CTS spoke to Jørgen Hallundbæk – founder and CEO of Welltec – about how his commitment to thinking and doing differently is shaping the future of the oil and gas and renewable energy sectors. The innovative Danish company continues to utilise digital technology to help reduce environmental impact, while improving safety and operating efficiency in the energy sector.
How has the role of a CEO or managing director evolved?
Understanding our clients remains key but their challenges have evolved and continue to evolve meaning that we also must adapt and develop with them. In the role of CEO, you need to decide which strategies and technologies to pursue, and that is about studying and understanding the market requirements at all times. We believe that because of our close collaborative relationship with our clients, we have that understanding and this allows us to rapidly adapt our technology portfolio accordingly.
More recently, this year has undoubtedly been a challenge with a global downturn stemming from the outbreak of COVID-19. As CEO, you must make difficult decisions that are for the ultimate good of the company. It can be challenging at times, with the need for decision making in short timeframe, especially when the impact can be significant. However, one of Welltec’s strengths has always been our agility, and this means we have been able to react quickly, make the right decisions and mitigate the impact of the pandemic relatively well. It also remains essential for a CEO to maintain a strong team with deep industry, market and technical knowledge.
Are new skills required from a CEO much in the same way that the workforce needs to be upskilled to take advantage of the digital transformation?
Well yes, a CEO must maintain a deep technical knowledge of what it is that their company is producing and the needs of the market within which they operate. That starts with product knowledge and staying involved in new developments and adaptations, through to understanding how new technologies could be applied to the market – identifying a niche so to speak.
It is not just the CEO; it’s of course important to have a group of people around you that have a strong grasp of the market and its needs. With the speed at which technology can develop, it is absolutely essential that we all keep our finger on the pulse and learn new skills where necessary.
What impact has the digital transformation had in the way that you operate your business across all of your business functions?
This is where we have a big advantage over some other organisations. We are still a relatively young company and have grown up in the digital age and working on digital platforms. That means that we have not had to go through the same challenges that some other companies in the sector have had to endure when trying to modernise processes. We started on digital platforms and almost all our data was captured this way from the beginning, giving us access to live data that we used to manage the company. So, for us the digital transformation has been fairly gradual and more like an evolution.
From a manufacturing standpoint we have been able to automate a number of processes, and this ties back to what you mentioned before on upskilling. For example, the role of our manufacturing technicians is incredibly important, so it’s a combination of introducing the technology but also ensuring that our people have the necessary skills, and this has had very positive impact in that we can boast 24/7 in-house manufacturing. Having that capability is also beneficial in terms of responding to customer demand and keeping lead-times to a minimum.
Looking at the energy sector in which you operate how has the growing momentum towards a low carbon future impacted your forward thinking and planning?
From day one, the focus has been on producing advanced tools that can lower the carbon footprint produced by the industry. It forms the basis of the technologies that we develop and so this means that we are not only keeping our own footprint as small as possible due to the efficiency and quality of the tools in operation, but we are actually enabling our clients to significantly reduce many of the externalities associated with their activities. For example, our lightweight solutions can be transported more easily than traditional technologies, and be operated by fewer personnel, and so the benefit for the environment accumulates. It has always been about building an oil and gas industry that is safer and more carbon efficient, and today I would say that this approach is truly welcomed.
What are the major changes you have seen inside your traditional oil and gas market?
Just as for everyone else within the oil and gas sector, the changes in the oil price have a significant impact on how business is performed. Looking 4-5 years back and also to the present, it is hard to believe that the price of oil could dip so low, but it did, and we’ve had to adapt.
Operators have continually pushed the service industry to optimize efficiency, helping push the envelope of technological capabilities further and further. This is a challenge we’ve always risen to and we have managed this well because of our agility and small footprint, and not just from a carbon footprint point of view but also from a financial standpoint. By having full control over what we produce and when, we’ve been able to be very effective with our investments back into the business.
So, continually pushing technological boundaries is important but sometimes you also need to completely re-think how things are done, and that is very much what we are doing at present with our Completions solutions.
Despite the need to reduce CO2 emissions there is an acceptance that oil and gas still have a crucial role to play in meeting the growing energy demand. How can your efforts in both Interventions and Completions in oil and gas help meeting the demand for energy while improving the environmental performance?
The fact of the matter is that the oil and gas industry consumes energy in the extraction process. The more we can reduce that amount of energy, the more we can reduce the CO2 footprint. If you look at orders of magnitude, the oil and gas industry is doing more than other industries combined in reducing its footprint. This maybe sounds a bit ironic, but it has become so much more effective and the CO2 footprint has been reduced significantly.
It is this efficiency in operations and this reduction in impact to the environment that our Completion and Intervention solutions actively contribute to. From the moment the well is effectively ‘installed’ to its subsequent maintenance – this is where we operate.
In Completions we have a growing business segment, the success of which has been remarkable, and the unique technology we can offer is at the centre of this growth. These are life-of-well solutions providing well assurance, integrity solutions and solutions that can reduce or eliminate the need for cement.
In Interventions we hold an enviable position, and this is where we started. The technology we provide continues to deliver massive efficiency gains – and there are many cases as testament to that – which again goes beyond the in-operation benefits that have been shown. Take our cleaning solutions for example, we’ve been able to deliver significant savings on setup time and the number of runs needed to achieve the best possible results, and then you still have all of the additional knock-on benefits of lighter logistical needs.
