Moving towards the digital oilfield

by Staff Reporter | March 18th, 2012

Kevin Thorley, CEO, Hermes Datacomms Middle East

As he explores the technology-centric solutions that will help the oil and gas industry leverage limited resources to optimise facility performance, Kevin Thorley, CEO, Hermes Datacomms, gives Supriya Srinivas an overview of the challenges he faces.

It has been only a few days since Sirte and the rest of Libya was declared free and Hermes Datacomms had this piece of breaking news on its website: “Hermes Datacomms is fully operational in Libya”. It brings into sharp focus the inherent risks in operating in a region that is in political turmoil. However, Libya, in the past couple of months, is just an extreme version of another day in the office for a company that has operations in Iraq and Afghanistan, among other places. Considering the mission critical nature of providing ICT solutions for upstream oil and gas operations, the task of companies such as Hermes Datacomms Middle East is as demanding in war-torn Libya as it is in the oil-rigs across Russia, Turkmenistan or in the UAE.

For the man heading the company’s operations in the MENA region, Kevin Thorley, CEO, it is tendering for a job that is one of the most demanding of operations – a sure sign of an industry in flux. He acknowledges that his company’s role in providing communication solutions for the oil and gas industry is getting more complex.

“The oil and gas companies are not just looking for a VSAT provider, they are looking for a company that offers an integrated solution. We are now working with partners to make sure we deliver turnkey projects that would involve fibre and last mile access, in addition to VSAT services, fixed, mobile and microwave services. Our approach is to manage and control all aspects of the network, end-to-end, including licensing and logistics at both ends of the satellite link.”

“The oil and gas companies are not just looking for a VSAT provider, they are looking for a company that offers an integrated solution. We are now working with partners to make sure we deliver turnkey projects that would involve fibre and last mile access, in addition to VSAT services, fixed, mobile and microwave services. Our approach is to manage and control all aspects of the network, end-to-end, including licensing and logistics at both ends of the satellite link.”

Towards integrated solutions

The digital oilfield is to the oil and gas industry what ‘cloud’ is to the IT world. The digital oilfield demands variables that include reliability, integration, security, scalability, openness and control. From forging strategic partnerships to incorporating sophisticated monitoring technology, companies such as Hermes Datacomms are alive to the challenge. Thorley says, “We expanded our Middle East office with a dedicated team of engineers and a 24/7 help desk. From an office of just two persons in 2008, we have now grown to 22. We see tremendous growth in Iraq and across the region for the next five to ten years.”

Iraq is probably not the most dangerous place on earth today, but a drive to the rig-site involves donning a bullet-proof jacket and being escorted by a convoy of three cars with armed guards that would cost $4,000 a day to hire. As companies such as Hermes Datacomms move into more remote areas, the challenge to service a rig-site that costs upwards of $500,000 a day to rent, and ensuring zero failure in critical communication links, grows in significance. Thorley says,”Highly reliable and accessible communication networks are critical for our clients to realise the value of their investment. Our customers are looking for real-time data transfer based on which they schedule their operations. First of all, our network is tested to operate in extreme weather conditions. Our engineers then use proprietary monitoring tools that allow them to identify any degraded performance and to maintain the integrity of the network without our clients even realising any change in the system.”

Intrinsic to Thorley’s mission to offer complete solutions to the oil and gas industry are the partnerships the company is forging with local Iraqi companies and with others such as the recognised leader in RF products, Comtech EF Data, the company that launched Vipersat at the recently held IBC 2011. Also present at the launch of Comtech’s CDM-800, a Hermes Datacomms’ spokesman said, “Comtech EF Data’s Advanced VSAT Solutions portfolio provides high-performance satellite-based communication solutions for a diverse range of applications, including mobile backhaul with RAN optimisation, IP trunking and backhaul, maritime and offshore networks, corporate and enterprise networks and emergency and disaster recovery”.

The value-added services will only expand as companies such as Hermes Datacomms transition to becoming an integrated service provider to the oil and gas sector.

Challenges of bandwidth

Apart from the obvious challenges of extreme weather conditions, remoteness of sites and the odd chance of your life being in danger, the big challenge Thorley faces is the availability of bandwidth.

He says, “Bandwidth is scarce. At the moment we could do with a lot more. It is important to educate our customers that we need to procure space from different providers. In the UK, we have our teleport with eight dishes in Shrewsbury, UK, looking at a number of different satellites , ensuring a steady coverage. We mainly work out of our teleport in the UK. In this region we work with Telcos such as du, Etisalat and satellite providers such as Gazprom, among others, for bandwidth capacity. Companies such as du and Etisalat help us with licences in their area of coverage.”

Similarly, Hermes Datacomms has formed a partnership with KB Impuls Hellas in July 2011, a satellite communications company based in Athens, Greece, that will be servicing a client’s remote office in Turkmenistan, among its first projects. “To provide reliable and cost effective communication solutions we are working through partners where necessary to enable us to offer licensing and engineering resources,” Thorley explained.

While companies such as Hermes Datacomms typically have agreements with a number of service providers, the problem is not so much coverage as the huge increase in the volume of data commercial satellites are handling. The technology is there, but there is only so much VSAT capacity available. The headline grabbing HDTV and 3D TV channels, and any mode of data transmission, need more bandwidth than the oil and gas industry.

