Digital Oilfields: The Pipe Dream Comes of Age

12 December 2007 (Last Updated December 12th, 2007 18:30)

Digital oilfields are becoming a reality thanks to improved IT applications. David Binning reports.

Digital Oilfields: The Pipe Dream Comes of Age
At Champion West in Brunei, Shell’s attributes last year’s 25-year production high to SMART technology which saw the addition of 25,000bpd.

Growing competition as well as shrinking reserves is driving investment in so-called digital oilfields throughout the oil and gas industry.

"Clearly the world – and especially western oil companies – needs to explore more and more remote reservoirs of oil and gas in an efficient manner," says David Williams, head of the energy business within Deloitte Consulting UK.

However, despite several years of hype from within the sector and the IT industry about the potential of digital, very little appears to have been really achieved. As Williams says, suppliers would almost have you believe that 'you could sit with a joystick and drill a hole anywhere you like in the planet'.

"Growing competition as well as shrinking reserves is driving investment in so-called digital oilfields."

THE DIGITAL STRATEGY

Over the last few years, most of the major players have announced new digital strategies, complete with digital sounding names, like Shell's Smart Fields and Chevron's i-Fields. Shell boasts a highly disciplined and methodical approach that starts with channelling crucial data collected from the field through specific applications and into dedicated reservoirs and then production models 'to enable better and faster decision-making, optimise asset performance in terms of ultimate
recovery and production'.

Software is already playing a key role for both upstream and downstream operations. Downstream, operators are able to monitor and compensate for things like temperature and pressure with far greater subtlety than in the past. Upstream technology is helping to refine techniques for exploration.

Broadly speaking, the benefits have been two-fold; better information creates the potential for better decision making and therefore improved efficiency, while the issues of safety and the environment are inevitably better addressed.

SHELLING UP FOR DIGITAL

Again over at Shell, measurement sensors are providing continuous data on key reservoir and process parameters, for example, well downhole temperature and pressure. Data is funnelled into reservoir and process facility models to create options for improving current performance. All of this is done under the eye of a multi-disciplinary team charged with monitoring and collaborating on the various information silos and operations so as to make the most informed decisions.

Shell stresses that the execution of these decisions occurs quickly via the secure control domain of the wells and remote facilities for adjusting things like choke valves. IT has delivered immediate tangible benefits to both existing and greenfield operations. Shell reports that SMART technology has led to increased efficiency, better data collection and modelling as well as better safety at its new Ormen Lange gas fields in Norway.

And at Champion West in Brunei, the company attributes last year's 25-year production high to SMART technology which saw the addition of 25,000bpd. Part of this came from the development of previously uneconomic hydrocarbons. The well is the largest ever seen in Brunei (up to 8,000m) with a 4km reservoir.

WHERE DO SUPPLIERS FIT IN?

On the supplier side there continues to be a strong community of specialist mining software and other technology companies. Because the oil and gas sector is so enormous, many of these businesses are very large. Unlike in the mainstream technology sector they tend to be very low key. Inevitably, however, mainstream applications are creeping into their applications.

"Software is already playing a key role for both upstream and downstream operations."

Specialist mining software companies market a number of geospatial software solutions to improve exploration. Many have evolved in the mould of applications like Google Earth, which marked a major leap forward for people's understanding of the planet. IT behemoths of the likes of IBM, EDS, CSC and others have a long association with the oil and gas sector. The incredible wealth it produces has seen massive investment in innovation rights across the spectrum of science, including IT.

Much of the existing technology within the sector is of a proprietary nature, however. Now with the move towards standards-based digital technologies and increased reliance on the internet, the oil and gas industry must face up to the reality of digital security.

SECURING THE SEA

The risk of terrorism or wanton sabotage via communications networks is now a reality. Companies throughout the sector are now being forced to learn about and invest in what has until recently been completely foreign technology.

