Economizing Oil & Gas Capital Projects with PLM-Based Digital Transformation – The LTTS Approach

ECONOMIZING OIL & GAS CAPITAL PROJECTS WITH PLM-BASED DIGITAL TRANSFORMATION – THE LTTS APPROACH

ATUL TIWARI

GLOBAL HEAD – PLM

www.LntTechservices.com

Table of Contents

Transcending Conventions to Optimize CAPEX and OPEX

3

Reckoning with Industry Headwinds

4

EDW-based CAD Solution vs PLM-based Solution – A Comparative Study

5

Building a PLM-based Consolidated Information Foundation across all Assets

6

PLM-enabled Digital Transformation Benefits

8

Staying Future-Ready

9

Way Forward

9

Appendix 11

TRANSCENDING CONVENTIONS TO OPTIMIZE CAPEX AND OPEX The Oil & Gas (O&G) industry has been in a state of flux over the last few years. A constant fluctuation in the oil and gas prices is the result of disruption in demand and supply, which is fueled by drastic and unpredictable changes in the commodity price, rapid technological advances, changing customer needs, tighter environmental norms, and aging plants. These factors inevitably impact effective utilization of resources, calling for a measured focus in the following areas:

• Investment – Disciplined capital investment • Operations – Maximization of delivery from the assets, including exploration facilities and refineries

• Personnel – Streamlined and well-defined roles of the workers While cash flows have started to look promising, project scopes have expanded and brought with them bigger challenges to curb operational costs and manage project risks. Given the industry’s recent propensity for mega projects that leverage economies of scale, it is now time for companies to target prospects that can be rapidly developed at a lower cost. This can make way for greater agility and help companies respond quickly to market changes.

In order to align the humongous cost of new capital projects with the current economic reality and shorten exploration & production (E&P) cycles, companies need to go beyond just putting pressure on suppliers or implementing stringent internal project controls. According to PwC, the implementation of digital technologies can cumulatively save up to $100 billion in the upstream oil & gas sector by 2025. The immediate focus should be on implementing a robust enterprise data management (EDM) platform for improved collaboration and asset data management (ADM) strategies to drive operational efficiency. Now that the industry has successfully achieved material cost reductions of almost 30%, this might very well be the next logical step toward optimizing capital project costs.

The O&G industry is awash with more data than it can manage. Companies in this segment have access to diverse data sets generated by smart sensors, logging tools, geophones and other sources.

Analytics helps add a layer of insights on top of this data deluge, enabling better decision-making.

As analytics-driven operating models become a new norm in the industry, the focus will shift toward data quality.

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RECKONING WITH INDUSTRY HEADWIND Data management has always been a critical challenge for the O&G companies, especially with a typical offshore oil platform generating a staggering 1TB to 2TB data every day. As this data stream makes its way to the central cloud repository or enterprise data warehouse (EDW), there emerges a need for its real-time analysis. However, with organizations looking for quicker data access, there are often compromises on data quality.

The typical data management architecture of an upstream E&P platform consists of several independent systems with stand-alone applications assigned for each process across project lifecycle, including project management, quality and risk management, plant design/engineering information management, inventory/bills of material (BOM) management, contracting and procurement, enterprise resource planning (ERP), and vendor collaboration. This siloed data management framework has several discrepancies within disparate data repositories and systems, with data often being manually moved within applications. In fact, in several instances, the accumulated data is also distributed through intermediate steps like Excel workflows.

This multi-application environment involving specific solutions for every discipline, including procurement, plant design, vendor collaboration, and maintenance, is extremely costly and difficult to maintain. Moreover, it infuses complexity in identifying and analyzing the right data and makes information integration across assets a tedious task (Figure 1).

Quality Management

Design Management

Information Management

Regulatory Compliance

Part / BOM Management

Dashboard

Vendor Collaboration

Project Management

Contracting & Procurement

Plant Design

Plant Maintenance

Knowledge Management

Fig 1: Typical IT landscape in Oil & Gas sector

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Aggregating diverse data within this complex data management framework and analytics can help O&G companies get an integrated view of its processes. However, the following constraints remain:

• • • • • •

Scalability and cost Low traceability of the source data Difficulty in integrating with application performance management (APM)/other systems Limitations on AR/VR connectivity for future requirements Limited dashboard capabilities Lack of integration capabilities with third-party tools

These challenges call for an effective data management system that can integrate disparate data streams across the applications of an E&P platform for holistic analyses and faster decision making.