So, I’d say whether it’s Completion or Intervention, we’re providing cleaner and more efficient solutions.
What technologies do you deploy that help here?
All of our robotic Intervention tools are designed and engineered with the same fundamental principles, to have exceptionally low energy consumption, to be lightweight and to be packaged in a way that allows for logistics to be cost and energy efficient.
Another advantage we bring is enabling of remedial work on live wells. By conducting Interventions in producing wells – and not shutting down production – this means operations can be conducted in a very cost-efficient manner.
We also perform our operations without the requirement for any additional chemicals or substances that need to be disposed of afterwards. Think of it in the same vein as keyhole surgery in hospitals, where you conduct an operation and the patient can go home on the same day with the costs and setup kept to a minimum.
Completions are of course a vital activity for operators and here we can ensure that the wells have a much higher degree of integrity by deploying our expandable WAB (Welltec Annular Barrier). A big issue with many wells is something called Sustained Casing Pressure or SCP, an industry-specific situation that must be dealt with to ensure that methane does not escape from the well. With methane being a greenhouse gas, preventing its emission in the first place is of major importance – and this is where our WAB technology delivers an enhanced level of Completion, by reducing and even eliminating the SCP issue.
How receptive is a traditionally conservative sector such as oil and gas to innovative technologies?
Again, in this instance our small footprint plays well. The fact that very few people need to go to the site has made the technology even more attractive during the current pandemic. We have seen many instances where operations had been planned to use more conventional technologies, only for operators to re-think and request Welltec’s advanced solutions to carry out the job with a much smaller footprint.
On the Completion side we see a strong desire for technology that is not only safer but also reduces the number of days to conduct the operation. A reduction in rig days can go towards achieving the improved safety, while also saving on costs for our client in a way that is truly beneficial for all parties.
What about other areas of industry? Is there the possibility of transferring the skills that you have built up in oil and gas and applying them, elsewhere?
We started collaborating with the geothermal sector several years ago. This is essentially the earth’s natural heat which can be extracted from areas where there is a high thermal gradient.
The challenge for the geothermal sector has been the knowledge base and this is something that we can supply with our experience in alloys and sub-surface expertise that we have gained from our oil and gas activities. In this we have been supported by the US government to develop high-end Completion components for four geothermal wells, and we’re playing an important role here in supporting the advancement of Enhanced Geothermal Systems – known as EGS – by providing the necessary Completion technology. EGS is different from conventional geothermal production, in that it is not restricted to the typical geographical hotspots.
The potential is enormous – the US government has calculated that with geothermal energy they could cover the entire production of electrical power across the country more than seven times over. We are looking at a substantial potential future for the production of electricity by means of geothermal energy.
In the fiscally constrained world how important is service quality and delivery?
It is not all about good technology. It is about delivering the service and it all starts with a very formal job planning stage. We plan the mission with a detailed risk analysis, and then present the customer with a series of mitigation plans based on what we see as the potential challenges. Not all of these challenges are obvious at the outset, but we try to cover all aspects of the project to ensure that at the end of the day the client is satisfied with the service we deliver. That process is automated through our safety assistance and analysis assistance; with this process we are well beyond what anybody else in the sector can offer.
With this detailed planning stage does it move your relationship with the customer beyond the traditional buyer-seller dynamic?
It does, it very much becomes a partnership. As part of any project we go through the learning process together and through that we can earn their trust to deliver the services. Because it is an industry where there are a lot of things that can delay the project and hold back production, the operators want to be in a position where they can trust their suppliers.
What role does research, development, and engineering play in being able to meet the often-disparate needs that are coming from the market? What role do the emerging technologies play in your development process and maximise value creation?
We are constantly consulting with our clients about the future and where they are heading, and this allows us to continually update our own development plans so that we are moving in a direction to support our customer’s requirements. At the heart of this is the ongoing digitalisation of the oil and gas sector. It’s about getting better data to the surface and then ensuring that all the operations are conducted transparently.
We need to be able to visualise the process so that our customers can always understand and see what is happening. That ability to visualise an operation has become more highly valued in recent years in recent years.
How have digital tools helped your development process?
Digital tools have allowed us to optimise the design process right from the drawing board, with manufacturing and out into the field. So, our design process is closely aligned with our manufacturing capability.
When an engineer designs something it is now almost ready to manufacture, which was not the case in the past, so we have drastically compressed the timeline from concept to production. This has allowed us to remove as much risk as possible from the development process by validating the performance digitally. In addition to the digital technology, other innovations such as 3D printing also support the increased pace of the development process.
Founder and chief executive officer (CEO)
Inspired by work on 3D wave simulations for the design of offshore platforms, slim hole drilling and geotechnical surveys, Jørgen Hallundbæk founded Welltec in 1994.
Welltec has gone on to transform the oil & gas industry by introducing technology that significantly enhances recovery rates and lowers environmental risk and impact compared to conventional technology. Jørgen has ensured that a concern for the environment has remained a guiding principle in the ongoing development of Welltec’s solutions.
Jørgen has developed the business from a minor subcontractor into a direct contractor to the world’s leading oil & gas companies, and now a key collaborator with the geothermal sector. He still plays an active role in the development of new technology and has authored many SPE papers.
Jørgen Hallundbæk holds an MSc in Engineering, Naval Architecture from the Technical University of Denmark.