OTC: 'Digital energy' replacing 'e-business' efforts in the upstream oil and gas industry

May 6, 2003
The development of a "digital oil field" model has become the latest area to gain the greatest amount of research and development for oil and gas exploration and production companies, according to panelists discussing the topic Tuesday at the Offshore Technology Conference in Houston.

Steven Poruban
Senior Staff Writer


HOUSTON, May 6 -- The development of a "digital oil field" model has become the latest area to gain the greatest amount of research and development for oil and gas exploration and production companies, according to panelists discussing the topic Tuesday at the Offshore Technology Conference in Houston.

The struggle to gather and manage seismic and well data efficiently—encapsulated by the new catchphrase "digital energy"—has even overtaken efforts by oil and gas companies to sustain their "e-business" strategies, the panelists agreed.

Data management issues
Data management is the "most critical component" of digital energy development, said Keith Millheim, manager, operations, with Anadarko Petroleum Corp. The Houston-based independent, he said, can now easily call up any information about any of the wells drilled by the company since 2000.

Time management also comes into play when handling data, Millheim said, estimating that roughly 50-80% of a petroleum engineer's time is spent handling data and other well information. "We can't afford this," he said, adding, "The only way to get three- to fourfold increases (in production) is to seamlessly integrate information and free up engineers' time." Engineers, put quite simply, "should not be a part of the data management problem," he said.

Data management costs also are increasing, noted Steve Comstock, vice-president, upstream technical computing, ExxonMobil Corp. "They are killing us," he lamented. The problem with managing data, he explained, is rooted in knowledge that is lost in the "ocean of data" and the company not being able to find "the golden nugget" of data being sought.

Visualization emphasis
John Willis, vice-president, real-time field, Halliburton Co., said that when it comes to real-time drilling, the "anchor" of any exploration project is the company's real-time operations center. "Visualization is a real important area for us," Willis said, adding that most of the biggest changes occurred through the exponential expansion of baud rates and the ability to capture, store, and view large amounts of seismic data.

Years ago, it took months to visualize any particular reservoir, which is something that now takes only a few hours, Willis said.

Halliburton's vision of a real-time field development project that optimizes production is one comprised of six basic elements: field data capture, data management, surveillance and analysis, economics, intervention design, and real-time operations. Willis said that this set-up enables the company to decide exactly when along the line an engineer is required to look over the data.

New generation of fields
Charles Cosad, manager, digital solutions, Schlumberger Ltd., said that digital energy is "shaping the new generation of fields." The "Holy Grail" of the oil field, Cosad noted, is to control all aspects of a well in a reservoir.

Cosad added that digital energy's largest role will be played out in mature basins with projects such as getting net gains in artificial lift wells. Digital energy "lends itself to the most mature provinces," he said, adding, "People that work there (in mature fields) have their 'backs up against the wall.'"

Cosad said that a structured approach to projects is necessary as is a scaleable, long-term development plan.

Standardization sought
After the Exxon Corp.-Mobil Corp. merger was completed, the combined company desperately needed data standards, said Steve Comstock, vice-president, upstream technical computing, ExxonMobil Corp. The merging of Exxon's data with Mobil's was "a test of industry standards," Comstock said. The challenge was to deliver a standardized upstream technical computing system, he said.

"The infrastructure part was easy for us," Comstock noted. "It was all boxes and wires." But data was an issue, he recalled. Every database was set up differently, he explained, which resulted in multiple listings of data on the same well sometimes.

The largest challenge for industry currently is going to come from the growth in seismic data availability, Comstock suggested. There has been exponential growth in data acquisition and availability, he said. This is fueled by business needs, technology, and computing power growth.

Comstock said that industry should embrace standardization when it comes to data. Ultimately, standardization will lead to increased efficiency and decreased costs, he said, adding that it also will allow industry to interact to solve the data management problem. "It is incumbent upon the oil companies and governments to force the data exchange and integrating issues with partners, service companies, and vendors," he said.

The next 'big vision'
The mastering of digital energy for the oil and gas industry is a "big vision," and industry will have to "be careful about the hype," said David Archer, president of the Petrotechnical Open Standards Consortium (POSC), alluding to the hype once surrounding the electronic-business craze early in 2000. POSC is an international nonprofit corporation founded in 1990 to address open specifications for information modeling, information management, and data and application integration over the life cycle of exploration and production assets.

One of the bigger inhibitors for industry advancing along the digital energy road is the matter of digital security, Archer noted. Questions asked by oil companies include: "What should my firewall concerns be?" "How do we handle the volume of data hitting us?" and "How will we catalogue, find, and manage these data?"

The upstream sector probably should benefit from lessons learned from the downstream sector, Archer said, alluding to the pipeline industry's now wide use of "smart pipe" technology.

Contact Steven Poruban at [email protected].