A few years ago, the concept of intelligent operations was confined to assorted software programs and pieces of hardware, the most significant of which were remotely controlled subsurface sliding sleeves that allowed greater production control.

From the recognition that installing pieces of equipment could improve operations, the industry has moved to embrace the concepts of intelligent energy (IE) and integrated operations (IO). Today, these concepts are being applied much more broadly than ever before under the umbrella of the digital oil field (DOF).

Building on success

Pieter Kapteijn, director, Corporate Technology and Innovation, Maersk Oil, believes success of early programs set the stage for DOF development and validation. “Application of intelligent solutions has finally proved and confirmed the value we always knew was there,” he said. “You fundamentally change the risk profile of oil and gas operations. The subsurface gains from improved recovery and more cost-effective development dwarf the gains from a more effective surface operation.”

As evidence of how far the industry has come, Kapteijn pointed out, “Statoil, Shell, Chevron, and Saudi Aramco are designing in the intelligence from the outset.” For these companies, he said, this is a strategic plan.

Julian Pickering, company director, Digital Oilfield Solutions Ltd., considers the spread of DOF technologies to national oil companies (NOCs) a notable development. “NOCs are now jumping into DOF and are actively pursuing it,” he said. “We’re going up an exponential curve in terms of uptake.”

Steve Roberts, vice president of Field of the Future Flagship Program Subsurface Technology at BP, pointed to some of his company’s milestones as evidence that the DOF is delivering value for operators. “We’ve developed solutions for remote monitoring and production performance management for over 600 of what BP considers key high-rate wells. A sense of scale in terms of the data is that we’ve got more than 2 million data tags now covered by Field of the Future solutions.”

Some of those solutions address production optimization, minimizing riser slugging, and equipment monitoring. “We have thousands of pieces of equipment tied to Field of the Future solutions,” Roberts said.

According to Derek Mathieson, president of Products and Technology at Baker Hughes, IO is starting to underpin a much broader array of products and services in the marketplace. “I think the real beachhead was made in the drilling operations world,” Mathieson said, “where we really started to look at real-time technologies and how that changed the face of our interaction both on the operating and service side.”

What is surprising, he said, is a lot of the platforms developed only two or three years ago already are well past their operating capacity. “There are some new product lines moving into this landscape today just based on the significant progress that’s been made in the drilling world,” he said.

“As an industry, the biggest accomplishment has probably been getting away from the need to have hard and fast technical requirements for individual systems. We have more flexibility, and we’ve developed open standards as a group. Standards like WITSML have really become the baseline to help some of the digital enablement we see in the marketplace today,” he said.

This Schlumberger operation support center in Tyumen, Russia, is enabling new levels of consistency in field operations. The amount of real-time data flowing through such centers at Schlumberger has more than tripled over the past three years. (Image courtesy of Schlumberger)

Satish Pai, executive vice president, Operations, Schlumberger, believes a real step-change took place with the ability to ‘listen to the well being drilled,’ enabled through “improvements in the gathering, processing, and utilization of all available data generated during operations.”

Advances in drilling and production technologies have enabled higher efficiency wellbores; however, these advances also have negatively impacted well planning. “Fewer wells spaced much farther apart means less offset well information critical for predrill risk identification at a time when it is needed most,” Pai explained, noting that for service companies such as Schlumberger, using real-time data has become critical in updating predrill models during the well construction process to predict and mitigate potential hazards while executing performance management initiatives.

Moving from parts and pieces to field deployments has greatly changed the DOF according to Duncan Junor, senior director of Digital Asset, Halliburton. “Technology is only part of it,” he explained. “In the past few years there has been a lot more discussion about integrated operations.”

For Halliburton, that means a focus on Digital Asset strategy and developing integrated workflows. “We use them to drive efficiency internally,” Junor said. “We are looking for the gaps between service lines and processes to help customers and ourselves to be more efficient.”

For Mike Hauser, global i-field manager based in Chevron Energy Technology Co., one of the biggest achievements for the DOF is “tangible progress in the area of predictive analytics and diagnostics – being able to monitor, model, and analyze alerts to normal operating conditions is clearly transforming condition-based management of our key assets, starting with machinery.” Because signal analyses can be so far in advance of a failure, the industry is redefining “real time,” he said.

