April / May 2010 Issue 24

Special report onIntelligent EnergyconferenceUtrecht, NetherlandsMarch 23-25 2010

What Intelligent Energy means nowIE at Saudi Aramco, Chevron, BP, Shell Visualisations should be 'art'Acoustic fibre optics

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April/May 2010 Issue 24

April - May 2010 - digital energy journal

Digital Energy Journal is a magazine for oil andgas company professionals, geoscientists, engi-neers, procurement managers, IT professionals,commercial managers and regulators, to helpyou keep up to date with developments withdigital technology in the oil and gas industry.

Subscriptions: Apply for your free print or elec-tronic subscription to Digital Energy Journal onour website www.d-e-j.com

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Digital Energy Journal213 Marsh Wall, London, E14 9FJ, UKDigital Energy Journal is part of Finding Petroleumwww.findingpetroleum.com www.digitalenergyjournal.comTel +44 (0)207 510 4935Fax +44 (0)207 510 2344

Editor Karl Jefferyjeffery@d-e-j.com

Consultant editorDavid Bamford

Technical editorKeith Forwardforward@d-e-j.com

Finding Petroleum London ForumsEmerging deepwater areas - May 26Collaboration and the digital oilfield - June 22The oil industry and carbon - September 15Exploration, Technology and Business (2 dayconference) - October 7-8The 'capability crunch' November 23Digital Energy technology - December 14

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1

Cover photo: Roxar's RMS 2010 reservoir modelingsoftware - The latest version has a new wellcorrelation system, to display well trajectories andwell log data together with the model. There arenew statistics tools to work out probabilities. It canalso be used to estimate reserves, plan wells andsimulate past and future production

David BamfordConsultant Editor, Digital Energy Journal

Editorial Policy

We at Digital Energy Journal take a

journalistic approach to reporting re-

cent conferences, events, software re-

leases and allow individual contribu-

tors to express opinions, introduce

ideas and offer insights. We aim for

a fairly short cycle time – thus this

edition is devoted to the Intelligent

Energy Conference that took place in

Utrecht just a few weeks ago.

Whilst we will do our best to

avoid printing anything that is libel-

lous, manifestly untrue or clearly an

extreme minority viewpoint, we do

not engage peer review like a scien-

tific journal would. This means we

are a little exposed to contributions

where the underpinning maths, sci-

ence or technology is somewhat

‘flakey’ and in such circumstances

we are reliant on our readership re-

sponding. And some folk do – I have

had a number of e-mails commenting

on various articles in Digital Energy

Journal and, for that matter, presen-

tations that have been given at one of

our Finding Petroleum Forums and at

our first Conference. The question is

how to bring some of these really

good insights to a wider audience?

Of course, this could be done

via a written contribution to a future

edition of the Journal, even a ‘Letters

to the Editor’ page, but this seems to

introduce a cycle time that is too long

compared with the rest of our Jour-

nal. Writing a ‘blog’ on our social

networking site seems to me to be a

much better way to offer comment,

point out problems or inaccuracies,

and, where appropriate, get a debate

started - and to do this relatively

quickly.

In the main, ‘blogging’ remains

an under-utilised part of our Finding

David Bamford is non-executive di-rector of Tullow Oil, and a past headof exploration, West Africa and geo-physics with BP

Petroleum site, with only one or two

substantial discussion threads gener-

ated, for example, one on climate

change which was triggered by an

editorial of mine. I am hopeful that

we will soon see a really interesting

thread develop, triggered by the arti-

cle “Adrok – find hydrocarbons with

dielectric resonance” from the March

2010 edition of our Journal. One im-

provement we are going to make is

to have significant ‘blog’ contribu-

tions highlighted on the home page

of our web-site (instead of just

mine!) – at the moment you have to

dig for them a bit.

Meanwhile, enjoy our edition

on Intelligent Energy. As a geophysi-

cist and explorer, a sub-surface per-

son, I recognise that the digital world

just provides the way things gets

done – without it we could not ac-

quire and process seismic data, inter-

pret 3D, work on well logs, integrate

different sorts of data, run a reservoir

simulation, visualise the results in 3D

and in ‘time lapse’ mode etc etc. Ac-

tually, the digital world provides the

blood stream which enables every-

thing to happen and thus, when I

walk around the offices of the well-

known company on whose board I

serve, I am not surprised by the ob-

servation that every technical person

has a double-headed screen on their

desk.

April- May 2010 - digital energy journal 3

Contents

Using fibre optics in wells to ‘listen’ Did you know you can use fibre optic cables in wells to listen to what is happening down there, like a long microphone? Silixa has developedthe underlying technology and Weatherford is their commercialization partner

Baker Hughes – well data on your desktopBaker Hughes has launched a software tool called ‘WellLink Desktop,” which will automatically download the latest data about wells you areworking on, onto your desktop computer

PDS - making workflow less rigidPetrotechnical Data Systems, a company based in Rijswijk, The Netherlands, has developed a new approach to building production, well, andreservoir management workflow solutions

BP Field of the Future – halfway to 2017 targetBP’s Field of the Future program, to use advanced digital technology to improve production, is already halfway to completing its target, set in2007, of increasing BP’s net production by 100,000 barrels of oil equivalent per day

Roxar – making reservoir modelling quicker to doRoxar believes it is making big strides in making reservoir modeling easier and quicker to do, and end up with a model which more closelyresembles the actual structure as seen from the seismic data with the latest release of its RMS reservoir modeling software

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Intelligent Energy - news from the exhibition

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4

Plenary one - Shell, Schlumberger, Chevron, Aramco, HalliburtonIn the opening plenary session of the Intelligent Energy conference, senior executives from Shell, Schlumberger, Chevron, Saudi Aramco andHalliburton talked about developments with Intelligent Energy in their companies

Plenary two - "to the next level" In Plenary session two of the Intelligent Energy conference, speakers from IBM, Schlumberger, Saudi Aramco and Baker Hughes talked abouthow they were taking Intelligent Energy to the next level

Plenary three - making it happenIn plenary session three of the Intelligent Energy conference, speakers from BP, Saudi Aramco, Chevron and Shell talked about how they weremaking intelligent energy happen

Optimising with better visualisationsPatrick Calvert, optimisation engineer with BP, thinks that people in the oil and gas industry should try harder to make graphs and diagramseasier to understand?

DOF enabled procurement approachesDr Michael Popham Head of Oil & Gas for BAE Systems Integrated Systems Technologies, together with Dr Tony Edwards, CEO of StepchangeGlobal, talked about how having more information, collected and shared through Digital Oilfields, can lead to improvements in the wayprocurement is managed

BAE Statoil and CISCO - delivering change more effectivelyUK company BAE Systems, the global defence, security and aerospace company, has been working with Statoil & Cisco Systems to explorehow improved Proactive Environmental Monitoring could minimise the possible negative environmental impact of operations

CSC / Oracle - Oil company on one screenImagine having all your oilfield data and information available together – including financial, technical and operational data

Woodside’s online “improvement zone”Woodside Energy of Australia has developed an online tool for employees to share ideas and keep track on new development projects,called the “Woodside Innovation and Improvement Zone,” or WIIZ

Intelligent Energy - conference sessions

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Intelligent Energy - summaryWhat is Intelligent Energy?Delegates to the SPE Intelligent Energy conference on March 23-25 in Utrecht discussed many things - not least what Intelligent Energy actually is

How is Intelligent Energy progressing?Peter Kapteijn, chair of the programme committee for the first Intelligent Energy Event in 2006, also director of technology and innovation atMaersk Oil, gives his thoughts on where Intelligent Energy is going and what remains to be done

Tony Edwards - do it your wayTony Edwards, chair of the program committee for the 2008 Intelligent Energy event and now CEO of consultancy Stepchange Global, thinksthat the best advice for new entrants to IE is to learn from others but do it your way

Doug SuttlesIn his keynote speech for the Intelligent Energy conference, Doug Suttles, chief operating officer of BP Exploration and Production talkedabout the importance of Intelligent Energy to BP

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What is Intelligent Energy?Delegates to the SPE Intelligent Energy conference on March 23-25 in Utrecht discussed many things -not least what Intelligent Energy actually is.

“It is becoming more and more difficult for

us to describe what intelligent energy is,”

said Bernard Looney, managing director BP

North Sea, at the Intelligent Energy Expo in

Utrecht (March 23-25).

It used to be quite easy to describe what

Intelligent Energy is. Here’s an example –

an oil company installs communications

equipment and flowmeters on their wells.

Now, instead of having to drive across the

desert to take readings, a task which was on-

ly done a few times a year, the company is

continually monitoring the well, which

means it can respond faster to any problems

and increase production.

But then the company gets “change

management” problems. You know the sce-

nario – people don’t know how to deal with

a stream of data. They can’t, or don’t want

to use the software. At the first Intelligent

Energy event in 2006 a main topic was how

change management is much more difficult

than the technology implementation, and it

hasn’t changed since then.

Rick Kennedy, general manager - Ma-

rine Services Group, with Chevron Shipping

Company, told a story about what sounded

like the toughest change management proj-

ect the industry has ever seen - convincing

its Gulf of Mexico functional division lead-

ers that they should share boats.

You can see how clear the logic looked

before the project was started. Many of the

different functional divisions at Chevron had

their own vessel, and overall vessel produc-

tive utilisation (the amount of time the char-

tered vessels are moving cargo) was just 45

per cent.

With a web based software tool, the dif-

ferent divisions could share boats and deck

space, reducing expenditure and safety ex-

posure (since shipping is a risky activity).

The project was indeed successful. By

the 10th month of the project, productive

vessel utilisation increased from 45 percent

to 70 per cent. The company reduced its ma-

rine injury rate by 50 per cent, with zero lost

work days in its marine division, while

shorebase and marine spend was reduced by

35 per cent.

But it also required the full arsenal of

change management tools - the company

took a group of very credible high perform-

ing leaders, provided them with behaviour-

al training and assigned them to be behav-

ioural coaches for six months. These inter-

nal coaches helped supervisors prepare for

their weekly team meetings to review the

vessel utilization data.

They coached the supervisors on devel-

oping appropriate messages based on the da-

ta and on using the data to reinforce the de-

sired behavioural change. The coaches sat

in on all the weekly meetings and provided

supervisors with pinpointed feedback relat-

ed to the effectiveness of the meeting after-

wards.

Normally it doesn’t sound so hard.

Quoting BP's Bernard Looney again, "The

real buzz for us is when we bring people

with vastly different experience together to

tackle issues” [using intelligent energy tech-

nology].

BP has been re-organising the compa-

ny so that people are organised more around

functions than around assets. This "creates

the conditions for Intelligent Energy to flour-

ish," he said, with functional teams keeping

expertise into how different types of technol-

ogy can add the most value.

Melody Meyer, President of Chevron

Energy Technology Company, noticed that

questions were being raised about the so-

called ‘management by exception’ and its

impact on training future employees.

It is common for software engineers to

try to set things up so that people are only

alerted if the data is showing something dif-

ferent to what would be expected, so that

people do not have to see any of the data

streaming from the oilfield saying that

everything is within limits. But if staff are

'managing by exception', how easily can they

share their knowledge with others?

Brady Murphy, vice president for Eu-

rope and West Africa with Halliburton, no-

ticed that the conversation has changed from

talking about whether the equipment is reli-

able enough, or provides enough benefit to

justify the cost. Now it is more about getting

people out of their ‘silos’ (discipline groups)

to talk to other parts of the company.

Perhaps the biggest issue of all for

many of us in the industry over the past year

has been the threat (or reality) of layoffs with

a declining amount of work. Could Intelli-

gent Energy help here? Satish Pai, vice pres-

ident of operations with Schlumberger Oil-

field Services, thinks it might. “We just went

through quite a gut wrenching down cycle.”

