Data-driven production optimization: are we there yet?

There’s plenty of gear on data collection from sensors and actuators for offshore infrastructure, experts say. Now we just have to use it.

Shell began talking about its Fieldware Production Universe in 2008 (Shell)

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It has been seven years since Shell began talking about its Fieldware Production Universe (PU), a suite of applications for processing real-time signals from offshore wells to optimize production. Shell, after all, is recognized as a leader in the field, along with Statoil and Saudi Aramco.

That may be hard to believe, because there is a perception in the industry that operators do not really “do” data-driven production optimization, or do it that well, yet. 

But experts who spoke to Upstream Intelligence painted a slightly different picture. They say that the penetration of sensors and actuators into offshore infrastructure is actually fairly well advanced across the sector.

Where the industry hasn’t kept up, however, is graduating to a more sophisticated use of all the data these sensors are faithfully producing. Falling oil prices – and revenues – will accelerate this evolution, they say.

Downstream does it better

“The technology has been around for a long time, and I think there is plenty of technology already available both sub-surface and topside to do what we need to do today,” said Chris Lenzsch, solutions manager for Upstream Analytics at EMC2 Corporation.

Each year more and more sensors are being incorporated into wells, platforms and machinery, he said, but when it comes to upstream, operators do “a very poor job” in using all the data being generated.

They can collect it and make some levels of historical analyses, but their use across integrated workflows in a predictive or prescriptive manner is pretty unsophisticated when you compare it, for example, to the use of sensor data in the downstream, which is substantial,” he said.

“Downstream they’ve utilized full lifecycle optimization and modelling for considerable gains in productivity. Upstream could do a heck of a lot more solutions like these and what we have been espousing through ‘digital oilfield’, but they just don’t seem to really exploit this opportunity in front of them.”

“Maybe they don’t know,” he said, “or don’t want to know, or perhaps simply lack the impetus to try something different and wrestle with the change management needed to effect positive outcomes.”

It’s a culture thing

Philippe Flichy, senior digital oilfield advisor at Baker Hughes, told Upstream Intelligence that the reasons for the disconnect may be cultural in a sector that is otherwise very advanced in its use of ICT.

“Oil and gas definitely lags behind other industries in terms of leveraging analytics,” he said. “One of the reasons is that it’s a highly engineering-led process. Engineers do not like to hear, ‘Oh, I don’t exactly know how, but our data is telling us this or that.’ They tend to want to confirm what they’re seeing from analytics with solid engineering rationale.”

“The key is trusted data. That’s what’s stopping analytics from really blossoming in our industry” he said.

“You have the automation people capturing the data, then you have the IT people doing the data analytics, then you have the engineering people demanding clear answers from the data. Those three worlds don’t talk to each other. So you end up with a lot of suspicion about the quality and validity of the data. If you’re missing the trust, it’s very difficult to do anything with all of that.”

“A lot of people in data analytics come from other industries and don’t realise that there is a bit of a different flavour with oil and gas,” he added.

Mother of invention

A key question now is whether the collapse in oil price – and the corollary need to cut costs and boost productivity – will provide the necessary push for the industry to get to grips with its data.

Lenzsch believes that, in this case, necessity will indeed be the mother of invention. He said companies will be looking for “massive improvements” in productivity and efficiencies, and that this should lead to an uptake of technology.

“It’s sort of the reverse effect of rising oil prices, which drives some degree of technology uptake but also drives a ton of inefficiency,” he said.

“In the last upturn, 2009 to 2014, I was really surprised by the level of inefficient growth. They had so much money that it didn’t matter if you were efficient or inefficient, at $100 you’re going to make a lot of money. So the downturn is really going to accentuate all the ineffective models and processes that got embedded in the last four to five years.”

Philippe Flichy is optimistic as well, though he believes that the need for greater safety and control is as big a driver as straight cost reductions.

“The biggest plague for oil and gas is non-productive time,” he said. “There are zillions of reasons for down-time but I really think data analytics will help better understand the different correlations that need to be put together to reduce it. We’ll start seeing big advances soon.”

Yet more disruption

Coupled with low oil prices, Chris Lenzsch believes that a huge disruption is coming with the so-called “3rd platform” in computing, a loose term that analysts like Gartner have used to describe the convergence of social media, mobility, cloud computing, big data and other developments in 21st century ICT.

“All this 3rd platform technology and service model approaches are changing how we will run and enable the computing infrastructure, which in the end controls data capture, ingestion and real-time analysis,” he said.

“It’s very much like the development of distributed computing and relational computing in the 1990s, but the velocity of change today is so, so much greater! The change is going to be profound. Capex and opex will have to come down, and the low price of oil is going to push companies into engaging with the 3rd platform to drive out costs and inefficiencies.

“If you want to go from twenty wells per engineer to forty wells per engineer, you’ll need technology to provide the visibility, collaboration and decision-making support to ensure the right decisions are being made with absolute safety. Ubiquitous cloud infrastructure coupled with Big Data and Analytics, Software Defined Data Centers, and ITaaS will transform how we run our industry with direct, bottom line results.”

“The next two to five years will be very exciting and a lot of fun,” he concluded.