digital energy 2007

Why integrate simulators with real time well data?

Simulators for operations managers

Wi-fi on offshore oil platforms

Maintaining quality subsurface data

BP's Future Fields project - update

May - June 2007 Issue 7

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dej june correct.qxp 14/05/2007 20:37

dej june correct.qxp 14/05/2007 20:37

May 2007 Issue 7

Digital Energy Journal is published on print 6 times a year, supported

by a free website and email news serviceWe cover information technology and communications in upstream

oil and gas production,drilling / completions and exploration.

Each issue of Digital Energy Journal is mailedto 2000 oil and gas executives, as well as

distributed at major trade shows such asATCE, Petex, Digital Energy

and Intelligent Energy.

Subscriptions: GBP 195 a year for 6 issues.To subscribe, please contact circulation

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Alternatively you can subscribe online atwww.digitalenergyjournal.com

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Digital Energy Journal213 Marsh Wall, London, E14 9FJ, UK

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Editor Karl Jeffery

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Technical editor/ IT managerKeith Forward

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Consultant writerTracey Dancy, Paras Consulting

Production, design and circulationKaterina Jeffery

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Contents

Subsurface

Simulators and real time informationThere's a lot of talk in the industry about integrating real time well information withsimulators, but not so much about the value which can be achieved from doing it. We askedWellDynamics, a well information company which recently announced a tie-up withsimulator software company Landmark Graphics, what the benefits are.

Good subsurface data Maintaining good quality subsurface data is a challenge nearly every oil and gas companyis struggling with. Paras Consulting expert Lee Hatfield gives his tips.

No single data management solution - Crouse conference One emerging theme of Philp C Crouse's first ever European conference, heldin Amsterdam, April 19-20, was that there is no single way to fix oilcompanies data and knowledge management challenges.

What lies between wellsIsle of Man company Geodirk has some interesting new methods to improve knowledgeabout rock formations between wells, by combining seismic data with measurements frominside the well, and building up a picture of how the rock formed.

Why well operators should use simulators Digital Energy Journal spoke to Landmark technology fellow StanCullick about Landmark’s vision for bringing reservoir and wellsimulation right up to the well head, as a tool operations managers canuse, and why they would find simulators helpful.

CommunicationsBT - a new service offering for oil and gas We all understand what a traditional telecoms company does - but BT is seeking to redefineit.The company has quadrupled its US oil and gas business since 2004.We spoke to head of US oil and gas sales Ross Burley.

Wireless on offshore oil platformsUsing wireless data communications on offshore oil platforms is a much more viableproposition now than it was a few years ago. Stan DeVries, director of upstream solutionswith Invensys, explains why.

Surface

Implementing a document management systemEMC Documentum recently installed and expanded company-wide content managementsystems at BP, BG, Anadarko, PetroCanada, NordskHydro, and also some of the world'slargest state owned and non state owned oil and gas companies.

Aker and IBM's condition monitoring Aker Kvaerner has teamed up with IBM to offer oil and gas equipment conditionmonitoring services. We spoke to Aker Kvaerner's vice president for concept andtechnology, Erik Erdal.

Getting data out of spreadsheetsProduction Access is Houston is on a mission - to persuade independent oiland gas companies to move from spreadsheets to integrated software.

Oracle and data managementAn estimated 90 per cent of oil and gas data is stored in Oracle databases.Here's how Oracle thinks we should approach data management.

Digital EnergyConferenceHoustonThe SPE Digital EnergyConference in HoustonApril 11-12 included asubstantial update onBP's Field of the Futureprogram, updates fromShell's chief scientist for well engineering, and Petrobras' digital oilfield manager.

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From the editor

For readers craving a deeper un-derstanding of the context inwhich our industry operates

(which is probably all of you), I can rec-ommend a recently published book'The Last Oil Shock,' by BBC journalistDavid Strahan.

Mr Strahan has spent the last twoyears trying to find an answer to thequestion, is the world in deep troublebecause the oil is running out?

He hasn't been talking to environ-mentalists, but mainly ex-oil industryexecutives, geologists and engineers,and, when he was able to, current oil in-dustry executives and geologists, to tryto put together his answer.

You have probably already reachedyour own conclusion about when thepoint will arise, if ever, that Western tra-ditional suburban living will cease to beviable.

But is fairly clear that managing to-morrow's energy supply will be muchmore complex.

We're going to need as good systemsas we can get, to work out where thereservoirs are, work out if they will beprofitable to drill, and optimise the

management of the available resourcesto produce them - capital, expertise andequipment.

We'll also need to weigh up a growingrange of energy sources.

We'll have big challenges educatingthe public, so that their expectationsmatch the deliverables, rather than peo-ple resorting to riots and violence.

The people who can make the bestcontribution here are people with an inti-mate understanding of the oil and gas in-dustry,who will still be alive in 30-40 years,and have a good understanding of datacommunications and information man-agement, have good communicationsskills, have good management skills, andprefer to compete based on their techni-cal competence, rather than their abilityto fight wars.

Sounds like most Digital Energy Jour-nal readers to me.

So you won't have to worry about everbeing out of a job, or indeed, a fascinatinglife in the future. It will be an exciting jour-ney and Digital Energy Journal will joinyou on it.

Even if you have to get to work by boat,bus or bicycle..

Karl Jeffery, editor


May - June 2007 - digital energy journal 3

Subsurface software news

iStore's PetroTrek on SharePoint 2007

www.innerlogix.comNewfield Exploration Company of

Houston has selected InnerLogix'sQCPro to manage its upstream dataquality.

The implementation followsa successful trial.

QCPro automates assessing,correcting and exchanging up-stream data. It can work with 65different vendor and propri-etary data sources through a setof plug and play adapters.

"QCPro provides a faster,more efficient process for mak-ing quality data available," saysJim Day, Geoscience Applicationand Data Coordinator of New-field Exploration.

"Our exploration geoscien-tists have already seen improve-ment in both the validity andthe availability of data.

A new version of the soft-ware, 3.7, has just been released,which uses parallel processingto improve compute capacityand performance.

The new version has fully in-tegrated tools to automaticallycorrect the data and check va-lidity. It can be used for explo-ration and production data.

There are tools to audit dataand measure how much it haschanged.

InnerLogix says that the dataexchange between corporateand project data stores will besmoother.

www.microsoft.com/oilandgasMicrosoft has commissioned a surveyof 100 oil and gas experts worldwide,to find out how much they thinkmore computing power at their deskscan improve their performance.

The survey was conductedby Gelb Consulting Group ofHouston during February 2007.

81 per cent of respondentssaid they thought more readyaccess to high performancecomputing capability could in-crease oil and gas production.

61 per cent believe that hav-ing the capability to run addi-

Newfield selectsInnerLogix welldata qualitysoftware

www.gxt.comGX Technology Corporation, a sub-sidiary of seismic systems companyInput Output, has launched Auto-bahn, a seismic data processing sys-tem, to help the company processlarger data sets.

The system can be used toautomate pre-stack quality con-trol workflows.

It should help increase thedata handling capacity of largeprocessing jobs, and reduce thecycle time of seismic data pro-cessing.

For certain processing jobs,the system will be able to deliv-er outputs in 12-24 hours, whichpreviously would have taken 45days.

The first version of the sys-tem is being applied on BP'sWamsutter fractured gas reser-voir in Wyoming, where the da-ta is full wave and densely sam-pled.

"Oil and gas companies con-tinue to demand faster deliveryof higher quality subsurface im-

GXT processes more seismic data fasterages," says Nick Bernitsas, seniorvice president of data process-ing at GXT.

"We needed to develop anextremely powerful data pro-cessing engine that could serveas the foundation for all of GXT'sadvanced imaging techniques."

"As we see streamer countsincrease offshore and stationcounts increase onshore, theamount of data that is beinghandled for each seismic surveycontinues to increase."

The system can sort incom-ing seismic data in many differ-ent ways. For example, the fielddata can be organised into bothcross spread sorts and vectortile sorts, so it is ready for differ-ent noise reduction processes.

The decision making mod-ules contain automated geom-etry quality control and refrac-tion statics algorithms, to helpstreamline many routine pro-cessing workflows.

GXT believes the system willbe of particular value in marine

Microsoft high performance computing survey

tional tasks and iterations willreduce project risk.

56 percent prefer to sched-ule their own jobs to a techni-cal computing or high perform-ance computing cluster ratherthan refer to a cluster adminis-trator to manage the job queue.

47 percent say their comput-ing-intensive scientific applica-tions require multiple itera-tions.

The survey also found thattwenty-five percent of comput-ing-intensive scientific applica-

seismic projects, using comput-ing intensive techniques suchas 3D Surface-Related MultipleElimination.

It will also be useful for on-shore seismic processing, wheremany seismic teams still use old('legacy') processing softwarewhich was developed for muchlighter data jobs, with around3,000 channels.

GXT will be using the systemon its seismic program with BPand Apache, together with itsFireFly seismic data gatheringsystem, where it will have10,000 three component (3C)stations, so 30,000 channels al-together.

www.istore.comHouston oil and gas softwarecompany Information Store (iStore)has made its PetroTrek digitaloilfield software available onMicrosoft Office SharePoint Server2007 and Microsoft Virtual Earth.

This is a new system runningon Microsoft .NET.

Running the software onSharepoint Server 2007 and Vir-tual Earth creates more power-ful possibilities to manage thedata, including finding, visualis-ing, controlling and using it, iS-tore says.

It is easier to combine infor-mation from different sourceson the same web page.

The PetroTrek software wasfirst launched in 1997 and cus-tomers include BP, Chevron, PE-MEX and Shell.

"Products like PetroTrek Web

Services and Solutions are im-portant to our operations, andintegral to our Field of the Fu-ture Program," says Steve For-tune, information managementdirector, for BP, Gulf of Mexico.

"By using the latest versionof SharePoint Server, our teamscan easily collaborate to moreeffectively manage our produc-tion assets."

SharePoint Server is a suite ofserver tools, which can help anorganisation manage its con-tent, bringing together its in-tranet, extranet and web appli-cations onto an integrated plat-form.

Virtual Earth is a set of onlinemapping and search services,which enables you to see datatogether with aerial and satel-lite images.

tions still take from overnight tomore than a week to run.

Microsoft observes that itshould be getting easier forgeoscientists to do high per-formance computing at theirdesks, as processors get cheap-er and faster, and new softwareis developed to help managehigh performance computing,such as its own Compute Clus-ter Server 2003.

Gelb Consulting also ob-serves that it has taken a longtime to persuade geoscience

manages to let go of their UNIXmachines for mission criticalapplications, but they are nowstarting to move to PCs.

"Smart-client PCs and appli-cations are reaching a level ofmaturity, reliability and stabilitythat has caused even the skep-tics to trust a move to MicrosoftWindows," says John Elmer,president of Gelb ConsultingGroup.

The full survey results are atMicrosoft's oil and gas website.

www.openspirit.comLynn Babec will focus on product plan-ning and the future extension of ver-sion 3.0 of the OpenSpirit application.

She joins OpenSpirit fromHalliburton Drilling Evaluation& Digital Solutions / Landmarkwhere she held a number ofproduction operations and sys-tems development roles.

During the past seven years,she managed product develop-ment, marketing programs andprofessional services deliveryacross the production and eco-nomics engineering domain,most recently as the ProductionOperations Practice Manager inthe Consulting and Servicesgroup.

Lynn Babec joinsOpenSpirit as vice president of marketing

Innerlogix software to manageupstream data - in this screenshot, the colour indicates the quality of the data for that area (sampledata only)



Subsurface

www.i-o.comNorway marine seismic contractorReservoir Exploration Technology hasawarded a $29m contract to seismicsystems specialist Input Output, tobuy its VectorSeis Ocean system,which collects seismic data from thebottom of the ocean.

The system is redeployable(it can be moved somewhereelse after it has been installed)and gathers full wave (multi-component) data.

The system has enhanced di-agnostic capabilities, whichcome with its Gator commandand control software, made byInput Output's subsidiary Con-cept Systems.

Delivery of the system is

Reservoir Exploration Technologyawards $29m seismic contract

scheduled for the fourth quar-ter of 2007.

"Seabed acquisition is prov-ing to be a valuable and cost-ef-fective solution for explorationand reservoir appraisal in areashaving complex geology orhigh development costs," saysChuck Ledet, senior vice presi-dent of the Marine Imaging Sys-tems Division at Input Output.

"Over the last severalmonths, we have worked inclose partnership with RXT towitness first-hand their field ex-perience with the VSO system."

"As a result, we have identi-fied valuable ways to advanceits performance."

www.acopia.comData storage company Acopia Net-works has signed a deal with CabotOil and Gas to provide its Acopia ARXTfile storage system, with its Free-domFabricT operating system.Cabot will use the system for itsseismic and geophysical map-ping data.

Cabot expects to be able tofree up disk resources and re-duce data storage/backup costswith the system.

Cabot Oil and Gasuses Acopia filestorage

www.openspirit.comDynamic Graphics of California, whichproduces the EarthVision, WellArchi-tect and CoViz 3D software, has madea deal with OpenSpirit to make itsEarthVision and Coviz software inte-grate with other software applica-tions.

Users will be able to inte-grate their EarthVision andCoViz databases with otherdatabases, such as Halliburton'sOpenWorks and SeisWorks, aswell as open formats like SEG-Yand RESCUE.

The company has taken outa license of OpenSpirit's appli-cation and data integration de-veloper's kit, so it can make useof OpenSpirit to enable users to

Dynamic Graphics uses OpenSpiritdata integration

share its data with software ap-plications made by other com-panies.

CoViz is a software tool toview 2D, 3D and even 4D data.The data can also be interrogat-ed.

EarthVision is a 3D modelbuilding and viewing tool, thatcan be used to create and up-date 3D models for well posi-tioning, reservoir characterisa-tion and environmental analy-sis.

OpenSpirit thinks that theidea of interoperable tools,which enable teams to workbetter together across differentsoftware packages, is gaining afoothold in the industry.

www.ihs.comIHS has launched IHS Acquisition

Screener, a new asset screening re-source for oil and gas acquisition anddivestiture (A&D) teams.

Acquisition Screener pro-vides information that helpsidentify potential acquisitiontargets and validates economicassumptions on specific assets.It offers new and unique infor-mation, including: operatorrankings, valuations, activitytrends, operating expenses,ownership and reserves.

Currently, A&D engineersscreening Texas assets onlyhave access to detailed data forproperties that are publicly of-fered for sale. With Acquisition

IHS releases Acquisition Screener and PETRA with Enerdeqintegration

Screener, users can query acomplete set of screening-leveldata to identify assets, or entirecompanies, to approach with anoffer.

Users can also generateranked production lists for fields,operators or leases within a basin.These ranked lists will help usersfind more detailed economic in-formation based on selected at-tributes such as daily production,number of wells, depth and pro-ducing formation.