These are controversial issues, and Mr

Pai was careful to stress that this was a sug-

gestion for discussion, not a suggested

course of action. “I do not know the answer

but I want you to discuss this,” he said.

To avoid having to lay off so many peo-

ple in a down cycle, you need to avoid need-

ing so many people in an up cycle. This

might mean having more automation sys-

tems in the field so you don’t need so many

people. This might mean putting automation

digital energy journal - April - May 2010

Intelligent Energy - summary

4

systems more in control (so people’s role is

to run the automation, like pilots arguably

do in planes).

The company could end up with much

less staff out in the field in the boom times.

It could have a smaller population of experts

but each able to look after more of the wells.

Continuing on the subject of recruit-

ment: of young professionals (35 and under)

in the audience, admittedly a group likely to

be very enthusiastic about new technology,

94 per cent said that intelligent energy was

extremely, very or somewhat important in

their choice of employer.

The discussion moves onto people’s

communication skills. How good are people

at the oil and gas industry at explaining

things, or making them easy to understand?

Do people usually say when they don’t un-

derstand something?

Is there a play-off between people de-

veloping communications skills and devel-

oping in-depth knowledge? Is it like the

cliched university arts / sciences debate

(people either develop their communications

skills or their scientific skills)?

David Latin, Vice President, Subsur-

face Resource, with BP’s E&P Centralized

Developments Organization, thinks that the

people with the most in-depth knowledge are

usually also the best at communicating it.

Like the best teachers we had at school. “I

believe people who are really good at that

they do can communicate it effectively,” he

says.

On the subject of recruitment: if intelli-

gent energy tools make it easier to assess

people, this ought to mean that the choice of

people for different jobs can be made much

more accurately on the basis of their pure

ability – and if there have been any restric-

tions on promotion for women or people

from different nationalities in the past, they

should not be there in future – which should

lead to the industry becoming more diverse.

And if the industry becomes better at

communicating, perhaps it can improve its

communication with one of the toughest

groups – the general public. “The more peo-

ple can understand about what we do – the

better for us and for them,” says BP’s Mr

Latin. If Intelligent Energy “is a way into the

conversation it’s great.”

Broadening even further, Peter Kaptei-

jn, who as chair of the program committee

for the first Intelligent Energy event in 2006

surely counts as one of the fathers of the In-

telligent Energy movement, thinks that the

ultimate test of E&P “intelligence” is how it

performs on the environmental front.

So it seems that just about everything

in the oil industry could come under ‘Intelli-

gent Energy’. Does this mean that this move-

ment, whatever it is, is meaningless as a def-

Download reportsHow fast are we progressing? Download

our reports from the Intelligent Energy

event in 2006 and 2008 (both in Amster-

dam) at www.d-e-j.com/download.php -

see issue 2, June 2006 and issue 12, April

May 2008.

inition because we are actually talking about

the oil and gas industry itself?

Or does it mean that Intelligent Energy

is a cultural change, with the potential to al-

low the oil and gas industry to find more oil,

produce it more efficiently and safely, man-

age emissions better, be a much more attrac-

tive employer of a more diverse group of

employees, and thus have an enormous im-

pact on the quality of life of people every-

where? In short – something about 1,000

times more important for than the iPad?

It is maturing inside most companies.

People are starting to talk about the chal-

lenge of ‘industrialisation’ – or moving tech-

nology from a pilot project to something

which the whole company does.

Many speakers made the point that in-

telligent energy initiatives started around the

subsurface – but the surface provides the

next big opportunity – particularly improv-

ing the reliability of equipment.

Melody MeyerMelody Meyer, president of Chevron Ener-

gy Technology Company, said she thought

that intelligent energy is becoming a lot

more mainstream, summing up the confer-

ence in the final session.

“Most companies are using collabora-

tion centres,” she said. “Remote monitoring

is a key part of intelligent energy. Safety and

environment were mentioned regularly,” she

said.

It was clear that companies were fo-

cussing on the highest value solutions first,

she said.

Ms Meyer was impressed by a talk, giv-

en by Alan B. Lumsden, Professor and

Chairman, Department of Cardiovascular

Surgery at the Methodist Hospital, about

how some of the medical profession’s

knowledge, particularly about pumps and

pipes, can also be used in the oil and gas in-

dustry.

When it comes to talking about how to

make it work, “there's a need for openness,”

she said. Events like this forum “are essen-

tial.”

Ms Meyer was concerned that if staff

are 'managing by exception', how easily can

they share their knowledge with others?

“We need an intelligent way to manage

enormous volumes of data,” she said.

“We need courageous leaders and long

term extraordinary goals.”

“Data integration is a foundation and

key to success,” she said.

“We have a lot of subsurface solutions.

We might have a few examples of surface -

this might be an opportunity space.”

“There were few examples of wide en-

terprise deployment,” she noted.

Need to stay focussed - Helen RatcliffeHelen Ratcliffe, managing consultant oil and

gas at UK consultancy PIPC, and pro-

gramme committee chair for the event, said

she thought the priority is working out how

to sustain the value which IE is providing

and making sure the investment isn’t wast-

ed. “We need to stay focussed,” she said.

“Each individual organisation has their

own approach,” she said. “They looked at

their own organisation and culture and made

things happen in a way that works. It is es-

sential you know yourself what your organi-

sation is able to do.”

“I've been refreshed by everyone's

openness,” she said. “People have been hap-

py to share their problems. I haven't experi-

enced that openness in this event before.

We're not afraid to share problems with each

other. There's a value from learning from

mistakes and rectifying things.”

Helen Ratcliffe, managing consultant oil andgas at UK consultancy PIPC, and programmecommittee chair for the Intelligent Energy2010 event

April - May 2010 - digital energy journal

Intelligent Energy - summary

5

and impact are as yet not well understood. For

me the Value Loop definition that Shell uses

still works and is valid (how could I say oth-

erwise?), but the extension of that principal

model to the whole business at all levels, is

something that the Oil Industry needs to work

on some more. I tried to make the case for ex-

tending the thinking to Environment.

My team never thought of IE as a cultur-

al movement, but rather as the next level of

sophistication that the industry needed to reach

to remain successful.

We could see how other industries were

already embracing these concepts and how

fundamentally un-integrated E&P was (ac-

cepting that the E&P industry has some very

unique characteristics and challenges that fall

outside the scope of this note).

That the IE change is fundamentally in

sync with the thinking and values of a new

generation of engineers and professionals just

a big bonus. In fact I predict that companies

that do not adopt IE in the next decade will

have a hard time attracting the best people.

The message of connectedness, integration

and collaboration sits very well with the staff

entering the business. It’s how they think and

live! But the fundamental driver for this has to

be business value, recovery, production and

lowest environmental impact.

For me the IE2010 conference indeed con-

firmed that the IE approach has now reached

a good level of maturity.

In 2006 we had a good (I’d say power-

ful) new idea, but were unsure how to go about

implementing it and making it work. We were

figuring out how to build the business case for

it.

In 2008 most companies had a fairly

good idea how to implement it: the technolo-

gy was increasingly available and the critical-

ity of good change management was becom-

ing apparent. The value was not as clear as I

would have hoped, but that is unavoidable

with programs that address integration.

In 2010 most of the companies I saw had

developed a robust program, were aware of

the value, understood the fundamental princi-

ples and were realizing that the focus on peo-

ple and (again) change management was key

for successful implementation.

I can’t call IE mainstream yet though. In

spite of all the good IOC stories, I feel the pen-

etration of the IE approach is still somewhat

patchy. As far as I can see only Saudi-Aramco

and Statoil have truly made IE an integral part

of their operating philosophy and strategy. For

the rest it is still mostly an add-on. We still

have a long way to go, but have also covered

a lot of ground in 6 years!

This brings to me what I think is still

missing. In the first two years in Shell we had

worked out the fundamentals of “smartness”

or i-ness. It was the application of systems and

optimization theory to managed/designed

E&P systems (Oil and Gas Fields).

It was also about integration: not only

around and between core E&P processes

(workflows), but also of the key smartness el-

ements of Physical Assets, Data, Models and

Decisions (this lead to the Value Loop as the

central model for Shell’s program). We knew

that the approach had to lead to better enable-

ment of the highly educated and valued staff

E&P tends to employ and that any implemen-

tation program would require change manage-

ment in all the dimensions mentioned. We al-

so thought, in hindsight maybe mistakenly,

that this was predominantly about technology

and technical systems integration.

We should remember that few of today’s

applications and IT tools were available then.

Fortunately we also understood very early on

that IE was critically enabled by IT, but it was

not about IT! Some companies got that

wrong..

What we did not realize then was what

has now been shown to be work well: you can

start working the I-solutions from anywhere

in the loop or workflow and you can start with

any process (as long as you continue to grow

the concept out to include all elements and

other (core-) processes. Some of the more suc-

cessful programs simply started with collabo-

ration centers as the IE “seed point”. Shell’s

initial progress was boosted enormously by

the first collaboration centers.

What have I missed? Well I feel that you

can only call IE mainstream if the concepts are

routinely “designed in” to the field develop-

ments/assets, from day one. That for me would

be the key. SA and Statoil are close, but the

rest isn’t there yet. Once IE becomes a lifecy-

cle design philosophy, we’re there, I feel. The

we will also have the right infrastructure to

take on and leverage new high value technolo-

gies.

What else is missing? I mentioned it be-

fore, but IE is still too much an E&P internal-

ly focused activity. IE concepts can be extend-

ed to the interfaces of the E&P world or assets

with the technical and business environment:

partners, suppliers, service providers. Last but

not least the challenges that E&P will face go-

ing forward will require that we extend the IE

concepts to handle environmental aspects of

our business too. Then IE truly becomes an

operating (or even business) strategy.

Does IE represent a cultural movement?

Any radical new approach impinges on and

ultimately changes the culture of organiza-

tions. IE does that in a big way. The “culture”

required is that of (I repeat myself): systems

thinking (but not in a narrowly techie way),

integration, process focused (but not attempt-

ing to take the humans out of the loop) and

deep collaboration (while leveraging the

unique skills of individual engineers/special-

ists and others).

Lastly the culture required is one of life-

cycle value thinking in a broad sense. This is

where the IOCs will in the end be at risk of

losing the battle with the NOCs like Saudi

Aramco: SA’s program is driven by a longer

term vision and represents a sustained effort

that few IOCs can match. It is not the money,

it’s the mindset.

Do we need a definition of IE? As you

can tell from the previous: I think the defini-

tion is pretty much there, but its implications

Peter Kapteijn, chair of the programme committee for the first Intelligent Energy Event in 2006, alsodirector of technology and innovation at Maersk Oil, gives his thoughts on where Intelligent Energy isgoing and what remains to be done.

How is Intelligent Energy progressing?

digital energy journal - April - May 2010

Intelligent Energy - summary

6

conference. So why is this? Well we have

learnt over the past 6-8 years that the ‘one size

fits all’ approach does not work well in large

and diverse asset based companies.

I have more recently learnt that IE is re-

ally about the way that we run our companies

and businesses and is highly dependent on the

organization in which it is being implement-

ed. Just in the same way that BP is run differ-

ently from Exxon or Saudi Aramco then the

variety of IE that is implemented will reflect

the different drivers and ways of working in

these companies.

That does not mean that we have noth-

ing in common in our application of IE as

clearly a piece of real time drilling technolo-

gy could be applied in many companies. What

is important to recognize is that it is the way

that all these capabilities will fit together that

is different from one company to another. If

there is one piece of advice that I would give

to the new entrants into IE it would be: “learn

from others but work out what works for you

and DO IT YOUR WAY!”

