Schlumberger: Succeeding In Business With A Diversified Network

By | September 1, 2004 | Satellite TODAY News Feed, Telecom

Many IT network managers will attest to the following fact: A seamless, always-on corporate communications platform addressing internal communications and providing a solid T-1 connection to the outside world comes with little pressure when executing connectivity on a day-to-day basis. But throw in a corporate business structure whose profitable existence directly is connected to the company’s IT backbone, and the pressure is on.

Downed individual computer network issues, clogged e-mail portals and proxy disconnects pale in comparison to lost communication from executives working off site and proprietary data evaporating into the unknown Ethernet. In today’s business environment, lost information can equal lost profits. By establishing an electronic environment that is robust, seamless and can handle the rich media transfers of today’s corporate needs, those in business who have adopted such a model remain ahead of the bell curve. That is the reason satellite technology is playing more of a key strategic role in the corporate world and why IT network managers need to maintain a competitive advantage over their competition.

For the IT network executive team at one of the leading global oilfield services companies, such a scenario is in continual play. Schlumberger supplies technology, project management and information solutions to its customers working in the international oil and gas industry. But this business success is generated in large part by the company’s hybrid network. This network has to manage connectivity to remote oil sites both on land and at sea; provide traditional voice, e-mail and fax capabilities; securely transport proprietary data to and from the company and its customers; and has to be large enough to handle bandwidth-intensive, innovative value-added products and services. Not only does Schlumberger’s network cater to internal needs, it is the cache that fuels the corporation’s growing client base.

Making Remote Feel Like Home

Exploring for oil and gas is, by its nature, a solitary event. Whether it is drilling in the depths of the Gulf of Mexico or exploring the different strata in the valleys of Texas, headquarters is nowhere close. Remote crews for Schlumberger are able to keep in touch with their respective head offices located in the United States and in the United Kingdom by connecting directly into their company’s network, holding video conferences, sending and receiving proprietary data and even making telephone calls just as easily as if they were conducting a meeting in the main boardroom of their respective offices. What makes this system a reality for Schlumberger is its hybrid network, but more specifically, its global connectivity via satellite.

Schlumberger was an early adopter of satellite technology, recognizing 20 years ago that oil is a remotely located business commodity and terrestrial networks cannot always offer the links needed for connectivity. The company enhanced its network when it purchased Data Marine Systems (DMS) in the late 1990s. Based in Aberdeen, Scotland, DMS built its success on providing two-way communications for those working in the Northern European oil and gas region. Today, Schlumberger has replicated that success model in the Gulf of Mexico, Africa, South America and Asia, providing secure remote connectivity. The result is high-speed access from all sites in real time to anywhere the information has to travel.

Given the billions of dollars generated annually from the oil and gas sector, access is important, but being first to discover is paramount. Headquarters needs to remain appraised of key oil exploration developments as well as being able to seamlessly obtain information instantly so as not to waste time and resources drilling where black gold would not be found.

The Satellite Advantage

Because of satellite technology, oilrig crews are drilling where it counts. What used to take days, now takes a matter of minutes to relay. In an effort to make sure valuable time or money is not wasted, both Schlumberger executives and its customers can remotely monitor drilling activities, project progress, performance and geological readings.

“Our customers can access real-time drilling, automation of offshore procedures, transmission of geo-seismic data and monitor the progress of the exploration,” says Jean-Michel Rouylou, vice president, global connectivity services for Schlumberger. This fusion between business and technology is what has assisted Schlumberger in maintaining its market stronghold within the oil and gas arena. Through its Very Small Aperture Terminals (VSATs) system of more than 700 sites worldwide, customers are offered global voice, data and video communication to remote offices; and turnkey solutions for design, project management and deployment of operations via satellite.

Likewise, the oil industry juggernaut has teleports in Venezuela, Brazil, Lagos, Singapore and Scotland. This vast network is its arms for delivering the content sought after by its clients key to successful revenue growth.

In addition, Schlumberger has 35 points-of-presence globally, specifically centered around the oil and gas industry regions of interest. For example, some of the company’s points-of-presence reside in Venezuela, Brazil, Russia, Indonesia and Canada. This allows Schlumberger to deliver a unique end-to-end solution linking the remote parts of the world with the proper headquarters for .

But this success did not stop with the offshore rigs. It is natural to consider satellite over fiber connectivity when what you need to connect is located miles out in open water. But Schlumberger executives recognized a need for wireline trucks requiring integrated connectivity, voice and data communications.

