• Tuesday, March 05, 2024
businessday logo

BusinessDay

‘How technology, innovation aid contract management in oil and gas sector’

‘How technology, innovation aid contract management in oil and gas sector’

Chidi Ugboaja is an Electronics and Computer engineer with over 15 years of professional oilfield work experience involving Drilling, and Completions, Work-Over Operations, Intervention and Production Operations, and Installation using complex soft and hardware equipment in the oil and gas industry and working with one of the biggest global oil and gas companies. In this interview with ZEBULON AGOMUO, Editor, he spoke about Double E approach in project management, the energy transition, the importance of balancing the Capex and Opex to avoid cutting corners and the transfer of knowledge to young engineers, among others. Excerpts:

As a Well Completions Engineer, what does your work entail? What is it exactly that you do or have done over the course of your career? In what specific tasks are you or have you been engaged in your work?

Well construction is a fairly complex but matured field in the oil and gas industry. It is majorly made up of Drilling and Completions. Drilling entails drilling the well and Completion is what it takes to bring the oil to the surface in a controlled and safe manner to people and environment. A Well Completions Engineer is tasked with the responsibility of designing the Completions, selecting the correct, fit-for-purpose, equipment and deploying it in the well in such a way that the operator is able to achieve their desired production rates without compromising the safety of the people and environment that will be in constant contact with the well.

I am currently a Management Consultant in Well Completions Services, with over 15 years of experience, in the Oil and Gas industry. I have developed an innovative way of helping Marginal and Brownfield operators economically achieve their first oil, and beyond, in ways that are less harmful to the environment. I have a highly creative lean approach that leverages on the years of diverse job experiences I have gathered by working on big (multibillion dollar) projects and small (multimillion dollar) – I like to call my approach the Double E (I will explain later).

I started off my Oilfield career, in November 2007, as a Field Engineer with one of the global leading Oil Servicing Companies. I was an international staff, based in Baku to support our operations in the Caspian Sea.

As a Completions Field Engineer, I spent most of my time preparing for the various Deepwater jobs and flying to the offshore rigs to execute them. The Caspian Sea, at the time, was combining with the development and deployment of new frontier technologies. After 3 years in the field, I became the Engineer-In-Charge (EIC), where I had the entire Engineering and Specialist workforce reporting to me. This afforded me the opportunity to learn resource management in order to support the multibillion-dollar project I was executing with my team at that moment.

I was moved to Angola, another Deepwater location, after 4 successful years in Baku. Here, I was assigned to another multibillion-dollar project to be the Design Evaluation and System Control (DESC) Engineer. This position allowed me to apply the knowledge I got from the Caspian Sea in the different projects I worked in. After about 1 year on the role, I was made a Project Manager to oversee an entire multibillion-dollar project.

I moved to Nigeria, in 2015, after over 3, highly productive, years in Angola. The move to Nigeria was to enable me gain experience with projects in the marginal and brownfields. I quickly learnt of the huge gap, with respect to budget and environment, in the way the marginal/brown fields were run compared to the highly prolific deepwater projects. My task was to help my organization find the best way to work on such projects as the industry at the time was in a major downturn (oil prices had crashed from high 100s to very low 30s).

What are the most innovative techniques that you have used or currently using to bring solutions to crucial Completions and drilling challenges? When and where, specifically, have you used them? What would you remember as the biggest challenges you have ever faced in your career? How did you resolve them? Are there any particular ones that made you think of quitting?

By 2018, I decided to change scenery as an employee and work as a partner with the industry giant I was working with. I wanted to leverage on my knowledge, conviction and very good relationship with my former organization to offer innovative solution to the marginal field operators, using the management consultancy approach.

As mentioned earlier, most marginal and brownfield operators in the world face economic and environmental challenges due to the relatively low budget they operate with. Both Capex and Opex are a balancing act for them and can lead to cutting corners.

The traditional procurement approach of tendering and evaluation of tenders eats up valuable scarce resources from these marginal operators. Also, due to the nature of the job that requires different product lines and services as well as skill sets, it becomes increasingly difficult for the operator to provide the necessary supervision and oversight.

