National Oilwell Varco Inc. (NOV) and GE Oil & Gas are collaborating to optimize their production businesses to bring down the costs of working in the deepwater, considered the most costly area to develop oil and natural gas.

The “integrated solutions” project initially would be for floating production storage and offloading (FPSO) vessels by combining NOV’s fluids pumping and treatment expertise with the GE unit’s power generation and gas compression technologies.

“With this agreement, we are bringing together capabilities and expertise from GE Oil & Gas and NOV to better serve our customers and overcome oil and gas offshore industry challenges,” GE Oil & Gas CEO Lorenzo Simonelli said. “Digital solutions will add even more value to the agreement. Digitization has become not only a competitive differentiator but increasingly, a necessity to help our customers make their businesses stronger long term.”

The combined platform would provide topside systems with “repeatable deliveries, scale economies and standardized interfaces” to reduce construction delays and cost overruns. Additionally, the new platform would incorporate digital solutions to optimize performance and provide predictive analytics through the life of the vessels, enabling FPSOs to adapt to a wider array of operating parameters.

The partners expect to complete joint engineering efforts and begin offering topside package solutions by early 2017. No financial details were disclosed.

“We can materially improve deepwater production economics by industrializing the supply chain and standardizing complex interfaces between our complementary topside equipment,” NOV CEO Clay Williams said. “For the past year we have quietly explored this new and better way to make floating production vessels and are excited about how this collaboration will change the industry and improve the economics of deepwater production development.”

Houston-based NOV engineers and manufactures advanced fluids pumping/treatment/processing systems, composite piping systems; cranes/deck machinery and disconnectable turret mooring systems for FPSOs and related vessels. NOV also has installed and commissioned equipment in shipyards for the oil and gas drilling industry.

The GE energy unit, which said it could involve other GE businesses in the NOV collaboration, provides technology solutions for a variety of projects. The subsea production systems business also provides subsea trees, manifold/connection systems and power/processing technology.

To compete with less expensive land operators, structural changes in the offshore industry are necessary, Raymond James & Associates Inc. analysts said in May (see Daily GPI, May 9). Collaboration to bring down costs has become the name of the game.

Last year Houston-based OneSubsea allied with Norway’s Subsea 7 SA to design, develop and deliver integrated offshore options (see Daily GPI, July 14, 2015). In early 2015, OneSubsea, Helix Energy Solutions Group Inc. and Schlumberger Ltd. partnered to develop more efficient subsea well intervention systems (see Daily GPI, Jan. 8, 2015). Two years ago FMC Technologies Inc. joined with Gulf of Mexico producers BP plc, Royal Dutch Shell plc, Anadarko Petroleum Corp. and ConocoPhillips to “overcome the technological and economic challenges” facing the deepwater industry (see Daily GPI, July 22, 2014).