Deloitte's Williams says that the oil and gas industry is only just coming back down to earth after all the hype that surrounded digital oilfields around five years ago. One after the other, all the major players have trumpeted their grand plans for digitisation. Yet few appear to have lived up to expectations.

"Great big programmes were launched, but my feeling is that none delivered the goods in quite the way that was expected – therefore the uptake is slower," Williams says, noting that countless examples of projects which saw large-scale deployment of IT ended up seeing very little in the actual utilisation of them.

Typically, the reason is an inadequate executive framework to accompany the increased information and changing processes following their deployment. "There are huge volumes of information, but what decision-making processes do you [companies] have in place?" Williams says. "There is a need for checks and balances; there needs to be a plan."

"Specialist mining software companies market a number of geospatial software solutions to improve exploration."

PUSHING AGAINST THE TIDE

Of course this shouldn't be allowed to obscure the fact that very real gains have been made in IT&C for the oil and gas sector.

Fibre-optic cables have been a regular fixture in downwells for about the last five years. This marked an important step in the collection and transmission of crucial data from hard to reach and dangerous areas. There also continues to be significant investment in down-well sensing solutions which are expected to have major implications for the whole oil and gas industry.

Another important technology to have emerged over the last few years is 4D seismic. The time-lapse, or 4D, seismic method involves acquisition, processing and interpretation of repeated seismic surveys over a producing hydrocarbon field. The objective is to determine the changes occurring in the reservoir as a result of hydrocarbon production or injection of water or gas into the reservoir by comparing the repeated datasets. A typical final processing product is a time-lapse difference
dataset (i.e. the seismic data from survey 1 is subtracted from the data from survey 2). The difference should be close to zero, except where reservoir changes have occurred.

Chevron Australia's Mike McLerie says it's tempting to overstate the power of the digital oilfield in terms of exploration. Compared to the 'analogue' fields, they are but a drop in the ocean.

"The world is run on oil found in pre-digital oilfields, which are insignificant compared to the analogue oil fields," McLerie says. "We can't overcome the fact that most of the world's oil has already been discovered."

One of the biggest recent oil discoveries occurred in the Gulf of Mexico after local fishermen were complaining about oil covering their fishing ropes. However, McLerie explains that cleverer fields will deliver important advantages from increased efficiency, more intelligent deployment of skilled workers for the better management of facilities with obvious implications for improved safety and environmental performance.

"The digital oilfield is not going to save the world from peak oil or peak exports, but it's going to make for a softer landing," McLerie says. "It's like comparing an old box to a digital camera."

WHAT WORKFORCE?

Many analysts feel that unmanned platforms will become the norm in the coming decades. Provided that the key challenges of automation have been ironed out, operators stand to reap massive savings, not just through wages, but also in the costs of building given unmanned shelfs can be significantly smaller. Operators are also moving towards remote control for many tasks such as the real-time adjustment of instruments.

"Over the last few years, most of the major players in the offshore industry have announced new digital strategies."

"In the old days you'd send a bloke in and he'd turn the handle – now it's remote," says Deloitte's Williams. This reduces the exposure of workers to dangerous situations and allows already staff-starved operators to deploy them more intelligently. Of course the increased deployment of digital networks is making it easier to transfer skills and information.

"If you're the world's expert on horizontal drilling you can be deployed anywhere simply by tapping into the global information grid," Williams says.

And many operators are taking advantage of virtual environments."20 years ago being a seismic surveyor was a very difficult thing," Williams says. "You had to visualise in your brain what fields look like; now there's virtual environments."

But perhaps one of the most extraordinary developments in the digital oilfield has been the creation of entirely underwater oil shelves. Communications technologies such as remote access solutions and sophisticated software for automation are making Atlantis a reality. The potential for new discovery coupled with the obvious savings for unmanned operations means that several major companies are now looking into this. Shell is already operating an underwater field in water off Brunei.
"These fields are remote and in deep water," Williams explains. "You might as well be doing it on the moon."