Andrew Dennant, Emerson Process Management’s director of Oil & Gas for the Middle East and Africa, says the traditional technology vendor model is becoming less relevant, and that he is spearheading a new era of collaboration to assist the region’s operators with the challenges of tomorrow
As Emerson Process Management’s recently-appointed director of oil and gas for the Middle East and Africa, Andrew Dennant appears to have plenty to hold his attention in his new role. Oil and gas accounts for 35 percent of Emerson’s global business, and between 50 and 60 percent in the region – evidently making it a hugely important part of the firm’s business.
Of course, this importance brings its own challenges, and Dennant says that ensuring the firm works with customers – rather than simply selling products to them – will be a key test.
“I think there are a number of things I need to be doing in my new role, and one of them is getting our people to understand more about the applications our customers face.
If we want to be trusted advisers, we want to be solving not selling, and to do that we need to fully comprehend the challenges they face. Improving the level of oil and gas knowledge our sales guys have is a really important factor in that,” he explains.
“To be involved in the major business we are conducting in the region – such as our strategic accounts with the national oil companies in the GCC and international oil companies in Iraq for example – we have to get closer to them to understand the business challenges,” he adds.
Speaking during the Emerson Global Users Exchange in Anaheim, Dennant says that the region’s distinct challenges are very evident when speaking to operators in the Gulf of Mexico and onshore US.
“Our customers have to protect the reservoir just the same. Yes, we have to get first oil and gas as quickly as we can. Yes, we have to optimise cost the same as they do. The big difference in play here is the way the reservoirs work because of scale.
The oil and gas deposits under development in the Middle East are just huge. Talking to people in the US, you get a real sense of how the scale is unimaginably different,” he says.
“We need to make sure that Emerson understands the implications of those scales when we are developing our own sales tools and also, of course, products and services tailored to our clients in the region.”
With this in mind, Emerson has recently announced plans to expand its project engineering staff to meet the increasing demands of project activity. With new projects appearing at double-digit rates, increased engineering capacity is required to ensure timely project execution.
“We’re not just adding staff; we’re making them more efficient and effective. We’ve invested for years in standard practices and tools for project engineering, and are taking advantage of global communications technology to be able to locate talent globally and then deploy our expertise anywhere it is needed.
Our commitment is to meet our customers’ demands for competitive, predictable, high-quality engineering services that get them into production and making money as soon as possible.”
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Regional success
Emerson has recorded impressive results in the region, with over 20% growth so far this year over 2011.
“It’s been a phenomenal year regionally for Emerson Process Management. This is because our customers are trusting us with huge projects. In Iraq, for example, we have had a great deal of success, but across the board we are winning big business.
“On the field rehabilitation side, we are now putting service managers on key strategic sites to manage a service team and relationship, to bring everything up to the optimised level of production. We are working offshore Qatar to help with production uncertainty, to understand better what’s coming out the top of the wells. In Bahrain, we are working with a major who is installing wellhead monitoring and achieving a huge improvement in production.”
Dennant says that, around the region, some countries have invested very heavily, with a lot of capital allocated to boosting capacity.
“The reality is that the global average for production per field is declining at around 6.7% per year; by 2030 that becomes 8.6% per year, which is a 28% increase in decline, but it also means that for every eleven wells you have today, only ten of them are going to be producing in 2030.
Combine that with a retiring workforce across the industry, then there is a cliff coming. We have to get better at getting the tough oil out of the ground. We have to optimise our reservoirs, and we have to enable young people to come in and get the job done. So employing better technology now to get the oil and gas out is vital.”
At the same time, countries such as Iraq still present a very bright prospect for firms such as Emerson.
“In countries like Iraq there is massive investment on the cards for the foreseeable future. There is just so much work to be done in both oil and gas. We have the largest service and support facility of any automation vendor in the world in Basra right now. And it’s growing. We’re employing at least 50% more people in the coming year too.”
One of the most significant markets for the firm is, unsurprisingly, Saudi Arabia. The Kingdom accounts for around a quarter of Emerson’s Middle East and Africa business, and Dennant says that is consequently vital that they stay close to Saudi Aramco and SABIC. The firm also has over 50 percent Saudisation, which Dennant suggests is a real source of pride for the company, and will be improved on further.
In October, Emerson announced that it was increasing its presence in the Kingdom further, with a US $25 million investment to create a technology and innovation centre in partnership with the King Fahd University of Petroleum and Minerals (KFUPM).
The firm has already signed an agreement to lease land in the Dhahran Techno Valley, where the “Emerson Centre for Technology and Innovation” will be built to help train technologists and innovation leaders.
Emerson says that the centre will allow the firm and its customers to “access groundbreaking innovation” and will help them develop both local technical solutions and human capital.
“Globally, Emerson has a strong track-record of new technology development – investing $800 million in engineering and development in 2011, and employing more than 8,000 engineering and development personnel in worldwide research and development.
The KFUPM agreement, however, is the first time we have invested a single amount of this size, which will be dedicated solely to technology development and innovation, in any single local market. Today underscores the critical importance of Saudi Arabia to Emerson’s growth in the Middle East and Africa region, and our commitment to training and recruiting Saudi employees and KFUPM graduates.”
Dennant is also confident that the oil and gas industry generally remains an attractive career choice for graduates in the region.
“There are two things working for us here. The first is that being part of the national oil and downstream companies hold a prestige attached to those organisations, and I think that does make it attractive. The other aspect is that we are seeing tremendous population growth across the region, and that means that there is no shortage of people looking to join the energy industry.”
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Billionth anniversary
Emerson’s wireless technology recently clocked up over one billion hours of wireless operations across 10,000 system, in over 120 countries. The firm’s WirelessHART standard is now in wide-scale use in refineries, oil fields and offshore platforms, and has demonstrated reliable performance in harsh, remote environmental conditions.
“We knew wireless technology offered substantial savings, and it is gratifying to see its rapid and widespread adoption. Many companies started out with small installations to prove the concept in their operating facilities.
Today, those starter systems are rapidly expanding to side-wide facilities.” In addition to reliability, Dennant says that a crucial aspect of the firm’s offerings is that they help customers save time and money.
“Using predictive maintenance, the intelligent devices within a plant can run self-diagnostic checks which will inform the operator about when a device is expected to need changing, so the spares can be ordered to fit around a maintenance schedule that will have minimum impact on operations.
We’ve seen examples where our customers have been able to change out just 28 of 900 devices because the system could confirm that the rest were running fine and operating within their design parameters. That saved the clients almost a million dollars in the first year,” he explains.
“Our downhole scope of supply is two-fold. We do permanent downhole gauges which are installed on the production well. We also do modeling. We have some great modeling software which can get a better model of a complex fractured reservoir much faster.
That means operators know to drill much more accurately. Tying this in with sensors on drilling equipment means that where we have actual data feeding back into the system, this is dynamically applied to the model and automatically updates it,” he adds.
Emerson acquired Roxar ASA in 2009, adding subsea reservoir management and production optimisation capabilities for its E&P customers.
“The Roxar acquisition is a good example of how we have been extending our solutions to help customers meet the automation challenges of offshore, such as smart downhole networks for real-time reservoir optimisation and flow assurance,” he concludes.