As the oil and gas industry wraps up the first decade of integrated operations, he said, “There has been tremen- dous headway in areas like real-time data surveillance, access, and higher end collaboration that goes beyond videoconferenceing into connecting the right people with the right information at the right time so the right experts are weighing in on decisions regardless of their geographic location and function or discipline.”

For Baker Hughes, progress in collaboration has been dramatic. “Going back only two and a half years,” Mathieson said, “we had three real-time drilling centers around the world. We now have 25, and all slightly different sizes and shapes. It really is something that’s now fundamentally part of the way that we run our business.”

Collaboration and remote monitoring are the cornerstones of IO in the High North, a joint industry project (JIP) being managed by Project Manager Fr?d?ric Verhelst, DNV. A primary goal of the JIP is to carry out monitoring onshore so informed decisions can be made for offshore operations.

“There are fewer positions offshore,” Verhelst said, which is a driver for better HSE performance. “Companies have to rely much more on the offshore/onshore link being available all of the time. Now that the concept of collaboration centers has gained ground, the goal has changed to creating more specialized onshore centers.”

Samit Sengupta, managing director, Geologix Ltd., said one of the most significant things about DOF application is the integration of real-time data with information gathered on site by experienced personnel.

“A lot of people on the rig are making observations, and all of those kinds of observations traditionally would have been included in a report that was completely outside the real-time information coming in,” he said. “It was not integrated in the real-time system.”

Within the DOF, Sengupta explained, “Observations are being communicated in an on-time basis. Instead of being sent as a report, information is being sent using the same system as data to recipients. That contextualizes all of the data being communicated.”

Now, observations made by workers can be placed in context, creating a richer set of information that improves the value for the operator because it leads to better decision-making.

The industry clearly has made great strides in implementing the DOF, and much more progress lies ahead for the early movers. While some companies have made enormous headway, however, there are many operating companies (many of them on the smaller side) that have not yet embraced IO. For those companies, Pickering says there is no time like the present.

“Now, we’re in a position that smaller companies can determine the true value to determine if application of the DOF is worth the investment.”

Jay Crotts, vice president of IT services at Shell, agrees. “Having planning analysis is very useful,” he said, “but what’s more useful is to start small with digital oil field solutions and see incremental success and not try to solve the most complex problems to begin with.” The important thing is to test small ideas and fail fast. “Failing fast is fine,” he said, because it allows companies to quickly determine the most likely applications for success.

Crotts speaks from personal experience. “From our smart field to our smart well operations to even our smart manufacturing, we follow an innovation process where we have ideas and we do proof of concepts. Not all of them are successful. We back the things that look as if they will be successful.”

This type of prototype environment works well for Shell according to Crotts. “You can and should do a lot of analysis,” he said, “but eventually you have to try it to see if it is going to pay out.

Pickering agrees. “Now there is a squeeze on finances, and on that basis, you need a much stronger business model that addresses why the company should be doing this,” he said.

Taking on challenges

According to Maersk’s Kapteijn, one of the issues the industry has to contend with is a myopic approach to field development in some cases.

“We have assets that are producing for decades,” he said, “but a lot of the thinking and decisions in development projects focus on the short term. The people who make decisions based on lifecycle considerations will not see the results of those decisions.”

Another difficulty, according to Kapteijn, is “the oil and gas industry, despite spending billions on research, still faces a major challenge when it comes to integration.” Nearly 80% of work is contracted out from operators to other companies, and resources belonging to subcontractors could help move things forward more rapidly as could resources from universities and other industries. “We do not get as much value out of the people we work with as we could,” he said.

One of the challenges being addressed at BP is implementing DOF practices across the company and truly changing the way employees work. “There’s more to do on deployment,” Roberts said. “It isn’t just about deploying technology; it’s changing working practice on the ground.”

“Technology is the easy part,” Junor said. “Getting the change management and getting multidiscipline teams to work together is really where the challenge lies.”

