Critical D&C issues with Dave Tucker, VetcoGray & Hydril Pressure Control
By Linda Hsieh, assistant managing editor
Dave Tucker is chief operating officer for VetcoGray and Hydril Pressure Control, both part of GE’s oil & gas business.
DC: Technology-wise, what does GE Oil & Gas see as some of the most critical issues facing the drilling and completion industry today?
Tucker: One of the top issues, as people move into deeper water, is do we have the equipment, components and systems that can get you there from a reliability or technical capability perspective? Higher temperatures, higher pressures, reliability, sealing technology – these things become critical if you’re going to help the industry reach further and deeper, and that’s what deepwater operators and contractors talk to us about on a regular basis.
Our customers are also always in the pursuit of safer systems and putting people out of harm’s way. We’re working to design equipment that takes risk and human intervention out of the process – how riser strings get clipped together, for example. Safety is on the front of everybody’s minds, and we’re always thinking about it with the development of our products.
Other than that, it will be interesting to see how 2009 and 2010 play out as far as people being able to produce and deliver these systems to customers on time. We’ve had a big boom cycle for the last two to three years, so will that continue and how will it affect the industry’s ability to deliver these systems on time?
DC: And how is GE working on addressing the concerns that drilling contractors are talking to you about – reliability, sealing, HPHT, etc?
Tucker: We’re working on 20,000-psi capable riser strings, our connection systems, our choke and kill lines, the composite dimension for drilling risers so we can have lighter joints and therefore drill deeper. Coupling technologies are critical to the industry, and it’s getting a pretty big piece of our spend, like with our MR-6H SE marine riser system. We’re also working on our blowout preventers and control systems to handle the greater depths, pressure and temperatures.
From when GE came into this segment and acquired both VetcoGray and Hydril, we’ve increased our spend on these technologies and programs 80% on a year-over-year basis. We’re putting a lot of money into things like the 20,000-psi riser, composite strings, coupling systems, control systems, and their ability to be reliable and handle higher temperatures and higher pressures.
DC: Do you believe there is a sufficient market for these high-end technologies you’re working on?
Tucker: We’re always pushed to have a cost-competitive product. Part of our responsibility as a supplier to the industry is to find a way to balance introducing technology and being able to deliver cost-competitive products. So even when you make these systems, you still have to stay cost-competitive to what you were doing before, maybe a little bit of an increase. And that’s not always easy, because when you’re introducing these technologies, the Serial No.1’s tend to be pretty expensive.
But, yes, we see a market for these technologies. We have been going through a process of talking to rig owners and customers about what they want to see for technology. We talk to them about their technical challenges and what they need solved. That’s what shapes our key programs and where we decide to spend money and what we decide to work on and produce to the markets. We get feedback from customers in lots of ways.
DC: In this kind of market downturn, are you concerned that some people may become more conservative and become less willing to try new technologies?
Tucker: Not necessarily. I think if you can demonstrate the equipment works, the appetite will be there for better technology. The number of rigs getting built may slow down, so what might end up happening is you sell fewer systems. But in terms of our developing the technology and the need for it, it’s still there. Because whether it happens a year from now, two years from now or five years from now, the need to go deeper and the need for these systems is inherently there.
I’d argue that the suppliers who can continue to find ways to develop these products will be better positioned when the market comes back and customers have more money to spend. It doesn’t matter if you’re in an up cycle or down cycle – you have to press ahead with these technology programs because the underlying demand is there.
DC: You mentioned earlier that on-time deliveries had been difficult during the boom cycle. How have you been working to improve that?
Tucker: Our own situation was such that we’ve had a huge backlog, and a fair portion of that backlog in our drilling business was late. We’ve introduced lean practices in our plants to reduce build cycles, and that’s starting to have a good impact. Cycles are coming down, and late backlogs are coming down.
DC: Can you explain how you’ve used “lean practices” to improve operations?