What was extremely pleasing to see at

IE 2010 was the presence of so many of the

mid-size IOC’s and NOC’s. It is clear that the

IE message is moving into these companies

and that they starting up their own pro-

grammes.

What was a little surprising was the lack

of some of the major disciplines in our indus-

try at the conference. The surface disciplines

such as Operations, Maintenance, Facilities

and Process engineering were underrepresent-

ed. We need to bring these disciplines fully

into IE if we are to maximize the potential

from the E&P value chain.

The project disciplines were almost non-

existent at the conference. We need to bring

major projects in if we are to really transition

IE from a Brown Field to a Green Field en-

deavor. If we do not take the opportunity to

influence our new projects then we will “end

up with brown filed assets that have not been

built yet!” and lose a huge amount of value in

the process.

One area I would like to challenge the

IE community on is why we are still building

huge platforms in a traditional way with 100+

persons on board (POB). Why can’t we bring

together what we have learnt from IE and tar-

get a minimum manning approach where new

offshore platforms have no more than 25 peo-

ple running them?

So as

we come

what may be

termed the

end of the

first phase of

intelligent

energy what

do I hope and

expect to see

in the next

phase and in

particular at

IE2012?

Firstly

the emergence of New Operating models that

make the most of the IE capabilities that we

have. We have seen the first sign of this from

Statoil who have based their new offshore op-

erating models on their integrated operations

programme and have subsequently moved

many roles and responsibilities from offshore

to onshore.

Secondly we will begin to see the use of

new performance based contracting models

that utilize the data and information that that

IE provides to change the relationship be-

tween suppliers and oil companies. This trend

is also driven by the complexity of some of

the technologies such as predictive analytics

where some of the analysis roles traditionally

done by oil companies will move to the serv-

ice sector. These new models and relation-

ships will also change the way we execute our

major projects.

Thirdly the beginning of the inclusion

mid-stream, down-stream and LNG in IE.

Saudi Aramco announced at the meeting that

they will be building operational and collabo-

rative support centres for their mid and down-

stream operations. This is a great step for-

ward.

Finally we will see the evolution of new

management and leadership styles that are

aligned to the global distributed working

models that are enabled by IE.

In general we can say that the first phase

of IE was enabled by the data and informa-

tion technologies and process improvements.

The second phase will be enabled by new or-

ganizational, operating and supply chain man-

agement models and a focus on how leaders,

managers and teams make value adding deci-

sions inside these new organizations.

The Intelligent Energy 2010 event felt like the

‘coming of age’ or ‘consolidation’ conference

for intelligent energy compared to the IE2006

and IE2008.

If Intelligent Energy (IE) is not quite

main stream to the industry then it is rapidly

coming the normal way or working for the in-

dustry leaders such as Statoil, BP, Saudi

Aramco and several others.

We have come a long way since IE2006

when we were trying to demonstrate that in-

telligent energy was a meaningful concept

which could deliver real value. Thinking back

to 2006 it seems incredible that we struggled

to get four papers for a session on Collabora-

tion. Collaboration is now one of the core

concepts at the heart of Intelligent Energy and

we saw many papers describing its successful

application in IE2010.

This year we saw real value from the ap-

plication of IE being reported at all levels

from, single capability applications through

the asset and up to the company or pro-

gramme level. Shell announced $5 billion val-

ue from their Smartfield Programme and BP

a further target of 100 mboed by 2017 from

their Field of the Future programme. This is

very encouraging and will hopefully ensure

that IE does not go the way of other ‘flash in

the pan’ initiatives that have a very short life.

So have we solved the issue of how to

apply IE and maxmise the value from it? Well

the answer to that must still be No! A clear

message from the conference was that we

have only just started on the journey to maxi-

mize the potential from IE.

Sustainability and Scalability are still

big issues for most if not all companies and

was one of the hot topics of conversation at

the breaks in the proceedings at this year’s

Dr Tony Edwards is CEO of Stepchange

Global, a digital oilfield consulting and

advisory company. He was chair of the

program committee of the 2008 Intelligent

Energy conference. He was previously

Head of iValue at BG Group and Ad-

vanced Collaborative Environment (ACE)

Programme Manager at BP. He was au-

thor of ‘The Art of Intelligent Energy’

(SPE 128669) that was presented at

IE2010. He can be contacted on :

tony.edwards@stepchangeglobal.com

Tony Edwards - do it your wayTony Edwards, chair of the program committee for the 2008 Intelligent Energy event and now CEO of consultancy Stepchange Global, thinks that the best advice for new entrants to IE is to learn from others but do it your way.

April - May 2010 - digital energy journal

Intelligent Energy - summary

7

In the area of

recovery fac-

tors the poten-

tial is massive.

The current in-

dustry average

recovery factor

is around 35%.

If the average

recovery factor

were raised by

just 5%, it

would add ap-

proximately

170 billion bar-

rels to world

reserves,

enough for more than five years supply.

In the Prudhoe Bay field in Alaska we

have new and better tools to improve recovery

rates from a mature super giant field. To under-

stand more than 30 years of production history

we need a great set of tools to manage and inte-

grate massive amounts of data – both old and

new.

So far we have increased the recovery fac-

tor from approximately 40% to more than 60%

since we initially sanctioned development.

Some of the technologies that have been

invented, developed, perfected, or applied in-

clude extended reach drilling, coil tubing

drilling, horizontal drilling, massive gas cycling

with the world's largest gas plant, miscible in-

jectant EOR, gas cap water injection, multilat-

eral drilling techniques and wellbore junction

technologies. Constantly integrating real time

field performance data with predictive tools has

and will continue to play a significant role in

Prudhoe’s development.

In Clair, BP and our partners have invest-

ed in a Life of Field Seismic to provide 4D seis-

mic which enhances reservoir understanding in

a very challenging, fractured reservoir. This is

beginning to have an impact on our understand-

ing of the reservoir, how we manage it, and in

improving the planning and delivery of new

wells, all in service of increasing the ultimate

recovery from this huge field.

Our recent start-ups in the Gulf of Mexi-

co, Angola, and Indonesia are proving up the

value of this decision with measurable impacts

on production, start-up efficiency, and faster un-

derstanding of reservoir behaviour.

For example, we believe we have in-

creased Thunder Horse production by 10,000

barrels per day from optimizing well rates

based on real time information. At Tangguh in

Indonesia we implemented real time collabora-

tion with our onsite drilling team and the

drilling engineers who were some 3000km

away so that they were able to see the same re-

al time information saving millions of dollars

in lost productive drilling time.

In the area of efficiency it is almost cer-

tainly true to say that today no-one has achieved

100% efficiency and perfectly optimized pro-

duction. In some of our older fields, optimiza-

tion is an important contributor to managing

production decline and driving efficiency.

Additional barrels through real time mon-

itoring, diagnosing and addressing performance

issues, and better optimization, tend to be

amongst the lowest cost barrels available – of-

ten more efficient than the most efficient well

intervention work we do.

It’s not simply about equipment. How we

improve the decision making and capability of

our people will also be a significant source of

future value. Effective decision making is about

getting the right data and information, as quick-

ly as necessary, to the people with the skills to

analyze and act, wherever they might be in the

world.

To date we have built 35 Advanced Col-

laborative Environments where the office sup-

port team are directly tied to the field with live

data and communication links in a dedicated

centre.

As we invest in ever more complex and

expensive wells that produce at very high rates

– in many cases over 20,000 barrels per day - it

is critical we optimize these wells in real time.

In BP we now have real time surveillance data

on more than 80% of our top 100 wells.

We must develop and use these new tools

and systems to codify expert knowledge and au-

tomate the routine – enabling us to alert our ex-

perts in real time and use their time efficiently.

In BP, we have seen Intelligent Energy

add roughly 50,000 barrels per day of gross pro-

duction across our portfolio in each of the last

3 years. This has been based on the deployment

of solutions in 25 different areas of functional

capability, including the 35 collaborative envi-

ronments previously mentioned, over 2000km

of proprietary fibre optic network, and enabling

access to over 2 million individual data tags on

thousands of pieces of equipment and over 700

wells. And all of this only covers about a third

of our portfolio – there is so much more to do.

Our proprietary well surveillance system

has now delivered over 100 separate instances

of incremental value creation since we began

deployment. The benefits include increasing

production typically 1-2%, supporting reserves

pull through based on improved reservoir man-

agement decisions, reduced costs through bet-

ter targeted interventions and infill drilling de-

cisions, and improvements in staff efficiency of

up to 25%.

This is no longer an event dominated by

innovators trying to sell the ideas. Many IOCs

and NOCs now have experience with the digi-

tal oilfield in a variety of settings, and have very

similar stories to tell of real business value that

has been delivered.

In the questions session, Mr Suttles said

that “the part of the oil industry most im-

mature with intelligent technologies is the

surface. These technologies are used the

most in the subsurface.”

The success of intelligent tools can

be analysed “using the same tools you use

for any performance,” he said.

Mr Suttles said he did not see a clear

differentiation between application of

technology and business. “We say – here’s

how much money we’ll spend and this is

the benefits. And we track the benefits.

We did look to justify each incremental

benefit. At a certain point, we stop it,

when we satisfy ourselves that we’ve been

successful.”

To organise its technology develop-

ment, BP has set up 10 technology “flag-

ships”, such as the Field of the Future.

“Most of our funding goes against them,”

he said. “They have to deliver a billion

barrels of incremental reserves.”

Each “flagship” has its own experts,

which the different assets at BP can go to

to ask the best way to do something, and

where most value will be created.

It is still important to understand

which technologies work best in different

places. “4d seismic won’t create value in

all fields,” he said.

Mr Suttles said he is responsible for

delivering 4m barrels of oil per day alto-

gether. The company counts 400,000 bar-

rels of oil per day as ‘production losses’ –

production which is lost for various oper-

ational reasons. “If we got rid of those,

we’d make 4.4m,” he said.

BP's COO Doug Suttles on Intelligent EnergyIn his keynote speech for the Intelligent Energy conference, Doug Suttles, chief operating officer of BPExploration and Production talked about the importance of Intelligent Energy to BP.

Intelligent Energy - summary

8

Shell, Schlumberger, Chevron, Aramco,Halliburton

Matthias Bichsel, ShellIn the first plenary session of the Intelligent

Energy conference, Matthias Bichsel, direc-

tor of projects and technology in Shell, said

he thought that Shell’s ‘smart fields’ project

has achieved $5bn additional net present val-

ue from 2003 to 2009, including from in-

creasing production, unlocking complex re-

serves, better monitoring, smart wells, 4D

seismic, field monitoring and visualisation.

As examples, it has fields in Siberia

which are all remotely controlled, so staff

don’t need to drive out in -30 degrees C to

turn on and off valves. Its Brunei field is op-

erated fully remotely. The Perdido field is

fully automated and controlled from New

Orleans.

“All new fields will be born smart, and

become smarter in ways we can’t imagine,”

he said.

The company will be “shining the torch

into the reservoir – to really see what is hap-

pening down there.”

In future, exception based surveillance

will become the norm, remote operations

will be the norm, with humans kept out of

harms’ way, he said.

Satish Pai, SchlumbergerAccording to Satish Pai, VP Operations,

Schlumberger, more complex operations, re-

quiring greater technology intensity and ex-

pertise, are the long-term challenges to max-

imizing value from intelligent energy.

Mr Pai took the opportunity to high-

light several areas in which an intelligent en-

ergy approach is already creating business

value while at the same telling listeners that

“adoption is still lacking in scale” through-

out the E&P industry.

