The next digital wave in oil and gas

Lone Star CEO Steve Roemerman speaks to Pipeline Magazine’s Julian Walker about the advantages that digital technology can bring

How is the oil and gas landscape changing through digital technology?

Every segment of oil and gas is hoping for digital transformation, but each segment has unique challenges and opportunities. Exploration and development have a long history of being driven by technology and data. Early in my professional career, I supported seismic work with digital satellite navigation and innovative super computers.

These segments continue to be early adopters and help other segments. Production has enjoyed less digital transformation but benefits from digital technology like connectivity and reservoir modelling which stems directly from exploration and development. Production assets have gradually been adopting data standards based on supervisory control and data acquisition (SCADA) and programmable logic controller (PLC) systems, but until recently this has not been fully utilised.

 Similarly, gathering and distribution systems have installed sensors and data transport for remote monitoring, compliance and response dispatch, but this data has also not been fully leveraged. With all this digital data collection in place, production and transport are positioned for rapid changes and cost improvements. The marginal costs to reduce production and transport expenses with technology will be small, so the returns on these transformation efforts will be large.

How will the digital oilfield improve the work flows of operators?

The work flow improvements will vary by segment, of course. For example, nearly every aspect of production cost should be reduced. Pumps and other equipment will last longer, while production interruptions and hot shot expedites will be less common. Predictive and prescriptive analytics can provide good estimates of the useful life of equipment to manage the well site and provide specific knowledge of what will need maintenance, repairs or replacements before trouble occurs.

For artificial lifts, the management of flow rates can improve production while extending the life of the lifting systems.

What are the main technology components of a digital oilfield?

The components will vary with each segment; exploration, development, production and gathering/transportation. Broadly, there are five technical components. First, data must be sourced. This might be data from equipment or people. Second the information must be transported. This might be easy if connectivity is available, or hard, like an electric submersible pump 15,000 feet below the surface and 50 miles offshore. Third, information must be processed and analysed. Fourth, action must be taken. This might be a decision by a human or an automatic response. Finally, data, analysis and actions need to be stored.

Those five components are not a time line. It’s a mistake to think of these as a sequence. In some cases, analysis might take place at the point of data collection. In others, storage would be a third step, enabling cloud computing.

What does Lone Star Analysis do in the sphere of digital oilfields?

Lone Star provides the intelligence. Data alone can’t create the predictions and prescriptions our intelligence offers. Our approach is to deliver solutions which transform “dumb” systems into smart systems. Our intelligence is a blend of preconfigured models of the most common oilfield components and targeted artificial intelligence for items which benefit from adaptive learning. Our approach is neither of the extremes, simple rule based controls nor brute force AI.

We also believe intelligence should operate at the point of need. The architectures of digital oilfield solutions will evolve over the life of most assets. So, we believe intelligence solutions should be flexible enough to operate at the “edge” (near the asset), in the cloud or anywhere the clients want. Usually, we work with partners who share our vision of flexible architectures to deliver a complete solution.

What advantages can technology offer in terms of efficiency?

There are too many benefits to list briefly. A few examples are longer lifetimes for capital assets at the wellhead and for gathering/transportation systems, and fewer service calls and hot shot truck rolls.

Mundane operating expenses like electricity use and consumable parts forecasting can be important too. For operators with many wells, these “small” costs add up to big numbers that the digital oilfield can reduce. Nearly all these efficiencies provide safety benefits, as well. Fewer truck rolls means fewer miles driven and fewer accidents. Situational awareness when approaching a wellhead or pipeline lowers the danger from many risky situations.

Are companies ready for the digital wave?

Some aren’t as ready as they think, whereas others are more prepared than they realise. We’ve seen equipment providers, service companies and a few operators make unsubstantiated claims. However, there are those who are ready and have more sensors and data than they know for production and transport, but, unlike for exploration and development, they have not been utilising it. An operator who acquires wells may not know how rich the sensor suite is. Some technology providers compound this problem because their solutions are inflexible. They will claim more sensors, more data and more cloud storage is needed. Buyers should be sceptical. In most cases, digital transformation should start with a ‘come as you are’ mentality.