Regional subscriptions forAcquisition Screener are basedon geological provinces androughly cover North, South,East and West Texas.

The new release of PETRA(version 3.1.9.0), IHS' PC-basedgeological analysis softwarenow includes an IHS EnerdeqDirect Connect feature provid-ing customers an easy mecha-nism for creating and refresh-ing oil and gas companies' in-terpretation projects with thelatest IHS data.

In the past, this often re-quired manual effort or the de-velopment of custom data-transfer interfaces. Enerdeq Di-rect Connect helps to reducedata access time, and improvesdata currency by retrieving themost recent data available onIHS servers.

KCA Deutag, one of the world'slargest drilling contractors, and theNorth Sea's largest offshore platformdrilling contractor, has extended itsuse Well Data Technologies' dailydrilling reporting solutionWellInform.

It is now using WellInform foractivities in 18 different coun-tries, compared to 9 previously.KCA Deutag now plans to addi-tionally roll out WellInform forits operations in Sakhalin, Libyaand Saudi Arabia.

KCA now considers the soft-ware to be a global perform-ance tool, providing the ability

KCA Deutag expands use of Well DataTechnology's reporting system

to report, analyse and measureglobally.

WellInform is a web baseddaily reporting system fordrillers, designed to be easy touse at the well site, where thereis generally restricted data com-munications capacity.

The tool can generate re-ports according to the user's re-quirements, which can be auto-matically e-mailed to peopleneeding them.The system is de-signed to be able to gather da-ta in many different ways, usingwhatever units of measure-ments are being used.

Acopia's ARXTfile storagesystem, beingused by CabotOil and Gas

Drilling contractor KCA is using Well Data Technologies drilling reporting solutionin 18 countries

Copyright acknowledgment

A chart appeared in Digital En-ergy Journal Jan Feb issue (pagep14, article Scandpower launchesMEPO3) which had previously ap-peared in SPE copyrighted paperSPE 89974. From Williams, G.J.J. etal.: “Top-Down Reservoir Model-ing,” presented at the SPE AnnualTechnical Conference and Exhibi-tion, Houston, 26-29 September2004. Digital Energy Journal ac-knowledges the copyright and re-grets not recognising this in theoriginal article


May- June 2007 - digital energy journal 5

Subsurface

With all of the costs associated withdoing business in today’s oil indus-try, operators are increasingly fo-

cusing on their decision-making processes– such as the quality of data they have, howeffectively they are using it, and how theymight apply it to make better, more accu-rate decisions that squeeze every availabledrop of oil from the reservoir.

Technology is helping with this chal-lenge, providing an assortment of real-timedata, collaborative computer environmentsthat allow people in many locations to shareinformation, and sophisticated modeling ca-pabilities that rapidly solve complex prob-lems.

The integration of these technologies in-to a real-time, collaborative environmentthat helps operators to make the best, mostaccurate decisions – and then act on thosedecisions in time to impact production – isthe “Digital Asset.”

Working within the Digital Asset, opera-tors can monitor, measure, model and ulti-mately optimise an asset.

Among other things, they can use thetime they typically spend on collecting,compiling, organising and distributing datato quickly assess a situation and make anynecessary adjustments.

They can also use real-time data as inputto self-learning predictive models that rap-idly provide results, allow for “what if” analy-sis, and handle hundreds of constraints in aslittle as a second.

WellDynamics and LandmarkThe integration of real-time data, predictivemodels, and intelligent completion equip-ment is one component of a company’s abil-ity to realize the vision of the Digital Asset.WellDynamics, the market leader in intelli-gent completion technology, and Land-mark, a brand of Halliburton Drilling, Evalua-tion and Digital Solutions, have recently col-laborated to “close the loop” on well opti-mization using this integration.

SmartWell intelligent completion tech-nology provides downhole control of flowinto or out of a reservoir, remotely and with-out intervention, and offers better manage-ment of recovery mechanisms associatedwith complex reservoirs, secondary recov-ery, and enhanced oil recovery (EOR), pro-viding real-time monitoring, zonal isolation,and subsurface control across extendedreach and multilateral wells. Reservoir man-agers can use the data from the SmartWellequipment to maintain reservoir modelsand to determine the optimal positions ofthe flow control devices.

The WellSolver application is a real-time,model-based optimisation application de-signed for individual wells. Using an ad-vanced neural network technology, Well-

Solver creates a very robust data proxymodel of the well. The model solves in lessthan one second, and is capable of runningcomplex optimisation strategies in relativereal time.

Combining real-time data with modelsThe integration of SmartWell data and theWellSolver software allows operators tomonitor, model, predict and optimise wellperformance scenarios using real-time pro-duction data, and to interface with controlsystems to effect closed-loop control of theSmartWell completion. Engineers use thedata as input to the model, run cases in onlyseconds, and then apply the results to movedownhole SmartWell valves to optimize pro-duction from the reservoir.

The integration also supplies valuableenterprise-wide business intelli-gence in a collaborative decision-making environment, where thereservoir management team us-es the data to forecast produc-tion needs and perform more ac-curate planning. This collabora-tive environment allows them toplan and execute proactive pro-duction and injection optimisa-tion strategies.

The environment also sup-ports the management of com-plex recovery methods, likechemical flooding, miscible re-placement, and thermal recovery.Resolving conflicting objectivesbecomes easier, such as increas-ing net oil production while con-straining water production.

Conventional ApproachTraditionally, reservoir engineershave relied on the dynamic reser-voir simulation modelas a tool to understandsubsurface conditions.In this situation, theengineer uses datafrom gauges and valvereadings, along withthe reservoir simula-tion model, and makesdecisions about bothindependently.

Some operatorshave tried to integrateSmartWell functionali-ty with reservoir simu-lation models to gainthe freedom and con-trol offered bySmartWell technology;however, the typicalreservoir simulator

Monitoring and modelsThere's a lot of talk in the industry about integrating real time well information with predictivemodeling software, but not so much about the value that can be achieved from doing it. We askedWellDynamics, a leader in providing intelligent completion technology to the upstream oil industry, andLandmark, a brand of oil services provider Halliburton Drilling, Evaluation and Digital Services, aboutthe benefits of their goal to bring an integrated solution to the industry.

Written by staff from WellDynamics and Landmark

A typical SmartWell completion. SmartWell monitors provide real-time downholedata to the WellSolver predictive model, which then selects optimal equipmentsettings.

that is currently available lacks the speedand robustness required and cannot effi-ciently optimise the downhole control func-tion (relative to a pre-defined objectivefunction).

As a result, any attempts to quantify thevalue of intelligent wells in a field applica-tion, or to determine the best way to oper-ate intelligent wells on a production or re-serve recovery basis, require frequent, labor-intensive interface with the reservoir simu-lator over multiple runs. Based on this con-ventional approach, reservoir simulationwith intelligent well capability and well op-timisation occurs intermittently, if at all.

The new approach of closing the loop ef-fectively resolves the problems of the con-ventional approach by successfully integrat-ing SmartWell technology with the Well-Solver predictive modeling software.

Reservoir models - what is the benefit tosupplying them with real time data from the wells?



Subsurface

7

Data management has become oneof the most important tasks facingsubsurface teams.

As more and more data is acquired it be-comes more important to manage that da-ta in order to avoid the cost and time issuesassociated with mismanagement of data.

Subsurface managers have a responsibil-ity to the company that they work for andto the staff that work for them to providequality data in a time effective manner.

Effective data management provides ahost of benefits that can be seen through-out the subsurface team.

Efficiencies will be realised both in termsof time and costs, and additionally produc-tivity will increase, but perhaps the mainreason for good data management is toprovide confidence in the data that is usedfor decision-making.

The three main factors that influenceconfidence of data are consistency, accura-cy and completeness.

It is now common practice for explo-ration and production companies to requiretheir asset managers and subsurface man-agers to provide auditable reserves figures.This means that the associated data and as-sumptions that go with that data need tobe preserved throughout the sub surfaceinterpretation workflow/lifecycle. In caseslike this it is important to be able to supplythe correct data and content.

Data management frameworkThe data management framework is a wayin which many different aspects of datamanagement can be defined under oneumbrella. It provides a way of working thatis sustainable and self promoting.

One of the most important points tonote is that the data management frame-work must have continued managementsupport.

A good data management frameworkneeds policies, industry standards, process-es and procedures for the functional datatypes.

The data needs to be accessible, havegood architecture / dataflows, have goodnaming standards, a publishing system, aphysical data management system, a quali-ty management system and good data cap-ture systems.

On the people side, you need a sustain-able system which people have ownershipof. You need roles and responsibilities, or-ganisation and leadership.

Data auditBefore embarking on designing and imple-menting a data management framework itis advisable to undertake a data manage-ment audit to understand what the specific

issues are within the team.The audit should include database inter-

rogation to gain an idea of existing dataquality, as well as 'interviews' with teammembers to identify the main issues andconcerns.

The audit results should drive the itemsto be included in the data managementframework and the priority of implementa-tion.

Data ownershipData ownership ensures that persons are re-sponsible and more importantly account-able for the data that the team uses and pro-duces.

Ownership should be assigned to all da-ta and those responsible should managethe data by tracking, maintaining and pub-lishing according to defined processes.

The levels of ownership within your teamwill depend on the size and complexity ofyour organisation. You should however,have the following key roles:

Management - usually an asset manageror subsurface manager who is accountablefor all data used and owned by the team

Data owner - technical experts who areresponsible for the specific data in their areaof expertise. These personnel should lookfor consistency, correctness and complete-ness of data as well as advising on publish-ing and flow through the team

Data custodian - responsible for day today data management activities and integri-ty activities

Data ownership should not be a difficultor demanding task if the correct standards,processes and procedures are in place.

Maintaining good quality subsurface data is a challenge nearly every oil and gas company isstruggling with. Paras Consulting expert Lee Hatfield gives his tips on how to do it

by Lee Hatfield, senior consultant,Paras Consulting

Good subsurface data

Data publishingAny unpublished data is usually hiddenaway in databases and filing structures,making it very difficult to find and use.

Data publishing is key to making data ac-cessible to those that rely on it. Data shouldbe published in the most suitable reposito-ry, whether it is an EDMS (Enterprise Docu-ment Management System) for reports or adatabase for some MDT (Modular Forma-tion Dynamics Tester) results. This reposito-ry should always have an owner.

The five main stages to publishing aredocument creation; putting in the content;approval / quality assurance / review; get-ting the final version; and publishing it forthe target audience.

When publishing data the followingrules should be applied:

Always add a date stamp to the dataAlways include a data ownerOnly publish relevant dataUse keywords to make searching and re-

trieving easierEnsure that data is published in the most

suitable placeIf possible, ensure that the team are no-

tified of new published data availability.

Data qualityAll exploration and production companiesstrive for perfect data quality and almostnone obtain that goal.

The reasons why are varied but it has toremain a high priority and something thatthe subsurface manager should be aimingfor. Items to consider include consistencyagainst standards, constant checking for ac-curacy, duplication and incomplete data,and ensuring that all information is up to

How to make sure your subsurface data is always of high quality



Subsurface

date and absolutely unambiguous.In order to ensure compliance and ac-

countability at a later date, it is also vital thatthe audit trail is available, consistent and ofhigh quality.

The important factors in ensuring quali-ty data are:

An awareness of data quality issues inthe team

Identifying critical dataEvaluating all current data problemsAssigning responsibilities and data own-

ershipAgreeing definitions and requirements

for all data typesDefining a process to identify and re-

solve data issuesSeeking expert guidance if necessarySustaining the effort on quality initia-

tives.

Data architecture and connectivitySubsurface managers should consider

whether their team has the correct data ar-chitecture. The data architecture relates tothe way in which data is stored, used andmoved around the system.

By defining a dataflow for each data typeshowing the main steps in the use, storageand responsibility of the data, the subsur-face manager should be able to see wherethe 'stoppers' or 'bottlenecks' are in theflow, and hence identify required changesin architecture.

Examples may include how differentdatabases and applications are connected,how data flows through them and how tomaintain data from master to working proj-ects.The example below shows part of a po-tential seismic data flow.

Each stage is colour coded to identifyownership and the flow of data through thesystem can be clearly seen. From this flowthe subsurface manager should be able toidentify where efficiencies can be made.

The first stage is that data is acquired orpurchased from a third party, including fieldtapes (in segd or segd formats), navigationdata and other reports.

The data is processed by a processingcontractor and sent on to the operationsteam. It is indexed by the storage contrac-tor.

The field data is indexed by a storagecontractor and sometimes quality con-trolled.

The processed data is passed to a dataloader for loading to applications.

After being loaded to the applications,the data is quality controlled by the opera-tions team, and if it is not good enough, theoriginal data is processed again.

Meanwhile the data in the applicationsis catalogued and sent into storage, andsometimes quality controlled.

Physical data managementPhysical data Management is the manage-ment of all physical media, reports, sectionsand so on.

These materials are usually stored andmanaged by dedicated storage contractorsbut the subsurface team has a role to playin how they are managed and what isstored.

Consider the following:

Does the team have robust proceduresand standards for getting physical data intothe correct storage supplier with the cor-rect metadata?

Do you issue retention dates with the da-ta?

Have you ever investigated the physicaldata held by your team to see if it still hasrelevance to modern working?

When archiving physical media into stor-age you should supply as many details aspossible so that the data is easy to find at alater date. You may want to set up standardtemplates for the data that you send tostore.

You should consider undertaking proj-ects that will increase efficiency and de-crease the amount paid in storage costs.These may include scanning of hardcopy re-ports, tape transcription to new media anddata rationalisations.

Effort must be made to implement andmaintain an index of all the data, with asso-ciated metadata. This index needs to be ac-cessible by all team members.

Policies, procedures, processes andstandards Policies, procedures, processes and stan-dards provide the backbone for data man-agement and ensure that all work done inthe data management domain has a firmfoundation for future development andgrowth.

The subsurface manager should identifygaps in the standards and procedures cur-rently used by the team and should put inplace an action plan to fill these gaps.

Standards would typically include nam-ing conventions for different data types.

Procedures can be written for physicaldata management, document manage-ment and control, most data types and da-ta loading into applications.

Whatever is chosen, the standards andprocedures should complement the way inwhich the team works, but should also pro-vide efficiencies.

They should be published in the publicdomain and should be actively communi-cated to all parties.

Data accessibility Data must be accessibility for it to have val-ue to the team.

This means that the data must be pub-lished in the correct place (see above) andapplications, databases and disk space usedby the team must be correctly configuredand managed.

Sustainability and data management cultureWhilst the subsurface manager investigatesand resolves items defined above, it is im-perative that all the work done is sustain-able, and that the subsurface team devel-ops a data management culture that growsand will actively promote data manage-ment in other parts of the company.

This should be done by involving theteam and if possible making data manage-ment part of staff annual objectives and in-centive schemes.

Once over the initial push of data man-agement activity, the subsurface manager

should find that his/her staff become moreamenable to data management and thebenefits that it brings.

