CRITICAL ISSUES IN DRILLING & COMPLETIONS
Aker BP is working through its drilling alliance partners to invest in technologies
that can reduce emissions from rigs like the Maersk Invincible.
What are your key considerations
when deciding whether to invest in a
digital technology?
Everything we invest in needs a busi-
ness case. One challenge with digital is
how do you actually link it to what’s cre-
ating value for the company? We’ve been
working a lot on this and finding ways to
convert it to value for the company and
show why we’re investing in it.
But we’re also investing in what I call
leap of faith, where we invest in something
because we believe it is the right thing
to do. It’s not straightforward, but as we
mature on our digital journey, we are prov-
ing why we invested in a technology.
Another important thing when invest-
ing in digitalization is to define what we
call end-to-end solutions. I have spent a
lot of time putting Drilling & Wells into
the value creation of our company – what
kind of value do we actually bring to the
table? As long as we can say, this is the
part that we are going to digitize now
when we create that kind of value, we can
build a business case. But still there is a
leap of faith when you initially invest in it.
Do you find that it’s hard to integrate
new digital technologies into existing
workflows? 24
Yes, but we have been in a much bet-
ter place since we started focusing on
these end-to-end solutions. This means
our front-line workers are always part of
the development process. And every time
we put together a use case, we pick where
we’re going to use it upfront. We know
which team is going to get the technol-
ogy, so they are a part of developing the
solution. We don’t want to end up with a
solution and then you run around looking
for a problem. We have to know, what will
you use it for?
It’s been a few years since Aker BP
entered into alliance agreements with
Halliburton, Odfjell Drilling and what
was then Maersk and now Noble. Can
you talk about your considerations
when you were selecting alliance
partners and share any lessons
learned over the last few years?
We spent a lot of time in the beginning
making sure we picked the right alliance
partners. We were not necessarily focused
on the technical stuff but more on the
mindset and behavior of the organization
and the leadership. I wanted to see that
we can work together to create more value
for each company by establishing a deeper
and longer relationship. This was impor-
tant because more than 90% of the work
within Drilling & Wells is done by the sup-
pliers. My thinking is: They need to win if
we’re going to win.
What we’ve seen with the alliances is
they give each company more predict-
ability. For example, we give our alliance
partners full insights into our five-year
plans. For the drilling contractors, that
gives them much more predictability on
their rig schedules.
But alliances also require everyone
to do things very differently than what
you normally do when you go to the
market and act in a more transactional
way. Because you have long-term con-
tracts, you will shave off the peaks, but
you will also remove some of the depths
of the dips. You also have much more
continuous operations, so you eliminate
costs associated with learning curves,
start-stops and the frequent equipment
mobilization. By working together to reduce cost, we
have also opened up opportunities for new
work. As an example, we contracted the
Maersk Integrator back in 2018 for just
nine months, but we ended up having it for
five years because we were continuously
pushing cost down, so new opportunities
came up.
Aside from the drilling alliances, we
also have an intervention alliance with
SLB and Stimwell. In the Valhall area, we
have a lot of work on normally unmanned
installations, and we found that we were
spending a lot of time rigging up and rig-
ging down equipment for well interven-
tions. So we started running coiled tubing
from a jackup from Maersk. That was an
inter-alliance setup between Maersk and
SLB/Stimwell, and it was a great success
creating value for everybody and creating
new opportunities that we never thought
of a couple of years back.
Does something like that come as a
result of having an open mindset?
You have to listen, and you have to cre-
ate trust. Our contractors need to make
money. If you’re a contractor that is losing
money, there will be no trust and they’re
going to move out as soon as you can.
We’ve learned a lot from our alliances
over the past five years, and we’ve recently
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CRITICAL ISSUES IN DRILLING & COMPLETIONS
renewed both drilling alliances. We have
updated our contractual framework and
the commercial mechanisms for achiev-
ing mutual benefit. I think that will help
to drive cost even further down, because
we have insights to the risks that our sup-
pliers face, which we can help to mitigate.
That will help them to reduce their cost,
which then benefits us.
Do you see the current energy crisis,
especially in Europe, leading to any
changes in the way countries are
approaching the energy transition?
In some ways, yes. Before, the green
shift was everything people talked about,
and everything with oil and gas was bad.
But the situation we now find ourselves
in shows us that oil and gas is part of
the solution. It’s a part of the energy mix.
