The roll-out of the digital oil field is helping Middle Eastern firms optimise production and reduce operating costs
In business, it can be the finest margins that make the difference. Any new application, methodology or innovation can be expected to be exploited by firms keen to procure greater efficiency, productivity and added value.
Which makes the stuttered evolution of the ‘digital oil field’ (DOF) all the more intriguing.Major international oil companies such as Shell with its ‘Smart Fields’, BP with ‘Fields of the Future’ and Saudi Aramco have pursued DOF initiatives for the past five to seven years. Yet its impact on the sector is still being felt, and its clear benefits have not been enjoyed across the sector. This is despite the fact the industry is projected to spend over $1 billion over the next five years on DOF investments, plus hardware, software and affiliated services.
Simply put, the digital oil field is an array of interactive and complementary technologies that enable companies to gather and analyse data throughout the job site. Intelligent wells provide constant data – via fibre optic sensors in the drilling apparatus – about the well and its environment, which enables operators to respond to changing circumstances in real time.
It is also known as i-Field, e-Field, integrated operation, real-time operations and real time optimisation, Increasingly, it is innovations in various technologies that are assisting in DOF’s greater deployment. Practical examples include sensor data being delivered to skilled personnel who, having remotely researched the data, converted it into usable knowledge and used it via advanced visualisation technology.
This assists analysts in detecting complex patterns and avoiding potential production problems before they occur. As an example, operators can adjust fluid pressure or valve settings as the drilling surface becomes more or less permeable.
Such cases lead to improved reservoir management, production optimisation and enhanced drilling operations. In turn, superior business performance is realised by increased reservoir recovery, accelerated production, lower costs and reduced risks for both the company and its employees as a result of a new and improved real time and remote monitoring technology employment.
For an industry that would previously keep field data in hard form on paper, or via Excel spreadsheets in local field offices, to have access to shared information is a major shift.
Alan Baird of Emerson explains further: “The digital oil field of today is far different from yesterday. Yesterday, information was old, it could be months old for any wellhead. Today, information is key and the more that is available the better planning that can be done. This starts at any wellhead, moves to the production plants and then finally out to customers. Engineers, maintenance and top-level management are driven by uptime and production, so data is key,” says Baird.
Some of the reported benefits of employing DOF include lower operational costs, earlier and increased production, lower capital investment and increased recovery of oil and gas. Furthermore, a number of studies have concluded that field operator productivity can be significantly increased by as much as 200%, operating costs reduced by up to 30% and production rates expanded by eight to 10 per cent.
Nick Coles, organiser of the International Digital Oilfield Conference (IDOC) event, which brought together members of the oil and gas industry earlier this year to explore current and potential use of DOF in the Middle East believes the sector needs to be more open to new methods: “Oil companies have a reluctance to embrace new methods. To get them integrated is by no means a short and easy accomplishment.”
He continues: “It is a combination of three aspects; collaborative environment, people and progressive technology. But if firms implement this there have been many examples of improved production. And good payback on investment costs and improvement on all aspects of production.”
The IDOC event, which was held in May in Abu Dhabi was a clear illustration of an evolving technology gaining credence with the industry. Focusing on the potential use of digital oil field (DOF) technology in the Middle East, the conference attracted major players in the field, from ADNOC and Emerson, to Microsoft and Schlumberger. It is expected that a follow-up event will be taking place in Abu Dhabi in 2011.
It would be a mistake, however, to label this a ‘new’ technology or in fact a technology at all, according to Tony Edwards, CEO of StepChangeGlobal, a market leader in the application of digital oilfields and integrated operations. Edwards was a workshop leader at the IDOC event in May this year.
The technology label is also a misnomer, said Edwards as it is more about implementing existing technologies in a particular way to maximise efficiency and deliver better results. “To call it a technology is a mistake. Yes, it uses technology but it is more to do with a fundamental shift in the way you work. Technology enables is but it is what you do with it,” says Edwards.
