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Page added on December 21, 2013
Why Digital Oil Fields Are The Future Of The Energy Industry
Oil exploration and extraction is going through a period of great technological innovation. Between 2005 and 2010, the number of patents filed in the classes relating to the oil exploration and extractive industries technically doubled from just under 700 to almost 1400. One of the growing areas of research has been the “digital oil field”. This is the latest buzzword in the sector and is something touted to be the future of the oil and gas industry.
A digital oil field is an environment where all the real-time data from the oil field is constantly fed and monitored by computers located at remote monitoring stations that is then used to optimize the production of oil. This is basically an umbrella term that is used to refer to all kinds of computerized networking and processes that help in creating a sophisticated monitoring and controlling system for oil wells.
To elaborate, consider this: the oil consumption is expected to breach the 100 million barrels per day barrier by 2015. To give you a perspective, this number was less than 80 million barrels per day two decades back. This rising consumption level causes a strain on the capital expenditure as well as on human labour. While capital expenditure may be justified on the basis of the increasing revenues that the oil drilling companies stand to make, human labour is a finite resource. According to some estimates, the labour shortage for oil drilling is expected to reach as much as 1 million by 2015.
A digital oil field is the way forward to ensure that the oil industry is able to extract higher volumes of hydrocarbons using fewer resources. This is done by feeding the thousands of minute data points from the sensors mounted on the wellheads, pipelines and the various equipments installed along the upstream to computers located at the monitoring station. These computers study and interpret useful information about the conditions and output. In the IT industry, such analysis of thousands of data points is called big data analytics and this is typically processed over a cluster of computers located at a remote location through what is called cloud computing.
The benefits of such a computer-controlled oil drilling process is immense. For one, it makes the operational process extremely efficient by drastically improving the productivity of the human workforce. Since the data is fed to the computers on a real-time or a near-real-time basis, a digital oil field may be equipped with automated pump controls to control the volume of oil extraction. In addition, the data may be used to track equipment efficiency and surface conditions to minimize rig downtimes. Also, by integrating the field details with information from third party seismic analysis, the digital system may be able to help chart out the future production estimates. Overall, the digitization of the oil rigs are estimated to improve the net present value of oil by up to 25%.
The huge opportunity present in the digital oil field industry has seen multiple IT companies enter the fray over the past few years. AllStream, a leading provider of enterprise networking services in Canada is already working with a number of firms in the Canadian oil & gas sector to implement a digitally networked oil drilling system. EMC, one of the leading big data analytics companies now has a dedicated center in Brazil for oil & gas data analytics. Besides, Microsoft, IBM and Cisco too are other companies that have made significant strides into the oil & gas sector.
The benefits of a digital oil field far outweigh any concern over capital cost. Besides improved productivity and optimized labour force, such digitization also helps in enhancing the collaboration between the off-site monitoring team and the on-site workforce. Add to this, the scope for improved automation of oil extraction, a digital oil field then becomes a critical element in the energy needs of the world over the next few decades.
9 Comments on "Why Digital Oil Fields Are The Future Of The Energy Industry"
Makati1 on Sat, 21st Dec 2013 3:28 pm
More techie dreams…
Poordogabone on Sat, 21st Dec 2013 5:40 pm
If you’re not sure wether you have enough fuel to make it home do you slow down or push on the gas?
Increase productivity = faster depletion
we are headed for a higher peak a little farther down the road than anticipated but the steepness of the downturn will be that much more severe.
We could very well extract 100 MB/D by 2020 and half that by 2030.
GregT on Sat, 21st Dec 2013 6:15 pm
“data from the oil field is constantly fed and monitored by computers located at remote monitoring stations”
The only remote monitoring station that we should be concerning ourselves with, is the one on Mauna Loa in Hawaii.
http://www.esrl.noaa.gov/gmd/ccgg/trends/weekly.html
DC on Sat, 21st Dec 2013 8:00 pm
LOL! There is no ‘innovation’ in the oil industry, just tweaks to techniques some of which are a century old. Clearly all that state-of-the art digital real monitoring isnt doing much to slow, much less prevent, the rash of leaks, blowouts and other eco-disasters the oil industry has given us in last few years.
Comeon tech! if all this digital hoeey is so friggen awesome, how does the oil industry still manage to spill so damn much oil?
