Oil and Gas Industry: 30% of Construction Risks Can Be Avoided
If there is anything that offshore ships, e.g. for the oil and gas industry, have in common, it is the complexity. Think about an offshore support vessel, a platform supply vessel, and a rig support vessel - all complex ships and often one-offs. Building on the knowledge of previous ships is not always possible, simply because new innovations need to be developed.
“The risks of new construction projects for these types of ships are huge as they involve many hundreds of millions,” explains Geert Schouten, director of Shipbuilder. “At the same time, I still see far too much hand work in these kinds of projects, like entering and managing requirements in Excel files, which implies enormous risks and additional work that can be avoided.”
In this article, we will delve deeper into the question of how risks during the construction of offshore ships for the oil & gas industry can be reduced.
Ships for oil and gas industry: Astronomical amounts of data
Let's first look at the amount of data that is required to build a complex ship: the amount of data circulating at shipyards before and during construction is huge. Geert explains: “Take a pipelayer, for example, a common ship in the oil and gas industry. Due to the complexity of a pipelayer, the documentation during construction consists of tens of thousands of documents and some of them easily contain 1,000 pages, including requirements and IO listings. In turn, these documents also refer to documents containing rules & regulations, standards and drawings. And speaking of the latter, a shipbuilding project like this easily has 15,000 drawings. Adding that up, such a complex project consists of 630 million data elements. Who will monitor this? Let me be clear: nobody can. It is naive to think that people will read all those pages without running a single risk. You need other solutions for such a project to be successful.”
Shipbuilding: risks in texts of offshore ships for the oil and gas industry
Keeping an overview is not the only challenge, according to Geert: “Also think about a consistent provision of information. I take drawing up a set of requirements of a pipework, as an example. I regularly come across a requirement in the oil and gas sector such as pipes should preferably be bent instead of using set-up bends. My first question is: what does 'preferably' mean? Does it have to do with a specific situation? And what kind of set-up bends are we exactly talking about if they are used anyway? I could go on and on, and my list with questions would become infinite. In the end, it may lead to a lot of problems, because a set of requirements of a pipework is only a small part of the total set of requirements of an offshore vessel. All inconsistencies in the documentation together can therefore result in avoidable failure costs, and may be decisive whether a ship can be delivered successfully and without additional work.”
Oil companies can take a leaf out of the Dutch navy book
In this article we are looking for an answer to the question of how risks in the oil & gas industry can be avoided. What is the solution? Geert: “Oil companies can take a leaf out of the Dutch navy book. Naval vessels are extremely complex ships and due to the high costs, the risks are huge. And it is exactly these risks that the Dutch navy now has a grip on through innovative digitalization processes. With our shipbuilding software Shipbuilder, all data elements are linked. Inconsistencies are filtered and must be adjusted. This requires efforts at the front end and during construction which will largely pay off because the risks are immediately identified and can be eliminated at the front end. In my opinion, oil companies should immediately embrace such systems. What’s more, the use of digitalization enables them to work faster and develop more innovations. You can start simply by making document management and approval processes, data-driven. That alone provides huge benefits compared to using solutions such as Sharepoint or Excel.
Digitalization: 30% fewer risks & more innovations
So, inconsistencies can be avoided with the correct use of digitalization. From customer experience, we know that this can easily decrease by 30 percent. But that's not all. Geert: "I like to use our customer Ulstein as an example. Because they have their information in Shipbuilder as knowledge, they don’t need to reinvent the wheel with every project. For example, they can draw up technical specifications in a few days, whereas this used to take weeks. Data is knowledge and making it centrally available for reuse saves a lot of time. At the same time, consistency increases to 100%. We also see that our users reduce the time to find the right information by 80 percent. The advantage is obvious. There is no time left to work on real innovations. So, there is good news for the oil and gas industry: companies that implement digitalization well, avoid risks, and are more innovative at the same time.”
This article is sponsored by Shipbuilder. For more information, please visit www.shipbuilder.nl
Maritime Pioneers Show How Digital Collaboration Can Work
[By Laurent Hentges, Vice-President, Digital Solutions & Transformation, Bureau Veritas Marine & Offshore]
It should be viewed as an opportunity that shipping is simultaneously confronting the challenges of digitalization and decarbonization. The former can enable the latter, but to fully achieve its potential we need to break technical, legal, financial and cultural barriers, according to new research from Bureau Veritas and Thetius.
Shipping is responsible for nearly three percent of global anthropogenic CO2 emissions and faces some imminent, mandated deadlines for reducing its contribution to climate change. Bringing the industry to net zero is a challenge far beyond what any individual company can achieve on its own.
Change of this magnitude requires collaborative effort and digitalization is a key enabler — potential emissions reductions of up to 15 percent can be achieved through interpretation and use of the right data. Some industry pioneers are already leading the way and collectively reaping the benefits.
But, as detailed in Common Interest, a new white paper written by Thetius and commissioned by Bureau Veritas, to expand this success to the industry as a whole, we need to address some major obstacles.