In effect the subsurface manager shouldtry to help the team help themselves.

In order to promote sustainability thesubsurface manager should consider insti-tuting periodic reviews to consider what isand isn't working.

Focal points are vital for teams manag-ing data, and data management tasksshould be given time on a daily basis.

All data management issues should beactively promoted by the subsurface man-ager at all times, in order to sustain consis-tency and team working.

Ultimately, it is imperative that subsur-face managers are seen to be putting time,resources and expenditure into data man-agement. Failure to do so risks the conse-quences of loss of data, inability to prove re-sources and take responsibility for individ-ual datasets.

This in turn potentially leads to lowmorale within a team as they spend largeamounts of time looking for data thatshould be easily accessible, and ultimatelya lack of confidence in both the data andthe decision makers, usually the subsurfacemanagement.

Lee Hatfield, senior consultantof Paras Consulting

About Paras Consulting

Paras is an international consultingcompany, highly regarded for itsability to define and resolve difficultchallenges within the explorationand production world. Independentof any technology, Paras is able to as-sist clients in selecting "best in class"solutions, and develop strategies fortechnology enabled change.

With a wide variety of senior-lev-el experience including informationand data management, investmentdecision making, subsurface andcapital allocation process improve-ment, Paras consultants delivermeasurable, lasting business valueacross the whole E&P spectrum.



Subsurface

The 11th International Conference onPetroleum Data Integration, Informa-tion and Data Management, organ-

ised by Philip C Crouse and Associates, Inc,was for the first time, held in Europe as wellas in Houston this year, in Amsterdam Mar-riott Hotel on April 19-20, co-sponsored byEnergistics and Shell E&P.

One emerging theme was that there isno quick solution to the challenge of datamanagement, solving all the needs for inte-grating, accessing and storing the exponen-tially growing mountain of data.

Sushma Bhan, information manage-ment discipline chief, exploration and pro-duction research and development, Shell,set the theme by explaining how Shell's ap-proach has been to have a number of small-er knowledge management efforts, withleadership endorsement and high manage-ment accountability, rather than one mas-ter project.

Mr Bhan explained how the challengeof information management in researchand development is very different to in oth-er parts of the company, because in re-search the emphasis is on wisdom andknowledge, rather than on data and infor-mation. Research and development peopleare often resistant to change, and dislike thelack of flexibility often found in generic ITtools, he said.

Staff often stay in the same companydoing long term research, and thereforehave vast tacit experience to pass on - notsomething that is easy to do in current datamanagement IT solutions. Investment in re-search and development IT is typically be-low average for the industry.

Dag Heggelund, president and CEO ofautomated data cleaning company Inner-logix suggested that with the challenges ofincreased data volume and a strong de-mand for data resources, people could startthinking of a company's data system as aninformation factory, requiring the samequality control on input as well as output.

All too often we are in "reactive mode"rather than working more efficiently in"proactive mode, he said.

Good quality management followingDMAIC (define, measure, analyse, improve,control) guidelines will enable a companyto have a decisive competitive advantageover others, he said.

Vidar Andreson, product manager of In-nerlogix, explained how it is vital that rulesare established over data quality, coveringcompleteness, consistency, uniqueness, va-lidity and content.

It is good to have tools which can showwhich areas need cleaning up, he said. Dataquality statistics can be made available onthe company intranet - providing a "nameand shame" motivation for users.

This kind of motivation always has a

downside however -how to prevent usersentering "null" resultsto make the metricslook good.

Gerhard Thon-hauser of the Universi-ty of Leoben, in Austria,spoke about data qual-ity control in the con-text of measuring andmanaging sensor data.The important stepsare data standardisa-tion (in this case usingWITSML); quality con-trol; quality reporting;data compressionwhere appropriate andgood access / visualisa-tion, he said

If done correctly,any problems can beidentified, flagged andcorrected automatical-ly. This can be done invery close to real time,although applying ex-tra filters for outliers and noise reductioncan increase the access time.

ArchivingLee Hatfield, senior consultant with Paras,talked about data obsolescence and archiv-ing, explaining that archiving should beprocess driven, using core principles, includ-ing standard neutral formats, good data in-dexing using mandatory metadata, andwith dedicated resources.

Discussions over whether archivingneeds to extend to software versions andoperating systems continue, but with digi-tal storage becoming cheaper and lessspace-consuming, this is an argument thatmay eventually resolve itself, he said.

Data ownership continues to be a big is-sue - it is vital for the efficient running ofarchiving systems to have ownership of thatdata. Assigning ownership implies account-ability and responsibility, which, in line withan overall data management policy, can en-sure that archived data continues to be ac-curate and accessible, he said.

In the conference discussion, it was stat-ed that 98% of legacy data is never re-ac-cessed, according to figures from outsidethe E&P industry. But how do you decidewhich 2% will be accessed? Clearly there isa requirement for at least a basic level of in-dexing, but often it is a question of prioritis-ing which data set to index first.

With company reorganisations andmergers an everyday fact of life in the indus-try, it is all too easy to allow data to becomelost in the system.

Regulatory compliance forms a large

One emerging theme of Philp C Crouse's first ever European conference, was that there is no single wayto fix oil companies data and knowledge management challenges - but enforcing universal rules goesa long way to help By Tracey Dancy of Paras Consulting, consulting writer to Digital Energy Journal

No single data management solution - Crouse conference

part of the motivation for keeping legacydata, although the length of time requiredvaries greatly, and may require keeping amountain of data in order to access the en-velope of information needed.

Standards Alexander De Leon with NCR Teradata tooka look at the lessons learned by WalMart inthe US, where all transaction data goes intoa central data warehouse, which can con-tain a number of data types and applica-tions, and is fed out to the decision makersand users, he said. WalMart's system is up-dated by 500 terabytes of data every 5-10minutes. The starting point with this solu-tion - as with all others - is to create stan-dards at least company wide, if not industrywide, he said.

Randy Clark, president and CEO of En-ergistics, gave an overview of the businessvalue of implementing Energistics stan-dards. At a time when "Intelligent Energy" isat the forefront of all E&P business drivers,there has never been a more urgent time tolook seriously at open data exchange stan-dards, he said.

The upstream oil and gas industry be-lieves that increased standardization can re-sult in billions of dollars of additional valuein the area of production optimization,alone, and knows that there are additionalbillions to be saved in other areas of thebusiness, he said.

"Standards developed but sitting on thevirtual, or any other, shelf have no businessvalue, and Standards developed in a collab-orative fashion but not widely adopted on-ly have potential business value. However,

Liv Maeland, senior Advisor for exploration and production data management withStatoil, speaking at the PNEC Conference



Subsurface

standards developed in collaboration, wide-ly adopted by the industry and deployed inthe oilfield have tangible business valuethat result in improved rates of return, pro-duction optimisation and operational effi-ciency," he said.

Alan Doniger, chief technology officerof Energistics, spoke about Energistics' proj-ect to develop a global unique well identifi-er, or GUWI, standard.

Energistics is working together with IHSEnergy to ensure that GUWI's are enabledthroughout the industry, he said. IHS Ener-gy will manage an international GUWI data-base, incorporating information about ex-isting wells, and ensuring that all newly reg-istered wells have a unique number, are reg-istered in their database and are madeavailable to the industry when required.

At the same time IHS will continue tomaintain the additional information theyhold about wells, which will, as before, becommercially available to clients who re-quest it, he said.

Trudy Curtis, CEO of the Calgary basedPublic Petroleum Data Model Association(PPDM), talked about the need for data tobe kept in the long term, not just for the life-time of any asset, as we cannot tell in ad-vance what and when information might bevital.

She emphasised the need for process-es, policies and procedures to be imple-mented, to ensure data use and access isidentified and documented at every stageof the workflow. Integration is hard work -there is no easy solution, but as the datamountain grows, the implementation ofgood solid workflows at ground level willensure that future data is more manage-able, she said.

Pre-stack seismic Janet Hicks, marketing development direc-tor with Halliburton Landmark, talked aboutusing pre-stack seismic data together withprocessed data to improve geophysical in-terpretation.

The market perception of using pre-

stack data has been that it is too big for in-terpretation or too specialist, she said. Butyou could store the entire data for (for ex-ample) The Heidrun Field, including pre-stack data, can be held on a 60Gb iPod, andthe data can also be made available over anetwork.

Much pre-stack data is held on tapewith questionable quality, and needs to beremastered before it can be used. But withtechnology in this area moving so quickly,this is clearly an area that may provide bet-ter interpretative models in the future.

Social networks David Zappa, knowledge managementmarketing manager with Halliburton'sBaroid Fluid Services, spoke about increas-ing knowledge sharing by developing em-ployee social networks.

Based in Caracas, Venezuela, Mr Zappaknows well the problems associated withbeing away from the central knowledgehub of any company.

The concept of structured networkingwithin a company is not a new one - thoughthe Halliburton answer has been to providethe applications to formalise the sharing ofknowledge and expertise through a de-fined social and professional network.

The advantages are many and disparate,and the ability to use and share knowledgein the network is tied to employee perform-ance - good networking skills are rapidlybecoming a requirement for advancementto management levels.

This presentation did provoke thequestion - if there are incentives to employ-ees to participate, how much of that is tiedto their personal goals rather than thesomewhat altruistic aims of the programmeitself?

In the meantime, it is clearly a way inwhich knowledge, particularly heritageknowledge, can be shared with a wide vari-ety of participants, based on the dominanceof more flexible working tools, as opposedto traditional networking methods.

Taxonomy vs folksonomy Alessandro Allodi, team leader documentsand knowledge management with Petrole-um Development Oman LLC, spoke abouttaxonomies and folksonomies.

Taxonomy is the more traditionalmethod of tagging data - a rigid hierarchi-cal structure based on Dewey Decimal Sys-tem type classifications.

Folksonomy, on the other hand, is basedon an open ended labelling system - whereusers contribute to tagging, using familiar,shared vocabularies. These are alreadywidely used by public websites like Amazonand delicious to great effect.

There are potential downsides to folk-sonomies however - users may not be con-sidering the "common good", and could usetagging to wilfully mislead other users - andthere is clearly the possibility of a "tagswamp" - where tagging the minutiae of da-ta leads to thousands of unwanted hits.

Metacarta

Kay Sutter, energy manager with Metacartapresented her company's way of dealingwith unstructured data, often the type ofdata that is left out of technology solutionsbecause of the complexity involved in in-dexing.

Energy company employees produce -and purchase - millions of documents, andthese are stored in a number of ways -repositories, servers, even personal laptops,she said. Finding and accessing data is fun-damental to business value, but this task istruly the ultimate needle in a haystack.

35-50 per cent of information is notfound by typical search engines, and 30 percent of the time available to knowledgeworkers is used in searching for documentsthat are not found. With 80 per cent of thedata stored by the average oil company un-structured, a solution to this is vital.

Metacarta's solution is to index the doc-uments around the geographical referencepoints mentioned in them. Metacarta's ap-plication can combine structured and un-structured data, using familiar interfaces,that can be called up using geographicalreferencing.

The information does have to becleaned up first - some standardising is vi-tal, and intelligent tagging methods willhave to be employed - many documents inthis industry will have a tag for "Houston"for example, but not be relevant to thatarea.

Kay Sutter, energy manager withMetacarta

The PNEC conference audience



Subsurface

Oil and gas companies are very goodabout learning about the subsurfaceup to about a few metres around a

well, obtained from sensors inside the well (onwireline).The data can be over 90 per cent ac-curate.

The problem arises when people try towork out what is going on between the wells.

Exploration and production managersknow that seismic is useful for mappingshapes and getting some attributes about therock, but it can give very wrong informationwhen used together with well data to map, in-ter-well, geology and petrophysics informa-tion.

The innovative steps in Geodirk's methodsstart with means to map how a sediment vol-ume was buried, and whether there were any-thing abnormal in the burial or if it happenednormally.

If you understand that the sediment wasburied normally, then via GeoDirk, you canconvert seismic data more accurately into rel-atively complete geological and petrophysicalmodels,using methods evolved from those pi-oneered 40 years ago.

But if there were anomalies in how the sed-iment was buried,then seismic data cannot beconverted so accurately into geology or petro-

physical models, unless such anomalies are‘normalised’, via GeoDirk.

Geodirk evolved from the ‘Spiral’ project re-search, (some of which was supported byPhilips and ARCO), evaluated by a UK govern-ment Department of Trade and Industry com-mission of Plymouth University, which report-ed it to be the biggest breakthrough in E&Pgeoscience of the 90s.

This was extended whereby now, GeoDirkexpert systems claim world records for bothspeed and accuracy of working seismic intogeology and petrophysics.

GeoDirk believes it can help provide twiceas much risk relevant knowledge for the samecost as other companies,and invites customersto test this.

"We would like to invite a National Oil Com-pany,or Hydrocarbon Ministry,to host an eventto assess the performance of seismic interpre-tation workstations available to them," saysKen Armitage of Geodirk.

Geodirk has tested its methods in manyprojects, by comparing seismic, worked minuswell control, resolution about 10m, againstover 100 km of well data, resolution 0.2m.Thisincluded an audit, using PAD (Irish govern-ment) data in the Porcupine Basin, Ireland.

Mr Armitage says that the audit showed

that seismic can be quickly processed at over90% accuracy into geology and petro-physics, without well data, and better withwell data.

It showed that four out of five wells madeavailable after processing, were drilled intostructures in which insignificant closed reser-voirs existed.

The company is offering service process-ing and training courses in its methods in theIsle of Man, and is also planning with othersto enable a multidiscipline PhD project atTrinity College, Dublin, to explain, documentand apply the new processes and comparethem with what was being done previously.

GeoDirk contends that today?s explo-ration and production efficiency levels arerelated to inability to quantify about 40% ofrisk relevant information, per cell.

Geodirk believes that this project shouldhelp exploration and production efficiencyin Ireland increase by 15 per cent through itsmethods, paving the way for use in otherbasins.

Having better subsurface knowledgemakes it possible to reduce drilling risk, andalso make sure the production facilities areengineered for the correct flow rate.www.geodirk.com

Isle of Man company Geodirk has some interesting new methods to improve knowledge about rockformations between wells, by combining seismic data with measurements from inside the well, andbuilding up a picture of how the rock formed.

Subsurface uncertainty


P e t r o l e u m N e t w o r k E d u c a t i o n C o n f e r e n c e sA Divis ion of Phi l ip C. Crouse and Associates Inc .

1 1 T H I N T E R N A T I O N A L C O N F E R E N C E O N

PETROLEUM DATA INTEGRATION INFORMATION AND

DATA MANAGEMENT

A M S T E R DA MApril 19-20, 2007

Amsterdam Marriott HotelAmsterdam, The Netherlands

H O U S T O NJune 27-29, 2007

JW Marriott Hotel - GalleriaHouston, Texas USA

Join your associates for the best value, international, power-packed conference. You will profit from the mix of technology, future potential and current application realities presented.