Lucky Luck on Sat, 21st Dec 2013 10:14 pm
How would it propel my 1200 kg steel vehicle. Digital gas 1 0 1 0 1, looks like a bumpy ride….
DMyers on Sun, 22nd Dec 2013 12:06 am
I landed close to Poordogabone on this one. The objective is to pump more oil faster, so without getting into the particulars of digital supplementation, it can serve no useful purpose. Depleting the resource more rapidly does not create more of said resource. It only serves to transform a curve of decline into an eventual drop off of scarcity. It amounts to another dubious benefit in the present, traded for someone else’ certain detriment in the future.
Not really a convincing case. I can’t buy the one million labor shortage prediction. Could be a million unemployed (jobs automated away), but if there are good jobs available, we have the educational infrastructure to bring in the ready labor.
“The benefits of such a computer-controlled oil drilling process is immense. For one, it makes the operational process extremely efficient by drastically improving the productivity of the human workforce. Since the data is fed to the computers on a real-time or a near-real-time basis, a digital oil field may be equipped with automated pump controls to control the volume of oil extraction. In addition, the data may be used to track equipment efficiency and surface conditions to minimize rig downtimes. Also, by integrating the field details with information from third party seismic analysis, the digital system may be able to help chart out the future production estimates. Overall, the digitization of the oil rigs are estimated to improve the net present value of oil by up to 25%.” [quoted from the article]
This amounts to a digitization daydream, where certain boiler plate benefits from digitization are applied abstractly to oil production and treated as self-evident improvements on the status quo. Some of these processes must already be digitized (as are core functions at banks, hospitals, auto shops, courthouses,and lens makers). And as far as “…tracking surface conditions,…” can’t some one just watch the Weather Channel, or even stand outside, and push code buttons to inform the operation what’s up at ground zero?
Much of the benefit from digitization has probably been realized already at the systemic level. I am inclined to believe that improvements from more intensive digitization would be marginal rather than the “immense” “25%” indicated. However, if I were employed by a company trying to sell digitization to the the oil industry, I would want to lead off with the 25% figure.
Arthur on Sun, 22nd Dec 2013 9:30 am
Playing the devils advocate here, you can denounce technology all you want, fact is that with the conventional oil extraction methods ca. 50% of the reserves stay behind, because they cannot be ‘harvested’ economically. Technology, like the method described above, or by injecting nano-particles into the well, or a host of other methods, gives new opportunity to extract much of the rest reserves after all, extending the oil age with many, many years, if not decades, albeit with substantial higher energy prices.
Look, I would love to see everybody drive to Walmart now and stuff their shopping carts full with wind turbines, solar panels and what have you, and next dump your cars, but that’s not going to happen. For those who are waiting for the peak oil version of The End of Times, they are in for a long wait.
Arthur on Sun, 22nd Dec 2013 9:34 am
http://www.forskningsradet.no/en/Newsarticle/Nanoparticles_helping_to_recover_more_oil/1253987298870/p1177315753918
Recovering extra oil with nano-particles.
rockman on Sun, 22nd Dec 2013 1:22 pm
Folks – I hate to disrupt this interesting conversation but there is nothing new to look at here…move along. LOL. 100% hype. Such systems were in place over 20 years ago. If interested (and bored) search “SCADA”. Still need boots on the ground from time to time but we’ve run unmanned offshore production facilities for a very long time. High end computer application have been utilized (especially in the seismic arena) by the oil patch for decades. Long before we had desktops the oil patch was running huge mainframes. A real life example: many years ago while working as pore pressure analyst for Devon I monitored in real time a Deep Water Brazil well from my home from 8 pm to 8 am. And sure enough at 11 one night I calculated a potentially dangerous drilling situation developing. And the tool pusher on the rig saw it also and shut down immediately. For 2 hours I had Devon senior drilling management on a conference call analyzing the data. We finally concluded it was a false alarm and went back to drilling with no problem. And yes: I did it in my underwear…really. LOL.
The only significant change is the increase in bandwidth allowing more/faster data gathering. Convenient for sure but not a game changer. And does nothing to improve recovery or less the decline rate. I’ll repeat a point I’ve made before: oil/NG exploration and production has never been as easy as it is today. Finding and producing the grease that’s there isn’t the problem. The problem is the lack of remaining grease left to be found.