Tucker: The concept of “lean” started with Toyota and the auto industry. You go about the process of removing waste from your engineering, production and sourcing cycles to reduce build cycles. When you quote a subsea system, people don’t want to wait a year and a half to get it. If you can cut time out of your cycle, it’s good for everybody. We’re applying these practices in our manufacturing facilities.
DC: What kinds of improvements in cycle times have you seen?
Tucker: Well, I can tell you that at our North Houston Rosslyn Road facility, we’ve improved the throughput on our riser joints fourfold – 400% reduction in the amount of time it takes to make a joint. Just by changing the layout of the plant floor, how things move through that facility, putting in new equipment and focusing on reducing waste. That’s an exceptional result, though. You usually see 20-30% improvement in most manufacturing operations around the world.
DC: When you said removing waste, what kind of waste did you mean?
Tucker: Waste can be all kinds of things. For example, it can be dead time, so you look at how things move through your plant. It’s not that there’s something happening with that product every single minute of every day – but you’d like there to be. You’ve probably heard of just-in-time manufacturing principles – making sure that all your parts and materials show up just in time. That usually gets worked in with “lean” too. So it comes down to manufacturing processes, assembly processes and materials management practices.
DC: Do you think the lean concept could be useful for drilling contractors on their own rigs?
Tucker: I’ve found that you can apply it in lots of ways to any kind of service activity. I’ve applied it before in service organizations on doing outages on power plants. I’m not quite sure how it would be used for drilling contractors, but it would be interesting to do a “lean” event with an interested company. We’ve talked about it with our customers and will probably go down this path later in the year.
Frankly, though, their focus has mainly been just getting enough equipment and getting the rigs built so they can satisfy their customer demand. But my guess is, as things slow down and people start looking for productivity and cost savings, more people will show interest in this.
DC: Going back to the 20,000-psi riser string connection – what are the challenges in making that kind of advance?
Tucker: As you get into higher pressures, a huge part of this game is how well things connect and how well they seal when you have 20,000-lb pressure in the riser choke and kill lines. In some reservoirs, corrosive materials are running through them with higher temperatures, so there are challenges around sealing and the materials used in riser strings – what can handle the more difficult and harsh environments.
Because of that, there is growing interest in the industry in being able to monitor the condition of the equipment and how well things are flowing through the lines. Customers, with us, are showing much interest in this whole concept of flow assurance, and monitoring and diagnostics. We are spending a fair amount of money on this concept, mostly around our tree systems, subsea production applications – though that’s quickly migrated over to drilling equipment.
DC: Is that already commercial in your tree systems?
Tucker: It is, to a limited extent. We are putting sensors on certain components and have been upgrading our control systems and the technology used in them. Our latest innovation is our fifth-generation subsea electronics module (SEM), which has a radical new design that utilizes open-architecture communications and supports future oilfield topologies and architectures, while maintaining full backward compatibility with VetcoGray’s existing SEM products as well as our current ModPod package. We’ve had discussions about it with a lot of the IOCs around the world, and it’s gone over very well.
Monitoring and diagnostics have become a huge part of the power plant industry where they monitor equipment from central stations. They are even able to apply something called remote tuning, where they can manage and fine-tune the equipment remotely, based on sensing technology that is put into the equipment. Our strategy is to head down that path on a lot of the subsea equipment, and that will eventually make its way to drilling.
We are also applying a little bit of that technology into some of our inspection technologies. We have something that we’ve patented called RADAR – it’s a small machine that goes through a riser joint and inspects wall thickness and welds and gives you an understanding as to how much erosion you’re having on the material and the actual physical hardware. It the kind of thing that will help people manage their assets better, and that’s our whole intent. Priced right, those kinds of things will be advantageous for customers and you’ll see it be adopted more and more in the industry, I think, over time.
DC: How are you working to improve the reliability of your products, or their maintenance and repair times?
Tucker: We try and deal with reliability in the design stages and the materials we choose to use. With reducing maintenance and repair cycles, you can apply lean practices or you can apply new welding technologies. You can apply new inspection technologies when the equipment comes in for repair and maintenance.
