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Aker Bets on Software Engineers for Its Oil Business

September 19, 2018

When the owners of Norwegian oil firm Aker BP decided to digitise its assets and operations, they searched high and low for the right software company. But they failed to find a suitable one.

So instead they set up their own, Cognite, to create digital maps of Aker BP's oil industry assets, integrating data from equipment such as pumps, heat and pressure sensors, maintenance records and even staff rotas to improve efficiency and safety.

Less than two years later, Cognite is selling its software to Aker BP's rivals and one competitor, Sweden's Lundin Petroleum, has even agreed to share its real-time oilfield data with Aker in what they say is an industry first.

"This will be the first time two different operators, or oil companies, will share operations/production data live from two producing fields, that is between Edvard Grieg and Ivar Aasen," a Lundin Norway representative told Reuters.

By combining all the data that typically sits in different digital silos - such as matching flow sensors with the piece of machinery they actually sit on - Cognite says its software can help reduce maintenance costs, extend the lifespan of equipment and avoid damaging breakdowns.

Digitizing industrial assets can also mean fewer people need to be offshore, less downtime for oil platforms, more targeted maintenance and better analysis of information such as geological data and valve pressures.

For Lundin Petroleum, sharing information from its Edvard Grieg field on the Norwegian continental shelf with Aker BP's adjacent Ivar Aasen field makes sense because getting more real-time production data from a rival in a similar geological area could help it improve its own oil output.

"Aker BP's view is that, unlike seismic data interpretation for oil exploration, operational data is not a strategic know-how to be protected," said its chief Karl Johnny Hersvik.

For Aker ASA, the biggest shareholder in Aker BP and Cognite, the Lundin Petroleum deal is part of its plan to create software for an industry that can be improved and refined the more it gets used by different clients - rather than just focusing on an in-house model for Aker BP.

"The value that Cognite's technology brings to the Aker companies will increase with the number of customers Cognite serves," Aker Chief Executive Oeyvind Eriksen told Reuters.

Aker ASA, which together with Aker BP owns more than 75 percent of Cognite, is even considering floating the company on the stock exchange within two years.

Controlled by Norwegian billionaire Kjell Inge Roekke, Aker also has interests in oil, engineering and construction services as well as fishing.

'That's Ridiculous'
John Markus Lervik, a software engineer who founded Cognite, said it has grown from just 2 people to about 110 in 18 months, has clients in oil and shipping and is only planning 12-months ahead for now because "things are happening so quickly".

It might seem counterintuitive to share technological expertise with rivals, but by learning from usage across companies and industries, software can be improved - even if no oilfield specific data is exchanged. Improvements can then be rolled out to clients, including Aker BP.

"To provide the algorithm and the software to be able to map or connect sensors to the right equipment, that's a big challenge all oil companies and also other companies have," Lervik said.

"The more companies we work with to create advanced algorithms to do this mapping, the more advanced, the more automatic, that mapping will be."

While Cognite is not alone in developing systems that can link masses of data historically kept in different systems, Alfonso Velosa at tech advisory firm Gartner reckons when it comes to oil and gas, Aker is out in front for now.

"Those systems tended to be stuck in proprietary legacy systems and this is now an approach that is trying to marry (them) together," he said.

"This is a trend that's coming down and they're just ahead of the trend at the moment in the oil sector."

Other companies looking to bring thousands of data points together in the oil sector include Eigen, a software firm in the United Kingdom founded by oil and gas engineers.

Chief strategy officer Gareth Davies said a new generation of people entering the oil and gas industry is partly behind the drive to come up with better digital systems.

"The guys who come in now who are in their 20s expect to have the information," said Davies.

"It's like, well you have to go to that system, you have to ask him to log in there and he'll export it here, and they look at you like: What are you talking about? That's ridiculous."

In one of its recent projects, Eigen digitally linked up 10,600 sensors on Italian oil company ENI's Goliat floating production, storage and offloading (FPSO) unit, the world's most northerly oilfield in production.

The system brings together gas and pressure detection to prevent accidents and fire detectors, sprinklers and extinguisher systems, evacuation plans, life boats and other data into one stream of integrated information.

"Up until now this would have been done through a monthly report," Davies said. "You don't want to know it every month, you want to know now."

(Additional reporting by Nerijus Adomaitis; editing by David Clarke)

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