I took a closer look at the situation and realised that the traditional approach that the whole industry was using, including the big players in the deepwater operations, was making it hard for the small players in the marginal fields to operate profitably and in an environmentally friendlier way. I introduced, to my first client, the innovative, management consultancy approach, that was used in other industries like construction and telecoms, where you can synergize and pool resources.

The management consultancy approach I introduced was focused on resource management – like equipment management, personnel management, time management and process management.

I convinced my former organisation, who is also my technical partner, on my innovative idea of using the consultancy management approach with the marginal field operators. I explained to them that my approach was to leverage my extensive experience with them and their tools, equipment and processes and adapt it to the operations of the marginal fields with focus on the economics and environment. I called it the double E approach – Economics and Environment.

This approach enabled me reach out to the marginal field operators and showed them the stack contrast between my approach and their own traditional approach. The consultancy management approach helped in the following areas:

One: Give the marginal field operator access to the rich knowledge base of Global Oilfield Services giant at no cost to them. This knowledge is important in making key decisions and usually costs between 2% to 5% of the OPEX (this gets into millions of dollars). It is a major de-risking tool.

Two: Introduction of equipment pooling in order to reduce the high cost of the dedicated approach that the traditional method adopts. This was quite innovative as prior to this time, no one was doing it due to trust deficit.

Three: Efficient time management as I had developed huge trust on both sides – the global giant and the marginal field operator – and this helped us save a large amount of time in the various aspects of the job preparation and execution.

Four: Efficient process management. To make the process a lot leaner and efficient, we had to take on some of the client processes by integrating them into the process pool we have.

Read also: I would have made the airport fire trucks with less money – Chukwuma, Innoson chairman

In your over 15 years in oilfield work experience involving Drilling, and Completions, Work–Over Operations, Intervention and Production Operations, and Installation, among others, using so many complex soft and hardware equipment, what would you consider as your greatest achievement or biggest project you delivered and what was the feeling like?

The special thing I have done in my career is the ability to leverage on my diverse experience to identify the gap that exists in the marginal field operations as it impacts the economics and environment.

I was also able to see what others did not see when we were in the downturn in 2015, the opportunity to introduce a different approach – consultancy management and I was lucky to have my technical partner, as it turned out that they had similar inclinations.

Some others have since tried to replicate what I am doing but I have the first mover advantage and a lot of trust within the industry. The track record we have from successful execution of the Double E approach of consultancy management differentiates us.

You have worked on different oil and gas projects with different teams in Nigeria, Angola and overseas, did your experience working in Africa first help you in any way when you started working on oil and gas projects abroad? How have you differentiated yourself from others in your field? What specific accomplishments (year, place, summary, and result) demonstrate that what you do or have done over the course of your career sets you apart from your peers–both within the company and outside it?

I actually started off my Oil Field Career abroad as an international staff with my former organisation who is now a partner. This was not conventional, as I was recruited here in Nigeria. I was fortunate to have started my career abroad as I believe that it helped me see things in a different way – I discovered this later in my career. My experience abroad helped me identify that there could be a better way of approaching brownfield projects.

I have differentiated myself by introducing consultancy management approach, to my clients, using our Double E methodology (Economics and Environment), to the marginal fields and specifically in the areas of equipment management, personnel management, time management and process management (thinking outside the box).

I gained industry recognition with one of the leading marginal field operators, after using my approach in their gas well operations. I received the GOLD award, which is the highest award possible. This award gained me big recognition in the Institute of Management Consultant a body with global affiliation, that regulates consultancy management. I was elevated to a Fellow of the Institute – FIMC. The award read “in recognition of outstanding academic and professional standing, and demonstrated commitment to creating, maintaining, extending and promoting the highest world standards of management consulting practice, ethics, competence and client service”.

I also received an award from the London Graduate School as a Certified Management Specialist (CMS) with distinction in Time Management. This award was as a result of the massive impact our approach had on one of the most important resources in the oilfield services – time. Most services items are billed with the unit of time and poor time management simply translates to loss of money.

