Combining two different cultures of technology and innovation

Statoil and Hydro were two independent companies that both had strong research teams and a culture of innovation prior to the merger. Would it be possible to harness the potential synergies and make 1 +1 = 3? 

Combining two different cultures for innovation and technology is not a job done in a heartbeat, and it has taken time. But the results have been plentiful, and very rewarding for Statoil.

Today’s biggest buzzword, digitalization, is not only a buzzword within Statoil. One of the ways we have seen the combination of knowledge and different ways of thinking has been the use of Big data. By systematising big data, it has been possible to reduce the time it takes to update a reservoir model from anywhere between 1 and 3 years down to just a few days, using a system called Fast Model Update (FMU). This Statoil-developed technology marks a paradigm change in the way reservoirs are modelled and developed. We started using this method in 2012. Both Hydro and Statoil were very far forward as developers and users of offshore technology in such areas as subsea development, multiphase pipeline transport, and horizontal and vertical drilling. By combining their technological expertise and knowledge, the merger stimulated faster development and greater use of innovative solutions. 

"It has revolutionised our ability to further develop our fields. By setting big amounts of data in a system and automatically integrate all modellingsteps, we can effectively test different models and probabilities. This helps us find the best well paths that ensure optimum utilisation and recovery from the reservoirs," explains Therese Brækken, Statoil's FMU project manager.

At the Peregrino Southwest area it was initially planned three wells. Continuous updates of the models as we got new data in, has resulted in a more optimal field development and drilling of 10 new wells and 8 more under planning.

Maximum effect

FMU draws on models used in meteorology, where large volumes of data are mined to predict the weather, and is defined as a high impact technology, i.e. technology that radically changes the way work is done and yields major savings. Over the last decade, Statoil has developed several ground-breaking technologies. Executive vice president for Technology, Projects and Drilling (TPD) Margareth Øvrum believes much of the reason for this is the merger of the teams from Hydro and Statoil.

We knew that a merger between Statoil and Hydro would bring huge advantages and give us even greater clout as a technology company

– Executive vice president for Technology, Projects and Drilling., Margareth Øvrum

"Before we were two companies that had quite similar technology needs on the Norwegian continental shelf, and were competing to be the first and best to develop the same types of technology. In light of the strong innovation track record on the Norwegian continental shelf, we knew that a merger between Statoil and Hydro would bring huge advantages and give us even greater clout as a technology company," says Øvrum. Ever since the merger, she has been executive vice president for technology in various organisational configurations at Statoil. One of her most ambitious visions has been the development of a seabed factory. Lars Brenne has been working on how to set up an almost complete processing plant on the seabed for 20 years. An important milestone was reached in 2015 when Åsgard Subsea Compression started up.

illustration of sub sea cluster

40 new technologies

"This has been a long and demanding development project. At Åsgard we have qualified something like 40 technologies in order to be able to realise the subsea compression," Brenne explains. Subsea compression on Åsgard has yielded 300 million extra recoverable barrels and is a technology that will be able to improve the recovery rate dramatically on many fields. Today Statoil is the world leader in this technology, which builds on more than 20 years of development work by two companies.

"Prior to the merger, there was something of a race between Statoil and Hydro to be the first. We both had the same goal, but slightly different approaches. At Åsgard, it is largely the Statoil method that has been realised, with work from Hydro before the merger incorporated. We were able to continue with development paths with suppliers and subcontractors that had already been started. This innovation was so radical and to mature the suppliers and ourselves to believe it was possible through technology development contracts over time was crucial," Brenne adds. Among other things, he highlights the need for the development of dedicated computers to process all the information from the plant. Here work had already come a long way in connection with the work Hydro had done on subsea compression at Ormen Lange

Offshore wind

Hywind started out as a drawing on a piece of paper by two Hydro engineers, passing the time while their sailing boat drifted on a windless day. Today it is being developed as a wind farm project with six turbines off the coast of Scotland and has garnered significant international attention. This solution has opened up a new segment for wind farming in deep waters.

"Hywind is a typical example of how we as a company have managed to use our skills and knowledge to come up with brand new business solutions. It also underlines how important it is for us to have a strong technology team in order to maintain our position as a world leader in technology development," says Margareth Øvrum. And while we are talking about new opportunities and wind farming: a new project is now looking into the possibility of incorporating FMU into the development of wind farms.

"The things we have learned both from meteorology and our experience in optimisation (how many wells, which order they should be in, where they should be placed, how we can minimise carbon emissions, optimisation of water injection, etc.) represent expertise that can be transferred to the planning of wind farms," says FMU manager Brækken.