IBM - Smarter oilfields make dollars and sense

Smarter oilfields make dollars and sense. How innovation powers the intelligent oilfield.

We all feel the impact of high oil prices — at the pump, when heating our homes and in higher costs for everyday products. And unstable oil supplies and hit-or-miss exploration methods can have wider impacts on global politics, economies and the planet.

But new technology is now transforming how oilfields operate. While the concept of the intelligent oilfield has been around for some time, what this model means and how it works is changing. So are the results: increasing productivity, more oil recovered from each field, lower costs and reduced risks to health, safety and the environment.

Optimizing the oil supply
Stable sources of oil and gas are becoming a scarce commodity in today's world of rapid industrialization and global security alerts. Intelligent oilfield technologies can help oil companies get the most out of their existing fields and establish successful new fields in remote and harsh areas. Our future may depend on it. Optimizing the supply.

Reducing costs, increasing safety
Leveraging the rich stream of data coming from today's oilfields can help companies save millions of dollars. Intelligent oilfield solutions can increase production and cut costs while reducing the risks for both the company and its employees. In fact, we'll soon see oilfields that monitor themselves and can be run by a virtual team of experts based anywhere in the world. That's the promise of the intelligent oilfield. Costs and safety.

Drilling for data: some challenges
Who knew that an oil business is actually an information business? With the intelligent oilfield, producers can turn raw data into intelligence to improve the efficiency of their operations. Find out about some of the challenges ahead for oil producers in this vital area. Drilling for data.

Optimizing the oil supply

As demand for fossil fuels grows and existing resources are stretched, oil companies are driven to explore new sources and new ways to extract oil and gas. At the same time, faced with a dwindling workforce, companies must manage facilities spread across the globe. The intelligent oilfield can help them deliver more oil more efficiently than ever. Here's how.

Getting to the last drop

Using intelligent oilfield technology, oilfield workers can:

Optimize both pump performance and well productivity by analyzing data such as rates, cuts, pressures, acoustics and temperatures.
Use historical trends to predict when a well will "water out." Likewise, data from older wells with mature production histories can be used to predict the performance of newer wells.
Manage more wells from a central location with remote monitoring systems.

Of course, information management is only part of the solution. Companies also have to manage process and people. It's all about creating an environment rooted in teamwork and collaboration and supported by technology.

Going virtual for improved collaboration and decision-making
Managing an oilfield requires a wide range of talented people - from oilfield workers and engineers to geologists and development experts.

New networking technologies let companies bring together employees from around the globe. They can pair real-time information and human expertise on an ad hoc basis to solve problems in 'virtual' meetings. The savings in time and travel costs alone make virtual operations worthwhile, but factor in the innovations possible through collaboration, and the potential benefits are staggering.

As authors Jon D. Krome, John R. Matson and Greg Mitchell of IBM Global Services observed in their recent article featured in E&P magazine:¹

"A key to the Intelligent Oilfield (IOF) is enabling a collaborative environment across business units. The collaborative environment is a network of people, connected in real time, with access to complete information sets, integrated tools and expert advice. In its most basic form, IOF is about creating a "new way of working."

1. E&P Magazine, November 2006. Published by Hart Energy Publishing LP; Houston, Texas, USA

Reducing costs, increasing safety

Managing an oilfield requires a balance of maximizing well life and optimizing equipment production. Monitoring and analyzing data can help staff achieve this balance. But the data validation, analysis and diagnosis is laborious and without a system to capture and manage the data flow, the costs outweigh the benefits.

With an intelligent oilfield solution, companies can increase production, lower costs and reduce the risks to both employees and the company. Here's how.

Increasing production
Manually analyzing data from individual wells is a monumental task. But intelligent systems can quickly assess what humans cannot. Armed with this information, staff can then identify which wells will benefit from pump upsizing, and which show signs of wear. Incremental production increases quickly add up and can significantly improve the output of mature fields.

Lowering costs
Producing wells periodically need work-overs to keep them running efficiently. Data mining can predict the likelihood of production problems, serving as an early warning system for well maintenance. Equipment showing signs of wear can be repaired before it breaks, avoiding costly downtime.

Reducing risk
Automating data collection and analysis means you need fewer people on the front lines—and in risky situations. For example, increased demand for fossil fuels means upstream companies are exploring harsh, remote locations. Remote monitoring systems can reduce risk by allowing people to monitor and control selected parameters such as pump speed from a safe location.

For example, one company, Statoil, is now working to apply intelligent oilfield technologies to new oil fields in environments like the North Atlantic Ocean and the Barents Sea. Statoil also expects the new technologies to extend the lifespan of its existing oil and gas fields, while increasing safety measures and reducing the risks of environmental issues.

Drilling for data: the challenges ahead

An important part of the intelligent oilfield is collecting and managing data for better, faster decision-making. This capability integrates people, processes and technology to turn data into knowledge that can be acted upon in real time.

For example, using sensors mounted on field equipment, an intelligent oilfield can gather operational data and examine critical well parameters. This helps oil companies manage their operations more proactively, schedule preventative maintenance and avoid equipment failures.

Similarly, knowledge management systems can capture human expertise and create a 'virtual expert' to guide less complex operator decisions. This frees up human experts to deal with more critical and complex situations.

The challenge: getting at the data
Creating the intelligent oilfield has its challenges. While many new oilfields contain state-of-the-art monitoring equipment, older oilfields can provide only limited data. In fact, some critical information is still collected on paper. Even when data is electronically gathered, most companies store it in isolated computer systems that have are not easily able to "talk" to one another.

The solution is to find a way to integrate all the systems and make the technology infrastructure a source of value, rather than frustration. Data must be stored in a single location and standardized to enable efficient analysis. This avoids the conflicting conclusions that can occur when data is stored in disparate systems.

The challenge: turning data into decisions
The intelligent oilfield is about more than data. It uses advanced technologies to analyze raw data coming out of oilfields and turn it into meaningful information that experts can use to improve production, reduce costs and streamline operations. This in turn improves the productivity of oil company employees—an important benefit, since the industry is facing an acute shortage of skilled workers.

With intelligent oilfield technologies, companies can maximize the productivity of limited staff and improve the output of oilfields. This will go a long way to ensuring that today's fossil fuel supply will meet tomorrow's demand.

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