Thorley explains, “There is only a fixed number of satellites at any one time and the cost of capacity is going up. It is tricky environment, but as a long-time service provider to the industry where we have forged close, time-tested partnerships with our clients, we are well-positioned to cater to the bandwidth needs of the oil and gas industry. Having bandwidth in reserve has helped when in April 2011, BP required WAN connectivity at short notice for 21 sites across Rumailah, Iraq (see box titled – Client: BP). We designed and installed a solution that provided internet, data and voice capabilities over a fully meshed VSAT network across the 21 sites within 15 days.”

“We designed and installed a solution that provided internet, data and voice capabilities over a fully meshed VSAT network across the 21 sites within 15 days.”

The digital oilfield has also invariably crossed into the realm of the ‘Cloud’ with companies in the oil and gas sector moving increasingly to a centralised computing topology, a ‘Cloud’ model, accessing data centres from all around the globe.

Seamless connections between head office and multiple sites

In addition to the cloud-based managed network services, Thorley says, “Among the typical requirements are basic VSAT – that allows for communication between the field and headquarters. The head office could be in the UK or in the US or even in Dubai. We offer seamless solutions such as four-digit dialing, so that a field office would be an extension of your Houston office.”

While real-time data must be transmitted quickly and efficiently around the world from increasingly remote locations, the personnel challenges oil and gas companies face compound the task for service providers. That includes an ageing workforce that is less likely to be onsite and the safety, security and morale concerns of the crew onsite.

When you consider the daily rental costs for an oil rig, the communications infrastructure costs are a small fraction of the overall outlay. But service providers will tell you, communications’ solutions offer the opportunity to deliver disproportionately high returns against cost.

Thorley says, “With more remote monitoring of the rig sites, and the need to connect anywhere anytime, we are seeing an increase in the need for solutions such as video conferencing that can consume a lot of bandwidth. Moreover, there is an increase in HSE requirements, so there is more CCTV on rigs and in addition, crew on vessels wants to browse the internet, use Skype and conduct online banking operations. So you need bandwidth for activities not specific to the industry. Given the multiple demands, we find it crucial to keep the client informed about the use of their communication facilities. From a business point of view, they are in a position to ensure the efficient use of their communication channels.”

Thorley’s team typically works with three different layers of companies involved in an oil rig site ranging from the oil companies and drilling companies to the support companies that would involve transport, food and so on.

The company works with multiple satellite operators ranging from Gazprom and Eutelsat to Intelsat and RSCC. Thorley says, “The satellite operators we work with understand the critical nature of our operations and our need to offer complete redundancy to our customers.”

In addition, there are the physical challenges of placing a VSAT dish on an oil rig given the space constraints and the potential for obstruction from other equipment. On the issues of operational challenges, Thorley says, “We have the regular rig moves. In a month, we would have 20 such moves and our team is always on hand to ensure that our equipment is realigned to ensure continuity of service.”

The impact of the oil and gas sector in the MENA region on the operations of a company such as Hermes Datacomms is clearly evident. Ranked in the top 100 among Britain’s fastest growing technology-related companies with a 45.25% growth, Thorley believes the MENA region has played a significant role.

He says, “As people demand more remote control of operations from the head office, the need for bandwidth is increasing. Also the company’s use of “meshing technology”, where multiple sites can share the same satellite frequency, has helped sales to grow 45% a year. Oil fields need a lot of data and reliable connections, so by targeting more difficult places in the world and offering a service comparable to that in the easier-to-reach places – that’s how we grow our business. They can have the same service in Libya or Iraq that they can in London. It’s about offering services in tricky places”.

BP Case-Study

Place of Performance: Rumailah Iraq

Date and Duration: 2010 – ongoing

Background

BP was starting operations and required WAN connectivity at short notice to meet their operational requirements. BP came to Hermes to design and manage a fully meshed, dedicated bandwidth network over 21 sites in Iraq.

Project

The project consisted of 21 sites across Rumailah including; life support camps, de-gassing stations and rigs. The network required internet, data and voice capabilities over a fully meshed VSAT network.

Solutions/Services

  • Developed a solution to provide BP with a VSAT network to meet their internet and data requirements.
  • Agreed strict SLA’s to ensure maximum uptime of the VSAT link.
  • 24/7 network monitoring and point of contact for any network queries or requests.
  • Inclusion of Out-of-Band management to allow for remote diagnosis and remote repair (if feasible) of the network.
  • Assigned an account manager to provide advice and support as and when required.
  • Monthly reports showing link usage and recommendations whilst providing information on priority fault tickets.
  • Arranged logistics for equipment and personnel.
  • Trained and mentored local BP staff on the use of VSAT equipment including installation and repairs to reduce additional costs.

About Hermes Datacomms

Established in 1991, Hermes provides managed communications solutions to the oil and gas industry. With more than 400 VSAT installations and Earthstations in the UK, Denmark, Russia, Kazakhstan, Azerbaijan, UAE, Singapore, Australia and USA, the company offers coverage in 88% of the world’s oil reserves and 92% of the world’s gas reserves. Customers within the oil and gas industry, include Maersk, Parker Drilling, PSN, KBR, BP, Eni, Fluor and Petronas, among others.

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