Visit us online at www.pnecconferences.com

T H E DATA E X P L O S I O N C O N T I N U E S

Key technologies and drivers are requiring new practical solutions and innovative thinking.

Hear critical papers presented from the leaders of data, information and

knowledge management, sharing with you their insights of the current

challenges and real world data management solutions. This is the most power-

packed, professional conference in the industry, providing you immediate return

and networking opportunities with managers leading the data explosion.

Presentation authors are global. This event has been designed for data and

information management practitioners and users.

C H A L L E N G E S FO R T H E O I L A N D G A S I N D U S T RY

:: Integration & Processes :: Quality of Data

:: Cost Effective Solutions :: Interoperability

:: IM and Knowledge Management :: Quantity Management

CONFERENCES & EXHIBITS



Subsurface

13

month to month, and operations engineerswork the well from day to day.

Surrogate simulatorsLandmark has developed what it calls "sur-rogate models", which are not as sophisti-cated or complex as the full reservoir simu-lation model which have complex physicsequations, but can run much faster. The sur-rogate models run on neural networks.

They are basically short term models ofwhat is happening, which run off the mainsimulator. Something like a simulator 'lite'.

The surrogate models can reproduce areservoir simulation, or network flow simu-lation.

As the main simulation model is updatedin a process called history matching, whichmight take a number of weeks or months, itis used to train the surrogate model. But thesurrogate model can run much quicker, inseconds, to provide faster day to day infor-mation.The surrogate model can also be up-dated as needed (for example on a day-to-day basis) using data measured directlyfrom the field.Thus, the surrogate model cangive a clearer indication of what is likely tohappen over the short term.

So you have a situation where the bigreservoir model is updated every couple ofmonths in a long complex process, and thesurrogate model updates itself all the time.

The surrogate model can be connecteddirectly to sensors on the wells.

"They are very quick to adapt, and validover shorter periods of time," he says.

The surrogate models do not have somany complex differential equations, as tra-ditional simulators do, but they can run inseconds.

This is a different way of working withsimulators, that is, using the sophisticatedsimulator to train a neural network that canprovide information to an operations engi-neer or manager that can be used "pro-acively" in the field to improve oil or gas re-covery and efficiency.

Landmark has an interesting vision -enabling the people who actually op-erate the oil and gas wells to make use

of the reservoir simulators.Reservoir and production engineers have

been using simulators for many years, con-tinually refining them, so they make whatseems to be a very accurate model of whatis happening underground, so it can beused to make decisions about how to pro-duce the reservoir.

But the problem is that the people whoare actually working the reservoir, the oper-ations managers, are a long way away fromworking with simulators.

Operations managers typically look aftera large number of wells, and limit their at-tention to the wells which seem like theymight have a problem, eg a drop in produc-tion, water production, slugging or sand.

This is a behaviour pattern which couldbe described as 'reactive,' continually fixingthe most obvious field problems.

Landmark believes that a large amountof value could be achieved, if operationsmanagers could employ a more 'proactive'process, that is fixing problems before theyoccur.

In other words, they might be alerted toan increasing likelihood of water entering awell, due to information from the simulator,and could then take action accordingly (per-haps decreasing water injection in certaingeologic layers, or choking the well).

This kind of proactive operations getsmore critical in more complex wells for ex-ample with several different zones whichcan all be choked and controlled independ-ently with the latest interval control sys-tems.

When a problem occurs, for example wa-ter entering the well, it is not always easy tofix it reactively - for a start you have to workout which zone the water is entering thewell at.

But if you always have a continuous ideaabout how the water front is moving under-ground and access to accurate computermodels, you can see how close the front isto each well perforation and close it in ad-vance.

You can do sophisticated things like setthe system so flowrate from one zone canbe choked back relative to another zone, sothere is always more fluid coming out of thesecond zone.

You can change gas zones and oil zones,to tweak the gas-oil ratio, for example if youwant to use the gas to give the oil flow a lift,but still maximise the oil production.

You might also want to control the pres-

sure drop from the reservoir to the well, toreduce the risk of sand production.

You also have good data that can tell youwhen you need to do a well clean up, or useacid to enlarge the pore spaces.

It is possible to develop very sophisticat-ed tools for operations managers, such asdashboard tools which tell them the statusof all their wells at a glance. "They can high-light problem wells and highlight solutionsmuch quicker," says Landmark research fel-low Stan Cullick.

Take-upPersuading operations managers to spendmore time with simulators is far from easy.

"We're finding it to be very difficult," saysMr Cullick. "There's a very slow take-up. A lotof it has to do with organisational barriers,functional barriers."

Confidence in simulation models is a bigissue. In order to be persuaded to use thesimulators, operations managers have to beconvinced that the information comingfrom the computer software is better thantheir instincts from years of experience.

One of the problems, according to MrCullick, is that many oil and gas companiesare still only updating their simulator mod-els every 6-12 months.

It's not surprising that operations man-agers, responding to reponses at the well-head on a daily basis have little confidencein them, when they might describe a pictureof the reservoir which is 12 months old.

"If they see a simulation model predic-tion that was done 6 months prior, and theycan see a divergence in what's happeningfrom day to day, their level of confidencemay not be high."

"The reservoir behaviour gets discon-nected from the predictive model," he says.

To get the most out of a simulator, you al-so need to have reasonable expectations ofthe level of accuracy which will be achieved.

A simulator can't tell you that, for exam-ple, water breakthrough will happen at 3pmtomorrow; but it can indicate the likelihoodof water breakthrough over the next 30 daysas long as the model is up-to-date with thehistorical performance.

Most operations engineers, productionengineers, and reservoir engineers havecommon training, and understand each oth-er's jobs well, but they often have a differ-ent time focus, Mr Cullick says. Reservoir en-gineers who are the primary owners of sim-ulation models might focus on the next 2-3years of development. Production engi-neers, who are the primary owners of wellproduction models, monitor the well from

Bringing simulation to the wellheadDigital Energy Journal spoke to Landmark Technology Fellow Stan Cullickabout Landmark's vision for bringing reservoir and well simulation right up tothe well head, as a tool operations managers can use.

Stan Cullick, Technology Fellow,Landmark



Communications and Automation news

www.caprock.comOil and gas satellite communicationscompany CapRock communicationshas signed a deal with offshore ship-ping company Otto Candies, to supplyVSAT communications to its fleet ofsupport vessels in the Gulf of Mexico.

It is using CapRock's stan-dard broadband package, withguaranteed data speed of 144kbps to 256 kbps.

Otto Candies will use thesystem for sending data such asfuel levels, weather / sea condi-tions, and information on cus-tomer instructions.

Company staff will be able tocall the vessels at any time fromtheir home or mobile phones,rather than only be able to callfrom the office, as they did pre-viously.

Otto Candies is particularlypleased that the new systemprovides an always on connec-tion for a flat fee, rather thanpaying by the minute or thekilobyte, as with its previoussystem.

A problem with the previoussystem was that employeeswould often write e-mails in anabbreviated style so they wouldtransmit faster, and this createda margin for error.

CapRock VSATcomms for OttoCandies

www.nessco.co.ukScottish communications systemscompany NesscoInvsat has won a con-tract with Petrobras to supply a com-munications system for the Mexilhão1 (PMXL-1) platform.

The system will include tele-phone exchange, radio commu-nications, GMDSS, personal ad-dress system, satellite terminalsand TV reception, and a back-up power system.

NesscoInvsat satcom contract withPetrobras

The contract was awardedby contractor Mauá Jurong ofSingapore. The system will beinstalled at Mauá Jurong's ship-yard in Rio de Janeiro.

The platform will work theMexilhão gas field in the SantosBasin region, offshore SãoPaulo. The platform is 230mhigh and the largest offshoremetallic structure ever erectedin Brazilian waters.

www.nessco.co.ukUK satcoms company NesscoInvsathas a contract from Single Buoy Moor-ings (SBM) of Monaco to supply a com-munications system on the FloatingProduction Storage and Offloading(FPSO) vessels Mondo and Saxi-Batuque, owned by SBM and Sonan-gol, operating in the Kizomba field,offshore Angola.

The system will include apublic address system, generalalarm systems, telephone sys-tem, GMDSS radio, crane radios,Inmarsat satellite communica-tions, a telecoms emergencyshutdown system, closed circuitTV, navigation aids, weathermonitoring including radar seastate monitoring, and testequipment.

The systems will be installedat the Keppel shipyard in Singa-pore.

Meanwhile NesscoInvsat hasa £200,000 contract to supplyVSAT satellite communicationsystems for a FPSO currentlybeing converted from a tankerin Poland, to operate in the Sirifield offshore Brazil. It will be

NesscoInvsat satcoms on FPSOs off Brazil and Angola

operated by Teekay Petrojarl forPetrobras.

The contract was given byTeleconsult A/S. It includes Cand Ku band VSAT systems,satellite TV and an entertain-ment distribution network.

It will enable both Petrojarland Petrobras to extend theircorporate networks to the ves-sel.

Avin International installs Iridiumsatcom on tankers

Greek tanker company Avin Interna-tional has installed Iridium satellitecommunication phones on its fleet of22 oil and product tankers.

It will also install an Iridiumterminal in its company head-quarters in Athens.

This will allow the companyto phone its ships without hav-ing to use fixed telecom net-works at all, and hence deny-ing fixed telecom operatorsthe opportunity to add a mark-up to the Iridium prices.

Keeping the call routingcompletely within the Iridiumnetwork also ensures that thecommunications are secure.

The systems are being in-stalled by Navarino Telecomunder a service agreementwith satcom company Stratos.

The system will also be usedfor seafarers to make phonecalls home, using pre-paid call-ing cards, so their calls are keptseparate from the companyIridium account.

The equipment will be inte-grated and tested at NesscoIn-vsat's workshops in Westhill, Ab-erdeen, and then installed at theshipyard in Gdansk.

Once the FPSO is in its stationin the Campos Basin of Southeast-ern Brazil, NesscoInvsat will man-age the VSAT service, connectingthe vessel to Petrojarl's Norwegianheadquarters.

Using a NesscoInvsat communications system - Single Buoy Moorings' FPSO

Merrick Systemsand BJ Servicesconduct downholeRFID test www.merricksystems.comMerrick Systems together with oil-field services company RJ Serviceshave conducted a successful pilot ofdownhole RFID (Radio FrequencyIdentification) tags.

The tags ran for over sixteenhundred hours in the field at 343Fdegrees under different fluid situ-ations including acid.

RFID tags can be used in assetmanagement to improve howdownhole operations are per-formed, how equipment controlsystems are applied, and howcomponents are selected, sup-plied, and managed to upstreamoil and gas operations.

According to Merrick its keydifferentiator is that it works bytaking a new approach to the de-sign and materials used to createcommercially reliable downholeRFID tags. Merrick's Rig-Hand andTool-Hand software products canbe used with the RFID tags to ef-fectively track and manageequipment through inspection,transportation and operations.

Merrick has also recently ap-pointed Philippe Flichy as VicePresident,Business Development.Prior to joining Merrick Systems,Philippe Flichy was co-founderand CTO of GlobaLogix, and hasalso worked as Solutions Manag-er Oil Field Services North andSouth America at Schlumbergeroverlooking Real Time Produc-tion Optimization.

www.gotoemerson.comEmerson and Qatargas have signed along term alliance agreement, mak-ing Emerson the preferred supplier ofdigital automation solutions andQatargas a preferred customer for thecompany's oil, gas and liquefied nat-ural gas (LNG) facilities.

The agreement will build onthe strength of the two compa-nies' previous collaboration to au-tomate six multi-billion dollar fa-cilities in Ras Laffan over the pastfour years.

As automation supplier on ex-isting and future Qatargas proj-ects, Emerson will engineer,proj-ect manage, install, commission,and provide long term support onthe automation solutions for theoil, gas and petrochemical facili-ties in Qatar.

In addition,Emerson will installits PlantWeb digital plant architec-ture with FOUNDATION fieldbuscommunications, integrate third-party equipment,and provide in-formation technology services.

Emerson to supplyQatargas


increases.If there is latency involved (eg a delay

when sending data to and from a satellite),this can cause problems elsewhere in thetelecoms network.

It is increasingly frequent for peoplefrom different companies to be sharing thesame computer network, for example ifemployees from different service compa-nies are working on a rig, and BT can act asa trusted third party to make sure every-one can access what they need and the se-curity is robust.

Services BT is making a big push to develop its serv-ices offering.

The company believes there is a busi-ness 'sweet spot' of providing combinedcomputer networks, managed IT and serv-ices, such as consulting; in effect, being anoutsourced provider of a company's com-puter and voice communications networksand everything that goes with it.

A big recent acquisition was INS, an ITconsulting and software company based inMountain View, California with 7,000 em-ployees (see bt.ins.com). The acquisitionwas made earlier this year.

BT is also developing its IT securityservices.

As well as the UK National Health Ser-vice IT network, BT runs the data commu-nication networks for many cash (ATM) ma-chines in the UK, as well as for one of theworld's largest oil field services organiza-tions.

In October last year, BT bought Coun-terpane, which provides network securityservices for retail and financial services.

BT is keen to persuade oil and gas com-panies that they do not necessarily need tomanage their data security themselves. Da-ta security is getting increasingly complex,so there are benefits in working with acompany which has the expertise to man-age it.

BT a new service offering for oil and gas

UK telecoms company BT has quadru-pled its US oil and gas business since2004, and is making an aggressive

sales push in the industry, setting up con-nections to its network in areas of oil andgas activity, such as Brazil, Russia, India, Chi-na and the Middle East.

Ross Burley, head of US oil and gas sales,BT, reckons the company can provide tele-coms services in these places "probably bet-ter than anyone else in the oil and gas in-dustry."

BT now has 150 employees dedicated tooil and gas, many of which are based inHouston.

The company believes it has made greatstrides to get beyond 'British Telecom' - itwas originally the UK government ownedtelecom company.

Now, of its 100,000 employees, 30,000 ofthem are working in global services, with of-fices in over 50 countries.

The oil and gas service offering hingesmainly around MPLS (multiprotocol labelswitching) network, which is essentially aglobal data network (like the internet), butfaster, more secure and under the control ofone company (BT).

This means that you can do many thingswith MPLS which you would like to do withinternet but can't - such as having guaran-tees of reliability, security and data speed.

The internet is fairly reliable, fairly se-cure, and fairly fast. Most of our e-mails ar-rive, and it works most of the time for voicecommunication (VOIP). You can get gooddata speeds on it most of the time.

But if you want something more reliableand secure, then MPLS is the next grade ofservice.

MPLS is true convergence betweenvoice and data; both travel down the samecables in internet packets.

BT is investing $20bn in its global IP net-work service, including acquisitions of 17companies around the world, to put it to-gether. It spans 170 countries.

BT continually optimizes its MPLS net-work, to make sure that there are no bottle-necks everywhere, all the data can get fromits source to its destination very quickly.

