As companies work through the worst excesses of the economic cycle, the oil and gas industry is again in transition, facing significant finance and personnel challenges as well as complex technical challenges. The industry is looking for solutions for handling sour and acid gas and optimizing existing reservoirs, to reducing CO2 emissions, refining lighter products from heavier crude, and monetizing stranded resources.

One of the greatest challenges in terms of deepwater production is meeting operational requirements for electronics that have to function in higher-pressure/high-temperature (HP/HT) environments. This is a major hurdle for the industry, particularly in the immediate term for the next three to five years.

Investing in solutions

The VetcoGray DHXT deepwater tree is designed to operate in water depths to 10,000 ft (3,000 m) and withstand pressures of up to 15,000 psi. (Image courtesy of GE Oil & Gas)

GE is addressing HP/HT in a number of ways. One of those is through the company’s Oilfield Technology (OFT) business’ investment in downhole electronics solutions that could take temperature ratings from today’s 347ºF to 570 ºF (175ºC to 300 ºC). The US Department of Energy (DOE) is part-funding a major OFT R&D program to understand how new downhole technologies could withstand the extreme temperatures and pressures of deeper geothermal reservoirs where the most promising resources are located.

In October GE received a US $11 million grant under the DOE program, in part to develop high-temperature circuitry for sensors and communication devices in deeper, hotter geothermal wells. The effort is based on the application of silicon carbide technology to extend the top operating temperature of downhole electronics to about 572ºF (300°C). Success would represent a step change over current HP/HT electronics and could increase downhole drilling depths to around 37,000 ft (11,278 m), and unlocking new hydrocarbon sources for development by adding a layer approximately 2.8 miles (4.5 km) thick to the total available for exploration and production.

GE has already raised the bar on new levels of Open Architecture IP-enabled communication capabilities through the introduction of SemStar5, which is being developed as part of a $70 million StatoilHydro contract signed in June 2009 for first commercial use offshore Norway in 2010 and 2011, along with the VetcoGray ModPod subsea control modules.

Among the additional technical challenges being investigated at the company over the next three years are subsea compression, separation, and power; a 150-bar gas and sand tolerant twin-screw pump; AC/DC power-transmission systems; and CO2 reinjection. Over the next three years, the company will spend more than $500 million on R&D specifically targeting these goals.

Stepping out subsea

The company will launch the new VetcoGray DHXT deepwater horizontal tree and integral control system at OTC 2010.

The newest member of GE’s modular, short-delivery subsea tree systems, the DHXT horizontal tree builds on more than 25 years of design and subsea experience. The first of the Deepwater D-Series to be launched, the new tree is designed to operate in water depths to 10,000 ft (3,000 m) and withstand pressures of up to 15,000 psi.

The D-Series package includes the VetcoGray ModPod, a field-proven subsea control module that is powered by SemStar5, a new generation of ultra-reliable, open architecture subsea control and instrumentation systems.

Like the new shallow-water VetcoGray SVXT S-series subsea tree that was launched at Offshore Europe 2009, the VetcoGray DHXT was envisioned as a flexible solution and was engineered to meet the needs articulated by both major and independent oil companies. This approach has improved product functionality and has incorporated common project requirements to meet a wide range of customer standards.

New approach boosts performance, efficiency

The new trees are examples of GE’s extensive investment in a product structuring initiative across the company’s global supply chain to drive greater value and efficiency for customers.

Delivering rigorously qualified and validated pre-engineered solutions means faster execution in pre- and post-order phases. Quality is boosted by reduced variation and improved clarity during the equipment specification stage, and there is much greater site-to-site commonality, allowing installation, maintenance, and training synergies. Meanwhile, the early adoption of supply-chain feedback continuously improves the quality of configurations. Ultimately, this repeatability equates to greater quality and speed and to better performance and value.

The Product Structuring approach is not about standardization. Instead, the objective is to “max-up” the technical specifications so that modularized equipment orders are delivered at optimum level, enabling improved lifecycle management and more refined customization. A major byproduct is that the best engineering minds (both within GE Oil and Gas and in operator companies) spend much more time focused on solving tough engineering challenges.

Working closely with its customer engineering teams to determine the baseline parameters of mission critical oil and gas equipment, GE Oil & Gas can make better use of time, finances, and personnel resources. The impact this approach has on the procurement stage is profound — average quote cycle time, for example, on the Frame 5 gas turbine has been dramatically reduced from 15 days in 2008 to a single day in 2010.

Product Structuring is a huge undertaking in an industry historically known for customization at every level. Because the benefits are so immediate and tangible, however, this approach has gained real traction with a majority of the company’s customers. In 2009, GE Oil & Gas sold more than 5,000 structured product items.

More than 200 of GE’s suppliers are engaged in the program. To date, the company has a 70% adoption rate of Product Structured solutions offered and is able to deliver a 20% cycle reduction on structured configurations.

Mitigating risk

Customer intimacy and partnership are critical to the successful introduction of new and dependable technology. GE invests in developing partnerships and incubating new technologies with all types of customer — independent oil companies, national oil companies, and independents. Regardless of the partner, the challenge is essentially the same.

In each case, the company follows a 5-step approach to innovation. The first step is to build long-term partnerships in which risks are minimized and shared. The goal is to introduce the new technology the industry needs, while at the same time mitigating the risk for the company that agrees to be an early adopter.

Second, GE ensures the technical challenges are clearly defined and understood. When the problem is defined, the company leverages technology from other businesses in the GE family such as aviation and healthcare. This requires extensive coordination with the company’s Global Research Center. The fourth step involves rigorous prototype testing that proves the concept at every stage. In some cases, this is extended to destruction testing that delivers greater understanding of the limits of the technology. The last step in the progress is execution of the solution, which is carried out with rigor and discipline.

This 5-step solution is applicable regardless of the oil and gas industry segment, application, or geography. The partnership mindset with which innovation is undertaken allows the company to share in its customers’ toughest challenges and to collaborate to find a solution that delivers reliable technology.