The adoption of new technologies could save the oil and gas industry billions of dollars every year, but companies have a long way to go before they make that happen
Falling oil prices and weakened energy demand have reinstated the need for oil and gas companies to become more efficient and reduce spending. In many cases, technology is seen as the key enabler to meet these objectives.
According to estimates from a GE report, if deployed aggressively, smartfield technologies could save the industry over $6bn a year, or $90bn over 15 years and add billions of barrels of oil to existing output. Over the past few years, great emphasis has been put on harnessing automation to optimise operational efficiency and lower cost.
As a result, companies have started investing heavily in modernising their equipment. Last year alone five of the world’s largest National Oil Companies (NOCs) spent $5.3bn on technology and research, increasing production and tapping into the hard-to-reach reserves.
Yet research suggests producers have hardly enjoyed the wider benefits technology has been said to offer, such as improving overall efficiency and cutting cost. So where do they go wrong?
Andrew Dennant, who is a director for oil and gas in the Middle East and Africa at Emerson, said: “This is not a technology project. This is a project enabled by technology.”
“The first side of the coin is that people rush to implement the technology and unless you have a clear vision of the business reasons behind the project, what you are going to achieve and how you are going to achieve it upfront, then you will likely not achieve optimised implementation.”
In order to be successful, the digital oilfield requires far-reaching changes on different organisational levels. Therefore, it is not a decision that should be taken lightly.
“When you implement significantly different technologies and you engage different people with different workflows in the decision making process, there is a significant amount of change management that has to be incorporated.
Often if you do not do change the management effectively then people will use the new technology in the same way they used the old technology and you don’t get the benefit,” Dennant explains.
When combined with the right business structure, work processes and qualified personnel, technology and automation can bring tremendous benefits to companies in the region, with a number of NOCs already making gains.
So far, Abu Dhabi National Oil Company (ADNOC), Saudi Aramco and Kuwait Oil Company (KOC) are said to be leading the way in the digital revolution.
“We have seen all of the oil majors moving towards the intelligent field and that will continue to happen. The intelligent field is a great tool. It allows you to make better decisions; to get more production on stream faster, striking the balance between production in the near-term and reservoir protection in the longer term,” Dennant commeted.
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Another common term for the digital oilfield is process automation. In oil and gas, it could generally be explained as “the use of certain IT-related functionalities to communicate with equipment in order to either control or optimise work processes”. This is according to Yiannis Bessiris- a regional business leader for advanced technology at Honeywell and a process automation specialist.
He says: “We are talking about solutions which not only control the plant but also optimise production; there are new heuristic algorithms that can turn data into predictive analysis tools.”
Certain automation functionalities, Bessiris says, have become the standard for certain units.
“You cannot commission a plant without a DCS system. Of course, as soon as you move up the value chain you have technologies like operator training simulators, alarm management and advanced process control, which are more about optimisation and value.
Return on investment depends on the practicalities and complexities of the process itself. I have seen projects with a return on investment in seven days but for most of the projects it is between six months and a year.”
Remote control, round-the-clock surveillance and data gathering have now become an everyday reality for companies in the region. This has given producers the chance to move from repair-and-go to predict-and-prevent mode. The results are more optimised workflows and better enabled decision making.
“In the old days of well test and no automation at the wellhead, every three to four months if you had a water break through a well, potentially you would not know for a year.”
In the pre-digital era, processes would be rather cumbersome but with the introduction of automation technologies this has changed dramatically, Dennant explains. “Before they implemented the digital field workflow, they had six or eight different decisions that had to be made. Each decision had to be collected by a group of people or a person within a group of people and sent by email to someone else.
“That could take three or four days. Add that up and you have 28 days before you can effect a change. In the new digital environment you have the right people in the same room, the data comes in, they look at it, they make the decision and it gets effected in hours,” he added.
“Process automation is about taking humans out of the control loop, which is also out of harm’s way or when they do not add value so that your process runs optimally and automatically.”
When the control valve detects a friction building up or ‘wear’ in the valve, and before quality of control is lost, the automation system will flag up to the operators that there will be a problem. The operators know the control loop needs more monitoring and the maintenance team go get it fixed in a financially optimal way, Dennant explains.
“If you have a set of control loops, they will not need human intervention until the system determines that there is something that will soon go wrong and at that point humans should be brought into the loop.”
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Increased mobility as a global and social phenomenon has further advanced oil and gas digital environments. One trend called ‘Bring Your Own Device’ (BYOD) to work, which started off in Asia, has now become a common practice in many fields, including oil and gas, and could soon turn into a requirement, experts say.
“The industry will move towards a more IT-oriented environment and more innovative technology will come along. We are going to see more solutions moving to the cloud. We need to address cyber security issues accordingly.
“I also see an upward trend in mobility. Process automation happens in the control room but with all these solutions you can see your data, trends, reports on your mobile devices, iPads, iPhones and tablets,” said Bessiris.
Gert Thoonen, global process technical consultant at Rockwell Automation, says the biggest benefit from moving toward a more integrated environment is that “you can run data and control on one single platform” allowing your employees to feed and access it from many different locations.
“Due to the fact that they are coming together you can use one single platform and share data between all systems in your plant much more easily.” However, multiple data sources create one big concern and that is getting connectivity to all those different devices, Thoonen adds.
Normally, the plant, well or rig is at a remote location and getting wifi connection or any other signal for that
matter often proves a challenge.All these new technologies also require the right infrastructure, configuration, maintenance and in some cases standardisation and integration.
Then you have the sheer number of different devices, software and operating systems used to access or enter data, which makes standardisation even harder.
The best investment companies can make is in process integration, Thoonen says, as it not only increases workflow efficiency, but eventually lowers the total cost of ownership.
Systems requiring more frequent upgrades are now increasingly being used by vendors and in a number of industry applications, including oil and gas.
“I know solutions which have been running for the past ten years such as DCS systems. But of course as we are moving more towards Microsoft-based platforms, the automation systems are following the obsolescence cycles of windows-related software. That means that technology needs to be upgraded between five to ten years,” says Bessiris.
However, oil and gas companies are still at the baby stages of fully exploiting the benefits technology has to offer, says Biessiris.
“Oil and gas is quite conservative and is lagging behind. They tend to prefer the good old telephone and fax machine instead of using a fancy iPhone 6 Plus.”
This is often due to the fact that if something goes wrong, it could cost the lives of employees and billions of dollars in damage, Thoonen explains.
“Food and beverages are quite innovative because the risk is lower. In oil and gas, where there is a risk of explosion, you need to make sure that you can run [the plant] for the next 15 to 20 years.”
