Digital Energy Journal- DOF: devil is in the details

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DOF: devil is in the details

Thursday, February 17, 2011

The key to getting a digital oilfield project working is detailed planning, says Julian Pickering, director of Digital Oilfield Solutions Ltd

Every reader of Digital Energy Journal knows that digital technology can help make well planning and drilling operations much more efficient, with better collaboration, things getting done faster, better understanding of risks, better decision making, better response time and more likelihood of hitting the payzone.

But you can’t just show your management a PowerPoint slide saying that, and expect them to greenlight a digital oilfield project, said Julian Pickering, director of Digital Oilfield Solutions and previously head of digital technology for drilling and completions with BP, at the Dec 9 Digital Energy Journal conference.

Management expect a detailed understanding of what the project will earn for them.

They want to know how much work it will take to get the project implemented – particularly if it involves redefining people’s roles.

For example, will there be people who suddenly have to work closely with teams halfway around the world, something they have never done before?

Will there be people who usually live most of their lives on a plane, who suddenly find they have to spend more time at home, communicating electronically?

Will there be staff who find that their responsibilities have increased from looking after one or two wells locally to looking after hundreds of wells remotely?

“There’s a whole raft of things that need to be put in place,” he said.

But once you have a detailed understanding of what the benefits and barriers will be, “you’re in a position to do implementation, scope and requirements,” he said. “You’ve got the project up and running.”

Not enough preparation

A common problem is that people rush in to deploy a solution and skip all the preparatory work which needs to be done.

This means that many digital oilfield projects meet a great deal of resistance from employees who are affected by them. “I can’t believe there’s anyone who hasn’t met some element of resistance.”

To get around this, you need to do more preparatory work. “We’ve got to get some input from the people who are going to use the technology,” he said.

“The business needs to decide what it actually wants, instead of drifting to the idea that it would be good to implement digital oilfield technology.”

“The important people to influence are the people who will be working with the technology,” he said. “Some engineers equate their influence to the specific knowledge that they have and with this type of thinking they can be reluctant to collaborate.”

“So there is an important exercise in making people comfortable with knowledge sharing and helping them to recognise that this enables them to use their knowledge more effectively.”

“Don’t just go straight in and say ‘as of March 1st you’ll be sitting in a wonderful new collaborative environment’.”

Dr Pickering said he has visited a few companies which have invested large amounts of money on collaboration centres which are only used as “glorified meeting rooms”.

Collaboration centres must not be technology showcases – they must be demanded by the business and support operational workflows. This will usually require new business processes.”

“Don’t go and build exotic collaboration centres unless you’ve done your homework first.”

Many people have become frustrated with digital oilfield projects because they have not delivered to promises.

“Perhaps in many ways digital technology has been oversold,” he said. “Is digital oilfield the answer to all the oil and gas problems that we have? I think the answer to that is no.”

“We have to paint a realistic picture so that people understand what it can deliver.”

Assessing value

All the time, it is important to calculate what business value the project will actually provide, taking into consideration how it changes the risk profile, the effort needed to get the business using the new technology (“business alignment”) and the success factors.

“It’s amazing how many large projects do very little in terms of assessing business value and so how do you know whether they have been a success?” he said.

It is far more engaging if those people who will need to put effort into the project also get something out of it. Just influencing the overall company bottom line feels very remote. “Most projects in oil and gas are very large and involve many stakeholders. We need to create a win-win environment,” he said.

“You can’t have a process where one company is making all the money whilst another contributor is losing out. The business value process needs to be thought about in the widest possible sense.”

Meeting today’s challenges

Many people need better digital oilfield technologies just to meet their needs today.

“The way oil and gas companies operate is changing,” he said. “Decisions have to be made very much in real time. We have to make decisions as wells are being drilled.”

“We need to become increasingly collaborative. The industry is now truly international and faces challenges to work across geographical boundaries, multiple languages and diverse cultures.”

“We’ve actually got a shortage of experts, which has been talked about widely.”

“This is creating new demands. Increasingly experts are required to interact with operations not by being there but through IT technology. They are looking at real time data far more and interacting remotely with site personnel. This is a very different way of working.”

“We are making increasingly large demands on digital technology to make that happen.”

As offshore drilling operates in deeper and deeper water this will introduce greater technical challenges and will be “a catalyst to improve uptake of digital technology,” he said.

Connectivity

One of the easiest ways to convince people that digital oilfield is a good idea is to enable better connectivity between different systems in different places.

Most people accept that hardware and software for their home and office PCs connects together easily. So why is it that connecting digital oilfield hardware and software together is often so complicated?

“This must change. End users will not be willing to tolerate a lack of connectivity,” he said. “It is not reasonable to expect an end user to buy one device from a vendor and thereafter be committed to buying everything else from that same vendor just to ensure connectivity.” This is a critical area that is being addressed by data standards in the oil and gas industry.

IT risks

You need to ensure that the IT is secure and that people will believe it is secure. If a system creates new IT security risks, that will “negate a lot of the value statements that you’re putting forward,” he said.

This doesn’t just mean hacking, it can also mean people being fed incorrect information and making decisions on it, not knowing that it is incorrect.

Also, people will become very dependent on the new data streams, which means that rapidly they will become business critical. If the data becomes unavailable for any length of time operations can be severely hampered.

Pushed by vendors?

There is still a large perception that a lot of the drive for digital oilfield technology is coming from vendors, he said.

“I approach a lot of exploration and production departments and it feels as though you’re a second hand car dealer trying to flog them a dodgy motor.”

We are still some way in E&P from the importance of digital technology and automation being recognised. In contrast, there are other industries where it has become the normal way of working, frequently driven by business pressures. “In the automotive industry, for example, no-one builds a standard production car at western labour rates without robots and plant automation - it would not be economic,” he said.

“When you actually think about the degree to which digital technology has embedded itself in the medical, automotive and space industries, they don’t even have specialist conferences on digital technology because it is part of normal business,” he said. “We are still talking about DOF as though it is something slightly different from routine oil and gas operations.”

“We want to get to the point where we don’t talk about DOF as a separate subject, we just talk about oil and gas operations and digital technology is an enabling component,” he said. “Most of us would agree that DOF is not embedded as much as it should be.”

Big and small companies

Most large companies already have some degree of digital oilfield technology but many of the smaller ones, until more recently, did not have anything at all.

“A big company can afford to be more speculative and to try new technology but a small company cannot afford to do this without a guaranteed return,” he said.

As a consequence, when a small company, with a tighter budget, decides to invest in digital oilfield technology it is more likely to maximise effort to deliver a return. This has resulted in many success stories in smaller companies but these have attracted much less publicity. An example might be implementing a system which gathers data from the field and provides engineers with real time and historical access. This has become routine in most large companies but now that it is more affordable it has transformed productivity in smaller organisations.

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