The potential of data
Success at scale requires competing parties to recognize unifying goals and accept more data sharing, enabling better decisions and reducing, for instance, port waiting times.
To begin with, we need to define which data is useful, and then decide how we use it.
The potential of data breaks down into distinct areas. Starting with the vessel itself, applications from companies such as NAPA provide performance models based on a ship’s propulsive characteristics, hull form and dimensions, and the effects of biofouling. That knowledge drives fundamental design choices as well as operational best practices including voyage optimization.
For collaboration to work, stakeholders have to speak the same data ‘language’. Companies such as Opsealog (which has identified a collective €2.4 trillion opportunity from collaborative decarbonization) and OrbitMI have sought to bring manual processes, such as the updating of ships’ logs, into the electronic realm. This has the effect of standardizing entry, removing human subjectivity, and making data more accessible in order to extract insights that can boost efficiency.
At sea, there have been numerous attempts to tackle the “rush to wait” phenomenon, and they all require data. The consortium-led Blue Visby solution, for example, uses a digital platform to assign optimal arrival times to otherwise unconnected ships heading for common destinations, together with a contractual architecture and a sharing mechanism to encourage adoption.
Ports have also been busy looking at ways to enable “Just in Time” (JIT) arrivals by doing so in a digital environment. The Singapore MPA’s digitalPORT@SGTM has taken a phased approach to JIT harmonization of port arrivals. This has included setting up common APIs for all users and led to Singapore and China piloting data exchanges of 25 types of ships certificates for port clearance and state control.
Addressing key challenges
While the potential of digital collaboration is clear, Common Interest describes a “network optimization problem” where numerous issues stand in the way of change. The report identifies four main challenges to effective data sharing and progressing both decarbonization and digitalization: competition laws; data siloes; cultural and behavioral resistance; and cost.
For a start, many businesses remain reluctant to openly share data, although sharing some data with trade partners/the wider supply chain is increasingly common and enables competitive advantage to be retained. However, challenges arise where international trade bodies prohibit anti-competitive agreements, even where decarbonization is the aim. Successive legislative updates are providing greater clarity, but currently, it is recommended that legal advice be sought before entering any data-sharing or collaborative arrangements.
Siloing — the collection of data without a cohesive integration strategy, or its storage/control by a single entity in a way that makes it inaccessible to others — can needlessly restrict access even for those with legitimate interests. Liberating data has time, effort and cost implications, and there is the potential to introduce errors when syndicating. The first step is getting data onto common platforms. Market-ready solutions exist that can do this and the use of standardized exchange mechanisms is becoming increasingly common.
Addressing cultural and behavioral resistance requires effective change management. Pragmatism and adaptability are key to understanding how strategic objectives will influence frontline operations. A two-way dialogue is especially important in digital technology design; a 2022 Thetius survey found that 40 percent of crew members who worked at sea with digital technology did not believe that it had been optimized for their needs.
The cost of data gathering, storage, processing and sharing is another potential obstacle, but this can be significantly reduced if suitable market-ready solutions are used. Furthermore, digital technologies offer significant returns on investment — up to 81 percent, according to Lenovo — and maritime-focused studies have shown that 71 percent of shipowners/managers see cost reduction as a prime driver of digitalization.
Next steps
In a commercial capacity, shipping is already experienced in trading under bilateral contractual arrangements. P&I clubs, slot-sharing and tanker pools demonstrate how mutual interest has prevailed, and over 95 percent of East-West containership capacity is controlled through alliances.
Now, we have to translate that collaborative mindset into new areas. We should start by leveling the technological playing field, ensuring that digitalization does not just remain the preserve of the most resource-rich carriers.
Today, the proliferation of Very Small Aperture Terminal (VSAT) satellite technology is fuelling demand for access to new digital products and services at sea. Take-up is accelerating — according to Euroconsult, there were 37,000 VSAT-equipped vessels in operation in 2022, up 42 percent from 2018, and it predicts that 90,000 vessels will be equipped by 2032. Meanwhile, Low Earth Orbit satellite constellations such as Starlink and OneWeb will further underpin opportunities for more sophisticated maritime data-driven services.
Levelling-up includes continuing roll-out of high-speed maritime connectivity, and we need to look at how and why we do things. ‘Sail fast then wait’, for instance, comes from an age when vessels could be out of communication for several weeks – and today the practice is still incentivized by contractual arrangements.
Perpetuating older practices makes diminishing sense, especially when technology exists to change things for the better.
Delivering realities
Undoubtedly, the global shipping industry is committed to making up lost ground when it comes to digitalization. However, complex problem-solving relies on converting data into insight and then into action, and we have to recognize shipping’s vastness and complexity.
In an industry where 80 percent of data goes unused, 80 percent of ports still rely on manual, analogue processes to manage day-to-day tasks, and 70 percent of the addressable fleet is owned by companies operating fewer than 15 vessels, consolidating data and sharing insight throughout the ecosystem is key.