I would like to call to mind my very first project, back in 2015, that I applied my Double E approach. It was a deepwater project that was being operated by a local operator. I introduced a novel method of restoring production in this deep offshore subsea well by installing a velocity valve since the conventional safety valve had failed. Typically, when you have a failed safety valve, you would perform a lock-out run and then install a wireline retrievable safety valve. This clients Economics would not be able to support that kind of intervention as there were no guarantees with the lock-out procedure. Also, there was the ever-burning concern for the environment especially in a deepwater environment.

When I told them of the Double E approach, I was able to guide them towards the velocity valve. It had never been done in this kind of environment before and as a result met some initial resistance. However, by the time we went through the entire Double E process, the client was confident to adopt the novel approach I was proposing. The project was a resounding success and has since been adopted in other projects both locally and internationally. I had to write a technical paper, that was published, to help share the knowledge among peers.

Another good example of where I used my Double E approach was in a project that required the deployment of Inflow Control Devices (ICDs) to enable clean sweep of a horizontal well and prevent early breakthrough of water (called water cut). There was an advanced technology of the ICDs called AICDs (Autonomous Inflow Control Devices). Now the challenge was that the client had already acquired the old technology but would have preferred to use the new one. There was no possibility of a trade-in, which meant buying a new set and discarding what was already in the inventory. This was going to be a very expensive option.

When I applied my Double E approach, I was able to drill down to the possibility of retrofitting the main components of the AICDs on the client’s ICDs. This saved the client a lot of money and the project was successfully delivered way below the budget. In fact, I had to write a technical paper on this, which was presented in OTC, Houston Texas, in 2021.

How has technology and innovation contributed in cost control, contract management and in the efficient Well delivery process? Share your experience in relation to Pre and Post COVID times.

Technology and innovation have undoubtedly contributed to resource management and efficiency but from my experience, they must be fit-for-purpose. There is no one-size-fit-all. What worked in a particular project might not necessarily work for the next. I have seen that the consultancy management approach is very useful in resource management and efficiency. I had a front row seat in testing this approach in 2020, in the heat of the Covid pandemic, with 2 major projects. Because the approach is naturally lean, it was relatively easy to adapt. it suffices to say that it was one of those projects that won us the Gold award mentioned earlier.

What would you term the biggest drawback of Well Completions Engineers in Africa, if any?

Well Completions Engineers in Africa are highly competent in what they do but a potential drawback, that I have seen, is the risky environment that they are, at times, exposed to. The good thing is that the industry players are all coming together to find ways of managing these risks so that it does not impact operations.

Another drawback is the access to some of the technologies that could make things a lot easier when it comes to well design and delivery.

Training and proper transfer of knowledge to the younger Engineers is also a drawback as most of the hard knowledge you would gain as a young engineer would come from your exposure to different types of jobs. This would require the engineer to be hands-on over a relatively long period of time. This is not always possible.

However, there has to be a conscious effort by the more experienced technical people in the industry to share their knowledge and for companies to invest in the training and exposure of their personnel. The personnel also need to be open to these trainings and exposures and accept some of the sacrifices – when it comes to comfort and time – required to gain knowledge.

What would you say is the future of Petroleum Engineering and Deep Water Well Construction and Completions? How prepared are you for this future vis–a-viz the lessons the Coronavirus Pandemic has thought business leaders across sectors?

This is a question we ask ourselves every day and people are on different divides. Deep water well construction is more expensive than the ones we do on land and swamp or even shallow waters. The wells are usually more prolific, when it comes to production, but new projects are highly impacted by oil price. The economics have to be right for the deep water well constructions to be viable.

In the heat of the coronavirus pandemic, oil prices crashed, everyone in the industry was hard-hit as demand plummeted. This exposed how fragile the industry was as a whole and it also exposed how people can adjust to new ways.

No one can adequately prepare for adverse events like a global pandemic but it is interesting to see that investment into the Deep water well construction has increased since last year, even though they are baby steps compared to what was initially projected.