Real-time hydraulic fracture monitor-

ing and optimization, called StimMAP Live

monitoring, is one of those technologies that

is enabling progress, particularly in harness-

ing the potential of shale gas. The technique,

he said, involves lowering an array of geo-

phones into a nearby well during frac opera-

tions to listen and record, in real time, the

microseismic events initiated during the

fracturing process. Computer images display

the activity in 3D space relative to the loca-

tion of the frac treatment. These real-time

data are transmitted to operators’ offices dur-

ing the pumping operation allowing them to

change fracturing strategies and to plan di-

version schemes as the job progresses.

During one job, Mr Pai said, the com-

pletion design was changed in stages 3 and

4 based on real-time diagnostics. Addition-

ally, the results gained from that job provid-

ed the operator a field-wide understanding

that reduced well -stimulation costs and op-

timized field drilling plans.

Another area that Mr Pai pointed to as

an example of progress is reservoir testing.

There, real-time capabilities allow domain

and field experts to stay in communication

seamlessly throughout the test execution.

Quality checks can be made on real-time da-

ta and adjustments can be made to the test

design while the test is being performed.

This collaboration also enables interpreta-

tion while testing, which ensures all test da-

ta required by the operator are collected be-

fore terminating the test.

“Integrating the three phases of reser-

voir testing and enabling them with real-time

data and collaborative decision-making

brings about better and more efficient reser-

voir testing,” Mr Pai said. “Enabling clients

to achieve test objectives first time, every

time, and to be certain of their decisions—

this is the value of intelligent energy.”

Mr Pai also told his audience about a

new generation of coiled tubing service that

integrates fiber-optic technology. The com-

bined technologies allow real-time surface

readout of downhole measurements so that

wells and treatments can be monitored live.

In Alberta, Canada, this new service has

made it possible to accurately identify thief

zones, and wells treated with this method

have demonstrated, on average, a 54% pro-

duction improvement compared with wells

using more traditional treatment methods.

“Although there are obvious benefits

to be gained from intelligent energy, imple-

mentation at scale in the industry is still lack-

ing,” Mr Pai said.

“The industry needs to take an indus-

trialized approach to the implementation of

intelligent energy in the next few years for

measureable and significant impact on the

long-term challenges related to operations,

reservoirs, and people.”

In contrast to the oil and gas industry,

he continued, some industries, such as the

aviation industry use automation as the core

of operations, with expertise available when

required.

“In our industry,” he said, “we’re tak-

ing a different approach. Automation in the

oil field will support new ways of working

to make the most efficient use of our expert-

ise, and to improve drilling efficiency and

safety. Clearly, technology is not a limita-

tion, and so success depends on making in-

telligent energy business as usual.”

Melody Meyer, ChevronMelody Meyer, president of Chevron Ener-

gy Technology Company (and a past vice

president exploration and production for

Chevron in both Alaska and the Gulf of

Mexico), said she thought the I should stand

for "integrated" not "intelligence", because

this is what it is really all about.

"We want the highest impact work-

flows to be integrated," she said.

"Digital oilfield is not a place but an

operating philosophy, transforming how we

work," she said.

More complex operations, requiring greatertechnology intensity, are the long termchallenges - Satish Pai, VP operations,Schlumberger

In the opening plenary session of the Intelligent Energy conference, senior executives from Shell,Schlumberger, Chevron, Saudi Aramco and Halliburton talked about developments with IntelligentEnergy in their companies.

digital energy journal - April - May 201010

Intelligent Energy - conference sessions

It is hard to calculate the benefits if

iField technologies, but Chevron estimates

that it increases output and reduces operat-

ing costs by 2-8 per cent, she said.

In the Gulf of Mexico, the company

moved its compressor decision support cen-

tre from planned to predictive maintenance.

It can detect abnormal events. "We're ex-

panding this to other rotating machinery,"

she said.

Ms Meyer said she is encouraged with

results on improving existing fields. "If you

want to get my attention - find a way to raise

production in a developed field," she said.

Chevron's i-field solutions are being

applied in existing fields and in new field de-

velopments and proving benefits in safety

and developing the workforce of the future;

and well as managing the cycles in the in-

dustry. . This is a "win we didn't see coming

or might have undervalued," she said. "We

have to prove value at any part of the cycle."

Saudi AramcoMohammed Al-Qahtani, executive director,

petroleum engineering and development

with Saudi Aramco, talked about the compa-

ny’s Haradh project on the southern tip of

the Ghawar oil field.

The project was planned in three incre-

ments, each aiming to increase production

by 300,000 barrels of oil per day.

Increment I, onstream in March 1996,

had 100 vertical wells. 4 years later, it had

an 8 per cent water cut. There were 22 dead

wells and 18 new wells required.

Increment II, onstream in 2003,

achieved the same 300,000 bopd increase in

production, with 46 horizontal wells. It had

a 12 per cent water cut after 4 years, and just

4 dead wells, with 7 new wells required.

Increment III, onstream in 2006, had 32

maximum reservoir contact wells, with an

intelligent field framework. There was just a

2 per cent water cut after 4 years, no dead

wells and no new wells required.

You can see from this data the success

the company is having with intelligent ener-

gy techniques, he said.

The next step is “autonomous fields”,

he said, which can run by themselves.

y also wants to find ways to improve

development of its people, so they have

deeper and broader expertise. It is building a

new upstream professional development

centre, opening September 2010.

Tim Probert, HalliburtonTim Probert, president, Global Business

Lines and Corporate Development Hallibur-

ton, says the com-

pany uses the term

“service intensity”

to describe the way

that the business is

always becoming

more complicated.

“All of us feel

reservoir complex-

ity is increasing,”

he said. “We call it

the ‘service inten-

sity.”

Halliburton

thinks there is a

general “12 to 14

per cent increase in

service intensity

per year,” he said.

On the sub-

ject of intelligent

energy, the compa-

ny is learning that

it isn’t possible to

“integrate every-

thing to every-

thing,” he said. “It

is like boiling the

ocean. It’s impor-

tant to ensure you

select the right

workflows for the

right applications.”

When it comes to creating productive

oil wells, “we don’t do a good job at looking

at it as one optimised process, bringing to-

gether all the disciplines,” he said.

The one optimised process would in-

clude everything from picking the right lo-

cation and pathway for the wellbore (which

includes both geosteering engineers, geolog-

ic and geophyics professionals); getting the

biggest possible stimulated reservoir volume

(and aiming to reduce uncertainty); and

drilling as quickly as possible, which means

choosing the best drilling tools, fluids and

bottom hole assembly.

Relationships with service companies Shell’s Mr Bichsel said that the company has

been exploring new relationships with serv-

ice companies, instead of the standard con-

tract where the service company bills by

hour, and does not have an incentive to get

the job done quicker.

“With one company we decided on a

different approach, linked to performance

standards and a contract,” he said. “It al-

lowed us to beat the competitors significant-

ly in terms of drilling time: 48 day drilling

compared to industry average of 65-68 days

(for one well).”

Halliburton’s Mr Probert said “I really

think that over the last 5-6 years the co-op-

eration between IOCs / NOCS and service

companies has increased substantially. We

work in a partnership basis in a way we did-

n’t a few years ago. From our standpoint

there’s a major effort underway.”

Intellectual propertySpeakers were asked for their views on when

was the right time to try to protect intellec-

tual property (IP).

“IP is an important subject and many

It is important that you don’t underestimatethe challenge of achieving behaviouralchange - Melody Meyer, president of ChevronEnergy Technology Company

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11April - May 2010 - digital energy journal

Intelligent Energy - conference sessions

people are concerned about it. But it’s not an

issue,” said Saudi Aramco’s Mr Al-Qahtani.

“The issue is how to get it in the field soon-

est. We want a return on our investment but

that’s only a reasonable return.”

Shell’s Mr Bichsel said that the compa-

ny thinks very carefully about what it applies

as intellectual property. “It’s more about pro-

tecting freedom to act,” he said.

He also noted that many times Shell

avoids patenting its inventions. “When you

patent it you’re exposing what you’re do-

ing,” he said.

LearningIn a discussion about learning, Mr Bichsel

said that a lot of people confuse what can

and can’t be done with automation. “You

definitely can’t automate a creative process.

A lot of people confuse that,” he said. “But

when it comes to automating, there’s a lot

you can do.”

Shell’s Mr Bichsel warned against

overdoing it. “People tend to overpromise,

they say, this will solve world hunger,” he

said.

You should also try to work out the

‘right’ level of intelligence and not try to go

too far, he said.

Chevron’s Melody Meyer said it was

important that you don’t underestimate the

challenge of achieving behavioural change.

It was also important not to look at it “too

broadly,” she said. “You have to walk before

you can run.”

Halliburton’s Mr Probert said it is im-

portant to make it part of your company

strategy. But you have to “be patient,” he

said. “It’s very hard for people to get their

head around the softer parts of the workflow.

Don’t try to integrate everything to every-

thing. Put it out to your organisation in bite

sized chunks.”

Shell finds the collaboration centres to

be useful for training, as well as enabling

limited experts to do more. “1 person can

oversee 5/6 drilling rigs but has the young

graduates under his wing,” he said.

Chevron’s Melody Mayer is concerned

that tools don’t necessarily help people learn

what thought processes the experts are go-

ing through.

What not to doSpeakers were asked for their advice about

what to do, and what not to do.

Schlumberger’s Satish Pai said that the

most important thing is to have senior man-

agement buy-in, “otherwise it won’t get im-

plemented,” he said.

One mistake Schlumberger has made is

seeing it as just a technology implementa-

tion, and not focussing on how to get people

to use it. “You put it down and think it’s go-

ing to be absorbed and it’s not,” he said.

digital energy journal - April - May 201012

Intelligent Energy - conference sessions

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IBMJohn Brantley, general manager chemicals

and petroleum with IBM, said that compa-

ny is working together with Shell to help

them do more with the mass of real time da-

ta they get.

Mr Brantley emphasised the need to

use open systems. “We see people start to

fall behind when they build proprietary sys-

tems,” he said. “I’ll put my money on the

2,000 people to solve a problem, not the

handful over here.”

Mr Brantley talked about the idea of

“collaboratiums”, where different compa-

nies come together to tackle problems, par-

ticularly online.

The company can also use expertise

developed from other industries. For exam-

ple, in the University of Ontario, it devel-

oped a software tool for infants in intensive

care, which could gather together the avail-

able data, and pinpoint what might be a life

threatening problem 24 hours before it

would otherwise have been spotted.

SchlumbergerAshok Belani, president Reservoir Charac-

terization Group, Schlumberger, discussed

how he sees intelligent energy technologies

and solutions evolving over the next few

years to meet the challenges facing the in-

dustry.

Mr Belani focused on the development

of data and information integration and how

measurements of different resolutions, dif-

ferent time horizons, and different investi-

gation depths can now be integrated in sub-

surface models with updates in real time.

He also highlighted how the integration of

onshore and offshore teams is leading to

improved decision making by fully lever-

aging the knowledge of the joint team.

He discussed what her sees as the sig-

nificant trends in relation to intelligent en-

ergy technologies and solutions over the

next few years.

“Since the last conference in 2008, we

see that the industry requirements have

moved beyond delivering data ‘from point

A to point B’ to assurance of high-quality,

high-volume real-time data streams flowing

into sophisticated software applications.”

He explained that “with improved

availability of connectivity and the intro-

duction of wired drillpipe, fiber optics built

into coiled tubing, and new wireless teleme-

try solutions, this trend will accelerate sig-

nificantly, and a new generation of intelli-

gent applications that consume, analyze,

and present information in a rich decision-

ready context will become available.”

