Baker Hughes, a GE company (BHGE) has introduced a new approach to subsea development, called Subsea Connect. This includes new lightweight, modular technologies as part of its Aptara TOTEX-lite subsea system. These technologies are designed for the full life of field, allowing operators to make changes to their infrastructure across the full life of field.
BHGE claims Subsea Connect can reduce the economic development point of subsea projects by 30% and potentially unlock an additional 16 billion barrels of reserves globally.
Molly Lempriere: What do you think changed in the industry and how is that affecting partnerships?
John Kerr: The industry has changed over the past few years. Typically the industry’s roles were in three lumpy vertical type deals, which was OEM (original equipment manufacturer), OFS (oilfield services), as well as SURF (subsea umbilicals, risers and flowlines). Now the edges are greyed, starting in 2013/14 when downsizing forced companies to come together.
We’ve seen with ourselves, as well as other companies such as Schlumberger and One Subsea, that mix of the OEM and OFS company emerging. You’ve also seen other elements where companies have merged with the SURF side, so all the traditional verticals have greyed.
Lots has changed in the supply of services and hardware, and a healthy dimension of change has taken place from the buying community. I think we’re now seeing some results that show that that’s working; the needle has shifted on the economics of fuel development, and that doesn’t turn by itself – that comes with a significant cost reduction and a way of doing things differently.
I’ve been in this industry for 33/34 years, all of it in subsea and all of it in engineering technology, and if I look at that span in totality, that needle has moved more in the last two or three years than it’s done in the last 30. Before the last two or three years, it was just different iterations of the same things. That’s kind of interesting, kind of scary for some, for many, but because it’s moving at quite a pace. I think we’re positioned very strongly.
ML: Do you think technology has been instrumental to making this change?
JK: Yes, I do. I think we’re seeing some quite rapid evolutionary steps taking place in a number of fields. I think the commercial side has contemporised very quickly indeed, project engagement and execution has contemporised very quickly, and technology has played a massive part of that. That’s where Aptara comes in. By nature of its design, Aptara reduces not only the initial purchase cost but also the life of field ownership cost, and that’s when you see the modularity of what we’re calling the tree caps, where you can commit to buying the base unit but you don’t have to commit through life to bolt on HIPPS systems (high integrity pipeline protection system), or pumping systems, etc.
By just changing out the top portion, the top 10%-15% in physical terms of the hardware, it’s a different way of owning and delivering technology solutions, a shift beyond the traditional CAPEX/OPEX lens. It’s actually forced us to look at a lot of the traditional legacy design principles that we’ve held dear for so long; it’s almost that case of ask yourself when you’re pointing your finger at any components that you design, the robustness of the five why’s – if you can still answer a good question after asking ‘why’ five times then keep it, if not, get rid of it. Doing that allows us to take out huge amounts of weight, it makes things much more simple, we also have a huge investment in technology that’s allowed us to move away from engineering to order to manufacture or configure to order type deals, again helping us really change the way that we define success.
ML: How did Subsea Connect come about?
JK: We’re thinking about a number of things differently as an organisation; one of course is the way that we engage across the lifecycle. The other is how we think about products and services, the two or three decades old model is that it is one or the other, but now we’re seeing those things intermingled. It’s now combined with other elements, such as different ways of partnering, different ways of introducing commercial models, where again we find ourselves wanting to be much more embedded and connected. So product talk ultimately becomes a means to an end as opposed to how we physically link it.
Subsea Connect really covers a broad space, it’s not a prescriptive ‘one package fits all’ type of deal. It’s designed to be a flexible environment covering everything from hardware technology, service offering, commerciality and life-of-field service and everything in between. Depending on how the customers wish to operate and where they wish to operate, we will partner with them, at the earliest opportunity, to package a solution to suit.
ML: Can shifting to a modular approach affect the safety of the products?
JK: Firstly it doesn’t, because the one thing that we don’t do in any shape or form is compromise any of our commitments to delivering things safely.
With modularity, if you want to take safety in the broader terms as well, introducing anything that’s new and bespoke into your manufacturing supply chain also introduces consequential aspects as through-manufacture safety. It also has a consequential upside in terms of cost of poor quality, which is an important focus area for the industry.
Modularity, configurability and structuring are really one of the only ways that we’re going to be able to deliver what the industry wants. If we can step strongly in that direction, and at the same time our customers can continually evolve, with getting over their desire to have their traditional bells and whistles, and everything on it, we can end up in a happier place. And if we can all make money doing it, more’s the better.
ML: How do you see the industry in 20 years or so?
JK: I think based on the pace we’ve seen in the last few years, it’s hard to predict what it’s going to look like in another two years, let alone 20. But I think what surprised me of late, is how little consolidation there has been, and I think there’s more to come from that. I’m not suggesting that it’s going to come as a consequence of another downturn, but I think the buying community is going to force that.
It’s going to be a rapidly changing environment from a culture perspective too; I think there has to be a lot of flexibility, openness and transparency. I use the word contemporary a lot and I think that that is appropriate, forward-thinking, and all of the good words that fall into that category. If you’re not there and moving at speed, then you’re going to be left behind. So as I say it’s interesting, it’s an interesting time.