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Study Points to Public Policies to Develop Innovation in the Oil Sector

PhDsoft was invited to join in a study that has just been released: Technological Learning and Industrial Innovation – Working Paper Series. It was made by FGV EBAPE, a renowned Brazilian Institution. The objective was to answer two basic questions: To what extent and how have companies in the Brazilian oil and gas industry accumulated technological capabilities, both for operational activities and for innovation? And how has this process influenced the reach and strength (or weakening) of industrial competitiveness?

The choice of the oil and gas sector is justified by its economic and technological importance in Brazilian industry. Oil and gas extraction and its supporting activities have a share in the country’s industrial GDP of over 10%. Petroleum and its derivatives are products of great importance in the export agenda (11% of the total exported in 2014) and oil is the main energy source used in the world and in Brazil (representing 33% and 39% of the world and Brazilian energy matrix, respectively). From a technological point of view, this industry has presented new opportunities for innovation, with overflows for other economic sectors, such as the chemical and construction industry. In addition, partnerships for overcoming technological challenges are a notable feature of the oil and gas industry.

Brazil has 6% of the world’s oil reserves, which is a stimulus factor for investments in the sector. By 2020, the total investment in equipment and services for Extraction and Production (E&P) in the country will be US$ 400 billion.

Of this sum, more than 30% will be directed to the production of submarine equipment, which shows a good opportunity of scale to develop the local productive chain. Brazil ranks 13th among oil producing countries, considering the number of barrels produced per day, corresponding to 2.7% of world production.

The study got to several conclusions and pointed to public policies that could help to develop the sector in the country: “It is important to note that the internationalization of the oil and gas industry has been a high priority in the industrial policy framework of the sector in several countries. In Norway, for example, the policy objective was to use the technological capacity developed internally for the international market, thus strengthening the growth and development of the oil cluster in the country in the long term. Today, advanced products and systems created in Norway compete successfully in the global market, including in Brazil”, concluded the study in respect of the need of support for Brazilian companies to compete in the international market.

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From a hull maintenance software to an innovation platform

The use of hull life-cycle maintenance software since 1995 on 26 major Brazilian oil company tankers has reduced inaccuracies in the evaluation of ship renewal costs during dry-docking. Due to its success, the software has been redeveloped and extended for the whole floating fleet, including FPSOs and jackups, replacing regular drawings by the 3D models. While jackups’ needs are very similar to ships since they can dry-dock, FPSOs have a totally different approach with attention to corrosion being the primary focus. Past 20 years, PhDC4D has become an innovation platform that can include almost any kind of new features tailor made to companies’ needs.

Today, PhDC4D is already in use for painting and pipes of the FPSOs process plant of a major Japan company. It is also in test for the Internet of Things, both to ROVs and measuring sensors of tube thickness. Soon it will include cranes and pipelines as much as secondary equipment as an FPSO stair. “The software allowed a sophisticated data acquisition process to be applied, capturing and applying large quantities of key information thus enabling risk-based inspection to take place”, explains PhDsoft CEO, Duperron Marangon.

Results achieved

The technology incorporated into the software has been shown to reduce by 50% the cost required to renew steel on a VLCC. By extrapolating old gauging data to achieve a better mapping of the corroded areas, we were able to raise the accuracy of the forecast steel renewal figure. The client was therefore able to predict the budget required ahead of time more accurately.

We subsequently had two cases in which we helped to avoid a tanker’s repairs to continue regular operation. Due to the large amount of steel renewal that would be necessary the hulls were converted to FPSOs instead. Use of the software also allowed a ship owner to anticipate a request for classification societies to use FEM criteria to produce reassessments. This reduced by half the amount of steel renewal required.

PhDC4D allowed users to realize the poor quality of some thickness gauging reports and take actions to improve accuracy. Besides the primary applications for the software such as identifying areas of greater risk or those with higher corrosion rates, the models were also used to aid knowledge management for all structure-related issues. This replaced the existing management systems for this information. The models became the database for risk-based inspection procedures adopted by Petrobras.

