physical things. That’s the nature of hydrocarbon delivery. We’re not Google for instance where concept and product delivery are both digital. For us, it’s about harnessing technology to our advantage.”

To provide context, Eyton flagged up Valhall, an oilfield in the North Sea, where BP shot its first ever 4D seismic imagery. “We got perhaps one of the most accurate measurements of fluid flow. It was a great experiment, and now the technique is being regularly deployed in the Gulf of Mexico towards lowering costs and improving operations (For example at the Mad Dog off-shore oilfield).”

Sensor technology is also improving, according to Eyton, and the cost of digital itself is expected to come down. “It has only been 10-15 years since we’ve had sensors capable to reliably operating at depths of 30,000 feet; a pretty hostile environment in terms of pressures and climate.”

“Now the costs will start coming down. Sensors which cost $1,000 could over the medium-term be priced as low as $10.”

An efficiency drive within the industry does not need an oil price decline, Eyton opined, adding that it was a one way street to progress. “In 2013 [with higher oil prices], we did a review of digital technology, and actually one of the things that came out was the seemingly extraordinary potential of digital technologies to enhance revenues and reduce costs.”

The seriousness with which BP views the drive is demonstrated by the fact it has spent close to two-thirds of a billion dollars towards research and development, and nearly just as much towards deployment across new prospects and mature gas and oilfields.

And the next challenge? “Making sure every department can leverage the technology rather than just upstream or one division or the other. Upstream end of the technology is predominantly differentiated around sub-surface technologies.

“In downstream, it ranges from chemical formulations and conversions to drones inspecting pipeline infrastructure. At the end of the day, digital solutions nearly always drive efficiencies. I am quietly confident we are ahead of the pack in that respect.”

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