I look to the future with optimism with respect to our ability to adapt. We must continue to pursue the lean ways of executing deep water projects just like my Double E offers.

The energy transition debate: African leaders want more time to enable Africa industrialise with resources available to her before joining the clean energy transition proposition. What is your take on this? Give us your thoughts on the energy transition as a whole.

History have shown us that you cannot stop the advancement of technology. Energy transition is inevitable and will be good for us all. The oil and gas industry came as a necessity to help us with industrialisation. Industrialisation has helped humanity in technology advancement including in energy transition. Most of the leading oil and gas industries are in the forefront of the transition.

The fact is that Africa is not as industrialised as it ought to be but I don’t believe that we must use the same path the industrialised countries used in the 17th, 18th and 19th centuries. Our natural resources still form a key part of journey to industrialisation but efficiency and accountability in the use of these resources can help shorten the time we require to be industrialized and be in a good shape for energy transition.

Energy transition and economy are interwoven and without a stable economy, orchestrated by judicious use of our resources, we might not be able to achieve it. It looks like a chicken and egg situation but in my opinion, it is actually a situation of taking care of the mother hen so that it can lay the much-required eggs.

Like in many other science professions, there is a dearth of skilled manpower, petroleum engineers, project engineers, geoscientist and geophysicists in Deep Water, Cost Completions Engineering, especially in Africa. How do you think this can be mitigated?

This is a big problem that cuts across industries. There is a big skill gap that has to be addressed. My approach would be mentorship. There is a big need for the experienced people like me to make a conscious effort to mentor the young people that we come across. They have to be caught very young as there are now a lot of distractions.

At any particular time, I have a number of young people that I am mentoring and encouraging to acquire the relevant skill – not just the certificate. I know that it takes time to fully develop the skill required to deliver in our industry but I also know that if the interest is instilled in the young engineers and other tech specialties early enough, and in the right doses, it would go a long way to help.

We need to encourage the corporate internship programs like SIWES and ensure that the interns actually get exposed to the right skills – they should not be used as office boys and girls, just running errands. There must be that conscious effort to expose them to the industry experience. I am happy to say that we do this in my organisation.

According to Bill Clinton, former President of the United States of America, in his book ‘Giving’, he said, “each of us can change the world through giving”. Tell us are you involved in any form of giving back programme to touch lives and change society?

I am very keen on giving back to the community in an impactful manner and not just giving out handouts that do not go a long way in people’s lives. This has spanned from when I was little and even during my NYSC I volunteered in the polio programme in the very remote area of Niger State in 2003/2004. The most recent was in 2019. I was doing a personal project in my village and had to send some people to work on it from Lagos. While the workers were there, they informed me about the difficulties they were having in getting basic food like bread. Bread that was supposed to be affordable by all was scarce and expensive in my village. Immediately, I knew that I had to do something about it. I needed to solve this problem in a very impactful and sustainable manner. My plan was as follows: One: Setup a high standard bakery, with modern machines, that will be non-profit. It will, however, be self-sustaining. Two: Produce very good quality products at very affordable sizes and prices. Three: Send a Master Baker to the village to train and certify the local workforce. Four: Create specialised skills that are tradable beyond the village. This would empower the people. Five: Create direct employment. Six: Pay the employees livable wages. Seven: Create indirect employment, which would stimulate the entire local economy. Eight: Provide solar powered street lights, for the entire village, that would encourage economic activities even into the night.

I am happy to say that the bakery officially opened for business on December 16th 2020 and it has been a resounding success. All the objectives were met and has been sustainable. This is my proudest community project, yet, and I believe that I will be building on this success story to do more.

How do you relax, when you are not thinking of managing human and material resources, Polymer or Mega Drill or Completions projects delivery deadlines?

My most relaxing times are when I am with the family. My favourite activities are swimming and cycling and we do this as a family thing. I also try to keep my social circle by hanging out with my classmates from secondary school, those guys have a way of bringing back lovely boyhood days. I also love watching movies and can binge on series I find interesting.