Controlling costs in challenging times

The monitoring and management of fuel consumed by OSVs has always been the critical factor in enabling fleet owners and operators to control their operational costs. Crude oil prices have always determined the overall outlook for oilfield service (OFS) sector performance because of the link between hydrocarbon prices and the level of capital spending by oil and gas operators. And the recent reduction in oil prices, resulting in considerable cost reduction pressures on exploration and production, has brought fuel consumption efficiencies into even deeper focus.

Damian McCann, product manager for fuel management systems at diesel engines specialist Royston, explains: “The reduction in fuel prices has been a double edged sword. On the one hand, fuel price savings can have a considerable impact on day to day operational costs for OSVs. However, there is inevitably less exploration and production activity around to bid for, and contracts come with considerable requirements for operational cost reductions and controls.”

To meet these challenges next generation fuel management systems are being introduced to help operators and the oil companies improve management of their fleets. Improvements to both the hardware and software have increased the ability of these systems to gather comprehensive, real time engine performance data, as well as to incorporate operational conditions.

In the latest upgraded Engine

i

system developed by Royston, sophisticated on board flowmeters and sensors have been combined with powerful data capture software to produce a complete picture of the mission critical information required for assessing and maintaining vessel fuel efficiencies. The upgraded system has the ability to acquire comprehensive vessel performance measurements beyond the usual RPM, fuel usage, GPS, sea state, weather and other traditional inputs to take in a wide range of other engine control unit parameters and output characteristics.

This increased scope of fuel, engine performance and voyage data collection, can be used to provide enhanced data analysis and reporting options to enable more informed fuel optimisation and fleet management decisions to be taken.

McCann says: “In the constant challenge to manage fuel and operational costs more effectively, there is no substitute for having the ability to carry out accurate, in-depth and real time analysis of all the relevant information required. Advanced fuel management systems enable both the vessel operator and onshore operations teams to effectively optimise all aspects of vessel performance and fuel usage.”

Enhanced sensor input means specific fuel burn figures can be provided against different vessel operational modes, such as standby, in transit and anchor handling, as well as during dynamic positioning routines – with the fuel consumption levels associated with the latter now coming under particularly close scrutiny by both oil majors and service vessel operators.

This can give operators a complete picture of how different vessel types perform in different conditions. Comparative fuel efficiencies of individual vessels can be measured and used as a guide to their suitability for specific types of work or future contracts.

In highly competitive market conditions, detailed performance data can also be used to develop a more accurate system of bidding for specific contracts, so that profit margins stay healthy, and ensuring value for money operations for the contract owner.

Fuel management data can be used to support a wide range of fleet management tasks. These can include decisions on individual captain and crew working practices, troubleshooting of unexplained performance episodes and demonstrating compliance with SEEMP and other IMO emissions-related regulations. The ability to measure fuel consumption by individual engines also means that vessel owners can more accurately determine actual engine load for the scheduling of service and overhaul requirements.

All of these factors are of considerable importance to the oil majors utilising contract vessels and who meet the fuel bills of their operational OFS fleets. The ability to remotely access the information captured on board through online portals and web dashboards means that onshore fleet management and supervisory staff do not have to rely solely on daily crew or voyage reports.

McCann notes: “We are already working with oil majors who are utilising the depth of fuel and vessel performance data made available to them remotely, to compile their own fuel efficiency league tables. This enables them to make direct comparisons to make informed decisions on the suitability of vessels for specific tasks, types of oilfield service work and future contracts.

“In other cases the overlay of fuel burn patterns against a combination of speed, weather and sea conditions, is being used to assess overall voyage performance characteristics and establish recommended working practices for crews or introduce KPIs for a particular contract or voyage.”

Detailed engine and fuel data can also be used to assess the effectiveness of OSV fuel caps and penalty arrangements and ensure that operational parameters such as vessel speed, pitch and other factors are being optimised for both environmental and efficiency factors.

Fuel theft is also a serious consideration in some territories. Royston reports that tamper-proof fuel monitoring systems linked to inventory controls have proven success in eliminating such problems by comparing fuel burn rates against bunkering information and vessel performance to determine whether any pilferage has taken place.

In one case, Royston was approached by a Singaporean fleet owner over concerns that their vessels appeared to be very high users of fuel, with the suspicion that this was being caused by a combination of excessive operational speeds and pilferage. The vessel operator fitted an Engine

i

system on one vessel to provide a complete overview of the ship’s operational profile. The real time and automatic logging of fuel was also used to prove to the customer that the data was accurate, reliable and free from manipulation.

The controlling effect of the fuel management system was quickly demonstrated, with monitoring showing that speed was maintained within the required 10 knots and the resultant bunkering of fuel being dramatically reduced month on month.

With hydrocarbon prices set to remain lower for some time yet, the pressure on oilfield services companies to reduce their costs will remain high. McCann concludes: “The focus of the oil and gas majors on cost reduction is not expected to change in the immediate future. As a result, those oilfield service companies that utilise new technological solutions to reduce risks and lower costs for their customers should have significant competitive advantage. The latest upgraded fuel management systems are designed to help them achieve this and contribute to successful long term operational efficiencies.”