Wintershall Dea looking to the future with a focus on technologyNov 11, 2021 by Energy Connects
Wintershall Dea Chief Technology Officer, Hugo Dijkgraaf, sat with Energy Connects to discuss the company’s investment in technology, and its future energy transition.
What are your technology targets going forward? What are you focusing on, within, different areas, but also you prioritising over others?
There are two things that we are really doing. One is, performance today. How can we deliver operational excellence today in the 13 countries we operate in – from MENA to Europe - and deliver on our 2021 plan. And the next thing is, how do we position ourselves for the future?
This is my focus as CTO. I am responsible for a number of units focused on operational excellence – for development, production, subsurface technology and projects. And I am also responsible for some future-focused activities: exploration, driving digitalisation, and carbon management and hydrogen.
Let us look at operational excellence: I think results speak for themselves. Last year we cut our already low production costs to € 3.5 per barrel. That’s low compared to our peers. Technology has a clear role in bringing down costs. Take remote operations. In the Southern North Sea we have upgraded our operations: our installation platforms there are now completely de-manned, with a remote control centre. We see a massive impact on OPEX by running this form of remote-control local site. Another example would be at the operated Brage platform in Norway, where we have reduced costs significantly by optimising our drilling campaign and the execution of operational tasks by using collaborative technologies.
Then if you look at the future, we are also delivering results. We are really happy with recent exploration performance. Last year we had a 64 percent success ratio: meaning two in three exploration wells that we drilled, were successful. We added 90 million barrels of recoverable- most of them are relatively easy to develop in the sense that they are near existing infrastructure. At the same time, we have a clear plan for the future, lower carbon world, in the form of our Energy Transition Pathway.
In summary, our focus is operational excellence for today, then in the longer term, preparing for certain changes that are coming in the industry and in the world.
What are some of the major technical hurdles that you are facing across the places you are operating in?
Of course you will always be encountering all kinds of technical hurdles in specific projects. In terms of global operations, I think it is more a question of what the challenges are that we face to perform at the highest standard. One of the reasons that we established the CTO division, was to have this clear focus on operational excellence, to support the business units, to support the assets.
A big focus is on the development of capabilities across the organization. Constantly improving information, knowledge transfer between the various units and, data sharing. Connecting our different global teams to all the expertise in the business is probably the biggest opportunity, and challenge.
Can you talk to us more about your strategy on digitalisation and where you see it going?
Digital is a fascinating topic. If you think about strategy, we are focused on what we call ‘Best Bets’. Those are a group of solutions that offer the highest return – the highest impact on factors such as sustainability or safety; or operational performance driving financial performance. We look at getting maximum results in minimum times. An example is a system we are developing: our “virtual flow meter”. This gives us real time, continuous insight into how our wells are producing. The key here is it being in real time; and therefore knowing all the time exactly what is happening in the wells. This leads to increased production and a faster response when required. It will tell us, straight away, when a well is not producing as it should be, enabling us to make quick decisions and avoid spending weeks working out what and where the problem is. With artificial intelligence, you can already start to automate decisions.
What we have seen is that you can actually get up to 3 percent more production from a field by having a virtual flow meter. A three percent increase from just one digital solution is significant. And this is just one example: we have a range of other solutions, like our artificial intelligence Exploration Advisory Tool, developed jointly with IBM, that helps us to make better exploration decisions, faster. In 2021 we’ve started rolling out that tool across our business.
You mentioned IBM, and you are having partnerships with technology companies, is that that kind of style, with the technology, big hitters out there, that you would look at working with?
Totally. The days where you are the E&P company, and you know everything, and you have all the knowledge in-house, those days are long passed.
Partnership is key to the success of our business. On one level; our partnerships with NOCs and IOCs around the world. But then also, when you come to technology; for instance, on digital, there are a number of companies that we work very closely with. So, we are building an ecosystem, working not just with IBM but also with expert specialists like Eigen and Cognite. Or on hydrogen and carbon management: we are part of a 30 organisation CCS consortium in Denmark: Project Greensand. That is an exciting new kind of partnership for us.
I think that nicely goes back to what you said about the future. What is Wintershall Dea doing in the area of energy transition? And what technical aspects are you sort of looking at working out seeing what you could get involved in?
We are well positioned for this energy transition. It is a major focus for us. The starting point is that we have a great, gas weighted portfolio. That is nowadays a distinct advantage. We also have a low-emissions intensity portfolio. To be specific, if you look at the IOGP average emissions, they are 19 kilos of CO2 equivalent per produced barrel oil equivalent in 2019. We were at less than half of that in 2020.
But of course we need to do more. That is why we set our climate targets last year. We have a clear target to achieve net zero for our Scope 1 and 2 emissions by 2030. That is an ambitious target, and it is not just for our operated but also for our equity share of non-operated projects. Whether we are partner or operator, we are using strict emissions management and technology to reduce emissions, for instance at Mittelplate, we are now running the whole production island with renewable energy from shore. Overnight we reduced emissions there by 88 percent.
But we are also looking beyond 2030. We want to reduce our Scope 3 emissions, the ones from the use of our products. Here CCS and hydrogen are key.
The IEA has said: ‘reaching net zero will be virtually impossible without CCS.’ That is exactly our view. CCS is a key technology. And we have the assets – depleted reservoirs for CCS, pipelines and the technical know-how. Our newly established dedicated Hydrogen and Carbon Management team is pursuing projects to advance gas-based hydrogen and CCS as commercially viable solutions.
We are involved in multiple projects on CCS. Project Greensand in Denmark is exciting. Earlier in 2021 the consortium announced it will now deliver a pilot phase involving a first injection by late 2022. If all goes well, we could be delivering full scale storage as soon as 2025. And the area concerned, around the Nini West reservoir that we know well, could store up to 8 million tonnes of CO2 per year by 2030. That’s around 25% of all Danish emissions.
In the field of hydrogen, we are exploring industrial use of methane pyrolysis to produce climate-friendly turquoise hydrogen from natural gas in a partnership with the Karlsruhe Institute of technology. And in 2021 we have established a hydrogen cooperation with German gas-group VNG, jointly investing in the methane pyrolysis start-up HiiROC. Together we are developing a pilot facility for turquoise hydrogen production, the first of its kind in Germany. The facility uses HiiROC’s methane pyrolysis technology and will go into operation in 2023.
But we are also developing some projects in the field of blue hydrogen. Those will be connected to CCS of course. It`s important to be technology open and not dogmatic about the colours. Green hydrogen from renewables won`t in our view be accessible in sufficient and affordable quantities soon. We will need all different types of hydrogen we can get, to make the market work now.