Seeing fracture attributes ––such as height, width, and length –– and calculating stimulated reservoir volume in real time provide insight into how the formation is responding to stimulation treatment, which helps reduce uncertainty and improve effectiveness. (Image courtesy of Halliburton)

BP has an internal team working on this issue. “As we review current solutions and how they are deployed, one of the things we want to address going forward is the fact that some areas of the company are taking more advantage of the solutions than others.” One of the things BP did to address the challenge of deploying at scale was look at work processes. “Support mechanisms have to go with deployment, otherwise it would tend to die on the vine,” Roberts said.

According to Pickering, “There sometimes isn’t a proper match with the existing work processes within the company, or people just haven’t bought into the technology. Before you rush out and start building collaboration centers, you need to clearly understand how people do their day-to-day jobs, how those jobs are going to be transposed into this new collaborative environment, how people are going to work remotely because they’re not physically on the site, and how such a center could improve work process.”

Hauser agrees. “DOF gives us the ability to shorten the learning curve for our early-career employees by giving them access to expert mentoring and decision support. This strengthens our organizational capability to manage global development, deployment, and support of solutions. What will be critically important is how we utilize our limited expert resources while developing new organizational capability to sustain our future.”

Deployment of intelligent solutions across an enterprise is not so much a technology challenge, as much as a change management challenge, according to Pai, who pointed to the adoption of drilling automation technologies as an example. “A majority of the drilling com- munity are reluctant to utilize automation enabled by real-time data,” he said, noting, “overcoming this resistance will be key, recognizing there must be balance between automation and human control.”

Success will be determined by the implementation of a top-down directive that establishes an industrialization process with sound business models, standards, training, and clear objectives. “Without such a formalized approach, any implementation is sure to endure false starts, employee confusion, management frustration, and ultimately a short project life span.”

Hauser added that the evolution over the past decade from concepts lauded by “DOF Evangelists” has matured to real value-adding solutions. “The key will be how we focus our efforts to successfully impact our business at scale across our global operating organizations,” he said.

One of the impediments of executing such initiatives is limited personnel resources, which is complicated by the Big Crew Change – a situation Pai views as much an opportunity as a challenge. “Adoption of high-value intelligent solutions can result in higher personnel efficiency,” Pai said, “as Schlumberger has seen through the centralization of our domain expertise, providing oversight across a broader range of operations.”

The Big Crew Change is particularly challenging, according to Mathieson, because it brings a very different way of thinking into the workplace.

“We live in a world where ‘digital immigrants,’ people who are still learning what the baselines are and how to use the new tools, are being forced to move from one way of working to another. The new generation of workers, ‘digital natives,’ are used to the social engineering tools, but they approach work in a completely different way.” These two groups have to work together to effect a rapid transfer of knowledge from skilled workers who are retiring to younger workers with considerably less experience.

“As part of the real crew change that’s going on just now, there are some fundamentally different behavior sets that we’re looking at in the company, and for companies like Baker Hughes, and others that have been around for the best part of 100 years, the legacy training systems, the way that we look at wellsite readiness, needs to be part of the digital modernization process as we train a new generation of people to run operations. The battle we’re starting to face now is that these new tools are working and really showing some differential performance, but getting from the 20% to the 80% is still a big deal. It’s forcing some real transformational ways of looking across the whole business and creating an extensive list of things we need to take care of to move completely to a new way of working. And that’s tough. For many big companies, it presents a pretty high commercial hurdle to upgrade legacy best practices.”

For Verhelst and IO in the High North, one of the focuses today is on data and information models and collecting information to allow workflows across organizational boundaries. Both drilling and production workflows are being examined, he said.

“Production workflows are centered around a production support center created two and a half years ago in Stavanger,” Verhelst said. Though the multi-asset support center can support asset teams in resolving production challenges, he said, “They need to be able to hook into all of the data systems available, which at the moment is very diverse. A very large project is targeting creating a common interface that will allow a standardized way to tap into those.”

Resources are being allocated now on prototyping and demonstrating workflows around the Production Support Center and how external centers can be used in decision-making, he said.

