BHGE Annual Meeting 2019, Florence

The 2019 BHGE AM was dominated by concerns over carbon and the climate. Plenary sessions highlight the growing role of LNG, ‘the magnitude of which is hard to appreciate’. BP trains thousands in ‘agile/scrum’-inspired management. Total’s ‘Gaia’ AI for geosciences. Binu Mathew interview. AkerBP on digitizing with Cognite.

Opening plenary

At a pre-conference briefing, BHGE CMO/CTO Derek Mathieson reflected on the first year of post-merger activity which has seen BH’s upstream footprint added to GE’s mid/downstream activity. In line with other ‘green’ objectives in the oil and gas industry, BHGE has initiated a CO2 reduction program that targets energy use in turbomachinery manufacturing. A novel ‘Lumen Suite’ for methane monitoring was announced. BHGE is working with advisors from its wholly-owned Gaffney Cline unit to establish carbon intensity KPIs and accreditation of their management and reporting.

BHGE Chairman and CEO Lorenzo Simonelli, speaking early in 2019, warned of ongoing industry volatility and the need to be ‘cleaner, more efficient and productive’. A lot is happening in digitalization and IoT and there is a ‘democratization’ of technology as startups change the landscape. Climate is now discussed in many boardrooms. Of the global 50GT of CO2/year, 10% comes from the oil industry. Renewables are set to grow tenfold out to 2040, ‘we need to take this on board’. Simonelli cited BHGE’s new technology incubator/energy and innovation center in Oklahoma and a new investment fund. In the quest for lower carbon, gas is seen as a transition fuel out to 2040. BHGE is to reduce its own carbon emissions by 50% by 2030 and to “net zero” by 2050.

Comment: At the risk of stating the obvious, the carbon footprint of the manufacturing process of a compressor is probably rather insignificant when compared with that of the gas it compresses throughout its operating life span.

Energy futures

In the ‘smarter energy future’ panel session, Equinor CEO Eldar Sætre observed that the oil and gas industry ‘makes the same mistakes over and over’ and ‘never prepares for the next up or downturn.’ Sætre opined that ‘digital is to be truly transformational in the energy transition’. Oils need to join the political and public debate and to ‘understand how our behavior is perceived’. There are growing concerns re climate change both from the greens and from investors. Climate change is the most important issue for the future. Human warming is a scientific fact. Equinor supports the Paris agreement and is to produce oil and gas with a smaller carbon footprint, more wind and the name change (from Statoil).

Mohammed Al Qahtani, SVP Upstream, Saudi Aramco begged to differ (somewhat). A rising world population needs reliable, cleaner energy but here the consensus ends. Al Qahtani offers a different narrative of a long, multi-generational transition where it is realistic to expect oil and gas to continue to play a role for decades. Time is needed for an orderly transition ‘where no nations are left behind’. Industry needs a more productive dialog with the public around reducing its carbon footprint. Aramco is working on carbon capture and storage and claims the lowest upstream carbon density in the world. Digital technology like artificial intelligence is turning science fiction into fact. Oil and gas has massive amounts of data, ‘terabytes per day’ from a single gas plant, but currently, only a fraction is used. Machine learning can sift through huge 3D seismic data sets to extract features that are invisible to the human eye. The current climate has had a chilling effect on investment. We need to reverse the trend of lagging investment.

Worldwide LNG Market

A panel session on the worldwide LNG market addressed three LNG sub-markets: established buyers like the EU and Japan (which are not considered a growth area), the major growth markets (China) and ‘emerging’ LNG markets with small but growing needs. There are also opportunities in bunkering. While supply is currently not an issue, things will change around 2022-3 when supply and new investment will be needed. There are some 500 LNG carriers at sea today. Today, natural gas is still flared in the US due to low natural gas prices and pipeline constraints. Looking forward, the ‘magnitude of change is hard to appreciate’ with massive investments already committed. Anadarko’s Mozambique LNG project is the largest single African investment ever.