Contractors spend a huge amount of money every year inspecting their fleet, all their risers around the world. If we can help reduce those cycles, if we can come up with consistent ways to do inspections so equipment gets back in service for them more quickly, that’s a great value. Our hope this year is to be able to put some capabilities in front of customers that will make them want to strike agreements on the maintenance and service of their global fleets.
DC: Some drilling contractors have shown interest in the modular concept and using that to make maintenance and repairs more efficient. How does the modular concept fit into your products?
Tucker: I think that really works around product management. In other words, have standard products and their component designs so that they become interchangeable in the field. If you have lots of different vendors’ products in your fleet, it becomes very hard for them manage it, and they can’t necessarily change components on different rigs as they need to. It makes it easier for them if they have common components on all these rigs.
For us, it’s about product management, and we’re applying this modular, standard product concept to the equipment that we quote and bid to drilling contractors like Transocean. We’re doing the same thing with HHI in Korea.
DC: How do you think the drilling industry, specifically drilling contractors, can improve using technologies or practices outside our own narrow silo?
Tucker: I think looking to other industries that have advanced asset monitoring technology and applying that to their fleets is a pretty big deal. I think this industry could probably improve on that.
The whole thing around composites – if you look at the aviation industry, they use metals inside their turbines that are able to withstand thousands of degrees of temperature and not wear. Some of those exotic metals and machining capabilities will probably eventually make their way into this industry. It’s a cost-benefit trade-off.
But really for me, our role to this industry has to be about delivering these technical advances in our equipment and our components, reducing our costs, being a reliable partner in delivering our products on time, and how big we advance the remote monitoring and diagnostics game so people can manage their assets better. If people can manage their fleets and assets better and reduce their cycles so their rigs are more productive, that’s the kind of technology or practice they want out of me as a supplier.
DC: What are some technology challenges you’re working on addressing for the longer-term future?
Tucker: These things seem to progress more in incremental stages. You go from 10,000 psi to 15,000 psi, then 15,000 to 20,000. It’s more of a step-to-step progress. But I think if composites come in, that could make a big difference. Using carbon fiber composite materials on riser strings to reduce weight – it will have a pretty big impact on this industry. That means some rigs that can only go out to a certain depth now, will be able to go further because they can carry more weight on deck. These lines will give you the ability to reduce weight by 30% so you can fit more risers on your rig deck. Those are going to be big changes for the industry.
Right now we’re using composite-reinforced steel risers, which not only reduces the weight but will allow drilling risers on SPARS/TLPs to handle higher pressures. But if you can get to the point where you can have a completely composite line, you’re in a different league.
DC: Are we close to that?
Tucker: No, it’s going to take a few years for that to come through. I’m hoping that this year we’ll be able to have just steel-reinforced risers actually out and commercially available. But this industry is typically conservative when adopting new technology, so my guess is it will take a while to work its way in. In the meantime, we’ll keep working on a completely composite one.
DC: How do you think the drilling industry is doing to meet its personnel challenges? And what is GE doing to recruit and train for yourself?
Tucker: I’m not close enough to drilling contractors’ hiring and training development practices so I can’t speak to how they’re doing on their front. I can tell you that, from where I sit, everybody has a lot more demand for engineers than the industry as a whole is able to find. We’re just like everybody else on that front. We’ve added several hundred engineers to this organization over the last year, and we will continue that effort.
In hot markets like Norway, the UK and Houston, it’s tough because a lot of people are hunting for the same talent. We’re trying to go to other markets to find engineering talent – India, China and other places where you have large pools of graduating engineers. We’re recruiting them, training them and turning them into productive engineering resources in the business.
Many GE businesses have done this in the past. Our aviation business grew from nothing to several thousand in India. We’ve gone from nothing to over 100 people in Poland in the last year, and we have the same effort going on in India. In a limited market where there just aren’t enough engineers for everybody, you have to get creative. We’re trying to solve the challenge by seeing the world as a global landscape for talent.