The application of a diamond-like coating to the screws and flow surfaces within the TwinScrew pump allow it to remain in service longer, despite the possibility of considerable sand ingestion.

In January 2007, global infrastructure, finance, and media company GE announced its acquisition of VetcoGray, the supplier of products and services to the upstream oil and gas industry, including subsea drilling and production systems.

A little more than two years later, according to Manuel Terranova, VetcoGray senior vice president for subsea, adoption of GE best practices for product management and engineering has put the company on the verge of delivering benefits to subsea operators in the form of “structured” subsea solutions that it says are easier to purchase, install, and maintain.

Other gains have come with access to the GE technology network in composites, sensors, and materials science, as well as to expertise in select engineering disciplines (see sidebar).

At least some of the change seen at VetcoGray was inevitable, as subsea markets evolve from an emphasis on bespoke engineering for achieving breakthroughs in things like attainable ocean depths, toward a greater focus on sustained, profitable subsea production.

“Market dynamics led us to think about designing solutions a different way,” Terranova said, “it’s not just about addressing the challenging pressures and temperatures, but also looking at total cost of ownership by, for example, incorporating a perspective on how much does equipment weigh, how much space will it take up on a ship deck, how difficult will it be to get into the water.”

Yet, “As GE has come into the game,” said Terranova, “there has been acknowledgement that we have to play to a broader set of opportunities. It’s part of the huge cultural shift that has taken place since GE’s acquisition of VetcoGray.”

Results include revamped product lines and reorganization of the product management and engineering functions. But it also involves attention to detail, and even to things many might find mundane, like looking at the bills-of-material (BoM) structures used in equipment manufacture, which actually end up impacting activities taking place in the ocean’s depths.

The right BoM structures, said Terranova, “Allow equipment to be easily serviced when it comes out of the water.” Impact can be even greater when you start thinking about things like needs for localization. “Operators increasingly work with national oil companies. That being the case, what type of product and BoM structures facilitates work done in a remote location? It also has implications for training, meeting local content requirements, and many other project aspects.”

Case study example

Terranova sees VetcoGray’s incorporation of the technologies, processes, and practices that GE makes available to it as increasing innovation in subsea systems.

“Traditionally,” Terranova said, “if you look at the scope of supply for subsea systems at the component or subcomponent level — a tree or a choke — it’s a highly customized base of activity, including custom engineering and manufacturing. That creates entropy.”

Of course, modern manufacturing systems, from at least the time of Henry Ford, are meant to exploit the benefits of standardization. A more recent goal has been achieving flexibility within a more or less standard framework. Finding the correct balance between standardization and flexibility is a big part of what Terranova calls “structure.”

“The goal isn’t necessarily product standardization, but rather provision of structured products,” Terranova said. One example, “would be our D-Series integrated deepwater package, including tree, choke, and control system. To identify the proper product structure, we’ve gone back through years of tenders to see what customers asked for in terms of functionality and options.”

The next challenge is to meet 85% of those requirements by means of a structured product, based on a menu of pre-engineered options. “The methodology requires you to first qualify your selections with customers,” said Terranova. “Therefore, we’re confident that the options we selected for the D-Series can meet 85% of requirements. The result is considerable reduction in cycle times.”

It’s said that a bespoke tree requires from 9,000 to 14,000 engineering hours. The approach taken with the D-Series, Velco Gray said, reduces that by as much as 80%.

Pre-configuration also reduces supply-chain challenges. “For example, we can pre-provision forging sets,” said Terranova. “Typical supply-chain cycle times today might be 12 to 16 months. For the Gulf of Mexico, we’ll be looking at eight-month cycle times, and in other places, such as Angola, closer to 12 months.”

Other results of taking a structured approach to the D-Series include a 20% reduction in weight, significant foot-print reduction, and attaining a base configuration of about 82,000 pounds, “about 20,000 pounds less than any other unit we’ve done qualified for that depth,” said Terranova.

What’s left are the approximately 15% of field conditions that need to be addressed through further engineering. “We’re well qualified to do that,” said Terranova.

“VetcoGray has always taken on the tougher developments. Our customers push us to do that and we have a track record of solving their problems.”

Process changes

To become a reality, a corporate cultural change has to be manifested by means of defined business processes. To apply the structured-product approach, VetcoGray adopted practices originally forged at GE Aviation and other GE units. The model allows preservation of domain expertise, but combines it with product-management rigor.

“What the subsea industry needs is ultra-reliability,” said Terranova, “and I can’t think of a better example of providing ultra-reliability than GE Aviation. We want to leverage technology from GE Aviation and bring it into the subsea space.”

The process begins well before a job hits engineering. In fact, that’s the whole point. “You start by taking specification of requirements out of the hands of the engineering department and giving it to the product managers,” Terranova said.

The result is a comprehensive market view that extends beyond technical specifications. Thus, product priorities are based on petroleum industry business needs, including cost, supply-chain cycle time, and even planning for the local content needed to be competitive.

For the product manager positions, said Terranova, “We handpicked the best engineering talent, coupled with a good understanding of market and supply chain parameters.

The product managers have the authority and ability to set commitments. They can say, ‘We need to go from 1,400 to 900 parts. The configuration team will be able to quote in three weeks’.”

In a practical sense, the product teams have been in place since April, 2008. “We’ve been at it a little under a year,” said Terranova. “The first products coming to market under the new system are the SemStar5 subsea electronic module and the S-Series tree on mudline. Both have been quoted already. We’ll start quoting the D-Series in the August-September time frame.”

Closing thoughts

Finally, GE’s acquisition of VetcoGray has also entailed a more comprehensive commitment to and adoption of open systems, increasingly an issue in subsea environments.

Like its competitors, VetcoGray has in the past designed its own operating systems and chip sets, and relied on protocols that had their roots in the 1970s avionics industry.

Terranova sees a “huge opportunity” to move away from proprietary protocols and toward open standards.

“In greenfield and brownfield tenders I want to win on the best technology,” he said. “Lack of open standards is a real challenge in brownfields. I don’t think customers should be limited to doing extensions with incumbents simply because proprietary standards present integration issues.”

Besides moving to TCP/IP-based open protocols, Terranova said, “We’re able to take commercially available chip sets sourced from GE Fanuc and put those into SemStar5.

Their expertise combined with ours related to heat dissipation in subsea environments makes it work. Moreover, use of a standard chip set means the actual chip manufacturer will maintain that BoM significantly longer than it would for a custom job.”

In short, concludes Terranova, “we’ve leveraged the intellectual property and know-how of the broader GE.”