Harry Brekelmans Shell stated that climate change is society’s greatest challenge. We need to provide more and cleaner energy. Shell’s ‘Sky scenario’ meets the Paris goals and provides energy to the world. Shell is reducing its carbon footprint across the board including energy inputs and usage* by 20% by 2035 and 50% by 2050. As an example of how this is to be achieved, the massive Shell Canada Energy LNG export project at Kitimat, BC uses GE turbines and a ‘partial use of hydropower’ to reduce its carbon footprint*. Shell is also upping its investment in wind, hydrogen and e-vehicle charging stations. CCS is likewise considered a key technology, witness the Alberta Quest project that has sequestered some 3 million tonnes to date.

* But same caveat as for GE – this does not reduce footprint on end-use.

Energy transition and oil and gas

Mark Brownstein (Environment Defense Fund) puts the oil and gas industry at a strategic juncture. New technology means that fossil fuels are no longer essential to serve some needs. The world is looking for lower carbon energy. Fugitive methane emissions are also problematic, industry must do better monitoring. On the other hand, ‘we are terrible at forecasting demand’ now at 100 million bopd and growing at around 1 million bopd/year. Investment is not keeping up. The IEA’s World Energy Outlook has it that 50% of the world’s energy in 2040 will come from oil and gas. For some, digital technologies will enable methane management to be embedded in operations. Using CO2 in EOR got a plug as a form of CCS. This will have a ‘net negative impact’ if enough CO2 is injected into ground. Hydrogen is ‘getting important’, sourced from methane using ‘low carbon energy sources in the transformation’. Efficiency got a plug too. If 2018 was the year of methane, 2019 is the year of efficiency. EDF has launched a competition to find good projects for efficiency.

BP COO upstream Gordon Birrell observed that a rising world population means that energy demand is up. But the Paris agreement means that emissions need to be down. Renewables are the fastest growing source of energy. BP is a long-standing player in biofuels and wind. These represent under 5% and are forecast to be 40% maximum by 2040. For BP, the race is less to renewables, more towards lower emissions, efficiency and ‘perhaps CCS’. Birrell warned of low investment in oil and gas, the resulting price spikes and lower standard of living. Today, we live in a world of oil and gas abundance, so ‘only efficient companies will win in the future’. For BP this entails modernizing through digital. For example, Plant Operations Advisor*, BP’s IoT for oil and gas ingests 150 million data points/day and this is ‘just a start, what is exciting is the predictive capability that it could have’ (sic). BP claims digital twins of all of its facilities that allow optimization ‘in a matter of hours’. Birrel reported that in 2018, POA and the twins ‘added 30k bbl/day’.

ENI’s Alessandro Puliti said that the world has already used up 70% of the carbon budget needed to stay inside the 2°C scenario. Moreover, forecasts are for a 40mm bopd oil supply/demand gap by 2040 without new investment. A ‘sustainable’ development scenario relies on negative emissions, removal and sequestration of CO2. This means that the second part of this century could balance the excesses of first half(!). Wind and solar are not good enough. Biomass plus CCS are crucial. CCS needs scaling up quickly. Without widespread deployment of CCS, it will be very difficult to achieve negative emissions in the second half of the century.


‘Demand from millennials’ has seen BP training some 2,000 employees in Agile/Scrum methodologies. The techniques originated in software development but now BP uses them to solve business problems fast. A small number of specialists work together in ‘incredibly efficient’ teams. BP also encourages a business ownership mindset, that means ‘solving problems as though they were problems in your own family’ (presumably divorce is not on the table). Successes here include a record time to FID for BP’s Tortue West African gas project and new thinking (and deep ownership) at the Atlantis Gulf of Mexico development which has revealed an extra 400 million barrels. Birrel concluded with a shout out to the UK IOGP’s JIP 33 that is to create standard specs for vendors to bid against. Twelve have been produced to date (subsea trees, valves ...) and BP is ‘starting to use them on procurement tests’.

* GE’s Unified Operations, deployed in POA provide ‘holistic insight’ into performance of gas compression systems.