I now see more discussions around the
time needed for the transition, and what
is it going to cost? Before, the conversation
was always around how they need to shut
down all oil and gas tomorrow because
they’re making a green shift.
In my view, wind and solar will never
ever replace oil and gas because of the dif-
ferences in energy density. Nuclear power
plants may be part of the solution. Molten
salt reactors can be an example since they
have a much higher energy density than
solar and wind. But if you ask me what
time frame? I don’t know. I still believe
that oil and gas will be the most important
ingredients in the energy mix until at least
the late 2030s.
How do you view the investments that
drilling contractors have made in
emissions reduction technologies?
We have worked closely on that with
our drilling contractors as part of the
alliances, so we actually helped them to
invest in this. But I would say that what
we’re doing now are just stepping stones.
These include hybrid packages, flywheel
solutions and urea injection to reduce NOx
emissions. We have also done a lot of work on
changing the mindset of people – like
making sure the motorman knows he
should shut down a generator when it’s
not needed. I think we’ve achieved more
than a 20% reduction just by working with
people and changing behaviors.
But the question that I’m pondering is,
when do we bite the bullet and say we
need a different fuel than diesel? At Aker
BP, we’ve looked at ammonia, and we’re
going to try to run bio-methanol on a
jackup within the next year.
The biggest problem with alternative
fuels is that there’s no infrastructure
onshore to support it. That is starting to
change in Norway. We’re also working
with Odfjell on their offshore windmills
and potentially getting electricity down to
the subsea templates.
In short, emissions reduction is impor-
tant, and we are investing, but I think we
need another step change. Right now, Aker
BP is investing a lot on the production
side because it’s the production facilities
that are the big emitters. Drilling & Wells
is only about 10% of Aker BP’s emissions.
But once the production facilities are done,
we’ll be in the limelight, too, so we can’t
just sit and wait.
We are also working with suppliers on
four hotspots to reduce emissions: cas-
ing, cement, big-volume chemicals and
logistics. So we are doing what we can, but I
believe that within five to 10 years, we will
need to find a way to get to zero emissions
on drilling rigs. And what might get us
get there, particularly in Europe, is higher
carbon pricing. Right now the taxes as
alternative pricing makes it hard to create
a value stream on investing in technology
to reduce emissions. Sooner or later, there
will be heavier taxes on emissions, at least
in Europe. Then you can get enough of a
pricing system where you can invest in
new technology to reduce your emissions
because the alternative cost is high.
How do you view the industry’s chal-
lenges around people? A lot of com-
panies find it difficult to recruit young
talent. The worst thing we are doing as an
industry is how we promote ourselves.
When we talk about drilling, most often
you see a photo on a land rig that looks like
it’s 1950, with a roughneck covered in mud.
How appealing is that to new talent? How
about showing a photo of someone sitting
in a cyber chair or in a simulator at our
onshore collaboration center (OCC)? Show
them how we’re investing in ESG. Show
them what we’re doing in digital.
We also need to make sure that we are
developing engineers who are not working
what we call dead-end streets. We have to
show them that the technical know-how
they develop in our industry can be appli-
cable in other industries. That would help
to make us more attractive.
Personally, one of the things I’ve done
at Aker BP is to have very young people
run my rigs. Why? Because they think
differently, and they want to change. But
to do this, we need to create a safety net
around them so they don’t make the same
mistakes that the previous generations
have made. That’s why I involve the more
experienced people in early-phase plan-
ning and have them do risk mitigation
long before it hits the rig line. We’ve seen
our productivity increase quite a lot since
we did this; it’s really paying off.
The other thing is we need to create an
environment where people want to work.
I’ve been part of building onshore collabo-
ration centers before, but they’ve always
ended up being fancy meeting rooms. The
newest OCC we built at Aker BP has a
much more inviting atmosphere, where
people actually want to spend time in the
break room, where they can mingle and
get to know each other.
What innovations do you hope to see
around well completions?
First and foremost, we need to get elec-
tricity down to the sandface of the comple-
tions. If you think back to what I said ear-
lier about needing to do more with what
we already have, that means you need to
embrace challenges like water produc-
tion. Electricity will help, so we can put in
valves that can be manipulated.
Overall, cost needs to come down, so
you need to simplify where you can.
Aker BP has a stake in a company called
Fishbones. We invested in the company
simply because their technology allows
us to reduce our stimulation cost. It lowers
our cost of installation and reduces the
time to production. That’s the kind of tech-
nology we need so we can economically
drain smaller pools of oil. DC
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