The sharing of information through the software between ship and rig owners with classification societies’ consulting branches and gauging companies has been made possible through a common interface. Petrobras has hired the consulting branches of major classification societies to develop and update the many different models to assure the safety of offshore rigs including stability, hydrodynamics, FEM and degradation. For stability they developed their own software to keep a common interface for all rigs. The same approach has been used for degradation information by using the single interface provided by PHDC4D with the various classification societies involved.

There have been no major structural incidents with Transpetro tankers during the last two decades, when they have used this technology. In part this is due to a broader set of good practices being implemented such as better control of structure integrity status through the use of PhDC4D.

Technology standardization

A number of other organizations developed products with similar goals. Similar approaches have been used applying the same principle as the classification rules. These had to be standardized according to IACS common structural rules. On December 14th 2005, the Common Structural Rules for Tankers & Bulk Carriers were unanimously adopted by the IACS Council for implementation on 1 April 2006. The Council was satisfied that the new rules have been based on sound technical grounds, and achieve the goals of more robust and safer ships. IACS started then to implement the CSR maintenance program (IACS Procedural Requirement No32) via the IACS CSR Knowledge Centre (KC). All the agreed Q&As and CIs (common interpretations) are published on the IACS web site without delay in order to assist its member societies and industry in implementing the CSR in a uniform and consistent manner.

It took some time for the rules to be standardized and we believe there should not be the same delay for hull maintenance software. The sooner standards are established, the sooner the industry can benefit from a common interface. Establishing a common database format, but still requiring a user to have deal with multiple different interfaces according to the classes of their fleet, is not desirable. Ideally broader development cooperation should be realized to facilitate faster development and interface standardization.

PhDC4D as an innovation platform is mature for large-scale application. Building models and inputting data is a long-term process. Addressing differences between emerging technologies represents the next big challenge. PhDsoft has experienced these issues while the software was under development with models having to be adapted to reflect changing technology. The software development process, therefore, has to be sufficiently flexible to address evolving technology and successive model changes.

Please, contact us for more information: +1 (713) 340-9958 or phdsoft@phdsoft.com.


PhDsoft wins its 10th award since 2000

“The epic quest for oil, money and Power”, announces the subtitle of the classic book written by Daniel Yergin: “The prize”. At PhDsoft someone could add “for awards”. The company was founded in 2000 already being awarded by Finep at the I Venture Forum Brasil. Since then, it has never passed many time without recognition.

The last award was granted at the Rio ITech event, at Veiga de Almeida University. Before that, at 2015, PhDsoft had won the Louisiana Gulf Coast Oil Exposition (LAGCOE) New Technology Showcase, as Spotlight innovation technology.

Another highlight was in 2011, when PhDsoft won the Latin American and Caribbean Regional Partner Award in the Sustainability category at the Microsoft Worldwide Partner Conference. The Sustainability Partner of the Year Award recognizes exceptional partners who have delivered software and technology innovations built on the Microsoft platform that help people and organizations around the world reduce their impact on the environment.

“PhDC4D allows the customer to reduce maintenance costs by automating the engineering process of inspection and repair, and reducing unnecessary steel renewals due to subjective data interpretation. It also mitigates risks of catastrophic failures that could lead to environmental disasters by providing an accurate and comprehensive awareness of the structure integrity and risk levels. PhDC4D also provides regulatory compliance with Classification Societies Rules. Ultimately PhDC4D avoids accidents that can harm the environment as much as the BP accident in the Gulf of Mexico. Despite of deep water exploration in Brazilian, no incidents like that happened and this is partially due to PhDC4D contribution”, stated the company at the time.

In 2011, PhDsoft also won the Assespro Rio de Janeiro Award. In 2010 and 2008, PhDsoft won the Best Solution in Oil and Gas at the Rio Info Conference. It is really a great track record for such a recent story that reveals the potential of a glorious future.


PhDsoft wins another award

PhDsoft is proud to announce that is winning yet another award in recognition of its technology, this time in the United States along with a select group of only 6 companies.