Arnaud Breuillac reported on Total’s ‘Metis’ seismic (acquisition concept) currently testing in Papua New Guinea and ‘Gaia’, artificial intelligence for geosciences, a two year partnership with Google. This will ‘delegate low value tasks to an AI assistant such that specialist can focus on high value tasks’. Gaia is be implemented in Total’s SisMage flagship. Total/BHGE teams work at real time support centers in Pau and Aberdeen. Breuillac also mentioned Total’s ‘Drill-X’ drilling data analytics project which started in 2018. ‘TIM’, the Total Industrial Mobility solution has provided ATEX tablets and smartphones to some 1,500 users in 2018. These provide SAP notifications, digitized sites and work orders. Another project, remote assistance intervention and diagnosis (RAID) involves real time monitoring of rotating equipment. Some 260 shaft lines are monitored with 30,000 data points captured and analyzed every 10 minutes at the RAID Center in PAU. Total’s AI initiatives are scaling-up in 2019. Total preaches ‘sustainable growth fueled by competitive advantage’. Its production costs are lower than peers and declining, to around $5/bbl. Breuillac also reported a ‘post-dividend organic breakeven’ at under $50/bbl.

Karl Johnny Hersvik described how AkerBP is digitizing its business processes with a radical impact on productivity. However, some technologies, like VR glasses, may be great at trade shows but unsuited to the offshore. Solutions need to be actionable. AkerBP’s flagship digital deployment is the Ivar Aasen field with a digital platform from Cognite streaming 10 hz data to a data center in Belgium. AkerBP has set up the ‘Eureka Program’, a digital lab where some 300 projects have been trialed across maintenance, subsurface, HSSE, digital worker, production optimization, NLP and ‘semantic’ processes. Ivar Aasen is operated from an onshore control room ‘while maintaining full manning for offshore operations’. Hersvik says we need to stop talking about data sharing and do it. AkerBP and Cognite have done just that through the OpenIndustrialData real time data showcase.

Interview Binu Mathew

We chatted with BHGE’s Global Head, Digital Products and asked if the overarching Predix platform, as announced a couple of years ago, has failed.

Mathew – Predix has evolved. While it is still used in a number of asset-orientated /IoT solutions such as APM and other GE stuff, oil and gas needs more analytics and AI and running at scale.

OITJ – OK, but was announced as a platform for AI, a whole software stack in fact. There were other IT goodies rolled-in with Predix, microservices, cloud and all that. Is this a return to monolithic apps and point solutions?

Mathew – No, we are bringing all the data together in our Enterprise AI factory. This provides a holistic analysis of plant reliability. Predix looked at assets individually. Enterprise AI looks at the whole plant as opposed to individual pieces of equipment.

OITJ – We heard from Cloudera yesterday, is that the basis of the EAI software stack?

Mathew – Cloudera is a partner, but we have no specific provider for the stack. We work with any combination of public/private cloud at a higher level than Cloudera or Pivotal. We are also working with Nvidia, Microsoft…

OITJ – And with Yokogawa/KBC …

Mathew – Sure. KBC is still going strong in the process domain. What we are doing is bringing data together to predict failures. Especially those that come from complex inter-reactions of material across the plant. What is key in the information landscape today is the web, that allows for data discovery. Also, knowledge-connected and polyglot storage.

OITJ – So what are the tools you use today?

Mathew – Python, Pandas, TensorFlow, our specialty is Bayesian Networks.


On the exhibition floor we saw a demonstration of artificial intelligence that leveraged System1, condition monitoring software from BHGE’s Bently Nevada unit. System1 was driving Yokogawa/KBC’s PetroSim to model heat exchangers in a refinery. More generally, BHGE’s AI offering is now available from the AI Factory.


We attended the 2018 Baker Hughes GE Annual Meeting in Florence in the expectation of learning more about the ongoing fusion of things digital and mechanical that former CEO Jeff Immelt had embarked on. We were also interested in how the two companies were working together post-merger. Immelt pushed digital – particularly Predix, the first major infrastructure for IoT/AI/ML in the world, to the forefront of GE’s activity setting up a large digital unit that looked set to rival the likes of IBM and Accenture. Today, Predix is something that nobody in BHGE wants to talk about (see elsewhere in this issue for our investigation of Predix’ fate). Regarding the merger, fusion has given way to a more traditional division of labors. The BHGE Florence event is mainly focused on the old GE Oil and Gas turbomachinery activity. Other facets of the Baker Hughes unit’s ‘digital’ activity will be the subject of a separate ‘Unify’ event to be held later this year in Monaco.

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