At first, Schlumberger equipped many of its 200 trucks in North America with standard portable VSAT terminals, but today it has integrated a satellite antenna onto the trucks. Now, Schlumberger’s Information Solutions division can bring real-time drilling to its customers. Rouylou adds that this has cut down on wasted time and excess cost because this process used to take up to six hours with satellite, and now takes minutes. To put it in perspective, Rouylou says that recently, 12 customers who have been using a pure terrestrial connection to receive Schlumberger information have since gone on to purchase satellite service as well because they saw the benefit of the technology.

The satellite upgrade has streamlined operations and brought a competitive advantage to Schlumberger, setting the company ahead of its competition. Translated into productivity, the combination of real-time connectivity and specific applications around drilling optimization has contributed to an increase of production rates by nearly eight percent, according to Rouylou.

“The biggest impact in terms of time has been due to the new dish that we have, which is fully integrated within the truck. When deployed, it automatically finds the satellite, which means we can get started on the job much faster. In this business, time really does equate to money,” adds Matthew Clayton, senior network engineer with Schlumberger Information Solutions. Even though exact revenue figures were not disclosed, technology improvements within the industry experienced isolated results of doubling target hit ratios and 25 percent overall cost reductions ultimately fueled by the growth of real-time drilling, according to Schlumberger executives. Ultimately, this improves time to first oil as well as providing for quick reaction to reservoir productivity and market fluctuations. Even in 2003, early adopters were seeing net variances approaching $20 million per well for some deepwater development projects.

In fact, Schlumberger crews in the field could not imagine doing their job without satellite connectivity. “Because so much of my activity takes place in extremely remote locations, being able to communicate easily with my home office and with the client’s office means I can ensure that the job that I do is consistent with the expectations of both the customer and the business,” says Philip Berrie, VSAT specialist with Schlumberger Information Solutions. “With millions of dollars on the line, that is extremely important.”

Likewise, Schlumberger has made sure that everyone on its team using this equipment is properly trained. Inevitably, problems arise with such technology and these remote networkers need to be able to fix those problems on their own. “We are luckier than most in that we have our own satellite services business as part of our organization. Clearly, this brings huge advantages in terms of support and problem resolution, particularly since the satcom people understand the conditions the field engineers work in and the demands of the industry,” adds Jeff Kahlan, remote connectivity specialist, Schlumberger Information Solutions. “Having a knowledgeable single point of contact makes a huge difference.”

Continued Satellite Advancements

Recognizing the already established success satellite has brought to Schlumberger in real-time drillings both offshore and on land, the company recently implemented a high-speed Internet Protocol (IP)-based network solution for its clients, known as IPoVSAT, to support communications and production operations for customers, particularly those in the Gulf of Mexico.

The IPoVSAT technology provides improved, two-way e-mail and Internet-based communications across a satellite network using a method of sharing network capacity, so that users can conveniently communicate to and from remote locations in any way they choose. The IPoVSAT platform optimizes the amount of bandwidth being used by sharing capacity with other remote users through an advanced Time Division Multiple Access (TDMA) based architecture.

“Normally, Internet-based communications within a satellite environment has been a challenge, especially for the oil and gas industry,” says Rouylou. “There have been attempts to deliver Internet protocol (IP) over satellite, but most satellite technologies are more suited to voice traffic and are not cost-effective for the full range of available Internet communications.”

Schlumberger now provides oil and gas operators working in some of the most remote global areas with a satellite connectivity solution that facilitates remote communications. The technology expands beyond traditional voice-over-satellite connections, allowing clients to use e-mail, the Internet and video across a more efficient remote communications platform.

To support IPoVSAT and the latest high-speed broadband-on-demand communications across North America, Schlumberger operates a dedicated satellite teleport in Sedalia, CO, bringing users in the Gulf of Mexico and the central regions of the United States a secure and seamless connection, regardless of their respective location.

“We are not just buying networks on price anymore,” says Rouylou. “Now we are taking into account the applications and connectivity services that are most applicable for the expansion of our marketshare.”

Moving Toward The Future

Schlumberger wants to increase its marketshare and satellite technology is going to continue playing an intricate role in its development. Currently, the company has a global rig market of about 30 percent. The Gulf of Mexico is high on its list, with hopes of increased marketshare toward 30 percent within the next few years. “As with all businesses, what we need is better, cheaper, faster technology to maintain a competitive advantage,” adds Kahlan. “Anything our connectivity guys can do to reduce the total cost of ownership while sustaining performance is particularly important to my business.”

Nick Mitsis is Editor of Satellite Business Solutions

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