Data packets can be labeled as to theirurgency and take priority through the pipe.For example, it is much more important thatdata packets in a voice communication orvideo-conference arrive immediately (oth-erwise the conversation is broken), then da-ta packets in large file transfers.

Interestingly, there does not need to beany barrier between your internal corporatenetworks and external ones. BT can manageit all.

To illustrate its potential to managelarge, complex, secure internal corporatenetworks, BT recently won a contract tomanage probably the world's most de-manding computer network, that of the UK'sNational Health Service. It will run the net-work both within the hospitals and between

hospitals.The data networkcarries people's confiden-tial health data, and realtime data from scanningmachines, and any down-time could result in doctorsnot having the data theyneed at a crucial time. Thisis possibly a bigger net-working challenge thananything the oil and gas in-dustry faces.

There are plenty morebenefits to having a global,managed network at yourfingertips.

You don't need to man-age your own companynetworks any more. Tuningeven small (eg 20 comput-er) networks within one of-fice so they work as fast as the internet is nota job for amateurs, as this writer has foundout.

When employees are travelling in othercountries, they can route their mobilephone calls over it, so no more expensiveroaming charges.

You can do high resolution videoconfer-encing at reasonable cost from anywhere inthe world whenever you like.

You can even connect closed circuit TVcameras to it, and monitor them whereveryou like.

"We look across becoming a new breedof services organisation, from just a carrierclass company," says Mr Burley.

"BT is absolutely moving to a new breedof services organisation."

Overly high network expectations One problem that probably all companieshave to grapple with is overly high expecta-tions of their computer networks from users.

It takes a while for people to grasp theidea of the internet which connects every-thing to everything. But having grasped thatidea, people can then easily start assumingthat you can get any data anywhere, so forexample a person working on rig can get in-stant access to a reservoir model over thecorporate network.

There are plenty of other potential prob-lems with making networks reliable, whichpeople do not necessarily think about, andBT makes it its business to be aware of andgood at sorting out.

Many countries around the world havestrong regulations about moving data outof the country, or need you to apply for li-censes, so they can keep a check of what isgoing on.

"If you perform seismic testing on a pieceof ground which another organisationviews as their asset - you cannot necessarilytransport that seismic data (property) out ofthe country," says Mr Burley.

Furthermore, as the data size increases,the complexity of the telecom network also

We all understand what a traditional telecoms company does - but BT is seeking to redefine it. Thecompany has quadrupled its US oil and gas business since 2004. We spoke to head of US oil and gassales Ross Burley.

BT is building a superfast and reliable worldwidedata communications network


Communications



Communications

One provider Many oil and gas companies go to BT be-cause they like the idea of having one tele-coms provider for the whole company,rather than hundreds of providers.

Many oil and gas companies do businesswith hundreds of different telecoms suppli-ers and internet service providers, and thecontract management gets extremely com-plex.

Some of the telecoms providers are theoriginal national telecoms companies, fromthe old days where each country had a na-tional telecom company you had to dealwith there. Others were originally setup bycompanies which have since been acquired.

Rather than have in house staff spend-ing time managing all of these contracts, oiland gas companies can move their entirenetwork onto BT's MPLS.

BT provides a 'tiered' approach to themanaged network.

On the top tier, it provides total outsourc-ing services for a company's telecoms. "Wetake ownership of sets of people, and rela-tional capital, and migrate those services on-to BT's platform," says Mr Burley.

In the second tier of service, BT will takeownership of a company's existing telecomscontracts until they expire, then move themonto its own network.

In the third approach, BT will act as a tele-coms contracts manager (a "manager ofmanagers" approach), but BT will not man-age the oil company's staff.

Digital networked oilfield For the oil and gas industry, BT has devel-oped what it calls its 'digital networked oil-field' solutions suite, a service to connect to-gether wells with corporate offices, so com-panies can monitor and optimise produc-tion in real time.

BT is not offering services in installingequipment in wells or selling modelling soft-ware of course, but envisages it could be'prime contractor' in a project to install acomplete digital oilfield working with othersoftware companies, which it already has ahealthy working relationship with.

Services can include designing the solu-tion and infrastructure, and working with re-spective partners to implement it.

BT would like to work with oil compa-

BT's Network Control Centre at Oswestry, UK - making sure that all the data is moving smoothly with no bottlenecks

nies for the whole life of the asset from ex-ploration to production.

For example, during the geologicalstage, it could provide rugged laptops withdata and voice connectivity over Iridium andInmarsat.

By the time the field moves into produc-tion, it is providing communications for 1000people, and a whole intranet system.

At the exploration phase, says head of oiland gas marketing Matthew Owen, thingsare kept very secret, and the company IT de-partment doesn't normally get to hear any-thing about what might be needed until thelast minute, when the company suddenly re-quires 50 rugged laptops with satellite com-munication, which work technically andlegally in the middle of the desert in Africa.

"Companies are often knee-jerk with ex-ploration," says Mr Owen. "They say, we need50 laptops at short notice in Bolivia. We sug-gest, you sit down with BT in confidentiali-ty."

"People don't consider the need to get li-censes for sat-phones in certain centres."

BT suggests it takes a role as a trustedthird party to the oil company, and it canprepare whatever equipment and telecomsservices the company needs well in ad-vance.

BT can then help the company expand itscommunications system as it moves to-wards producing the field.

Other research BT has a large research and developmentoperation. Two areas of potential interest tothe oil and gas industry are its research intofibre optics and RFID.

As part of its research into fibre optic ca-bles, BT discovered that they are so sensitivethey can be used to listen; they are so sensi-tive that an audible sound can cause a dis-ruption to a signal through them.

So this acoustic sampling could be usedto monitor leaks in a pipe, and tell with fairlygood resolution where the leak is by listen-ing to a hiss, rather than the conventionalmethod with is trying to detect a leak usingflowmeters and comparing input and out-put.

BT has been researching how radio tags(RFID) can be incorporated into computernetworks, and sees plenty of oil and gas ap-plications, for example putting RFID chips in-to riser pipe to make it easier to track whichpipe is where and how many times it hasbeen used.



Communications

how the need plays into the business strat-egy, examining at every point the strategictrade-offs between improving asset avail-ability and asset utilization.

Design a technology architecture thatwill encompass all stakeholders, includingoperations, safety, security, maintenance,and information technology.

Create a policy manual that sets clearcriteria for implementing a wireless solu-tion.

Select and purchase hardware and soft-ware that is proven, scalable, and capableof understanding diverse protocols.

Prior to implementation, conduct an RFsite survey to identify wireless signal pathsand sources of potential interference.

Build ongoing maintenance, support,and optimization services into the plan.

Creating unified systems managementis not just good practice; companies thatattempt to implement more than a few tac-tical solutions without a unifying plan aretaking a great risk.

Few companies have the resources tomaintain staff necessary for all of thesesteps, especially because demand for spe-cialists with relevant skills is very high.

As such, outsourcing to one of the emerg-ing specialist firms may be the most cost ef-fective strategy for companies that want toenjoy the benefits of wireless networkingmost immediately with the least risk.

Wireless on offshore oil platforms

Wireless networking is now afford-able for offshore production plat-forms.

The cost of low-power wireless networkcomponents, including battery-powered,hazardous environment sensors, and re-mote terminal units to equip an entire plat-form, would fit comfortably within thebudget of most offshore operations.

Combined with long-range radiomodems and gateways such as from vMoni-tor, which are also quite affordable, manyplatforms can afford to add sensors atprocess points that would not even havebeen thinkable with wired networks.

But the system will fail if it becomesmerely an exercise in collecting more datafor the sake of collecting more data, or col-laboration for the sake of collaboration.

Even as affordable as wireless network-ing has become, it is still overpriced if it isn'timplemented in the context of the businessstrategy.

New technologyPreviously, wireless solutions were not vi-able for offshore monitoring for many rea-sons.

The technology was still emerging andsecurity was variable at best.

Standards were incomplete or were of-ten in conflict with one another, and wire-less frequencies and communications pro-tocols clashed as well.

There was also general concern that wire-less communications were not yet robustenough for industrial strength communica-tions and there was no clear migration path.

The applications that did exist were tac-tical and not extensible and few if any infor-mation technology organisations were pre-pared to provide comprehensive support.

And because so much uncertainty sur-rounded this newly emerging technologydetermining the true cost of operations wasall but impossible.

Today, much has changed.Advances in safety, security, affordability,

and maintainability within the constraintsof frequency allocation now enable energycompanies to take full advantage of wirelesstechnology for challenging offshore pro-duction environments.

Maintaining networksWireless networks for offshore applicationsare also more maintainable than before.

It is now easier to troubleshoot, expand,modify, and upgrade the networks and thecomponents and without jeopardizing se-curity and availability.

Such improvement comes from the useof a single systems management approachthat treats and manages all wireless net-work technology in a unified, coherent ar-chitecture. Such a framework helps techni-

cal professionals to manage the diversityconsistently.

Saving moneyFor offshore production, money can besaved by combining mobile video and newsensors in the following ways:

Operating costs drop because fewer off-shore personnel will be needed.

Most drilling and production personnelwould be able to perform their duties on-shore, drawing on information from an ex-panded array of sensors and collaboratingwith a few platform workers via mobilevideo cameras.

Fewer platform workers will mean lesstransport to and from the platform, minimis-ing transportation costs, and reducing risk.

Improved one-way visibility will increaseproduction by enabling earlier and betterintervention.

Specialists can be mobilised earlier andcan multi-task better among many wells,many fields, and many assets.

Improved bi-directional visibility increas-es production by enabling better collabora-tion with remote, traveling specialists.

How to do itThe following are some steps that oil andgas producers can do to take full advantageof wireless technology today and tomorrow.

Survey the entire company to determinewho has need for wireless technologies and

Using wireless data communications on offshore oil platforms is amuch more viable proposition now than it was a few years ago.Stan DeVries, director of upstream solutions with Invensys,explains why.

Wiring up an offshore oil platform - is getting much easier to do wirelessly than with fixed cables



Communications

collaboration begins.Instead of bringing peo-

ple to the problem, the sen-sors and software will bringthe problem to the people.

The software senses con-ditions and trends morequickly, enabling collabora-tion on problems to beginmuch earlier than before,even at the point of preven-tion.This is even earlier than"real time".

These additional sensorscombine with wirelessvoice and video communi-cations to change wherecollaboration takes place.

Traveling specialists willbe able to collaborate effec-tively with roaming workerson the platform, as well aswith others in a centralizedoperations or collaborationcentre.

And this impacts whichpeople are collaborating byallowing less specialised orless experienced personnel

to intervene more often, guided remotely byusing advice from experts, without havingto call the experts as often or delaying ac-tion until the experts are able to becomeavailable physically.

Wireless communications will also changehow production teams collaborate by en-abling more proactive solutions augmentedby voice and video.

The energy they had previously devotedto overcoming time and distance con-straints can now by applied to improvingproduction and collaboration tools andmethods.

And, as sensor data from additionalprocess points begins to be incorporated in-to operations, solutions and training simula-tors will become even more accurate andmore proactive.

Producers will increase production andreduce operating costs by transformingwhen, where, which, and how people collab-orate in meeting production challenges.

Safety and securityWireless equipment used on an offshoreplatform must have certification for operat-ing in environments in which sparks fromelectronic equipment could cause harm.

Equipment such as portable video cam-eras, wireless transceivers, and associatedsensors must have EX hazardous environ-ment classification.

The VisiWear installation in Cono-coPhillips' giant Ekofisk platform in the Nor-wegian continental shelf, for example, usesEX-rated wireless video cameras.

But the greatest threat to the wireless se-curity is not malicious attack, but interfer-ence from overlapping wireless networks.

Environmental or accidental RF noise,broken RF equipment, dynamic changes inthe characterisation of the RF site, and therange on non-compatible RF devices gener-ally available all can interfere with the per-formance of wireless networks.

Prevention of such problems must be en-gineered into the network from its incep-tion, and must be covered by an enterprise-aware security and management model.

Adding to the challenge is the fact thateffective wireless networking on an offshoreproduction platform will require a combina-tion of wireless standards. One size does notfit all.

StandardsThere are many different systems for wire-less communications, with different powerconsumption, cost and data rate, rangingfrom 1G /GSM to WiMax and satellite.

The wireless industrial networking al-liance (WINA) has developed guidelines forharmonising the diverse wireless networkstandards required, and enabling the vari-ous networks to keep traffic separate andtransfer data between networks only whenthe architecture requires.

Companies such as Invensys, with its wire-less technology partner Apprion, are applyingthe WINA model in products and engineeringservices that help offshore producers to design,secure, and manage offshore the lifecycle ofoffshore wireless installations.

The approach is to manage all standardsand associated security as a single,harmonisedset.

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Fitting wireless communications on an offshore oil platform

New ways of workingNo matter how well constructed the systemsmanagement architecture, tapping the fullpotential to increase oil and gas productionand reduce costs will require fundamentalchanges in the way in which oil and gas pro-duction teams collaborate.

This includes improved collaboration onnormal production and drilling tasks alongwith collaboration on entirely new solutionsfor managing challenges such as flow assur-ance, equipment behavior, and major weath-er disturbances, enabled by unprecedentedvisibility into operations.

Instead of just reacting better, the newvisibility will enable teams to work smarter.

This will impact when teamwork begins,where team members are located, whichteam members perform which roles, andhow they actually interact.

Deploying additional sensors to drivesoftware that forecasts and recognizes con-ditions and threat levels will change when



Surface software news

www.productionaccess.comSouth and West Texas oil and gas opera-tor Escondido has selected ProductionAccess' Production Center software tomanage its production reportingprocess.

Escondido will use the soft-ware to manage its production re-porting process, rather than usingspreadsheets as it was doing pre-viously.

The software provides all theinformation that all departmentsof an oil company need, from asingle database.

This means that all employeescan access the latest up to date in-formation, and if any informationis changed by one department,then all other departments havetheir information updated.

Escondido says that using thenew software will reduce a 'signif-icant' duplication of effort.

"Professional resources are

Escondido uses PA Production Centersoftware

www.ofs-portal.comDave Wallis, European Representa-tive of oil and gas electronic purchas-ing service OFS Portal, has been invit-ed to become a member of the advi-sory board of the 'e-Business W@tch'group

e-Business W@tch is an initia-tive launched by the EuropeanCommission and industry in2001, which monitors and analy-ses ICT developments and theirimpacts on the European econo-my.

It has published e-business im-pact studies for over 20 sectors ofthe European economy,as well asreports, pocketbooks and data-bases.

Dave Wallis joins EC e-businessinitiative

It also conducts business sur-veys to analyse ICT adoption.

www.paras-consulting.comParas Consulting has introduced anew logo to reflect the company'smove from being a traditional adviceonly strategic management consul-tancy, to additionally helping clientsimplement its recommendations.