Mr Belani emphasised that the consid-

erable developments in the digitization of

subsurface tools and surface equipment will

deliver a significant impact on asset opera-

tions. And that onshore operation support

centers will evolve to remote operations

and automation, adding new levels of effi-

ciency and performance.

“This will be enhanced,” he said, “by

collaboration across domains and depart-

ments, both within a company and across

the whole supply chain, enabling truly glob-

al teams.”

But as industry requirements move

forward he encouraged a more open, and

faster, approach to innovation to accelerate

development and exploitation of intelligent

energy technologies and solutions.

Mr Belani said, “When our customers

told us they wanted a development environ-

ment and deployment platform where dif-

ferentiating intellectual property could be

leveraged, we developed the Ocean appli-

cation development framework as a way to

enable workflow integration.

“Dozens of operators, universities, and

small technology companies are now using

the framework to develop solutions. And

the system has now matured significantly

that from May this year we will be to pro-

vide the next level in innovation—an Ocean

Store for people to develop and share their

workflow plug-ins.”

Saudi AramcoSamer AlAshgar, manager of Saudi Aram-

co’s Advanced Research Center at its EX-

PEC (Exploration and Petroleum Engineer-

ing Center), talked about developments

with reservoir sensing technologies.

Saudi Aramco started with flow, pres-

sure and temperature meters, and has been

adding inflow control valves, electric sub-

mersible pumps and automated chokes.

It is developing borehole gravity and

electromagnetic seismic technologies to

read deeper and deeper into wells.

The company is doing electromagnet-

ic surveys between two wells around 900m

apart, with a goal to keeping the survey

equipment installed permanently.

The results from well electromagnet-

ics so far are “encouraging,” he said. “The

Plenary two - "to the next level"In Plenary session two of the Intelligent Energy conference, speakers from IBM, Schlumberger, SaudiAramco and Baker Hughes talked about how they were taking Intelligent Energy to the next level.

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Permanent monitoring gauges, which

measure pressure and temperature with a

10-20 feet long device strapped to produc-

tion tubing, is now a 20 year old technolo-

gy, he said.

Technology to reduce them in size, to

100 nanometers (0.001mm), is “closer than

you might think”, he said.

Baker Hughes is taking the first steps

towards “industrialisation,” or getting the

technology used across the entire company,

he said.

It is important to make sure all tech-

nologies installed today are likely to work

for many years in the future, which proba-

bly means it is important to use open stan-

dards. “The challenge is to make sure we

don’t lock ourselves out,” he said.

Mr Mathieson emphasised the impor-

tance of starting with targets then working

out how to reach them, rather than starting

with technology and working out what it

can do. “For example, if we want 70 per

cent (recovery) as the norm, start from there

and work back. “

very expensive to manufacture.

The company is keen to be able to up-

date reservoir models using live data.

“The ability to connect streaming data

to reservoir simulation is just around the

corner,” he said.

It is also keen to develop reservoir

simulators which can simulate giant fields,

using the full resolution in the reservoir

model – not a simplified (proxy) model.

It has a 6 billion cell reservoir model

of one of its giant fields – which took 6

days to run through a simulator in 2008. In

2010, it could run it through the simulator

in 1 day. It hopes to be able to do it in 1

hour.

The vision is to be able to have fields

which operate themselves.

Baker HughesDerek Mathieson, president technology and

product Lines with Baker Hughes, said the

company is “looking in fine detail at how

we use digital technology to make our op-

eration much better.”

fluid saturation correlates quite well with

expectations.”

The bore hole gravity survey equip-

ment is currently being lowered into verti-

cal wells. But unfortunately the current

equipment does not fit inside production

tubing. “It needs to be slimmer,” he said.

Saudi Aramco is pushing ahead with

its “nanobots” project, to ultimately devel-

op sensors actually within the reservoir, in-

jected down one well and recovered in an-

other.

A first step will be developing

nanoparticles which might be detectable us-

ing electromagnetics, which will give off a

different trace depending on what they find

in the reservoir.

The company sees developing tracers

which capture information as they flow

through the reservoir as “very much achiev-

able,” he said.

A challenge is getting the size of the

particles right – they need to be small

enough to flow through the rock (not get

stuck in the pores), but not so small they are

Plenary 3 - making it happenIn plenary session three of the Intelligent Energy conference, speakers from BP, Saudi Aramco, Chevronand Shell talked about how they were making intelligent energy happen.

BPBernard Looney, managing director BP North

Sea, said that technology has always been a

major element of BP’s past successes in the

North Sea.

BP has developed many of its Intelligent

Energy projects on the North Sea, helped by

the fact that it has a $50m fibre optic commu-

nications network to get data back to shore.

“This was just the very beginning,” he said.

However “we need to improve the way

we use technology and get expertise to the

problem,” he said. “We’ve often fallen short

when it comes to maximising the real value

from technology.”

The company is gradually moving to a

functional organisation, with people organised

around different areas of expertise, rather than

one where everyone’s work is geared around

specific assets. It is also trying to standardise

across the company as much as possible, with

similar assets being run in similar ways.

This reorganisation has “created the con-

ditions for intelligent energy to flourish,” he

said. “The functional model energises people

to what they do best.”

It can be better to look for small success-

es than a big bang, and also make sure people

have space to experiment, he said. It is easy

for people to get discouraged if their technol-

ogy projects do not show initial success.

A critical issue for the company has al-

ways been offshore-onshore collaboration.

In its North Sea headquarters building in

Aberdeen, BP has an “advanced collaboration

centre” for each of its major North Sea assets,

plus additional ones for production and

drilling enhancement. The team supporting

each offshore platform actually works every

day in the ACE. “It’s not a meeting room,” he

said.

“The link offshore–onshore is no longer

an area of challenge,” he said.

“We can have an onshore specialist

working on 4-5 locations in one day and he

doesn’t need to get on a helicopter.”

People are getting much more comfort-

able with the idea of video screens between

onshore and offshore, which enables people in

each location to watch each other, he said.

When the systems were first installed,

“people thought there would be a spy watch-

ing them,” he said, with screens were only

switched on 10 per cent of the time in some

places. Now people accept it as part of how

they work.

As an example of how it was used, BP

had a failed recycle valve on a platform, and

could gather experts together around the

world to view a high resolution image of the

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valve and look at the seal.

On the edge of the Valhall field, the com-

pany had problems with slugs coming onto the

platform, and was able to engage teams in its

headquarters building in Sunbury to solve the

problem and develop automatic slug control.

“I visited Valhall – and people offshore

knew the names of people working on onshore

and people in Sunbury. That for me indicated

where we’ve got to,” he said.

BP’s Valhall field, in the Norwegian sec-

tor of the North Sea, has had permanent ocean

bottom seismic since 2004. By doing repeated

(“4D”) seismic surveys, BP can identify new

targets and areas of overpressure, he said.

“We’ve got improved reservoir image. It’s a

very challenging fractured reservoir.

On Schiehallion, “there’s often a lot

more data than we can handle,” he said.

Saudi AramcoWaleed Al-Mulhim Manager, Southern Area

Reservoir Management Saudi Aramco (which

includes management of the Ghawar field),

said that intelligent energy is “an integral part

of our business”.

“It’s about having a new direction and

getting everyone moving towards that,” he

said.

The Haradh Increment II in 2003 was the

main ‘proof of concept’ for the intelligent en-

ergy idea at Saudi Aramco, he said.

Now, Saudi Aramco has 19 fields “fully

i-field enabled.. including every new field de-

veloped since 2003,” he said.

This means that they can be monitored

remotely. In the past, Saudi Aramco used to

have to drive a crew to its different wells to

take readings, so it only took 2-3 data points a

year.

The company is determined to find ways

to integrate real time data into its reservoir

simulators, he said, which would mean it

could respond much more quickly if the data

is different to what is expected.

You want to be in the drivers’ seat – you

want to manage the information – rather than

let the reservoir manage you.

“Lately the industry made very quick and

huge strides in intelligent energy,” he said. “In-

telligent energy leads to more sustainable and

reliable production and enhanced perform-

ance; reducing cost and improving recovery.”

Rick Kennedy, Chevron Rick Kennedy, general manager of the Marine

Services Group in Chevron Shipping Compa-

ny, and previously a leader of Chevron’s orig-

inal i-fieldTM program in East Texas and Op-

erations Manager for Chevron Gulf of Mexi-

co, talked about how the Company had imple-

mented a program to improve utilisation of

offshore supply vessels in the Gulf of Mexico

review the vessel utilization data. They

coached the supervisors on developing appro-

priate messages based on the data and on us-

ing the data to reinforce the desired behaviour-

al change. The coaches sat in on all the week-

ly meetings and provided supervisors with

pinpointed feedback related to the effective-

ness of the meeting afterwards.

The project did not require development

of any new technology – the technology need-

ed to enable the new work flow was all readi-

ly available – such as GPS tools to track the

location of vessels, and software tools to en-

able the process and to help make decisions.

As a result of the project, Chevron re-

duced its vessel charters by 12,000 hours per

month (500,000 man-hrs per year) in 2009.

The percentage of requests for vessel space

made less than 24 hours before the vessel was

due to sail decreased from 45 per cent to un-

der 10 per cent and, by the 10th month of the

project, productive vessel utilisation increased

from 45 percent to 70 per cent.

All of this led to a reduction in safety ex-

posure and big cost savings in 2009. The com-

pany reduced its marine injury rate by 50 per

cent, with zero lost work days in its marine di-

vision, while shorebase and marine spend was

reduced by 35 per cent.

ShellGerbert Schoonman, asset manager of East

Brunei Shell Petroleum, said that the compa-

ny needs a lot of intelligent technology to

manage its highly complex Brunei fields.

Shell has over 1,000 wells in Brunei, in-

cluding 50 smart wells. There can be over 500

reservoirs in one field. It performs around

1400 wireline operations in every well every

year. It also has over 100 platforms and 1400

flowmeters.

“We want accurate real time insight of

production of individual wells,” he said.

The company uses Inflow Control

Valves to change the flow of fluids within the

wells, instead of doing expensive wireline

jobs.

However it makes careful decisions

about which technology to install. Many of the

reservoirs are fairly small, and don’t earn

enough money to justify the cost of expensive

technology. “If I can avoid installing an Inflow

Control Valve and save money, I will,” he said.

The company makes training in smart

fields part of its core training for new employ-

ees. “When people join the company they get

exposed to new technology,”

Mr Schoonman said he has seen his

teams having casual conversations with col-

leagues via the collaboration screens, “as if

they were in the same room.. it takes that bar-

rier completely away.”

in late 2008.

At the time, the company was operating

up to 100 vessels across the Gulf from five dif-

ferent shorebases. Many of the different func-

tional divisions at Chevron had their own ves-

sel. Overall vessel productive utilisation (the

amount of time the chartered vessels are mov-

ing cargo) was just 45 per cent. “While it is

convenient, it is not necessarily efficient,” he

said.

Having more boats than necessary also

meant a higher than necessary exposure to

risk, since recordable injury rates from marine

activities were “among the highest in our or-

ganisation,” he said.

The company wanted different divisions

to share vessels used to move people, materi-

als and supplies with all marine logistics plan-

ning to occur from a central location.

The project had strong senior manage-

ment support at Chevron, and it was aligned

with Chevron’s general “i-fieldTM” vision.

Working with change management ex-

perts, key stakeholders from the company to

mapped out improved vessel utilization and

vessel management processes. This group al-

so identified critical behaviours required to

support the new processes and developed ac-

tion plans to drive needed behavioural change.

One problem was that 45 per cent of re-

quests for cargo space were being submitted

under 24 hours before the vessel was due to

sail.

For the system to work, it would need

people to submit requests for vessels at least

72 hours in advance, to give the planning or-

ganisation time to work out the best schedule.

