Using the D-Factor in upstream operations
Implementing an effective digital oilfield structure has been proven to help operators achieve efficient drilling, maximise oilfield recovery, eliminate non-productive time & increase profitability through the design and deployment of integrated workflows
Imagine an upstream operation where all segments are integrated and closely knit, systems automated, workflows monitored remotely and on-field activities managed digitally. It might seem like a utopian idea, but the concept of the ‘digital oilfield’ does exist and is being realised everyday in the global and regional oil and gas industry, albeit operating at a nascent stage.
The term digital oilfield, can at once, be simply understood as a system that has achieved complete digitalisation of the full spectrum of an upstream operation. The notion of a digital oilfield has been used to describe a variety of things, and its definition has encompassed an equally wide array of tools, tasks and disciplines. All of them attempt to describe various uses of advanced software and data analysis techniques to improve the profitability of oil and gas production.
The objective of the digital oilfield is to achieve efficient drilling, maximise oilfield recovery, eliminate non-productive time (NPT) and increase profitability through the design and deployment of integrated workflows. The digital oilfield combines business process management with advanced ICT and engineering systems to streamline and, in many cases, automate the execution of tasks performed by cross-functional teams.
“The digital oilfield concept has multiple interpretations by different operators,” Thony Brito Cardier, regional sales manager in the Digital Oilfields domain at Rockwell Automation, feels. “However the most accepted one is that it is an operation philosophy that requires the application of advanced sensing, automation, control, telecommunication and software technologies in upstream oil and gas in order to capture relevant process data and apply analysis and data management tools to it, with the ultimate purpose of optimising the process,” he explained to Oil & Gas Middle East.
“However,” Cardier continues, “over the last few years the industry has realised that to be successful in the implementation of a digital oilfield project, it not only needs pervasive application of technology but also requires organisational alignment, change management plans to adapt the organisation to the new practices and ultimately strong commitment and a clear vision from the leadership about the goals of the programme. In the end, it is a holistic process that affects all of the organisation.”
Although digitalisation of operations has been happening in the industry for a while now, for the NOCs and IOCs to fully adopt the concept of digital oilfield would require these operators to be convinced about the merits of digitalisation. As is fathomable, the primary benefit of digitalising operations lies in optimisation and/or increase of production, in the average range of 3% to 8%. Output can be raised by optimising well modelling, artificial lift systems performance, real time monitoring, remote control of facilities, as also achieved by applying advanced sub-surface monitoring and modelling tools according to Cardier.
Another key gain of the digital oilfield is that it helps optimise drilling and effective well completions can be secured by applying advanced surveillance to the drilling process and rig control systems, and also by implementing intelligent wells to manage multiple production zones in a well without the need of rig intervention. Digitalisation also brings about the benefit that means most to operators – that of cost efficiency. Cost reductions of up to 15% in areas such as maintenance and operations, as per Cardier, can be realised by implementing automated predictive alarming and automated workflows.
“One of the precursors of the digital oilfield is the implementation of smarts – systems that manage unit level control autonomously with no need for human interaction, unless things go out of the normal operational envelope,” Andrew Dennant, director of Oil & Gas for the MEA region at Emerson Automation Solutions, says of the benefits of the digital oilfield. “This is important for many reasons. The first is that, when people are monitoring and controlling these operations manually, they do not have the bandwidth to make significant business decisions as they are drowning in minutiae. The second is that these automated systems are the data servers that enable the digital oilfield – without data there can be no digital field. The third is that without the ability to implement control decisions remotely and systematically you cannot yield the benefits of the digital field. Let the systems do the smart stuff so that people have the data, context and time to use their intelligence for the benefit of the business,” he quips.
In this era of fluctuating oil and gas prices in the Middle East, upstream operators are increasingly resorting to using Big Data analytics to provide full business visibility and plan their long-term sustainable production. “The business benefits (of using Big Data) are not theoretical – with one recent report showing that 92% of the region’s oil and gas projects are delayed and 70% are over budget. Energy firms are using data analytics for real-time insights that cut costs, enhance operations and the supply chain,” Tayfun Topkoc, managing director of SAP UAE, says. Quite naturally then, the concept of Big Data goes a long way in ensuring the effective implementation of the digital oilfield structure, as the core element of digitalisation lies in managing and effectively channelising the large volumes of data being generated by an operation. “Digital oilfields can also use Big Data analytics to allow for more mobile workforces, better predict trends such new drilling locations, supply and demand, and predictive maintenance,” Topkoc says.