“The classic mistake some companies made was to treat it simply as an IT project. But it is not like installing SAP. Fundamentally it is how people work together, how they operate in real time and over long distances. A huge element is to do with management and process change,” Edwards adds.
With each company operating in its own unique way, Edwards said that this means there isn’t one approach to employ DOF programmes. “There is no one fixed way. It is dependent on the way the company works. You cannot just pick one approach from Shell and stick it into BP for example. Some companies don’t recognise that and consequently haven’t done so well. Whereas in some companies it is easier to implement depending on the structure.”
If firms do invest, the payback is significant Edwards said. Shell has attributed $500m in incremental added value through the use of DOF programmes while BP has attributed an increase in production of 100 000 b/d. Other anecdotal evidence states there has been up to 20 per cent improvement in well delivery times.
While it may be inaccurate to state DOF is a ‘technology’, there is no doubt that such an initiative is only possible through the latest advances in digital technology and systems which enable remote monitoring.
“The technology is already there now. Technology such as foundation fieldbus, HART, WirelessHART, asset management systems, distributed control systems,’ said Baird. “Producers are all looking at how they can make their fields and plant more intelligent. How they can reduce the downtime, how they can maintain their outputs. It is extremely important that producers have the right technology that fits the right applications.
It is these technologies and the latest innovations – from the multiphase flowmeter to the digital control system to asset management delivering the information which will be key to DOF’s success within the oil and gas sector. “Its hard to say which aspect has been most beneficial for the industry, as it is when they (technology) are combined this is what gives it true value,’ said Baird. “If I have to choose one breakthrough for industry, then I would feel that I/O on demand is significant as this drives the speed of implementation, yet also brings that high level of data to not only management but also the process and maintenance engineers.
“The beauty of the latest technology,” Baird continues, “is that that many challenges have already been addressed. From the reduction in cabling by using foundation fieldbus or WirelessHART devices to latest DeltaV, technology of I/O on demand which gives faster project implementation and startup. All combine to reduce cost and get the operations online much faster, thereby production quotas are met quicker.’
In the Middle East there are significant plans to embrace DOF to assist production levels increases. In the UAE, plans are underway to improve crude production levels from 2.8 million b/d in 2009 to 3.5 million b/d. ADCO is set to increase its current oil production capacity of 1.4 million b/d by 22 per cent in 2017. One of the main contributors to this plan is the implementation of ADCO’s Automation and Smart Fields programme (ASF). This will identify and apply fit-for-purpose technologies and tools to enhance asset management and optimising the use of infrastructure, facilities and manpower resources.
Elsewhere in the Middle East there are other examples of new technology being implemented. DOF programmes are underway in Saudi Arabia, Oman and Kuwait. Saudi Aramco has reported that all their new fields are intelligent fields with the latest being Abu-Hadriyah-Fadhil-Khursaniyah (AFK) field. In the Haradh increment, 32 such wells are reportedly doing the work that would otherwise require 280 conventional wells due to being equipped with remote operations, permanent downhole monitoring systems, compact multiphase flow meters and smart well completions.
Oman is expected to increase its oil output by 5.8 per cent in 2010 due to future enhancements through its digital oil
field programme. A recent significant announcement is its Fahid Collaboration Centre (FCC), which is the region’s first integrated virtual oilfield operations facility.
While the implementation of DOF in the Middle East has been steady rather than meteoric, a more pressing need than simply corporate desire to see profits rise will doubtless drive its implementation further. Figures from US consultant Booz and Co. reveal a disturbing decline in skilled labour in the oil and gas industry with a current shortfall of 500 000 – and a deficit that could reach 1.7 million by 2030.
With demand for oil in the region steadily increasing, the need to invest in oil fields initially deemed too expensive or remote could well become reality. Should this occur firms will doubtless embrace strategies which offer less labour-intensive set-ups with no loss of productivity.
