There is definitely an important market here in the Middle East terms of downstream and upstream.

Rajesh D. SHARMA Oil & Gas Digital Solutions SCHNEIDER ELECTRIC

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July 13, 2017

Rajesh D. Sharma, Schneider Electric’s global strategy and marketing director, oil and gas digital solutions, talks to TOGY about current challenges in the refining sector, the adoption of digitisation worldwide and the impact of connectivity technology.

French multinational corporation Schneider Electric specialises in energy management and automation. The company provides software, process automation, safety systems, field automation and measurement services and lifecycle services. For onshore operations, Schneider supplies artificial lift, field automation and measurement tools. The company provides supervisory control and enterprise applications as well as modelling and simulation for pipeline systems. The company also offers instrumentation for LNG and gas processing operations.

• On refining: “With the price of oil, the downstream sector has a big issue in terms of margins. Margins are very important, and companies are looking to reduce the capital cost, increase efficiency and then work on flexibility in terms of how they can move production from diesel to petrol depending on season, price, margins and geography.”

• On digitisation: “In the Far East, digitisation is picking up, and there is also something moving in the USA. Europe and the Middle East are a bit reluctant, though. Cyber security is one of the major concerns. The Middle East area is more conservative in this type of approach, but we are getting there.”

• On connectivity: “What is changing today in oil and gas, although it is a conservative environment, is the connectivity. First of all, there is a big availability of data, the costs of sensors are going down and then there is the type of connectivity that is available. A single device is becoming connectable to the cloud or the internet.”

Rajesh D. Sharma went in depth with TOGY about up and downstream technologies as well as the company’s partnership with Halliburton and the shift towards natural gas and renewables. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Rajesh D. Sharma below.

 

How have the needs of E&P companies been changing?
Efficiency is the driver at the end of the day. Any kind of failure with an ESP will cause a couple of weeks of lost production, and it is going to be a big hassle because I have to move people and bring in another ESP. It is a loss of a lot of money.
Now you have the capability to monitor all the ESPs around the world. We have been doing this for Eni, for example, and we are also discussing with Total the global monitoring of all the ESP installations to be sure about mechanical behavior or production.
We are able to reduce maintenance with that. We are able to monitor and avoid risky conditions. This is significant in terms of money. We can provide a type of solution, which instead of a big investment such as capex, you can transform it into opex in the form of a long-term subscription to reduce the cost.
Monitoring 1,000 wells, you can understand that there may only be one that is behaving in an odd way and take action. Efficiency is the productivity of the asset, but it is also the efficiency of the process that the company is taking for maintenance and the different activities. There is therefore efficiency in the workplace and efficiency of a specific asset.

What technologies are being implemented in the downstream sector?
With the price of oil, the downstream sector has a big issue in terms of margins. Margins are very important, and companies are looking to reduce the capital cost, increase efficiency and then work on flexibility in terms of how they can move production from diesel to petrol depending on season, price, margins and geography.
That means they need to have a tool that creates this flexibility. This is the type of application that we have been implementing as investors and as Schneider in a large multinational oil and gas company for all their refineries around the world.
Today, digitisation with the IoT [internet of things] is going to change this type of environment wherein, as Schneider, we have this type of know-how to provide the optimised and customised application to the solution and then maintain the asset.
The strategy is the same. The difference between Schneider’s strategy and our competitors’ strategy is that they are more looking to the asset as the equipment and we are looking at the asset at a different scale. It could be the pump or the compressor, but it could also be a refinery unit or the entire refinery. Depending on the size, we are addressing the gap in the same type of problem. We are looking to the asset, the efficiency and the performance of the asset.

What is your partnership with Halliburton?
In the upstream sector, a kind of consolidation is happening between companies belonging to the same domain. In our partnership with Halliburton, we are able to cover delivery to operation, production and production optimisation. We do the automation and power management, and we go to the reservoir with the skills that Halliburton is bringing to the E&P value chain.
We want this partnership to address the market in a different way. The industry had been lacking the capability to build a complete solution from reservoir modelling to everything else. We did not have such player in the market. It is a game-changer because, in some way, we can test the market and after all this consolidation, we can see if there is someone that can be in charge of the full project from A to Z. We want to figure out what the future is with that.
In middle of 2016, we won a big project in Egypt for the Zohr field. Schneider has been chosen as the main automation contractor and the main electrical contractor.

How does digitalisation differ regionally?
There is a difference between the markets, especially if you are talking about digitisation. In the Far East, digitisation is picking up, and there is also something moving in the USA. Europe and the Middle East are a bit reluctant though. Cyber security is one of the major concerns. The Middle East area is more conservative in this type of approach, but we are getting there.
There is definitely an important market here in the Middle East terms of downstream and upstream. If I look at the different domains, digitisation and development will be much easier in the upstream than in the downstream.
Digitisation will be faster in upstream than in midstream, and then slowest in downstream. If I look to the different regions in the world, the Far East is the fastest, the USA is second fastest, and Europe and the Middle East are the slowest.

What has changed in technology, such as IoT, the cloud and the problems of analytics?
Digitisation is not a new concept. We have been doing digital for 20 years and have always been dealing with the digital part at the automation level with different types of software solutions.
At the end of the day, something is changing; everyone is looking to have information available at the touch of the finger. Everyone is looking at smart phones and smart devices. All of these technologies need to be applied to different types of industries, such as oil and gas.
What is changing today in oil and gas, although it is a conservative environment, is the connectivity. First of all, there is a big availability of data, the cost of sensors is going down and the type of connectivity that is available is changing. A single device is becoming connectable to the cloud or the internet.
Then, there is analytics, which is a new word but not a new concept. We have a significant base of automation technologies, tools and software that are becoming the basic tools for creating these types of analytics and then moving these solutions to the cloud. It is not only about changing the location of this running software or application but about changing the business model.
Today, while providing big capital investment for software and hardware, we are moving towards a model in which an engine, for example, belongs not only to the company that purchases it but also to the one that manufactures it. There is a big change in the business, even though the IOCs are focusing on the core business, which is production, rather than focusing on IT or the hardware and other types of things.
In sum, there is a clearer push in terms of simulation tool technology, but also in the connectivity to the cloud. On the other side, the big change is the business model. Everything else we hear is something that is taking a different shape but is essentially nothing new.

How does Schneider cater to the renewables market?
It is becoming very important. We have a tradition of working on renewables with solar and other types of activity. We have significant business in renewables. We are looking at a kind of transformation in hydrocarbons companies in which they are looking to be energy provider, not only oil and gas companies.
Total is announcing that they want to go for a significant change in terms of their business. Renewables will become an important component. In the old European countries, they are looking to more sustainable types of energy and renewables.
As an oil and gas segment, we are looking to include renewables as one of the components of business because they are becoming so connected to the oil and gas business that there is a natural evolution. From one side, the oil and gas companies are looking at what is going to change in the price of oil before they look at what changes in terms of rules. Renewables and green energy are related to gas, and there is also a shift to gas. Second, there is renewable energy here in Middle East because there is so much sun, and people are looking to exploit that in the region.

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