“Big data enables better decision making. These better decisions span the value chain; all the way from exploration to export. The beneficiaries could be from any discipline; Geology, Production, Operations, Maintenance or Marketing. All have immense opportunities uncovered as Big Data, gathered from various sources related to their respective functions, is mined to uncover insights and relationships that were previously hidden,” Dennant says.
“The upstream sector, especially the field side of it, was relatively less automated for many years owing to vast areas it spans, which made instrumentation infrastructure expensive,” he continues. “Over the last decade, the development of wireless sensors has helped to get quality data from the field at a significantly lower cost and in less time. This has resulted in an exponential increase in data that applications can now mine for insight. The operators that benefit the most from Big Data are those who have invested in such analytics tools, to help them to interpret the ever-increasing volume of data and provide them with clear, actionable information.”
It is interesting to understand which of the two segments of the upstream industry – onshore or offshore – would stand to benefit more from implementing a digitalised operational structure. Although the basis for comparison between the two segments is limited, considering the particularities and varied nature of the operation, experts suggest both the sectors can be great beneficiaries of digitalisation.
“While in the case of offshore operations, data acquisition, control and safety systems are defined almost from the inception and design of the project – except for brownfield projects – it helps run the daily operations as an integral part of it,” Cardier explains. “However the operations can be optimised by applying automated workflows in different areas such as reservoir optimisation, water flooding, pressure maintenance, optimised reservoir drainage, production network optimisation with the assistance of petroleum engineering tools. Obviously the cost of services in offshore exploitation are higher than in onshore activities, so every tool available should be employed to reduce the cost of operations.”
Drawing a parallel, Cardier continues: “On the other hand in the onshore domain, the field operations are not constrained by the cost of marine services or higher rig and logistics costs, so the applications of a digital oilfield philosophy might look as an alternative to producers. However the proven benefits of converting a remote onshore operations into an integrated and connected entity, have driven many operators to implement an Integrated Operations approach.”
Digitalisation in the oil and gas industry, according to a research by Cisco, will generate an estimated $1.1tn in Digital Value at Stake between 2015 and 2024. However, the prospect of the digital domain cannot be quantified in terms of magnitude alone, but equally in qualitative terms through the benefits it will fetch for the upstream sector. Besides the key merit of reducing operational costs, another vital benefit of the digital oilfield is helping the operator raise and maintain HSE standards.
A digital oilfield workflow, quite understandably, reduces the requirement of deploying the workforce to hazardous operational zones and in fact helps companies better utilise the human potential by channelising workers towards managing the digital structure.
“One of the benefits of digital oilfields is the reduction of HSE exposure by reducing the time that field crews need to invest in visiting remote facilities,” Cardier says of the HSE angle. “There are also other benefits in the areas of asset integrity, fire and safety and optimisation of maintenance activities, which have been achieved by deploying gas sensing system, leak detection devices and software, integrated fire and safety system and personal communication systems, where a worker equipped with a camera and radio system can remotely interact with specialists, who can help him solve a problem in the field in real time.”
Dennant of Emerson voices a similar opinion, saying, “As we have already seen, digitalising operations keeps people out of harm’s way, which has a fundamental positive impact on health and safety. There are other ways that the digital oilfield can benefit HSE. Data shows that over 90% of all safety system failures are in the field elements (valves and transmitters) rather than the logic solver. A modern safety system extends the diagnostics all the way to the field, giving better insight into the health of the whole safety loop. A digital oilfield distributes this information to the right people to make better safety decisions. Remote monitoring of safety-related items, such as safety showers and eyewash stations, enable operators to provide timely assistance to those in need, and training to those who misuse safety facilities. Technologies such as corrosion measurement prevent leaks, and ultrasonic leak detection mitigate their effects.”