And once the schedule had been put together,

people needed to stick to it. “That was signifi-

cant behaviour change,” he said.

“It used to be people saying ‘I need it this

afternoon’. Now people have to plan more ef-

fectively.”

Weekly meetings are held to review data

related to timing of requests for cargo lifts,

deck utilization and vessel productive utiliza-

tion. During these meetings service requestors

and end users are asked what is going well,

what are the opportunities for improvement

and what is needed to make the new system

work.

The company took the change manage-

ment challenge very seriously. To help per-

suade the division leaders to accept that they

would be sharing vessels from now on and to

support them in making the needed behaviour-

al changes, the company took a group of very

credible high performing leaders, provided

them with behavioural training and assigned

them to be behavioural coaches for six

months.

These internal coaches helped supervi-

sors prepare for their weekly team meetings to

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Optimising with better visualisationsPatrick Calvert, optimisation engineer with BP, thinks that people in the oil and gas industry should tryharder to make graphs and diagrams easier to understand? (“Creating a Digital Picture of Our IntegratedOperations within BP: Why a Picture says a Thousand Barrels” SPE-128709, March 24th 8.30am).

Something we have surely all thought – but

people have rarely said.

“We need to find an improved way of

operating,” he said. “We need to rely on art

– or visualisation – to communicate it as

widely as possible.”

“Visualisation has a huge role to play,

connecting the expert with the operator. We

can communicate a whole operating strate-

gy,” he said.

“You have to increase the amount of

knowledge within the asset,” he said. “We

rely heavily on visualisation to tell our sto-

ry.”

Optimising production systems ulti-

mately needs a “nudge it and see” approach

– where parameters are changed a small

amount to see how it impacts the output.

This means that people need a clear under-

standing of where they are and where they

need to be, with many different parameters

they can change. It can all get very complex

– which is a good justification for trying to

make things as easy as possible to under-

stand.

For example, for flow stability, you can

put together a flow stability map showing

which flow conditions can give rise to slug-

ging, and where you need to be for stable op-

erations.

“Fancy models which spit out set points

can confuse people,” he said.

With any change, you typically want a

“80:20” solution, he suggested – where you

get “80 per cent of the (maximum potential)

value but with the minimum amount of

change. A 100 per cent solution will in-

evitably push against constraints,” he said.

You can do diagrams which show dead

or dying wells, and give an indication of if

they can be kept online for longer.

Adding collaboration tools, such as

comment functionality, to online visualiza-

tion can also be helpful. “We want to make

sure as many people can see the picture as

possible and promote critical review of what

we do. We use ‘blog sites’ eg SharePoint –

people can add comments around it,” he

said.

“You need to make sure you don’t over-

whelm the operator with too much informa-

tion,” he said.

“We try to keep the visualisation as

simple as possible.”

“We often add IT complexity for the

sake of it. It’s a lot easier to sell something

which people relate to.”

DOF enabled procurement approachesDr Michael Popham Head of Oil & Gas for BAE Systems Integrated Systems Technologies, together with DrTony Edwards, CEO of Stepchange Global, talked about how having more information, collected andshared through Digital Oilfields, can lead to improvements in the way procurement is managed.

We all know the terms of engagement be-

tween oil company and service company –

oil company takes the risk and service com-

pany bills by the hour. But perhaps this isn’t

the most efficient approach for both parties?

We can probably all think of times

when overall efficiency has been lost – for

example, if a drilling company was more in-

terested in maximising drilling hours than

drilling in the most efficient way.

But it isn’t surprising when you consid-

er how the industry manages procurement –

with different companies working intimately

together but a very unsophisticated financial

interface, like a daily charge.

“Customers are interested in capturing

the value that a complex, fully integrated

system provides, yet often, procurement ap-

proaches focus on buying different parts then

glueing them together to see what value they

provide, Dr Popham said – not an optimised

system.”

To move things forward, customers

should focus on procuring a ‘capability’, not

a specific service, said Tony Edwards. For

example, they could ask for a supplier to find

“98 per cent of faults before they get worse,

rather than providing discreet fault finding

services or technologies.”

If suppliers are correctly incentivised

and are provided with appropriate informa-

tion, they may be willing to take on risk cur-

rently held by the customer. The supplier’s

remuneration needs to be linked to whether

the customers targets are met – so the sup-

plier holds more risk. This approach can ul-

timately be beneficial for “both buyer and

supplier, as evidenced by established case

studies in the defence sector.

Dr Edwards thinks it is surprising that

we still buy rigs by the day, “because that’s

what we can measure, when we now have

the data and information to move to a

smarter procurement approach such as per-

formance based contracting ” he said.

Planned maintenance systems have

emerged, in part, because it is hard for sup-

pliers to suggest anything better. “Suppliers

will say’ change the part every 6 months’. –

there’s kind of a logic there but it’s also be-

cause they are blind,” Dr Popham said. “Pro-

viding them with real time information on

the health of their components can allow

them to play their part in optimising overall

system performance.”

"Customers should procure a capability, not aspecific service" - Dr Tony Edwards, CEO ofStepchange Global

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BAE Statoil and CISCO - deliveringchange more effectively

The idea is to build a simulator, or “Visualisa-

tion”, of a potential change initiative before in-

vesting time and effort in a pilot programme.

This enables users to “try before they buy”, un-

derstanding if a new way of working will pro-

vide value in the future.

This approach enables individuals around

the company to practise what they would do in

certain situations, for example if there are re-

ports of an oil leak. It also enables people to try

out different methods of working together – be-

fore they are “sealed” into workflow systems.

Also, if people are involved in the testing

of the work scenario, they should be more like-

ly to accept the final system, rather than if the

whole thing is imposed on them. Visualisations

make it possible to rapidly expose multiple

users to a change initiative in a short period of

time.

“We can create visualisations to see how

people respond in certain events,” said Dr

Michael Popham, Head of Oil & Gas for BAE

Systems Integrated Systems Technologies.

“They wanted to understand if it would work.

We look at how people, process, technology

and organisation fit together to deliver value.

You need to understand how people want to

work and how they interact.”

The project with Statoil was to test out

ways that people could collaborate to provide

appropriate response after something unexpect-

ed happening, for example an underwater oil

leak. It also gave a good indication on where

mersive’ visualisation could be done for envi-

ronmental purposes, so people could practise

and develop systems to deal with a problem, in

this case, an oil leak.

A “systems architect” was brought in to

build a model of how different people in the

company might communicate, share informa-

tion about responding to a problem – in this

case they dispatched an AUV to take a closer

look and then all decided to shut down the

pipeline.

Another scenario explored how to ensure

that drill cuttings continue to be safely dispersed

when conditions offshore change suddenly.

“We use the same technique on aircraft

carriers,” Dr Popham said. “We expose users to

what you're proposing to do and get their feed-

back to ensure that new systems meet their op-

erational needs.”

The approach is particularly useful when

people from different companies will be in-

volved. “You can get all the suppliers working

together earlier in the lifecycle,” he said.

Designing, building and testing the visu-

alisation with Statoil took just six weeks, he

said. There is also the benefit that you can get

everybody involved at the beginning – they

might feel less resistant to a change if they’ve

been part of the process of deciding to imple-

ment it.

sensors should be placed and what type of sen-

sor platforms should be used to ensure an early

detection of possible leaks and/or changes in

environmental conditions.

Sitting at their usual desks in front of their

PCs, the people in the respective roles can go

through different scenarios, and test out the sys-

tems the company is proposing to implement

to fix them, and take people’s thoughts into ac-

count.

Thus, when the ‘final’ solution is imple-

mented, people feel they have been more in-

volved, and it is not a question of a new way of

doing things being forced on them, which as

we all know, people do not like.

It doesn’t automatically mean you will be

able to implement a difficult change, but it helps

“stack odds in your favour for delivering

change,” Dr Popham says.

When responding to a potential situation,

companies often need people to work quickly

together who hardly know each other – for ex-

ample, the operators of the Autonomous Un-

derwater Vehicles (AUVs) and the pipeline op-

erators.

“You're trying to bring together people

who've been isolated for many different rea-

sons. How do you work out the best business

solution?” he said.

“It would be better if people could try it

before you buy it.”

In partnership, Statoil, BAE Systems and

Cisco built a demonstration of how a ‘fully im-

UK company BAE Systems, the global defence, security and aerospace company, has been working withStatoil & Cisco Systems to explore how improved Proactive Environmental Monitoring could minimise thepossible negative environmental impact of operations.

People can try a new working scenario beforethey "buy" - Dr Michael Popham, Head of Oil& Gas for BAE Systems Integrated SystemsTechnologies

If an oil company wants to implement systems to help people throughout the company solve aproblem quickly - they can try out a test scenario first. Here, Statoil wanted to implement asystem to ensure the right people were able to collaborate quickly to resolve a deep seaenvironmental problem

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CSC / Oracle - Oil company on one screenImagine having all your oilfield data and information available together – including financial, technicaland operational data.

With these capabilities, managers and engi-

neers can analyse data and make decisions

properly taking financial, technical and op-

erational factors into account, and everybody

in the company can see exactly the same da-

ta.

It does not take much understanding of

IT to understand that it ought to be possible

– and it is something many in the oil indus-

try have wished for and even tried to build –

but failed because it was such an enormous-

ly complex project that needs to address the

varied needs of many different roles in a

company.

Now IT and business solutions provider

CSC has put together a product they call

“Petroleum Enterprise Intelligence” (PEI) to

do exactly that – which uses enterprise re-

source planning (ERP) and business intelli-

gence tools from Oracle, petroleum dash-

board and visualization tools from iStore, the

Public Petroleum Data Model (PPDM) stan-

dard.

The number of companies and systems

involved gives an indication of how difficult

and complicated this has been to achieve.

CSC does not provide any software di-

rectly, but provides the service to put it all

together, taking between 3-6 months to build

a system for each customer, as a “system in-

tegrator”.

The company started building its first

live Petroleum Enterprise Intelligence Solu-

tion for an oil company customer in Novem-

ber 2009 and it was in production by March

2010, says Rus Records, chief technology

officer of CSC’s Chemical, Energy and Nat-

ural Resources Group.

It runs on Oracle’s business intelligence

applications, together with the Information

Store (iStore)’s data access and visualization

technology, including its PetroTrek applica-

tion to visualize production and well techni-

cal data.

The Oracle Business Intelligence soft-

ware is built around the needs of specific

business departments (eg finance, human re-

sources, supply chain and procurement). But

the Petroleum Enterprise Intelligence solu-

tion brings data from all of these systems,

geared around the needs of specific individ-

uals who need data from many different de-

partments.

It can help oil and gas companies inte-

grate technical, operational and financial in-

formation, analyse it and work on it, includ-

ing geoscientists, engineers and non special-

ists.

The PEI system can integrate data from

a variety of different sources – financial,

supply chain, procurement, maintenance,

Schlumberger and Halliburton technical da-

ta, and operational data (real time MWD/

LWD, SCADA/DCS, operations reports) to

the workflows.

It provides dashboards, KPIs, perform-

ance metrics and statistical analytics. Future

releases will include predictive analytics,

business process management, and data min-

ing. CSC is also offering a “cloud comput-

ing” based system that doesn’t require the

customer to invest up front in hardware or

software.

All of the data still stays in the software

tools it was created in (from reservoir mod-

eling to enterprise resource planning tools) –

but it is brought together by the software

tool.

The industry already has reasonably

good and fairly well integrated technical sys-

tems, covering drilling, production, geology

and the reservoir. It has reasonably good op-

erating systems (for managing production

data, maintenance and HSE), and financial

data. The next step, which this system pro-

vides, is bringing all of this together.

