The old cast-iron pipes are corroding at BP’s oil and gas gathering center on Alaska’s North Slope. The company knew it had to replace them, at an enormous cost.
Then it plugged the project into a 3-D model. And the software revealed that the British oil major doesn’t need to remove all the old piping, only some of it. Engineers can simply lay the new, stainless-steel pipe over the rest.
The digital subscription that allows BP to see its North Slope gathering center in augmented reality costs the company a few hundred thousand dollars a year. The adjustment to the pipe layout should, said BP executives at the Offshore Technology Conference in Houston, save the company tens of millions of dollars.
Digital technology is changing the way companies drill for oil, examine reservoirs and rebuild refineries. And companies like BP say that, because the technology has largely been pioneered for other applications — Microsoft builds 3-D software for gaming, not oil and gas — they can access it for thousands, not millions, of dollars.
“Price points are drastically lower,” said Dave Truch, technology director of digital innovation at BP. “We could not have done this two decades ago.”
Still, companies are spending more and more of their precious capital on digital. BP spent $14 billion last year on its upstream operations.
“Increasingly,” said upstream technology chief Ahmed Hashmi, “more and more of that is going into digital technology.”