Turning to IT in today’s resource-constrained environment

The litany of challenges facing the oil and gas industry is unprecedented. Oil prices have plummeted more than 73% from last year’s highs; capital spending and exploration budgets are dropping for 2009; capital project costs continue to escalate; and predictability of demand is a thing of the past. If that is not enough, the industry workforce is facing massive turnover, and political policies are shifting more dramatically than the San Andreas Fault.

There is one ray of sunshine in this turbulent picture. While not a cure-all for the current crisis, innovations in information technology (IT) available today offer industry players a lifeline to help weather these challenges, recover faster, and better use resources to come out ahead. Creating a culture and infrastructure that empowers better business and operational decision-making through the application of IT is central to surviving today’s volatile marketplace.

IT advancements and their potential as catalysts of transformation span the oil and gas value chain. Consider the following examples:

Visualizing seismic data

The quality of seismic data is key to getting the most value from budget-constrained exploration projects. The goal of seismic analysis is to extract additional information from seismic data beyond conventional approaches to structural mapping and stratigraphic interpretation. Seismic analysis provides powerful insight that can be used to lower risk in exploration, and to quantify reserves in production.

In seismic analysis, high-performance computing (HPC) is used to enable multiple iterations of processing and analysis of subsurface data to provide new ways to visualize assets and maximize resources – without having to drill. Today’s HPC cluster server solutions create the opportunity to increase the modeling capacity for evolving business environments and dramatically increase the speed at which operators can test business models against new scenarios.

The largest super majors in the world have employed cluster computing technology and have seen significant productivity improvements. With greater compute power available today, geoscientists have cited specific improvements in three areas—faster cluster setup time; faster, more accessible processing power; and easier configuration that cuts down on server idle time.

Better business intelligence to manage data

Operators are further constrained by the growing volumes of historical, contextual, and real-time data residing in disparate systems across a company’s IT systems. Though sometimes extraneous, these datasets also can be extremely useful in oilfield operations. In particular, large offshore oil platforms often require 100,000 design and operational documents, and 30,000 I/O points with 300 GB per day data streams.

One solution to maintain and facilitate the flow of information is the use of business intelligence (BI) tools that were once only available to exploration and production (E&P) financial departments. Applied in a work cycle model, geoscientists and geologists, and reservoir and production engineers, for example, now can work closely to evaluate and predict performance of new oilfields or to extend production of existing assets. BI capabilities heighten teams’ ability to view near-real-time information as key performance indicators (KPIs). Operators can thus view E&P performance visually and make faster, better decisions based on current business-health indicators. This approach allows operators to maximize return on investment for critical exploration projects.

Facilitating collaboration of vital information

The ability to locate, analyze, and share information necessary for E&P projects remains a business necessity for oil and gas companies seeking to reduce project costs and connect far-flung but limited staff. Better collaboration and synchronization with vendors can literally double productivity by shortening the cycle for decision making and critical team response.

Due to the increasingly global nature of business, workers need to collaborate on projects and stay up to date on information and status in real time. Seismic workers in particular are often based in wide-spread remote locations but still need the ability to communicate in real time. Unified communications technology helps collaborate securely using voice, instant messaging, and video in a single, consistent experience from a desktop or mobile device. In particular, one international oil and gas company has plans to deploy an integrated platform for voice, video, instant messaging, and Web conferencing that will offer heightened communication capability for thousands of its employees.

Collaboration also can help capture internal knowledge and best practices, which is all the more critical given the impending retirement of a significant share of experienced workers. Microsoft recently conducted a survey of 270 industry decision-makers and determined that many oil and gas companies are not prepared to retain the intellectual knowledge from workers retiring. In fact, survey respondents stated that the primary tools currently used for knowledge capture are electronic file shares (63.6%), databases or repositories (58.1%), and written documents/physical files (57.7%). These systems are not flexible and do not facilitate the reuse of information.

Oil and gas companies are pressured to avoid risk, manage uncertainty, and achieve more with less, especially within budget-restricted exploration and production programs. As such, IT must be considered as a key lever to mitigate risk and to innovate for future growth. These extraordinary times can create opportunities that were not always foreseeable a year ago. Success requires that the right technology, systems, and processes be in place to empower the industry to meet today’s challenges and the ones to come.

Craig Hodges
Director, Energy and Chemicals
Microsoft

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 Eldon Ball at [email protected].