"We now offer a completeservice, from defining clientneeds, developing sustainablestrategies through to deliveryand implementation," saysParas managing director

Paras Consulting reveals new image

www.neofirma.comHouston online services companyNeoFirma has launched Operations-Master, a suite of online softwaretools and information services for theupstream oil and gas industry.It is us-ing CapRock's standard broadbandpackage, with guaranteed dataspeed of 144 kbps to 256 kbps.

It has a tool for communica-tions between employees, em-ployees of partner companies /vendors, with all information en-crypted and protected as good asbanks do.

It has tools to put together re-ports, draw charts, and createspreadsheets, for production, ex-ploration status,drilling / comple-tion, workover / maintenancelogs, and prospects.

NeoFirma launches online collaborationtool

Partner companies can submitinformation electronically, with-out the hassle of being grantedaccess to the host companiesmain corporate intranet.

There is a tool to securely storedocuments called WellVault, withis archived daily.

Customers include CrosstexEnergy Services, Banks Informa-tion Solutions, Inc., Carr Environ-mental Group, Inc., and Haas Pe-troleum Engineering Services, Inc.

The system is put together foreach customer so that it reflectstheir corporate identity and hastheir logo on every page.

The service is priced per well.Customers particularly like the

fact that they can use the systemwithout having to employ theirown IT staff, NeoFirma says.

www.energistics.orgEnergistics held its first Annual Mem-ber Meeting and Reception in Hous-ton on March 8, 2007.

More than eighty membersand prospective members tookpart in presentations focused onEnergistics strategy and open da-ta exchange standards.

Highlights of the meeting in-cluded presentations on the busi-ness value associated with theadoption and deployment of En-ergistics' flagship standards,WITSML and PRODML.

DJ Johnson of Landmarkspoke about the 40+ WITSML-imbedded software solutionsnow available to the industry andthe operational efficienciesgained in the Norwegian sectorof the North Sea through the useof WITSML.

Energistics holds first annual membermeeting

Rick Morneau of Chevronspoke on the newly-releasedPRODML standard and its capabil-ities for automating productionoptimization.

Dave Latin of BP, Steve Ze-likovitz of ExxonMobil and RogerBrown of Paradigm were electedto three-year terms on the Ener-gistics Board.Randy Clark,Energis-tics' President and Chief ExecutiveOfficer was also re-elected to athree-year term.

Registration is now open forthe upcoming work meetings ofthe WITSML Special InterestGroup (SIG), the Energisticsdrilling standards user communi-ty,and the WITSML Public Seminar& Exhibition. Both events will beheld in Paris La Défense, France,May 14 - 16, 2007 hosted by Total.

www.p2es.comP2 Energy Solutions reports that BPhas put together an automatic budg-eting system on its deep water Gulfof Mexico operations, using P2 Ener-gy Solutions' Enterprise Upstreamsoftware.

Budgets / financial allocationsare made at the same time oper-ations are going on,rather than inthe conventional way (when forexample budgets are made forthe future year, based on lastyear's data).

This means that operationaldecisions can be better tuned.

There is an Allocation Process-ing Model (APM) which can inter-face with the oilfield data gather-ing and processing software.

The oilfield is particularly com-

BP completes automation of monthlyallocations with P2

plex, with many subsea tiebacks,and different parts of the produc-tion system having different own-ers, and different royalty rates /thresholds.

The system can also be used toaccurately distribute production,revenue and processing costs be-tween joint venture partners andother oil companies using thesame facilities.

It can be used to help cus-tomers meet Sarbanes-Oxley re-porting requirements.

BP began the project in 2006,aiming to increase the reliability,integrity and audit ability of its al-location process.

The improved accuracy and re-liability of the results has led to in-creased integration and relianceon them, P2 says.

Hamish Wilson.The new logo uses Paras'

"wave" symbol and incorporatesit into a multidimensional mar-ble symbol, along with thewords "Define, Develop, Deliver".struction, rebuild and modifica-tion.

Dave Wallis, EuropeanRepresentative of oil andgas electronic purchasingservice OFS Portal

hard to secure," says Bill Deupree,president and CEO of Escondido."Getting the most effective workproducts in their hands is a key toleveraging all of our assets."

Escondido was founded in2004,and has drilled 50 wells since2005.

Meanwhile Production Accessreports that its first quarter resultsshow a 'significant' increase in rev-enue over 2006, with four new li-cense sales in the quarter.

Operations Center 4.8 softwarehas been released,with version 4.9due out later this summer.

The company has also puttraining Webinars on its website,explaining how users can makethe transition to using the systemfrom spreadsheets.

Many Production Access cus-tomers use the system as a step upfrom using spreadsheets.



Surface

Management of unstructured con-tent is becoming a considerablepart of the overall cost of oil and

gas exploration and production, as the num-ber and type of content spirals upwards, dueto new regulatory requirements, and con-tracts and projects of ever increasing com-plexity.

EMC Corporation, based in Massachu-setts, USA, with their Documentum Enter-prise Content Management suite has gotprobably the closest anyone has got to a anenterpise wide solution, with enablesuntstructured content to be managed andmade available over company intranets.

The company now claims to be the mar-ket leader in oil and gas enterprise contentmanagement systems, and claims it is grow-ing faster than all other vendors.

"We have enterprise level content man-agement solutions at the vast majority of oiland gas companies worldwide," says PeterHodge, oil and gas marketing solutions de-velopment manager.

The system also puts together workflowsystems which track who has worked oneach document and what they did. It canmake sure a document has the required ap-provals before being published, and can re-mind people if they need to make input toa document, such as a contract.

The company recently made an agree-ment with Microsoft to integrate its EMCDocumentum software with MicrosoftSharePoint portal, so customers could ac-cess documents in EMC via the SharePointportal.

Oil and gas companies using EMC Docu-mentum include BP, BG, Anadarko, Chevron,ENI, Total, NordskHydro, Saudi Aramco, andHalliburton, to name a few.

Also Kvaerner Oil and Gas, Norsk Hydro,Pemex Exploracion Y Produccion, Petroleosde Venezuela, Petro-Canada, Reliance Petro-leum, Sinopec Corporation, Tesoro Petrole-um Corporation, RepsolYPF, and Yukos OilCorporation.

"All of these customers have been usingEMC Documentum for several years androutinely expand its use making it morewidely available across their companies,"says Mr Hodge.

Typically, oil and gas companies havesome structured information, includingdatabase, enterprise resource planning da-ta, customer relationship management andsupply chain management.

But there is plenty of information whichis typically not structured, including drillingapprovals, geological reports, contracts,health and safety documents, regulatory ap-provals, technical specifications, field devel-opment plans and economic evaluations.

AnadarkoAnadarko Algeria recently installed a Docu-mentum electronic document management

system, to make its documents instantlyavailable at any Anadarko office.

A typical exploration or production proj-ect for Anadarko involves 400,000 docu-ments, including AutoCAD drawings, tech-nical specifications, contracts and corre-spondence.

Many of these documents are createdand held by contractors who only give themto the company at the end of the project. Itwas not unusual for Anadarko to receivewhole truckloads of paper documents thatneeded to be managed and stored.

The company found it very hard to iden-tify and control multiple document versionsor enable efficient sharing and search.

Now, contractors transfer documents toAnadarko with metadata that can be easilymapped to an existing repository.

Employees can search for and retrievedocuments from any Anadarko location andcontractors are given secure remote accessto the system as needed.

All documents are subject to Documen-tum version control. Workflow and lifecyclemanagement are also applied to selecteddocuments.

The documents can be distributed in dif-ferent ways, including by fax, e-mail and se-cure access systems.

The project review and approval cyclehas been considerably shortened; adminis-trative costs have also been reduced.Anadarko also has greater confidence in thesecurity, reliability, and accuracy of its docu-ments.

"With the average project using 400,000documents, document management is asignificant component of oil and gas explo-ration and production. With Documentum,we can do it faster, more accurately, andmore reliably," says Gus Nodwell, applica-tion development manager with AnadarkoAlgeria Company.

PetroCanadaPetroCanada has recently installed a Docu-mentum system, so that documents couldbe instantly available to employees wher-ever they were.

When documents were only held on pa-per, employees could only access docu-ments by fax when on the road, and thatwould involve someone else in the officefinding them and faxing them.

This was a particular problem for the Sur-face Land Contracts group, which wouldtravel extensively and meet landowners torenew oil rights leases, and would need fastaccess to all kinds of lease agreements.

Documentum created a system enablingcontracts to be made available over the in-tranet.

PetroCanada has used Documentumsince 1997, but it decided to extend its com-pany content management platform to sup-port the intranet.

Before, only the IT group could update

internal web content, which was creatingsomething of a bottleneck in how fast newcontent could be uploaded.

With the new system, employees can cre-ate, modify, publish and delete content easi-ly using a simple template created by the ITgroup.

A lot of the content is safety related, in-cluding emergency response documents,standard operating procedures and materi-al safety data sheets.

The Documentum software makes sureoperating procedures are approved beforepublishing them, to ensure they are accu-rate.

Now, over 5,000 intranet users can accessover 100 internal websites.

The intranet is also made available tocontract partners, such as engineeringprocess control companies. This helps thecompany make sure that joint projects runmore smoothly.

Employees can also search for and findinformation much faster on the new in-tranet.

Global oil companyIn another project, a global oil company(which would not allow its name to be pub-licised but is described as the 'world'slargest non-governmental producer of oiland gas') wanted to harmonise 100 separatewebsites into one.It has developed many different websitesover time, providing information such asproduct and material data sheets, informa-tion on licensing the company's technolo-gies, locations of roadside service stations,and information about dealer opportunities.

The company had tried several times be-fore to force all content through the corpo-rate site, but found this led to exploding ITcosts, and slow publishing time, and lots ofold information on the website.

Documentum built an organisational hi-erarchy for the corporate site which served itsdifferent business units, creating custom tem-plates for the different workflows of eachgroup.

EMC Documentum recently installed and expanded company-widecontent management systems at BP, BG, Anadarko, PetroCanada,Hydro, and also some of the world's largest state owned and nonstate owned oil and gas companies. Here's how they did it

Anadarko petroleum is using EMC's Documentumsoftware to manage its documents

Implementing document management



Surface

This enabled content owners to publishcontent, knowing it had been reviewed by theappropriate experts, and would appear in ac-cordance with the website standards.

Six months after deploying the software,

the company had reduced its number of web-sites from over 100 to just five: the corporatesite, and four partner and supplier portals.

Publishing time for the corporate sitedropped from five weeks to three days.

Contractor web services were virtuallyeliminated, saving the company $500,000 an-nually.

The company now plans to use Documen-tum software for storing, controlling and dis-tributing thousands of documents related tolarge capital projects.

State oil company Another state oil company which would notreveal its name (it is described as the'world's largest oil producing company')used Documentum to manage over 2 mil-lion pages of electronic contracts, spanningfifty years and representing billions of dol-lars of revenue.Using Documentum, all two million pagesof contracts were scanned, including sys-tem specifications, materials standards, quali-ty certifications and photographs.

The company also had tough regulatory re-quirements, stating that documents have tobe stored in a vault for 15 years.

The company wanted an electronic con-tract management system which was integrat-ed with SAP, and would make it easy to create,review and approve contracts.

Creating and reviewing new contracts wasproving a slow, tedious and difficult to man-age process,with input coming from many dif-ferent internal organisations.

For creating new contracts, Documentummanaged the automated transfer of informa-tion between participants, tracking documentannotations, controlling the review process,ensuring security.

Users are informed of waiting tasks bystandard e-mail.

It only takes half a day of training beforeusers become productive with the system,Documentum says.

A typical contract which used to take 3-5 months to complete now only takes onemonth. There is a 30 per cent reduction ininvoice processing time.

Anadarko Algeria - typically has 400,000 documentsin a single project - now managed electronicallyusing EMC's Documentum

IBM / Aker Kvaerner condition monitoring tie-upIBM and Aker Kvaerner have embarked on a project to worktogether to provide condition monitoring services to the oil and gasindustry. We spoke to Aker Kvaerner's vice president for concept andtechnology, Erik Erdal, about what this means

ground who can sort out what you need tostore," he says.

IBM has been involved in condition moni-toring in many other industries, including theairline industry, and can apply this expertisehere.

The set-up is designed to be 'future-proof',as one thing that we can be sure of, is that theamount of data will escalate over comingyears, as the oilfield gets more digital.

Aker Kvaerner will provide the engineer-ing expertise, and will develop decision mod-els which will indicate if a maintenance taskneeds to be completed.

All of the data is put in a database. Overtime you can get information about how thedifferent pieces of equipment perform overtime, and when the optimum point is to per-form maintenance tasks is, based on the data.

Aker Kvaerner will explain what range thedata should be in,and at what point the alarmshould go off.The net result will be a mainte-nance program based on the actual conditionof the facility which again will reduce themaintenance scope as well as reduce numberof not planned shutdowns.

This knowledge can then be extended toinstallations of the same equipment on otherplatforms.

Ultimately,oil companies will run the main-tenance of their own equipment.

A bigger systemAker Kvaerner believes that the systemshould be just one component of a morebroader maintenance management sys-tem, such as its Technical Integrity Manage-ment Services (TIMS).

TIMS has five components: technicalcondition and analysis; maintenance engi-neering, condition monitoring; technicalsafety; and non destructive testing / in-spection services.

"What's important for me is that CBM isa part of a larger package - which includesother components - of maintenance andpreventive maintenance," says Mr Erdal.

"Maintenance engineering and condi-tion monitoring is very much linked to-gether," he says.

IBM and Aker Kvaerner are working to-gether to provide condition monitoringservices for the oil and gas industry.

The service combines Aker Kvaerner'scompetence in equipment maintenancewith IBM's competence in gathering andmanaging the data.

The service will initially be for rotatingmachinery, including generators, pumpsand compressors. Typical Data being sentwill include vibration, temperature and oilpressure.

It will focus initially on platforms in theNorth Sea and Norway, but ultimately theprogram will be provided internationally.

Aker Kvaerner also hopes to be able tomonitor static equipment, such as for corro-sion, although the technologies to monitorcorrosion remotely are not yet advancedenough for this to work.

Aker Kvaerner cites a recent study by theNorwegian Oil Industry Association (OLF),estimating that NOK 250bn increased rev-enues could be achieved using integratedoperations, mentioning improved efficiencyof maintenance as an area where improve-ments could be gained.

Aker Kvaerner has, of course, been pro-viding maintenance and inspection servicesservices for many years. The company is in-volved in 'more or less all' platforms in theNorth Sea, says Erik Erdal, vice president forconcept and technology with Aker Kvaern-er.

What is new is gathering real time data

and monitoring and the addition of IBM, toprovide the complex services of managingenormous amounts of data coming fromthe rigs and processing it.

Aker Kvaerner started working with IBMat the end of 2006, and finalised the com-mercial agreements leading to the tie-up inearly 2007, and the two companies are nowtalking to prospective clients.