EDW-BASED CAD SOLUTION VS PLM-BASED SOLUTION – A COMPARATIVE STUDY Parameters

EDW-Based Plant CAD Solution

PLM-Based Solution

Engineering Information Integration

Strong portal offering for CAD data integration, with good component separation. Integration maturity is limited to design and varies based on solution offered by AVEVA, HEXAGON, or BENTLEY.

Single source of truth for design, engineering, analysis, and as build data. It is a centralized database for project and as-build data management.

Project Data Integration

Limited scalability in terms of integration with project data.

PLM offers strong solution for collaboration across project lifecycle including budget, schedule, logistics, and progress dashboard.

Cross-Platform Integration

Availability of cross-platform integration is limited to CAD systems, which is also not available for all platforms, though platform owners are working towards improving this feature.

PLM platforms are open for integration with different CAD and enterprise systems making collaboration easy and smooth.

Supplier Collaboration & Vendor Management

Nil capability for integration with supplier management.

Full scale capability for integration with supplier management.

Industry Experience

Strong O&G market presence with long history of successful project execution, albeit limited to individual project deliveries.

Limited use cases available in O&G sector for usage of complete PLM toolset, though it has been used sparingly for project management, requirement management etc.

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It is apparent that stand-alone EDW solutions have certain limitations as far as their data integration capabilities are concerned. While some validate data outside the data warehouse either through a separate module or Excel which often results in discrepancies, others come with poor product configurations that don’t support data integration. Moreover, a majority of these solutions feature a complex data reporting module and poor search function which don’t allow the administrator to refine or filter searches.

LTTS’ advanced Data Aggregator solution, on the other hand, gives a whole new dimension to data consolidation by adding PLM to the mix.

BUILDING A PLM-BASED CONSOLIDATED INFORMATION FOUNDATION ACROSS ALL ASSETS A wise step toward effective data management is to implement integrated data aggregator solutions for all E&P assets under one consolidated environment. A solid data management foundation, with data aggregation and analysis more closely woven together, will enable O&G companies to realize the full potential of data.

An integrated PLM-based data aggregator solution combines the MDM and EDW systems into a single application, thereby reducing support overhead, simplifying application integrations, and empowering a company with complete access to data embedded within the warehouse, or any other downstream intelligence or analytics tool. In this advanced framework, data is constantly validated, enriched and reconciled across multiple sources throughout the asset lifecycle. This enables complete data lineage and a transparent data audit trail for all stakeholders, including plant design partners, suppliers, and third-party solution providers. (Figure 2).

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LTTS’s PLM Based Data Aggregator Solution Architecture Concept Development

Select

Design

Procurement

Execute

Operate

Plant/Asset Lifecycle Management

PLM Collaboration Platform

Association Document to Tag/Part

Requirement Management

Translation Plant CAD design to CAD neutral format

PLM-Integrated Asset Management

Tag and 3D Data Management

Plant Equipment Data Management Material Management

Platform to enable concurrent engineering & collaborate with external partners for plant design, MoC

Workow Management

Program Capital Project

Process Simulation

Phase Activity

Data-driven approach to document management

Project Data Visualization

Digital handover of project artifacts and documents including digital twins

Digital Twin

Simulation for Complex Plant Maintenance

Digital Twin for Remote Monitoring and Maintenance

Drill Down / Multilevel Reporting

Process Simulation Tools

Plant Maintenance

3D Navigation through Complex Plant Structure

Business Data Visualization

ALM Platforms

Data-Driven Document Management

Hierarchy Data, Relationships, Documents

Project Plan Status Update

Regulatory, Test Data

As Built & MoC

Asset & Maintenance Data

Material, cost, asset attributes

Attributes and documents

Authoring tools

Project Apps

Commissioning Apps

Authoring tools

Asset Application

ERP

Legacy Application

Project Team, Subcontractors, Suppliers

Fig 2: PLM-based Data Aggregator Solution The solution can allow plant operators to create a repository of critical plant lifecycle information pertaining to project execution, project collaboration, configuration management, requirements management, and change management. This data can be made available throughout the enterprise to help stakeholders plan, operate, and execute changes to the plant functions more easily and that too with minimal financial repercussions. Another significant aspect of this data management solution is that it can remove the complexities of designing both new and retrofitting projects by integrating high-end digital twin technology within the proprietary data management platform to create a digital replica of an entire facility and its corresponding data assets.