Petroleum Enterprise “orchestrates all

of the data in the enterprise into a single vi-

sualisation,” says CSC’s Martin Houghton.

“We tie different data streams together. The

sum of the parts is more than the parts.”

CSC does similar roles in other indus-

tries, including defence, health, financial

services, transportation and retail.

Benefits“When you bring together data that hasn't

been brought together before, you see corre-

lations you have not seen before. You can do

all that a lot quicker than doing it from dif-

ferent places,” says CSC’s Martin Houghton.

Russ Records says that the end game is

to “manage large projects with fewer engi-

neers, and accelerate the pace of decision

making.”

Mr Records quotes the vice president

of drilling with an oil major, who told him

that “only 5 per cent of the data he uses

comes from the drilling software. The rest

comes from reservoir systems and produc-

tion system.”

There’s a consensus in the industry that

“digital oilfield has been done,” says David

Shimbo, senior director of Oracle’s oil and

gas solutions group.

“We’re getting the data – too much da-

ta. It’s the workflows that are the next step.”

Altogether it can help ensure compli-

ance with regulations, manage audit trials

and help companies follow best practise, Mr

Shimbo hopes.

“The same oilfield problems occur over

and over again – and people don’t do a good

job of capturing the information,” Mr

Records says.

The tool can be particularly useful to

“production line” styles of running oil com-

panies – for example in the US, companies

drilling unconventional gas wells want to en-

sure that they can keep their rigs continuous-

ly operating, a factor which hasn’t necessar-

ily been a consideration if rigs were just

chartered for the days they were needed for.

This means that when planning opera-

tions, consideration should be made to

whether a rig is available, or if there is a pe-

riod where there is not yet a plan to utilise a

certain rig.

Mr Records said that the system would

enable you to have different ways of doing

the same process at the same time. You will

still have to have a limited number of ways

of doing something (ie standardised process-

The data has been done - workflows are thenext step - David Shimbo, senior director ofOracle's oil and gas solutions group.

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Intelligent Energy - conference sessions

Woodside’s online “improvement zone”Woodside Energy of Australia has developed an online tool for employees to share ideas and keep trackon new development projects, called the “Woodside Innovation and Improvement Zone,” or WIIZ.

The aim is to help people in the company

keep up to date about projects going on and

help people share ideas.

Woodside Energy is Australia’s largest

publicly traded oil and gas exploration and

production company.

Ideas are automatically e-mailed to the

right person, who can comment on how much

he / she likes them. For example, exploration

ideas are routed to the exploration manager.

All ideas are kept on the system forever

– they might be useful in a future point of

time.

People are given rough guidance when

submitting an idea as to the kind of informa-

tion they should provide to help people as-

sess it, such as why the idea fits the compa-

ny’s business strategy.

When logging on, users can see the

progress of their own ideas, and progress of

projects they are interested in.

All documents about the development

of ideas can be available from the one web-

site. “This is a single source of the truth. If it

is on that site it is correct,” says Andy Watt,

Information Management Coordinator with

Woodside Energy, speaking at the Intelligent

Energy conference in Utrecht.

The system serves to keep everyone in

the company aware of what people are do-

ing. "Previously technical people would say,

we’ve done this work, do you want it – and

business units would say, why did you do that

– we didn’t know you were doing it," he says.

"Now we go to the business units first."

The company has a comprehensive sys-

tem for tracking the life of projects.

If employees think that their ideas might

contain something which the company

should keep secret, there is a special button

they can press, which means that the content

is hidden from all Woodside employees ex-

cept a few senior personnel and company

lawyers.

The ideas have a tagging system, where

they can enter keywords to make their entries

easier to search. The system has been free

text in the past, but the company is now

changing the system so people select tags

from a limited list.

The company is starting to enforce use

of the site, by saying that if people want fund-

ing for a technology project, they need to put

full information about the project on the site,

so people who would potentially gain from

the project can give their opinion on if it will

benefit them.

es) – but surely you would want to do that

anyway, Mr Shimbo said.

So, for example, you wouldn’t have a

standardised way of drilling a well, but you

could have a standardised way of drilling a

horizontal well in Marcellus shale.

It can also enable visualisation to be

made in new ways – for example, you can

bring together financial and production data

to show how a well has performed over its

entire lifetime, something which is useful to

see and quickly understood, but not often

seen.

The system should also help analyse

data more quickly.

For example, when doing drilling, there

is a stream of logging while drilling (LWD)

data which operators need to be able to un-

derstand and act on as fast as possible.

The more analysis which can be done

with the data, and the more different com-

puter systems can process the data, the

greater likelihood of useful analysis.

When choosing between a number of

potential projects, you can view them all in

terms of return on investment, taking much

more factors into account.

ArchitectureThe architecture includes the user interface,

business intelligent engine (which does the

analysis), and connectivity. It is built up of

different components, with different user in-

terfaces and different interfaces to business

systems.

The most important technical develop-

ment is the meta data architecture which the

user doesn’t see, which brings together data

from the various sources. This is based on

the PPDM (Public Petroleum Data Model)

standard.

For systems like this to work, it also

helps if people work as much as possible

with open standards, such as Energistics and

PPDM, Mr Shimbo says.

IE audience surveyThe event had something of a slant towards

multinational oil companies and their service

providers. The attendee breakdown, counted

using handheld devices held by audience

members, was 33 per cent from multinational

oil companies, 8 per cent from national oil

companies, 7 per cent independent oil compa-

nies, 45 per cent service companies and 7 per

cent academic / institution.

The audience was asked how important

Intelligent Energy was to their company’s

strategy. 36 per cent said “extremely”, 44 per

cent said “very”, 18 per cent said “somewhat”

and 2 per cent said “not at all”.

When asked what they see as the limits

of adoption of intelligent energy in their

companies, 16 per cent said cost benefit, 43

per cent said organisation silos, 35 per cent

said change management and 6 per cent said

the reliability of the technology.

When asked how Intelligent Energy is

most impacting their daily work, 35 per cent

said in communications / collaboration, 21 per

cent said workflow efficiency, 41 per cent said

information availability.

When asked how it provides most val-

ue for the industry, 19 per cent said drilling,

45 per cent production, 5 per cent improved

well placement, 4 per cent supply chain / lo-

gistics, and 27 per cent reservoir performance.

Young professionals (people 35 or

younger) in the audience were asked how

important intelligent energy is in their

choice of employer. 28 per cent said extreme-

ly; 41 per cent said very; 25 per cent said

somewhat; and 6 per cent said not at all.

The whole audience was asked “which

best describes the current state of intelli-

gent energy”. 12 per cent said ‘not well de-

fined’, 71 per cent said ‘emerging trend’, 16

per cent said ‘mainstream’ and 1 per cent said

mature.

19April - May 2010 - digital energy journal

Intelligent Energy - conference sessions

Using fibre optics in wells to ‘listen’Did you know you can use fibre optic cables in wells to listen to what is happening down there, like a longmicrophone? Silixa has developed the underlying technology and Weatherford is their commercializationpartner.

Imagine if you had a series of very sensi-

tive microphones installed in your well – so

you could listen for sand going up the tub-

ing, listen to the turbulence in the flow, lis-

ten to the valves when they open and close

to check their condition, listen for leaks,

and listen for subsidence in the formation.

If you already have fibre optic cable

in your wells (for other sensing needs such

as temperature, pressure, flow and seismic

measurements), you can actually use this

same cable as a microphone – by installing

a new interrogation box at the surface.

The technology sends a light signal

down the fibre. The light is changed slight-

ly by the sounds around the cable. By

analysing the light return signal received at

the surface, you can find out what sounds

are being heard around the cable.

It is similar technology to how fibre

optic technology can be used to measure

temperature and pressure in the oil well (be-

cause the light signal is changed slightly by

different temperatures and pressures).

New developments in data processing

are making it possible to determine events

occurring in the well and the reservoir that

are producing the sound picked up by the

fibre cable.

It enables the sound to be synchro-

nously recorded at points every 1m along

the fibre, including the amplitude ( with

more than 90dB dynamic range), frequency

and phase.

With good signal processing and data

analysis, you can learn a great deal from the

sound recording and the location the sound

is coming from and how it propagates.

For example, if the noise a valve

makes when it opens and closes starts

changing, it can indicate an evolving prob-

lem with it. Similarly Electric Submersible

Pump (ESP) condition monitoring is also

possible.

The same technology can also be used

in the downstream oil and gas business for

for monitoring pipelines, as well as for high

temperature chemical plants and various se-

curity applications.

The distributed acoustic technology

was the brain child of Mahmoud

Farhadiroushan, co-founder and CEO of

Silixa, which was developed in his garage

–not in Silicon Valley though, but in Hert-

fordshire (North of London).

The technology is called iDAS™ (In-

telligent Distributed Acoustic Sensor) and

was developed with early stage support

from Chevron.

Mr Farhadiroushan, was also co-

founder of Sensornet, one of the leading

companies providing technology to use fi-

bre optics to measure temperatures in wells.

Silixa has now developed the next genera-

tion distributed temperature sensor (Ulti-

maTM DTS)which can also be used in con-

junction with iDAS.

In September 2009, Weatherford and

Silixa signed a Supply and Technical Serv-

ices Agreement that is mutually exclusive

for permanent applications of iDAS tech-

nology downhole.

Weatherford has over 200 fibre optic

sensing systems installed worldwide, and

plans field measurements using the iDAS

instrumentation in some of these existing

installations starting in the second quarter

of 2010.

Further researchWeatherford has joined a consortium to-

gether with Chevron North Sea Ltd, Silixa

and University College London (UCL) to

develop a distributed acoustic flowmeter.

Half of the £1.5m project funding is

from the UK government’s “Technology

Strategy Board”. The project runs for 3

years.

From April to June 2010, the technol-

ogy will be used in a North Sea field trial,

with fibre optic cables in two producers and

two injector wells, as part of the UK gov-

ernment project.

In March 2010, Silixa also announced

a $10m investment from Lime Rock Part-

ners, a energy focused private equity com-

pany. The company has also “reserved ad-

ditional capital” to support future expansion

of the company. This follows investment

from CTTV (Chevron Technology Ventures

LLC).

“Silixa has a very compelling value

proposition,” said Trevor Burgess, Manag-

ing Director of Lime Rock Partners. “Its

distributed acoustic technology is unique in

the market place.

“We have been very impressed by Sil-

ixa’s commercially smart management

team, who has already created strong rela-

tionships with leading oil companies and an

international service company. These col-

laborations will accelerate market introduc-

tion and acceptance.”

digital energy journal - April - May 201020

Intelligent Energy - news from the exhibition

“Embedding Energistics open standards into our E&P products allows Landmark to reduce R&D costs and enhance connectivity with our global customers.”

Paul KoellerPresident Landmark Software & Services, Halliburton

Normally people receive the files by e-mail at-

tachment, but this can be a pain, says Mike

Rosenmayer, WellLink Group Manager – Well

Site Delivery at Baker Hughes.

Individual wells can generate 50

megabytes of data every week – so if you’re in

charge of 20 wells, you can be receiving a gi-

gabyte of data every week, clogging up your

inbox.

If you get the data by e-mail, the files will

all need to be copied into your desktop com-

puter and organised – and they can make life

difficult when you are travelling and have to

download enormous files down slow and ex-

pensive hotel internet connections before get-

ting to your important messages.

Company IT departments dislike large e-

mail attachments because they all need to be

carefully scanned in case they include viruses.

The alternative system, WellLink Desk-

top, will automatically download the latest file

data so it is ready available on your desktop

computer.