As Common Interest shows, the time, technology, and trading environment are right to use data collaboratively to evolve and grow. Shipping can choose to achieve its goals for decarbonization and modernization not as a regulatory box-ticking exercise, but as a proactive, future-facing, and responsible industrial sector.
Laurent Hentges is Vice-President, Digital Solutions & Transformation, Bureau Veritas Marine & Offshore
Op-Ed: With Digitalization, the Human Role in Shipping is Changing
The systems and algorithms that will power up vessel efficiency can already ingest and process data faster than humans, says Silverstream's Nick Chrissos.
When it comes to data and digitalization, the shipping industry is following the well-established path of other sectors that have successfully incorporated technology and harnessed its potential for business advancement, says Nick Chrissos, Chief Digital & Information Officer of Silverstream Technologies.
The shipping industry now widely acknowledges the significance of the digital journey and the potential of data. The surge of interest in digital solutions in recent years indicates a shift from viewing data as ‘nice to have’ to recognizing it as a vital catalyst for driving industry transformation. It's no longer a matter of whether the industry will embrace digitalization and data, but rather when and how rapidly it will do so.
From costs to regulatory compliance, there are several influential factors driving this digital transformation and, in turn, the decarbonization transition. The upcoming European Emissions Trading System (EU ETS) spans both. Starting on January 1, 2024, the EU ETS puts a cost on emissions from commercial ships of 5,000 GT or more that call at EU ports. Initially, 40 percent of emissions are in scope, quickly ramping up to 70 percent for 2025, and to 100 percent for 2026 onwards. When factoring in this cost on emissions – and not to mention the additional extra costs that will come as regulation ramps up – the value proposition for clean and digital technologies, and the importance of leveraging data, is clearer than ever.
In this era of multi-tiered and complex climate regulations, actionable data has become a driving force behind both the industry's digital transformation and its decarbonization agenda. As a result, we are transitioning from an era where data was collected and stored passively, often leading to valuable insights being overlooked or forgotten, to a phase where data is being actively leveraged to inform business decisions and strategies.
Raising the roof
Looking specifically at clean technologies, in simple terms, data can and will be used by clean technology manufacturers to raise both the floor and ceiling of fuel-saving potential. Like the intelligent systems within modern cars that tune the vehicle’s engine as it drives, maritime clean technologies will learn and respond to their environment and operate in a way that ensures maximum efficiency.
Because clean technologies are deeply integrated into a vessel, there is the potential for them to identify and unlock efficiencies that others may not even know exist. In other words, they become active and intelligent solutions to maximize the performance of a ship.
The integration of Silverstream’s air lubrication system within the vessel’s ecosystem, for example, provides us with insights into a ship’s hydrodynamic performance. We can harness data from our system, as well as multiple sensors around the vessel, to gain an in-depth understanding of air lubrication technology and identify factors that could influence the ship’s overall performance.
It is also key to accurately calculate, measure, and report the efficiency level and decarbonization impact of clean technologies. This has always been a priority for Silverstream, and our air lubrication system reduces average net fuel consumption and GHG emissions by 5-10 percent. It does this by releasing a carpet of air under the ship’s hull to reduce the frictional resistance between the hull and the water.
Since its inception, Silverstream has only ever claimed system performance that we can prove. However, the digitalization of clean technology will allow for even more precision when sharing performance data. Monitoring and measuring performance data, as well as system health, will be an integral component of not just our clean technology, but all clean technologies, in the near future.
New thinking
The digitalization and data evolution is underway, but thinking about clean technologies in this way will require two key shifts in sentiment for shipping. These shifts are Silverstream’s big prediction for the next phase of maritime digitalization.
First, we will have to become acquainted with the human role changing, and with crew effectively being removed from active decision-making on some tactical elements of ship operation. The systems and algorithms that will power up vessel efficiency (and indeed routing, navigation, berthing and more) are already at the point where they ingest and process more information than a human can comprehend. Optimizing clean technologies even further will require trust in the machine learning (and soon-to-be artificial intelligence) systems that underpin them.
Secondly, and more significantly, shipping will have to change its technology outlook. Currently, technology – whether physical or digital, traditional or innovative – is generally seen as a means to fulfill the requirements of today, not to anticipate the future.
This is something that Silverstream has observed and educated the industry on with respect to proven clean technologies. Air lubrication is seen increasingly as a mainstream solution that helps operators keep their vessels flexible to the demands of the future, as well as improve efficiency today. We can collectively now do the same thing by applying data to all clean technologies.
We must continue to elevate our thinking about what proven technologies can do for ships, and develop a holistic vision of their impact. Fuel bills are cut, and emissions are reduced, certainly, but these technologies can be an even deeper enabler of change for shipping companies. Getting there is going to require a change in how we think about technologies and their impact on operations – and placing more trust in shipping’s digitalization pathway as a vector for genuine, lasting change.
Nick Chrissos is the Chief Digital & Information Officer of Silverstream Technologies.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
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