Oil & Gas Industry News Wrap - June 2018

Offshore oil rig at night

In this month’s PPM Oil & Gas Industry News Wrap, Hexagon PPM acquires France-based SPRING Technologies, a software provider specializing in integrated solutions for optimizing the machining workflow.

Also this month:

  • Russian oil industry digitization estimated at US$380B
  • Shell sells 15 percent stake in Malaysia LNG Tiga
  • Spanish utility Iberdrola plant to pump $1 billion into new wind projects in Texas

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Hexagon PPM acquires SPRING Technologies

In a move to boost client offerings, Hexagon PPM has acquired SPRING Technologies, a software provider specializing in integrated solutions for optimizing the machining workflow through machine tool simulation, toolpath verification and optimization, and machine tool management.

Announcing the acquisition, Hexagon President and CEO Ola Rollen said, “Manufacturing must be ‘smart’ if it’s to produce the next generation of products at reduced costs. The acquisition of SPRING Technologies further strengthens our Autonomous Connected Ecosystem (ACE) strategy which will ultimately enable the smart factory.

“Machining simulation is essential to connecting the physical world with the digital and achieving autonomy – both of which are prerequisites to delivering smart factory solutions.”
SPRING Technologies is headquartered in France and employs around 100 people, with offices in the USA, China and Germany.

It will operate within Hexagon’s Manufacturing Intelligence division as part of the CAD/CAM and production software business.

This acquisition came on top of Hexagon’s recent purchase of online training provider, PipingDesignOnline.com, which offers self-paced, in-depth training for CADWorx plant design software, CAESAR II pipe stress analysis software, and PV Elite pressure vessel analysis software.

Rick Allen, president of CADWorx and Analysis Solutions said. “We already offer advanced engineering software and comprehensive services including customer support and classroom training, and now we can provide an online training option as well. This supports our customer through the complete project execution lifecycle.”

#Hexagon’s acquisitions boost service offerings and supports customers throughout #project lifecycle (Click to Tweet)

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Russian oil industry digitization estimated at US$380bn

Since June 2017, when President Vladimir Putin announced the creation of a “digital economy” was one of his main priorities at the St. Petersburg International Economic Forum, digitization of Russia’s oil and gas industry has been gaining momentum.

Moscow-based Vygon Consulting predicts digitization will cost 24 trillion rubles (US$380 billion) by 2035. 

The consultancy said that for companies to successfully digitize, they would have to spend about 5 percent of their entire capital expenditure budget on cutting-edge digital technology.

This, in turn, could be a catalyst for Russia’s economic growth as it spurs activity in other sectors, but this technological ramp-up is not without its obstacles.

For starters, economic sanctions could make the transition to a digital economy difficult. The United States and the European Union imposed sanctions following Russia’s annexure of a portion of Ukraine (Crimea) in 2014.

This has led to minimal access to Western technology, meant Russian oil companies must look to domestic tech companies or suppliers from China or Southeast Asia.

However, companies face internal obstacles to digitization, such as under-developed capital markets, a lack of venture capital, and poor competition in oilfield services segment.

Royal Dutch Shell is able to control all of its oil wells online and in real time, and BP is catching up with of its own digital conversion. Without sanctions being relieved anytime soon, progress towards full digitization in Russian companies is likely to be slow. 

Related content: Download How to Build an Oil & Gas Digital Transformation Ecosystem for a practical look at these emerging digital technologies.

Russian #oilandgas companies face internal and external obstacles as they ramp-up to a $US360 billion #digitization program (Click to Tweet)

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Shell sells its stake in Malaysia LNG Tiga

Shell Gas Holdings, Malaysia, a subsidiary of Royal Gas Shell, has sold its 15 percent stake in MLNG Tiga to the Sarawak State Financial Secretary (SFS) for $750 million.
The extra 15 percent will increase the shareholding of SFS in MLNG Tiga to 25 percent. Other shareholders are PETRONAS (60 percent), Nippon Oil Finance (Netherlands) B.V. (10 percent), and Diamond Gas (Netherlands) B.V., a Mitsubishi Corporation subsidiary (5 percent). 

According to the Shell website, the sale aligns with company strategy to simplify its portfolio and reshape Shell into a simpler, more resilient, and focused company. It demonstrates the clear momentum behind Shell’s delivery of its global divestment program, which aims to dispose of $30 billion in assets by the end of 2018. According to Reuters, Shell has sold or agreed to sell $27 billion in assets since 2015.

Incorporated in 1995, MLNG Tiga produces and processes natural gas. It is operated by Petronas subsidiary Malaysia LNG as part of the larger PETRONAS LNG Complex in Bintulu.

The sale means Shell is exiting from the complex, but will continue to operate in Malaysia

Royal Dutch Shell sells its stake in Malaysian #LNG complex for $750 million. (Click to Tweet)

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Spain’s Iberdrola pumping $1 billion into new wind projects in Texas

Spanish utility company, Iberdrola has announced it will invest $1 billion into new wind farms in Texas. The wind farms will have with a combined generating capacity of 700 megawatts — enough to power some 140,000 Texas homes.

Iberdrola already generates 725 megawatts of wind in Texas through its American subsidiaries, Avangrid, Inc. of Orange, Connecticut and Avangrid Renewables of Portland, Oregon. Its largest is the 606-megawatt South Texas Coast Wind Farm.

While the company is currently part of joint venture to develop developing an 800-megawatt offshore wind project near Martha’s Vineyard, Massachusetts (USA), its wind generation plans in the Lone Star State are staying on dry land.

CEO Ignacio Galán said his company saw many opportunities in offshore wind projects, which account for 544 megawatts or 3.3 percent of Iberdrola’s global wind fleet. He said, however, there were still plenty of onshore resources in Texas that could be developed at much lower costs than offshore projects.

According to the International Energy Agency, an offshore wind farm can cost can cost nearly triple that of an onshore project.

Galan made the announcement in San Antonio as part of a business delegation that met with Spain’s King Felipe VI and Queen Letizia, who were in the city to commemorate the 300th anniversary of Spain’s founding of a colonial mission and presidio which became San Antonio.

The Spanish utility giant supplies electricity to 13 million customers worldwide and generates more than 48,000 megawatts across 12 countries including the United Kingdom, the United States, Mexico and Brazil.

About 60 percent of its power is generated from renewable sources, including wind, solar and hydroelectricity.

Spanish #utility company announces plans to invest $1 billion on onshore wind farms in the Lone Star State. (Click to Tweet)

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