Harvesting value from the digital oilfield of the future

Most companies picture the oil field of the future as the CEO sitting on the beach with a laptop optimizing the operations of the entire company. It's a nice vision, but it gives the digital oil field concept an aura of unattainability. Why pursue digital fool's gold now when we can keep drilling our way to higher profitability?

The beach scenario may be five years away, but the producing digital oil field is real and working today. While many industry teams envision sophisticated, fully integrated oil field factory concepts, producers operating in the North Sea, Kuwait, and Venezuela have implemented online daily operations systems. These systems uncover the hidden value that comes from optimizing one or more business drivers on assets the operator already owns, such as cash flow, production rate, reserves, or operating and capital expense.

Three producers now have real-time and sustainable optimization systems to handle complex producing networks that involve hundreds of wells. Assets benefiting from this approach include:

• Mature, artificially lifted oil fields producing at high rates with continuous gas lift
• Fields with intermittent gas lift
• Gas condensate and light/volatile oil fields
• Dry gas fields.

Producers and technology providers recognize the challenges of maximizing value in these demanding environments and have collaborated to develop a truly online well and surface network optimization system. These well and surface network configurations vary, but the systems in use all link real-time well, surface, and corporate data sources. This integration ensures constant monitoring and updating of reservoir, well, and facility models to reflect actual operating conditions. A sequential linear programming calculation engine then simultaneously optimizes hundreds of critical parameters, and appropriate actions are taken to keep the assets operating at peak performance.

The ability to gather and interpret data online as well as implement many of the changes electronically means production optimization can be sustained effectively with minimum manpower and expense. With the three online systems running today, engineers are streamlining and automating a number of production engineering tasks associated with asset management. Since no two fields or reservoirs behave exactly alike, the optimizer is not tailored to solve specific problems. The system can be applied without modification to a range of production optimization problems, including downhole controls in smart wells and intelligent completions.

The key to success has been to enable both accurate and timely prediction and the right actions required to improve performance. In most cases this cycle can be automated on a daily basis, and it is quite effective.

But challenges remain. The technology is affordable, and the need certainly exists, but many organizations are more comfortable using workovers or infill drilling to boost production. Either they don't have the resources required to design, implement, and operate these systems, or their decision-making processes are oriented more toward weeks and months rather than the daily cycle required to tune operations on these assets.

Certainly, people, workflow, and process issues have to be carefully balanced to maximize the technology's impact on asset value. But the effort is worthwhile. In quite a few assets we have analyzed, 5% sustainable gains in production are quite achievable, often with little or no additional capital costs. For a 100,000-b/d offshore field, this equates to about $40 million per year in additional profit. If extra production is not possible due to contract status or OPEC quota, then production optimization allows operating companies to produce the maximum, but with lower operating costs, or even reduced capital expenditure in the coming years.

If the challenge for management is to optimize asset performance, waiting for the digital oilfield of the future is not going to add any value today, especially on a mature producing field. The benefits of online production optimization are significant and have been proved on a continuous basis since the first system was implemented in 2000. Gains achieved are a 2-5% improvement in uptime along with a 3-7% improvement in produced volumes and overall reduction of lifting costs by 5-10%. In the three implementations to date, benefits like these dwarf development and implementation costs and have substantially changed the overall economics of the assets.

Keeping up with the pace of technology change is difficult, and knowing which technologies offer the best returns is perhaps the greatest challenge of all. And just as the fast food industry has created behaviors in most people that are not in their long-term interest, we have developed our own diet of behaviors whereby we crave production growth and are perhaps too eager to invest in quick production spikes from workovers or drilling infills. With some digital oil field vision, we may not operate fields from the beach, but we can uncover hidden sources of production growth lying dormant in the wells and facilities we already operate.

Campbell Airlie
Technical Director
Edinburgh Petroleum Services

This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry. Offshore Magazine invites you to share your thoughts. Email your Beyond the Horizon manuscript to William Furlow at [email protected].