"The stage we are in now is basically astudy - to investigate what can be done andhow it should be done," says Mr Erdal.

The serviceThe first stage of the service is for AkerKvaerner to sit down with the equipmentdesign team, and try to work out what kindof instrumentation will be needed. The datawill be gathered from sensors on processsystems on the facilities both offshore andonshore.

The two companies, working together,will put together a service including collect-ing data, managing information flow, dataanalysis, producing condition reports, andestablishing maintenance programs.

IBM is the partner providing data infra-structure services. It will put together the in-frastructure to get the data onto shore andmanage it.

"They have experience gathering hugeamounts of data, gathering it and analysingit," Mr Erdal says.

With so much data coming in, "you reallyneed to have a good machine in the back-



Surface

We all know that having good pro-duction information is critical tomaking the best operational deci-

sions.But too often, historical information is

not easily available to engineers becausethe information is stored in hard to locatepaper files, or the previous engineer has leftthe company and taken the knowledge withhim, or it is all on Excel spreadsheets hiddensomewhere on the network.

Production Access has a mission to per-suade independent oil and gas companiesto capture daily information and store it in acentral data warehouse, with special pro-duction management software, properly in-dexed for future understanding.

Over time, this data warehouse will buildto become a centre of knowledge that doesnot reside only in hard-to-access paper filesand with individual engineers, and is avail-able to everyone in the organisation.

For example, drilling engineers can ac-cess data about previous drilling informa-tion, they can use to select the optimum bitsand mud to use in their drilling operations.

The software can collect data from thefield, either automatically via interfaces withSCADA equipment, or manually using ahandheld device in the field.

Data is then synchronised with the officesystem and immediately available to man-agement to support operational decisions.

ChallengesProduction Access did a survey of land-based, independent producers and foundthat the highest priorities for production in-formation were as follows:

Integrating drilling, wellwork and pro-duction with accounting;

Providing net/gross production volumesfor accurate allocations, accruals, reconcilia-tion and regulatory reporting;

Having systems where data is enteredonce and flows throughout the enterprise;

Supporting Sarbanes Oxley financial andaccounting requirements, especially for pro-duction volume audit trails and accounta-bility.

Many also reported problems in acquir-ing accurate net/gross production volumes,performing complex multi-tiered alloca-tions; and obtaining accurate operationaland cost information around daily activitiessuch as production, drilling, completionsand workovers.

ed reporting environment," he says. "Suchan infrastructure will also foster accounta-bility and audit ability."

Drilling information and workflow, fromAFE generation and approval to well com-pletion and workover, is a critical source ofoperational and financial information.

Relevant information at drilling can beentered once and immediately made avail-able to users throughout the companythrough morning reports.

For example, after completion going intoproduction, all the well information is there,meaning there are no delays waiting for da-ta for approvals.

Actual production volumes can be com-pared with predictions to analyse the pro-ductivity of the well, and the costs can betracked to identify possible savings.

"On the revenue side, hedging strategiesare more profitable as the accuracy of pro-duction forecasting, production reportingand allocations increase," he says.

Managing maintenanceAn integrated data system is useful in

managing maintenance, because there isplenty of data which can indicate the levelof health of the well.

This includes tracking failure data andhistories on most types of down-hole equip-ment, viewing failure trends to developproactive solutions, capturing field comple-tion data, monitoring budgets, deliveringdaily completion and workover reports, andcreating wellbore diagrams automatically.

Engineers can use this data to decide thebest schedule for well workovers.

By looking at production over a period oftime the cause of failures can be identifiedby systematically looking at the system andcorrelating events.

For example it may be that one driller ismore expensive than another, but the datashows that their wells perform better, mak-ing it economical to use them.

"One company reduced field costs by 5per cent by having an engineer focussing onpreventative analysis to reduce failures," hesays.

"He can do anything he likes to achievethat objective but he can make more effec-tive decisions because he had the right in-formation about failures through the soft-ware."

Problems with spreadsheetsOver the past ten years computers have gotfaster and more powerful, but this has ledmany oil and gas companies to make moreuse of spreadsheets.

While they were good at putting users inbetter control of calculations and manipula-tions of data, they have proved cumber-some in sharing information with otherswho needed the same information.

Companies developed a multitude ofpoint by point solutions that forced core in-formation to be handled multiple times in avariety of formats and ways.

Meanwhile, the lack of standard namingconventions and identifiers on assets creat-ed a major obstacle to having an enterprise-wide view of the information on assets.There was not a way to expediently corre-late information, other than manually.

"Large efforts were required to generatequarterly reports, which involved finding,compiling and editing information aggre-gated from a variety of sources and sys-tems," he says.

"And, as the information originated frommultiple sources, the process was error-prone, in addition to being labour intensiveand time-consuming."

"The ability to tie information togetherand communicate between systems and de-partments was still missing," he says.

AccountingHaving an integrated system makes it mucheasier to track volumes of production forregulatory and accounting requirements.

The software manages the complex busi-ness rules involved in hydrocarbon alloca-tion and reconciliation, and integrates withthe accounting software.

It also enables tracking of deliverythrough multiple sales channels, which ishard for traditional accounting packages todo.

"Integration of well records with account-ing exposes details of AFE (authority for ex-penditure) cost, supporting drilling pro-grams and revenue forecasting," he says.

This kind of capability offers the ability toset flags on specific expense items being in-curred daily, such as daily production cost,budget vs. actual, actual daily spend exceed-ing pre-set limits, and variance from revenueforecast.

"In general, on the cost side, better man-agement of AFE's is afforded in an integrat-

Production data out of spreadsheetsProduction Access of Houston is on a mission to persuade independent oiland gas companies to get their production data out of spreadsheets andinto integrated production management software. We asked VP JeffChestnut how this would work

VP Jeff Chestnut of Production Access

cont/d on p25


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Surface

Upstream exploration and productionprofessionals spend up to 50 per centof their time sorting out data, access-

ing data and cleansing data.Oracle thinks this can be reduced to 25

per cent.Oil and gas companies are getting pretty

good at providing software applications foreverybody to do their normal work. For ex-ample a drilling engineer on an offshore oilplatform today will have no problem access-ing his drilling software.

The problem emerges when he wants tofind out information that requires the inte-gration of technical, operational and finan-cial data, i.e., when will the barges with drillpipe arrive, what is happening with thedrilling mud, what is the current actual vsprojected budget and what other reservoirintervals can this well be completed in.

He needs to access other people's soft-ware applications and the data which goeswith them, and that is where the challengearises.

A typical scenario is when staff know theinformation they want is available some-where in the company, in some software ap-plication, but just don't have the time andenergy to access it.

Or people start going back to putting to-gether their own private spreadsheets,rather than go through the trouble of tryingto access live data from the company data-base.

The number of different databases (Ora-cle, SQLServer, Access, flat files) being usedin the oil and gas industry has proliferated agreat deal over the past 4 or 5 years.

It's not surprising that nearly all oil andgas companies have active projects to maketheir data easier to store, manage, accessand modify. The focus of these projects is toprovide composite information from multi-ple data sources via a unified desktop.

Oracle Oracle databases are used by over 750 oil andgas companies, and hold around 90 per centof all oil companies' data, the company esti-mates.

It has been rapidly building its oil and gasdivision over the past few years, with staff withan intimate knowledge of both IT and oil andgas.

which exist between different data sets.This tool are available off the shelf, and can

be used by any oil and gas company whichstores its data in PPDM format.

Data hubAround the core data model, companies canbuild their own "data hub," with workflows,business intelligence, and different ways ofworking with the data (eg dashboards, PDAsand cellphones).

This data hub can integrate seismic data,ge-ologic maps, engineering information, finan-cial data, SCADA systems, real time well dataand safety systems.

The "business intelligence" layer is particu-larly interesting at the moment, Mr Shimbosays, because it creates new ways to look atcomposite data sets from E&P applications,op-erational systems and ERP systems The busi-ness intelligence layer can be customized foreach user's needs and creates a powerfulanalysis tool for end users.

Everything integratedSo are we heading towards a holy grail ofeverybody's work being reduced to movingfrom screen to screen on their computers,with all information they need at their fin-gertips, all data being typed into boxes, andno spreadsheets or e-mail in sight?

Mr Shimbo doesn't think so. He observesthat geoscientists and geophysicists tendnot to have any process they stick to and arevery intuitive in their geologic analysis, soworkflow software would not probablywork well for them.

Reservoir engineers on the other handoften follow strict engineering processesand use standard engineering tools, soworkflow tools work very well, he says.

Mr Shimbo recommends against puttingtogether strict workflow software which takesusers from screen to screen, because of its in-flexibility. "As the needs of the users change,you don't want to get locked into an inflexible,nonscalable architecture," he says.

"If we embrace very much open standards,open systems, we can change workflows, cus-tomize user interfaces and fully utilize serviceoriented architecture."

For example, Mr Shimbo was previously apetroleum engineer and geologist,with a mas-ters degree in petroleum engineering, and hasworked for companies including Exxon,BP,Hal-liburton and IBM. "The company has been tak-ing on a lot of people like me because we rec-ognize that we need to understand what theline-of-business operations managers need,"he says.

The company has a lot of expertise in howto build an E&P data management frameworkand make this information available safely andsecurely around the company.The focus of thissolution uses service oriented architecture andan open, scalable framework.

Proprietary or open sourceMr Shimbo believes that oil and gas compa-nies have a choice between using proprietarydata models,which can make it very expensiveto change database supplier should the com-pany ever wish to, and open source data mod-els, such as the Public Petroleum Data Model(PPDM), which enables a company to keep itsoptions open.

Proprietary data models include Land-mark's PetroBank and Schlumberger's Seabed.

Companies choosing the open source op-tion still need a database company such as Or-acle,but they can change database companiesmuch more easily because the data will be inPPDM format which will work with many dif-ferent databases.

The PPDM data model covers many differ-ent aspects of subsurface data, including seis-mic, geologic, engineering and operational da-ta. The PPDM data model was designed byPPDM members including ExxonMobil,Chevron, BP, PetroCanada, Schlumberger, PE-MEX, PDVSA, and ARAMCO.

Companies typically take the PPDM modeland adapt it to their needs, doing companyspecific extensions.

Data cleansingOracle has data management software whichuses business rules to cleanse petroleum data.It can either automatically correct known er-rors or notify a subject matter expert to manu-ally correct this data. I tsl has tools which willreconcile redundant data and automaticallyload the data into various applications. Usingdata mining and predictive analytics, the enduser can identify unique oilfield relationships

Oracle's approach to datamanagementWe have all heard that upstream professionals can spend half of their time managing data. We askedDavid Shimbo, Senior Director for Petroleum Solutions with Oracle, how he thinks this time could bereduced.

ImplementationMr Chestnut recommends that the softwareis implemented in a structured way, withphases for planning, analysis, design / build,testing, and training.

"The design / build phase will involve con-figuring look-up lists, data hierarchies, datagroups, and other functional and/or techni-cal elements specific to the customer," hesays.

"It will also include data migration activi-ties entailing the identification of legacy da-ta and data that must be included or consid-ered in the implementation."

"Testing and user acceptance activitieswill begin once the customer has acceptedthe system as it has been configured. A testenvironment is installed and configured inthe customer's offices. This configurationmirrors the applications that will be eventu-

ally deployed.""After deployment, there will be a period

of training, which is key to ensuring the re-turn on investment in the system and shouldbe planned from the outset.

"Experience has shown that knowledgeretention is most successful when the usercommunity begins using the software imme-diately after training."

from p23 / ProductionAccess


digital energy report

26

Talking about the cross over of roles, heasked if it was easier to train an IT person todrill a well or a petroleum engineer to use acomputer? The answer is obvious, he said;just look at other industries for examplemedicine, surgeons.

ShellCharlie Williams, chief scientist well engi-neering and production for Shell, talkedabout Smart Fields development and theneed for control systems to optimise pro-duction to increase recovery rates to nearer35-40%.

He talked about the need to implementIT systems using a value oriented approach,where those areas of a project where smarttechnology can deliver the most businessvalue are identified and people given the re-sources they need to be successful.

"One key question we need to ask is, 'howsmart do we need our wells to achieve opti-mum production?'"

"We can create a surveillance plan, usingan asset up approach, to decide what levelof 'smartness' to apply. We can decide whoneeds what when, then the technology weneed to apply to the problem can be evalu-ated."

"Not every field can be a full blown smartfield, but we still need to understand the da-ta flow and what is needed.

"We are working on unifying our datastore and updating our model periodically,not in real time but every day. Building in-terfaces between models is a big part of thebusiness at the moment. We want to buildactive learning models not just physicalmodels."

He went on to talk about ChampionWest, Shell's flagship smart fields project.Discovered in the 70s and comprising of acomplex network of around 1000 smallreservoirs, it was seen to be uneconomic todevelop until recently. Now it is one of thehighest producing fields in Brunei.

"The Champion West Brunei field is agood example, 90km offshore Brunei in 50mof water. There are many small wells and we

"At first we were trying to convince theassets that this was a good idea, now thereis a queue and we have to prioritise for themost appropriate projects," he continued.

Mr Beltrão talked about three pilot proj-ects they have just finished, "The perceptionis there are hidden costs such as mainte-nance but there are also lots of gains."

"Offshore we have a lot of opportunitiesbut technology can be too expensive. On-shore we don't have to convince asset man-agers because they realise it is worthwhile.We need to gather more data from pilots;we have already done the easy part, now weare facing more complex fields."

USCIraj Ershaghi, Professor and director, petrole-um engineering, University of Southern Cal-ifornia, talked about an initiative involvingcloser integration between industry anduniversity departments, which he said cur-rently send out graduates who have notcompleted a single course in digital fieldtechnology.

Mr Ershaghi runs CiSoft, the Chevron-funded Center for Interactive Smart Oil FieldTechnology at USC. The centre runs a mas-ter's program in petroleum engineeringspecialising in smart oilfield technologies.

"There is insufficient IT training at univer-sities, young engineers used to have men-tors but now there are all 55 and have noidea about IT," said Mr Ershaghi. "Young en-gineers need to be trained in useful skillsand that includes smart field technology."

"There is a need to involve people earlythrough master's programmes in smart oilfields.

"We need to try and make it compellingfor the workforce and introduce knowledgetransfer through cross training, deliveringchange in a way that eases adoption. Weneed to introduce virtual classrooms, re-mote learning centres and collaboration onprojects, setting up more links with univer-sities."

He said there was insecurity based onchanging roles; it was no longer enough tohave expertise in one area without under-standing how it affects other disciplines.

Need to decide which assets to digitise first - RicardoBeltrao, general manager, production and digital oilfield,Petrobras

Want recovery of 35-40 per cent - Charlie Williams,chief scientist well engineering and production forShell

Subtitled Bytes & Barrels: an energyrenaissance, the conference held inHouston explored the familiar themeof 'people, process, technology' in

digital field evolution and new for this year,showcased 70 technical papers chosen fromaround the industry.