The desktop software sends a ‘ping’, or

short message, to the Baker Hughes server

every 2 minutes, and if there is new data avail-

able, automatically downloads it (like the way

your computer antivirus system receives up-

dates). In addition WellLink Desktop receives

the SQL database attributes so your data is al-

so automatically organized in a logical and in-

tuitive well database.

You will have all the data you need ready

on your computer, and automatically organised

so you don’t need to mess around moving

around large files.

If you need to switch computers, you just

need to install the Baker Hughes software on

the new computer and the files will automati-

cally download onto it.

The system has sophisticated security –

the files are stored encrypted on your own

computer so it is impossible to transfer the da-

ta files directly onto another computer or pen

drive.

Because the files are downloaded direct-

ly from Baker Hughes’ server, they don’t need

to be rechecked for viruses.

It uses spe-

cial data transfer

protocols which

are 40 per cent

faster than

HTTPS, Mr

Rosenmayer

says. It down-

loads two files at

a time.

It was not

unknown for

Baker Hughes

staff to end up

spending hours

trying to retrieve

all the data rele-

vant to a specific well – with this system it hap-

pens automatically.

The software also has tools to automati-

cally re-download files if they are deleted by

mistake. The user can make changes to the da-

ta, and re-download the original from Baker

Hughes at any time.

Baker Hughes – well data on your desktopBaker Hughes has launched a software tool called ‘WellLink Desktop,” which will automatically downloadthe latest data about wells you are working on, onto your desktop computer.

PDS - making workflow less rigidPetrotechnical Data Systems, a company based in Rijswijk, The Netherlands, has developed a newapproach to building production, well, and reservoir management workflow solutions.

Most industry approaches to workflow so far

have been too rigid, operating as a sequence of

hand-offs of work, from user to user, says Gar-

ry Barclay, research and development manager

with PDS.

The rigid approach is suitable in a process

where efficiency, policy and predictability are

of paramount importance; the type of process

where the user’s focus is on individual tasks and

the system selects the next task to be complet-

ed.

The problem is that, "in this type of work-

flow users can often lose sight of the overall ob-

jectives and their place in the process," Mr Bar-

clay says. "For knowledge-driven workflows

this approach often turns out to be highly count-

er-productive."

The company believes that the rigid-style

system is better tailored to the sort of knowl-

edge-intensive process which is prevalent in

production, well and reservoir management,

than other workflow systems being used in the

industry.

“When engineers learn that a new a work-

flow solution is to be introduced, the reaction

can often be very negative. There is a percep-

tion that workflow applications will be restric-

tive and limiting. Users talk of frustration with

the system and a loss of control," he says.

Traditional workflow technologies cannot

adequately support complex and knowledge-

intensive working practices.

On the other extreme, it is common to find

engineers working with a range of different

software applications simultaneously open on

their worktop, switching as necessary from one

to the other.

Problems with this approach are the lack

of standardisation in the processes, and record-

keeping about how specific decisions were

achieved, he says.

PDS aims to find an approach in between

these two – too rigid and too flexible - a “sweet

spot,” Mr Barclay says.

“We have solved the problem of how to

provide workflow solutions that leave the user

in control.”

"Our workflow technology allows us to

capture and encode knowledge about best prac-

tices, delivering this to the engineers in a way

that doesn’t limit their choices," he says.

It is important that any workflow systems

can freely adapt, and people can easily make

changes that need to be made.

"Once we have these knowledge-inten-

sive workflows in place though, there is the

subsequent problem of how to properly man-

age them as the knowledge, practices and capa-

bilities of the organisation inevitably change

and evolve," he says.

“This is the reason we deliver workflows

as web-based content. We provide users with

tools which allow them to adapt the workflow

processes and activities themselves – they don’t

have to wait for an often overloaded IT depart-

ment to update the application.

"In effect, we take IT off of the critical

path for most workflow changes, maintaining

effective control in the hands of the domain ex-

perts”.

The company has built a wide range of

workflow solutions including solutions for Well

Test Validation, Well Performance Review, Gas

Lift Optimisation, Well Model Validation and

Production Reporting.

Receiving well log files bye-mail attachment can bea pain - Mike Rosenmayer,Baker Hughes

digital energy journal - April - May 201022

Intelligent Energy - news from the exhibition

it automates as much as possible. “The intent

is to get the right people working on the things

that matter, Mr Dickens says.

Interestingly, the company has avoided

an ultra centralised strategy of running all its

wells worldwide from one location – because

this can raise issues about local knowledge

and relationships in the operating location.

“The farther you are from the asset, the harder

it is for people,” Mr Latin said.

BP decided to present what it is doing at

the Intelligent Energy event, to “show how se-

rious we are about the technology and demon-

strate the progress we have made,” Mr Latin

says.

“It opens up the possibility for us to have

the conversation. And what we do externally

reflects what we do internally (ie its good for

our people).

There’s a recruitment angle too.”

TechnologyAs part of the Field of the Future project, the

company has developed sophisticated systems

to keep track of production from different

wells, by continually recording flow wherever

possible, rather than measuring flow with pe-

riodic well tests.

When data is measured just with period-

ic well tests, the real data can deviate as much

as 10 per cent from the measured data, Mr Lat-

in says. “With our system it’s a few percent.”

It has a monitoring system which can

record the performance of safety valves and

The company was planning to reach this tar-

get by 2017.

Systems have been installed on 85 per

cent of the company’s top 100 wells, and it

touches about a third of its total production.

Estimating the cost of the Field of the Fu-

ture programme is complex, but according to

BP one of the key components, integrated sub-

surface information system (ISIS), a well sur-

veillance application, is costing around $1 mil-

lion per 1,000 barrels of additional daily pro-

duction.

The company has not revealed the full

costs of the programme, which also includes

other components, for example data to desk-

top (D2D) technology, which is focussed on

gathering data from process plant and other

surface components.

BP has been “ruthlessly focussed on

tracking the benefits” of the program, says

David Latin, Vice President, Subsurface Re-

source E&P Centralized Developments Or-

ganization and previously vice president Field

of the Future technology flagship until No-

vember 2009.

The company is rigorous at measuring

the additional production which has been

achieved by the Field of the Future technolo-

gy, validated by the asset team – and not in-

cluding production increases which were

achieved using other means.

So far, the project has only been applied

to BP operated assets, not joint venture assets

(or assets which BP owns but does not oper-

ate).

The Field of the Future program was for-

malised in 2005, but built on work which had

been going in since the late 1990s. “In 2005 –

we got clear about what we were trying to do,”

says Jeff Dickens, head of the Field of the Fu-

ture program office.

Ultimately the Field of the Future proj-

ect will cover BP’s entire upstream infrastruc-

ture, from reservoir to oil distributing termi-

nal.

It has started by focussing just on high

rate wells, their associated facilties and equip-

ment, and optimising across both.

“It’s such a huge space – it can be hard

to know where to stand,” Mr Latin says. “We

said we’ll start with the big subsea wells.”

DevelopmentThe company is thinking deeply about how it

organises people’s knowledge, and ensures at

BP Field of the Future – halfway to 2017 targetBP’s Field of the Future program, to use advanced digital technology to improve production, is alreadyhalfway to completing its target, set in 2007, of increasing BP’s net production by 100,000 barrels of oilequivalent per day.

record all shutdowns. “You get a much better

data quality and insight on how valves are per-

forming,” Mr Dickens says.

It has systems to automatically detect

when a well is shut in and interpret the data.

In the Gulf of Mexico, most of its plat-

forms are connected to a fibre optic cable.

"Everything we’re doing can be plugged into

this structure.

That enables all the remote monitoring

we want to do,” Mr Latin says.

The communications are particularly

helpful during a hurricane, in enabling the

shore to monitor what is going on, and en-

abling experts across the company to get in-

volved in getting production running again.

Without the fibre, the company would be

dependent on VSAT communications links,

which can be affected by weather and some-

times damaged by high winds.

In the Valhall Field offshore Norway, BP

implemented a system to improve manage-

ment of slugs. The value of this system

equates to 3,000 barrels of oil per day in Val-

hall. The same system is also being introduced

in Africa and the Gulf of Mexico.

In West of Shetland, it implemented a

system to try to find the optimum configura-

tion for gas lift wells.

In Angola, the company has installed a

system which can inject water into different

zones in a well. It can switch flow from one

well to another using an automated system.

The BP exhibition stand at Intelligent Energy - on the left are David Latin, Doug Suttles andGeoff Dickens

23April - May 2010 - digital energy journal

Intelligent Energy - news from the exhibition

Roxar – making reservoir modellingquicker to doRoxar (a Norwegian company owned by Emerson Process Management), believes it is making big stridesin making reservoir modeling easier and quicker to do, and end up with a model which more closelyresembles the actual structure as seen from the seismic data with the latest release of its RMS reservoirmodeling software (RMS 2010, launched in February 2010).

As geologists and reservoir engineer know

when looking deeper in the details of a reser-

voir, there are many uncertainties often cru-

cial to reservoir performance. Roxar aims to

make it easier to generate many model reali-

sations in order to explore and understand

these uncertainties – vital if you are looking

at in place oil or gas volumes or looking at

future production estimates.

Knut Midtveit, sales manager Scandi-

navia, Roxar Software Solutions, believes

that the software is very good for situations

where a modeller has to combine the avail-

able data with this own knowledge and ex-

perience. “He can use RMS to build the

model that fits both his conceptual model

and the hard data,” he says.

The company claims to be the second

largest provider of reservoir modelling soft-

ware in the world (after Schlumberger’s Pe-

trel) and to provide software used to model

85 per cent of fields in Norway.

Roxar hopes to make it possible to up-

date reservoir models from new well or pro-

duction data in hours in the future, rather

than spending weeks or months as is normal

today, says Ordin Husa, managing director,

Roxar Software Solutions.

The latest version has a revamped well

correlation system, to display well data and

well markers together with the model.

It can also be used to estimate reserves,

plan wells and simulate past and future pro-

duction.

The RMS software is made up of 13

software modules, including mapping, reser-

voir modeling, well planning, reservoir sim-

ulation and uncertainty modeling tools. It

runs on Linux and all versions of Windows.

An important technology enabler has

been to get rid of the grid pillar concept. The

system does not have any pillars at all. “Pre-

viously you had pillars going through the

whole model,” Mr Midtveit says. “Pillars are

restricting you.”

“If you have a complex fault you can’t

do it with pillars. But now the geologist can

make the model as nature is.”

“You can do models which were really

impossible before. Now it’s easy,” says Mr

Husa.

“Previously the models made trouble

for simula-

tors, how-

ever the

new grid-

ding tech-

niques

makes

much bet-

ter grids so

simulators

can run

faster ” Mr

Husa says.

The

software

has an

open struc-

ture, so

people can

write addi-

tional ap-

plications

for it them-

selves, Mr

Midtveit says. This should make it easier to

integrate with other applications and also for

the research departments in oil companies to

develop new techniques and deploy it into

their organisation..

The industry trend, says Mr Midtveit,

is not so much for bigger models, but for

faster model updates that enable faster deci-

sions

Companies often have many models for

one field, at different scales, looking in de-

tail at specific areas.

People usually have a deadline to work

to – so the challenge is making it possible to

build the best reservoir model (or models)

by then.

The company changed the way the soft-

ware is used to build structures 3 versions

ago, and a new graphical interface 2 versions

ago, Mr Midtveit says. It has then been

tweaking it to make it easier and faster to

use.

The aim of the past 2 releases has been

to improve usability, so people can learn how

to use the product faster, particularly when

they have never used it before.

“You can do models which were reallyimpossible before. Now it’s easy.” - OrdinHusa, managing director, Roxar SoftwareSolutions

A horizontal well in RMS 2010 being edited in 3D with synthetic wells

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Intelligent Energy - news from the exhibition