Sengupta too sees workflows as a challenge. “Unless your workflow works with the technology, you don’t derive the full benefit of the technology,” he explained. When enormous volumes of data are collected and distributed to everyone in real time, information overload occurs, and the decision-making process is compromised. “This means the specialist is not working at the best of his or her capacity.”

Defining opportunities

Oilfield virtualization is maturing today, Hauser said, and predictive analytics are being applied to new areas. “The next horizon will be in the application of robotics and the intriguing promise of nanotechnology.” The key to moving these technologies forward, he said, is “cross-industry sharing.”

Pai agrees that technology transfer from other industries is one of the unexploited opportunities for the DOF. Schlumberger, a proponent of cross-industry collaboration, has a history of building on best practices from the automotive and aerospace industries to drive technology functionality and reliability, according to Pai.

“The aerospace industry is by far the leader of onboard monitoring systems that provide continuous diagnostic data streams for use in preventative maintenance and intervention processes,” he said. Schlumberger engineering personnel interface routinely with aircraft manufacturers to further advances on reliability systems. “Additionally, our relationships within the automotive industry provide the opportunity to share manufacturing discussions for further ruggedizing high-temperature electronics/sensors.”

Another aspect of the DOF that is showing a marked improvement is the uptake of data.

“Once the standards are established,” Pickering said, “it’s a free market for everybody. Standards make room for more and smaller players.”

As the Deputy Chairman of WITSML, Pickering works with Energistics, an organization that facilitates global noncompetitive vendor neutral infrastructure for collaboration aimed at developing and adopting open data exchange standards. “We’re building up to offering accredited courses in WITSML,” Pickering said. The first accredited courses should be available by 1Q 2012.

Shell’s Perdido field in the Gulf of Mexico was “born smart.” Before plans were made for development, the field was screened to evaluate where smart field technology could be applied best, and field-specific solutions became part of the development plan, which looked beyond the objective of putting the field onstream. (Image courtesy of Shell)

“The big drive for the course is to improve uptake,” he explained. “It’s good that we’re starting to develop professionalism in different aspects of the DOF because it’s no longer a cottage industry. It’s becoming fundamental to the way companies are working.”

Meanwhile, drilling and production automation are increasing dramatically. This aspect of the DOF, one Mathieson described as “really ‘blue sky’ a couple of years ago,” is now getting significant attention.

“Some of the biggest players on the operating side are seriously looking at how to automate certain portions of the well construction and production business,” he said. “They’re looking at critical decision systems, reducing operating footprint and step changes in efficiency with the technologies emerging today. There’s growing momentum in this space and the first signs of practical applications emerging.”

According to Sangupta, part of the impetus for this is the lack of human resources. “Automation is much more valuable to people who are resource constrained,” he said. “We’re always trying to automate everything.”

“What we need to do is start automating processes far more than we’ve done,” Pickering said. “Providers of automation are pushing. What we haven’t got within the industry is the pull. We need the end customers to start identifying the needs for automation, and once the demand is there, it becomes easier for suppliers to supply the appropriate systems.”

“I don’t think we will ever achieve a completely automated field,” Verhelst said, “but one of the things we will achieve is automating some of the very predictive functions so people can focus on anomalies and problems.”

The industry is investing heavily in DOF technologies, and that trend will continue strongly in the coming years.

“You’re going to see an awful lot more breadth of real-time operations,” Junor said. The key will be applying the “model, measure, optimize approach” to make those decisions and deliver scalable solutions. “I think everybody is recognizing that real time is an important way of closing the loop. You can do as much modeling as you like, but unless you can measure in real time and then optimize with a multidiscipline team, you’re not able to make better decisions in the right timeframe to add a great deal of value. Integrated workflows – understanding the gaps, bringing multidisciplinary teams together, and helping analyze and make decision-making more effective – are becoming more recognized as a business practice rather than a futuristic goal.”

According to Kapteijn, the next step for the DOF is to apply these concepts in the design phase. “We’ve only uncovered about 30% of the real value of these concepts,” he said. “The prize at the end of the rainbow lies in the subsurface. That’s where the value is. And IO is what is going to get us there.”

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