"This is not a technology challenge anymore, it's a people challenge," expressedone panellist.That about sums up the issuesfacing the industry: while most of the majortechnical problems have been largelysolved, there is still a need for more educa-tion and more understanding among engi-neers who have to work with the new tech-nology.

"Integration moves all the fixing workthat used to be done by IT staff out to theend user," said Gary Masada, IT CompanyPresident and CIO, Chevron.

"We still have a need to train the enduser; there is much work to be done on thehuman factors like user interfaces. We havea base but need to make the informationmeaningful through standardising process-es and training so data is consistent."

There was general consensus that moreneeded to be done to improve workflows toenable better management decisionsthrough flow of 'right time' relevant infor-mation. Also there was much activity in us-ing collaborative environments to bring ex-perts together to make faster, better in-formed decisions

"We are at the cusp of handling the chal-lenges," said Randy Kartowski, CIO up-stream, Chevron.

"At first we had to convince people it wasa good idea to make the investment. Nowwe are at a point where we can solve all thetechnological challenges. We have createdthe role of 'ifield engineers' to solve the de-cision support problems we were having."

The rapid growth of data from smartwells, wireless sensors and integrated man-agement systems caused concern as well asopening up opportunities. While there wasexcitement about the possibilities, therewas also a danger of being overrun by a'flood' of data.

"Do we keep all the real time data?"asked Don Moore, VP and CIO, Occidental.

"Storage costs are falling so the problemis it is harder to put in place procedures forgetting rid of data as well as to analyse it. Ifyou think future technologies will be able toextract more useful information then youhad better keep it."

PetrobrasRicardo Beltrão, General Manager, Produc-tion and Digital Oilfield, Petrobras, talkedabout various projects which began in 2006.

"We try to align technology with assets,selecting pilots to face different challenges,"he said. "Leadership is the key to success,working through committees to align unitswith the main goals of the companythrough sponsorship by higher manage-ment."

SPE's Digital Energy ConferenceSPE's Digital Energy Conference, in Houston April 11-12th, continued the industry's discussion abouthow to combine people, process and technology. Our technical editor Keith Forward was there.

digital energy journal - May- June 2007


are shared as rapidly as possible."In many cases these lessons are not sim-

ple extensions of current practices butrather a very significant shift in the way ofworking which will have profound and last-ing impact on BP's operations," he contin-ued.

"We think it is important to be able to ex-plain how technology supports the E&Pstrategy: increasing recovery, building pro-duction and managing decline.

"I don't see the point if it just allows usto produce existing wells more efficiently, ithas to add a reserve base. In the long termit can add 5%, that's a billion barrels to ourreserve base," he said.

Value propositionDiscussing the value of a project can be adifficult proposition, he said, as the con-cepts are relatively new to some so the po-tential sources of value may be unfamiliar.

"A complicating factor is that such pro-grams are sometimes described in terms ofinfrastructure and technology without al-ways clear identification of the businessbenefits that they are leveraging," he said.

"Also documented successes require aclear baseline from which to measure im-provement."

BP takes a twofold approach.First it works with the business units to

identify value threads that are enabled byField of the Future, designing new workprocesses and piloting technologies to im-plement them.

Next, it works to develop and maturenew work flows so that eventually they canbe incorporated into BP's 'Common Process'system.

Some of the areas in which real-time da-ta can impact production are:

Sand management - the ability to bean-up sand prone wells more quickly and tooperate them consistently closer to the lim-it of sand free production.

Optimisation - developing models ofwells and facilities to improve both produc-tion efficiency and capacity.

Surface equipment monitoring - reduc-ing planned and unplanned losses throughmeasurements of equipment run time andhealth monitoring.

For example, better sand managementthrough sand alerts resulted in a 1-3% im-provement.

Using slugging management, reducingthe percentage of time flow is unstable re-sulted in 1-2% improvement in production.

"We need to look at leveraging real timedata for a small number of high impact op-portunities for several aspects of the busi-ness at once," Mr Reddick said.

"Value can be evaluated from the groundup under a common framework.We have togo after a small number of value strands re-lentlessly to get them embedded within thebusiness."

"It will take ten years to reach the goal ofa billion extra barrels; we need number ofthings to go well, a number of componentsincluding new well control technology.

"The piece that is least mature is access-ing better management decisions throughbetter workflows."

BP predictive analytics"Energy companies' databases hold the po-tential for tremendous advantage and they

May- June 2007 - digital energy journal


He talked about the rapid growth of dig-italization and how the industry was beingswept up by advances that are resulting ina huge increase in data. "With the deluge ofdata the question is how do we manage it?A data flood is almost as bad as a datadrought and probably more expensive forthe industry."

"Seventy percent of seismic data is un-derused and fifty percent of the seismiclogs from one of the largest oil fields everdiscovered were discarded unused," hesaid. "We need to harness this data in futureand make use of it to influence business de-cisions."

"Real time is not fast enough," he contin-ued. "We need to operate in the realm ofpredictive analytics, instead of reacting toinformation predicting outcomes.

"We need to work more collaboratively,so that experts wherever they are can focuson a particular problem. Distributed deci-sion making is one of the keys."

BP Field of the FutureChris Reddick, technology unity leader inBP's exploration and production technolo-gy group in the UK, talked about implemen-tation of his company's Field of the Future(FoF) program, which is focussed on lever-aging real-time or near real-time data to im-prove both short term operational perform-ance and long term recovery.

By the end of 2007 BP will have devel-oped long term infrastructure in 20 fields.

"The programme is about increasing pro-duction reserves through real time data," hesaid. "We need to equip fields to be compat-ible with and make use of real time data.

"Communications, hardware, advancedcollaborative environments (ACEs) and in-troducing standards which are being usedto retrofit existing assets, these are the fun-damentals," he said.

He said there were a number of chal-lenges, not least being that it has to bedemonstrably focussed on the highest val-ue opportunities in BP's portfolio, and thatthe content of the program has to be seenas adding value to the business.

"Both of these challenges require deepengagement with the business around thequestion of value - how it is defined, ac-cessed and measured," he said.

Further, since BP's program is impactinga number of its business units simultane-ously, it is important that all lessons learnedfrom the implementation of this program

Making best use of real time and near real time data -Chris Reddick, technology unity leader in BP'sexploration and production technology group in the UK

are using new imaging techniques, newdrilling techniques; it is now economic touse snake wells and smart wells."

The snake well concept was developedby Shell and first used at the Iron DukeBrunei field, which consists of a series ofpockets in an area 28 metres thick, two kilo-metres long and 300 metres wide. In the up-per part of the reservoir there is a layer ofnatural gas whose pressure drives the oil tothe well, requiring accurate drilling to avoidhitting it.

Using drills that can be steered with highaccuracy, in conjunction with software thatgenerates detailed models of undergroundgeology and reservoirs, snake wells can besteered along complex horizontal paths hit-ting pockets with an accuracy of aroundtwo metres.

"On one asset at Iron Duke, we achieved15% additional production and a 2 year de-lay in water breakthrough using snake wellswhich are now a proved concept."

Shell is also increasingly using collabora-tive environments to improve teamworkand sharing of information. He said that re-al-time drilling operations centres are al-ready connected worldwide, so that it ispossible to shift operations to another cen-tre in the event of an emergency, such asduring hurricane Katrina.

He talked about Shell's operational ex-cellence planning cycle which operates ona yearly basis.

"We need to evaluate opportunities sothat they can be aligned with productionplans. Smart projects are not so different,there still has to be a value proposition, abusiness case to be evaluated so that thebest projects naturally rise to the top."

"The people element is often forgotten,"he noted. "We need to integrate smart con-cepts into daily work processes, implementa smart decision process.Then it will be eas-ier to deal with the crew change, to propa-gate experience and create an informationflow to new inexperienced people."

"How can we drive a passion for smartconcepts? We maintain a group of IT profes-sionals who champion innovation.

"Back in the late '80s we had to stop be-cause IT guys can not drive change bythemselves. Now there is a better under-standing of the need for smart systems. Ba-sically we have to deliver what people needto be successful."

BPPhiroz Darukhanavala, VP and CTO of digi-tal and communications technology, BP,talked about the, "tremendous opportuni-ties and successes that will go to those whodevelop hybrid work skills, IT and opera-tions.

"Neither side will have an automaticedge," he said, "and it will impact how wedevelop ourselves, who is recruited andhow they are trained; jobs will be more re-warding, bridging two worlds far into the fu-ture."

"IT professionals and engineers tradition-ally worked in two different worlds," he said,"but this is no longer true and an effective'renaissance worker' will have to be able togo back and forth with ease."

"The industry is facing a do or die situa-tion," he said. "Expertise must be betterutilised, remote collaboration will and musthappen because it will have advantages.Don't think this won't happen soon, beforeyou retire. Change is not new."

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are growing exponentially, fed by a mount-ing array of sensors, ERP systems, instru-mentation multimedia and other unstruc-tured data," said Paul Stone, technical direc-tor, BP.

To unlock some of this value, BP havelaunched a predictive analytics initiative, in-vestigating pattern recognition techniquesthat find correlations and relationships inlarge data sets.

"Recent advances in computing powercoupled with more sophisticated applica-tions, easy-to-use interfaces and easier ac-cess to data have made predictive analyticsa more valuable, practical tool for wide scalecorporate adoption," said Mr Stone.

"With more data available from sensorenabled applications, predictive analyticspresents an opportunity to make all aspectsof field operations more efficient and effec-tive."

"Using data driven models to predict fu-ture events implies a number of things, fore-most that there is a pattern in the data thatcan be associated to a particular event andthat the pattern can be detected in a time-frame to allow the business to act."

"By analysing large volumes of historicaldata and having associated various patternsto known events, the business is then ableto monitor current data and watch for thosepatterns as indicators of future outcomes."

"It is worth considering the differencebetween this and a first principles modelbased on physical equations.

"A physical equations model requires asignificant understanding of the processesinvolved, and can therefore take significanttime to build.

"A data driven model simply looks forpatterns, and it is not necessary to under-stand why a particular pattern correlated toa particular event to use this to drive pre-dictions."

"Data driven models will not replacephysical ones, but they can offer advan-tages in certain cases, where speed of im-plementation is important and where un-derstanding the causality in a system wouldbe too expensive or time consuming.

"Data models can even lead to such anunderstanding through revealing areas ofcorrelation to investigate."

"Another advantage is that data modelscan be tolerant to occasional bad data. Forinstance, in the event of a sensor failure, thepredictive analytics model can predict thereading of the sensor had it been workingfrom other sources, and thereby avoid a po-tentially unnecessary shutdown."

"A downside often mentioned is that be-cause predictive methods rely on historicaldata they struggle when the situation be-ing monitored moves into unknown territo-ry. This is true, but techniques exist for cur-rent data to be continually analysed to rec-ognize new patterns and update the mod-el."

"When a good understanding of the un-derlying physics of the system is known, thiscan augment the data driven approach.

"We believe that data driven will be anadditional tool to use alongside first princi-ples and indeed BP is pursuing first princi-ple models in many areas."

"Data driven models do not have to100% perfect, they have to tip the advan-tage in favour of the business and makingthe decision; they have to be right more of-ten than not and more often that was pre-viously the case in the absence of the tech-nique. In these cases there can be a clearbusiness benefit to data driven predictiveanalytics."

ImplementationsBP has been exploring the use of predictiveanalytics across a variety of its business op-erations.

Third party vendors were engaged to un-dertake the proof of concepts and resultingtrials, targeted at specific business applica-tions areas.

"A significant cause of production lossacross BP's operations is though equipmentdowntime. Increasing uptime of the in-stalled equipment base can have significantpositive impact on revenue."

BP selected a product from a leadingsupplier of predictive analytics software ap-plied to condition monitoring.

The supplier is relatively new to the oiland gas industry, and BP trialled the soft-ware at several refineries and oil productionfacilities with increasing success.

"Whereas traditional condition monitor-ing is based on trending various equipmentparameters, e.g. vibration, temperature,pressure etc. independently, this vendor'stechnique monitors all the parameters in anintegrated way creating a comprehensivepattern for the values of the sensor arrayunder normal operation."

"If say there were thirty sensors beingmonitored, the software will look at all thir-ty sensors together and can use twentynine of the sensors to continually predictwhat the thirtieth sensor should be readingunder normal operating conditions."

"The predicted value of the sensor inquestion can then be compared to the ac-tual value measured and a discrepancy sug-gests that the equipment has moved awayfrom normal operation."

One benefit of this approach over tradi-tional trending is that the software can dis-cern real problems more closely. An issuewith simple trending of an individual sen-sor is that alarm and alert levels have to beset with quite high margins.

"For instance, if the power to a piece ofequipment is increased one would expectvibration also to increase and this would benormal. Alert levels would have to be setabove this increased level to avoid falsealarms. However this situation may not thenprovide a warning to a problem when pow-er has not been increased."

"Knowing a machine's behaviour has de-viated from normal allows for immediate in-spection, and the deviation itself may becharacteristic of the problem developing,allowing it to be resolved before a failure,or at least more quickly repaired."

Virtual MeteringBP has been working with another vendorthat provides software that monitors wellconditions while the well is on test and theflow rates of gas, oil and water recorded.

The resulting patterns are then used topredict flow rates during normal operationbetween well tests, which typically only oc-cur once every month.

"An obvious question is, how does thistechnique cope with situations of change,e.g. for declining production scenarios?" MrStone asked. "It is our expectation that themodels can be updated with new well dataon a monthly basis to keep current."

"Of course, this depends on the amountand speed of change and may show limita-tions if the change is rapid or random."

"However there are significant advan-tages.The potential exists for this techniqueto be used on gas lifted wells, taking wellcondition data at the same time as measur-ing production for different choke settingsof the gas lift valve to generate a model.

"The model can then be inverted so thatwell conditions are monitored in real timeand checked against previous patterns todetermine the optimum choke setting formaximum production."

"The software can perform the optimisa-tion many times a second in real time andcould be used in a control loop to managethe gas lift choke setting.

"Where gas may be in short supply, opti-misation can occur across all gas lifted wellsusing available gas to maximum advantage.We are some way off from using this tech-nique but the possibilities are intriguing."

The software was trialled on an offshoreproduction facility consisting of eight wellsand historical well test data from forty testswas available. A static model was then cre-ated within two days which was usedagainst real time well condition data to pre-dict well oil, net gas and total gas produc-tion.

"The initial results were around ninety toninety five percent accurate for predictingtotal platform production, totalled from alleight wells, compared to the platform me-ter. This compares reasonably well with thephysical models we have attempted to usepreviously."

"The next step is to develop dynamicmodels by exercising a well while on test toprovide production rates at various chokepositions. The models created here will po-tentially lead to gas lift optimisation in aclosed loop scenario.

"We will also be working further to un-derstand how the data driven and first prin-ciple approach can provide complimentaryand enhanced results."


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