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PLM-ENABLED DIGITAL TRANSFORMATION BENEFITS In PLM-based data aggregator solution, every physical component, such as a shaft or a bearing, is assigned a tag, which essentially contains a 3D model of the component along with all its associated information. Considering that a typical offshore facility has over 150,000 tags, the benefits of using PLM-based solution are enormous.

•

Digital twin can be created in the most real sense, with dynamic updates happening parallelly in tags.

• •

3D visualization of components enables better understanding of the associated data.

• •

Massive cost savings result out of improved parts management and inventory control.

•

Transparency is established across the system owing to PLM’s philosophy of ‘Single Version of Truth’. Data that is made available to all the stakeholders, including project managers, engineers, regulatory bodies, and clients’ consultants, is essentially the same. The dashboard visualization may vary but the source of truth remains one.

•

Greater trust ensues among stakeholders due to similar and unbiased data accessibility rights granted to all the parties involved.

•

Speed and clarity of communication increase as the reliance on emails and other traditional mediums goes down. Instead, tag related queries are raised, relayed, addressed, answered, and stored in the PLM system for reference in the future.

•

Seamless collaboration among individuals and globally dispersed teams is enabled due to greater trust and transparency across the system.

Robust part management and management of change (MOC) control surplus and reduce material wastage, which has traditionally been one of the biggest challenges for O&G players.

Drastic reduction in operational time is made possible by providing correct information to all the stakeholders in a secured manner with role-based access control.

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STAYING FUTURE-READY It’s apparent that the convergence of emerging technologies is creating several new opportunities for the O&G industry. Many O&G global leaders are in the process of adopting PLM-based ‘Digital Project Delivery’ solution to optimize the CAPEX cost and ensure seamless digital delivery of project artifacts, including digital twins, to operators/owner.

The collective impact of this will soon be felt across every aspect of the business – from increasing asset performance and enhancing operational efficiencies to real-time decision-making. In order to make the best use of this transformation, energy companies will have to focus on data standardization and ensure that information travels seamlessly across all assets and operations.

Serving as a digital transformation partner, LTTS works closely with its clients to simplify their journey toward evolving as a data-driven organization that realizes cost efficiencies through digital maturity.

We help O&G players lower operating cost and maximize ROI from capital projects through new-age data management practices.

WAY FORWARD Document Driven to Data Driven Organization

s

s

12 month

s

12 month

1

nt Docume rg Driven O

MVP Development

2

Data dation Consoli

24 month

d tegrate Data In ss e c o r P 3 Business

Data Consolidation & Integration

Process digitalization

Integration with SAP and Bentley Asset Management Systems

Project management integration

Digitalization of additional process areas

Disparate systems and document driven processes

Development of dashboards for management reporting

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iven Data Dr ation iz n Orga

Digital Twin & Transformation Data Driven Analytics EPC project performance business analytics 100% digitalized processes with seamless integration with organization’s other enterprise applications & systems

Digital twin models / dashboards leveraging high end 3D capability of Dassault Systemes Real time simulation with integrated 3D view People, process, and technology in sync Incremental reduction in per barrel production cost

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We believe that the future of the industry will be molded by new-age technologies like 3D simulation, AR/VR, and digital twin, which can bring people, processes, and applications under the purview of one consolidated management platform. But to make that a reality, the sector will have to collectively focus on what it has been doing since ages - drill! Only this time, instead of crude, they’ll have to drill into large chunks of data hidden in process silos to haul out insights that can fortify massive digital frameworks and make them smart enough to run seamlessly.

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APPENDIX Acronym

Full Form

ADM

Asset Data Management

APM

Application Performance Management

AR/VR

Augmented and Virtual Reality

BOM

Bills of Material

CAD

Computer-Aided Design

CAPEX

Capital Expenditure

EDM

Enterprise Data Management

EDW

Enterprise Data Warehouse

ERP

Enterprise Resource Planning

E&P

Exploration & Production

MDM

Master Data Management

MOC

Management of Change

OPEX

Operational Expenditure

O&G

Oil & Gas

PLM

Product Lifecycle Management

ROI

Return on Investment

TB

Terabyte

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