Technology has been a key ingredient to helping the oil and gas industry navigate life in oil and gas fields post-downturn.

The subsea sector, which has been bruised by lower commodity prices as oil and gas companies slowed spending, has seen its share of woes. But technological innovation has continued, and there is still room to grow.

Emerging technologies such as predictive analytics and improvements in areas such as electrification and subsea boosting could help improve economics for operators and equipment manufacturers alike.

Neil Saunders, president and CEO of subsea systems and drilling for GE Oil & Gas, shared his thoughts, which have been edited for length and clarity, with SEN on these topics and more as he gears up to take on a new role—president and CEO of oilfield equipment—following the completion of the merger of GE Oil & Gas and Baker Hughes Inc.

When it comes to subsea oil and gas developments, which technological area is posing the biggest operational challenge today?

Saunders: The biggest challenge that we’re facing in subsea is trying to find economic solutions. If you ask me what technologies could leverage that economic position so that we’re able to deliver more cost-effective solutions, there are a few. Composites and finding applications for composite solutions would be near the top of our list. That might be in our flexible systems business. It might be in our subsea production systems business. Composites being lighter, potentially easier to handle, easier to install and more cost-effective, it’s something that we’re spending quite a bit of time on.

Could you provide a specific example of something GE Oil & Gas is working on in this area?

Saunders: In our flexible risers business, which is better known as Wellstream, we have launched a composite product where we replace some of the steel cross section with a composite replacement. We’ve done that leveraging the impressive composite that we have elsewhere in the GE family. What’s that done to a flexible riser system? In very deep water, it’s overcome a significant weight challenge that you end up having with the steel content in a riser. That means that the riser becomes easier to handle, requires less buoyancy and we believe we can reduce costs of it by 20% to 30% per km. That’s an application that we’re able to quote right now, and we’d love to see it find its way into the market in the next one to three years.

What role are digital technologies such as predictive analytics and Big Data playing in the evolution of drilling and subsea technology?

Saunders: That’s my No. 2. Digitization goes hand and hand with some alternative commercial models. The ability to understand how equipment is performing and make sure equipment is optimized—not only for performance but for its usable design life—in the current market is precious. It represents significant value for our customers. So how do you understand how your equipment is performing? First of all, you need data. Digitizing a subsea system, being able to set up networks to get data on how equipment is performing not only from one project but from wherever you have your equipment installed. That significant amount of Big Data through analytics will definitely allow you to optimize performance, which allows you to reinvest that knowledge into the design equivalent so you are inherently making it more reliable. The commercial piece that I referred to, which has relevance in drilling and subsea production, is that you can change the commercial model to the extent that an original equipment manufacturer such as us can be prepared to be compensated in a different way based on how the equipment is performing. That lends itself to us in conjunction with the operator wanting to digitize the entire system and have networks in place that allow us to analyze data. You don’t get the value unless you have the complete circle. You don’t necessarily need a new commercial model but you certainly make everybody’s incentives very clear. Digital comes organically. That’s something that we find in our drilling contractual service agreement that we launched last year with Diamond Offshore Drilling.

What other emerging technologies have the power to transform or improve the oil and gas industry’s operations?

Saunders: There are three other things that we’re either watching closely or we’re directly involved in. Electrification, replacing hydraulic systems with electric systems, has the potential to enhance reliability. With some maturity it has the potential to give us some cost benefit. Potentially, the technology for electrification goes hand and hand with the digital strategy. It allows you to go deeper, which lends itself to subsea applications. We have in our family a company that has some actuator technology. We’re excited to have them in the family and we’re looking for applications of that.

No. 2: Compact pumping and boosting technology. We have launched our modular contra-rotating pump, MCP. It’s a very compact pump. Why is that important? One of the things that we love about this technology that we are testing and qualifying is it allows you to add boosting and pumping through the life of field, so as the reservoir depletes you can add small packages either to the tree or to the manifold, which are not usually capital-intensive but give enhanced recovery in mid- to late life.

The last one is probably inevitable and we’re watching with keen interest, which is away from production systems, will be around ROVs, specifically autonomous underwater vehicles. Without a doubt, the ability to fly the equivalent of a drone to either inspect or apply some level of intervention and do that autonomously without having to mobilize ROV spreads and vessels to the field is something that presents huge cost advantage. Digital becomes an enabler there as well.

When do you step into your new role as president and CEO of oilfield equipment for the new Baker Hughes? What have you learned from your existing role that could help in your new role?

Saunders: It’ll be after the deal is formally closed—probably mid-July. We have been working inside GE Oil & Gas to try to find ways to provide our customers with more holistic outcomes. That’s something that we are very open about, and we’d like to do that using other parts of the GE family that we refer to as the GE Store. As opposed to us just being a product or component supplier, or even a service provider, we continue to have an appetite to provide much bigger outcomes for our customers—more solutions, bigger systems. In order for us to do that, we can leverage parts of the GE family from the GE Store. But we have had some gaps. If we really ever wanted to apply some true oilfield service, go in-hole, we’d have to partner with somebody or subcontract. That gap that we’ve had gets filled very quickly and comprehensively by having Baker Hughes with us in the family. If you look in my business and the ability that I have—albeit at a future state—to go into the field and provide a client with an outcome, I have everything I need to do that. I’m incredibly excited. We can’t wait to get this deal done, and get after it.

From a subsea perspective, what are some of the advantages of Baker Hughes and GE joining forces? Saunders: If you drill a very basic diagram and say what do you have in your current business from a products and service standpoint, you draw a subsea production system, drilling equipment and subsea wellheads. You show casing systems, which take you into the hole. But at no point can you draw or express anything that really has you go into the hole—either with a completion or with any kind of service that will impact the customer from an outcome standpoint. If I want to be able to do that, I need one or probably two or three companies in the world that can do that—one of which we’re about to merge with. My ability to connect my subsea production system into Baker’s completion system with my well access system with Baker’s oilfield service offering is incredibly integrated, very few overlaps—incredibly complementary. If we can make sure we can articulate the value to our customers, it’s going to complement my business beyond my wildest imaginations.

—Velda Addison

Offshore