Calgary-based WellPoint Systems Inc. claims to be breaking new ground in the oil and gas Enterprise Resource Planning (ERP) software sector with the creation of a ‘comprehensive, integrated suite’ based on Microsoft’s Axapta ERP technology and the .NET architecture.
Flagship
WellPoint’s flagship client is Deer Creek, an operator in Western Canada’s massive oil sands development. Core of the WellPoint offering is a joint venture accounting and ERP solution for finance, inventory, project management, cost control, field operations and production accounting.
Kowal
Deer Creek CFO John Kowal said, ‘The integration of Microsoft technologies from Axapta, through SQL Server, to the server and desktop operating systems brings a tremendous advantage. This enterprise-level solution adapts to your needs as opposed to forcing compliance with rigid processes.’
Stanford
WellPoint CEO Frank Stanford added, ‘We have the products and the expertise to assist in the strategic development of systems and processes to support Deer Creek’s fast growing business. Users of a previous Axapta implementation have reported increased employee productivity by up to 25 per cent. Managers have access to the information and tools they need to make smart, strategic business decisions and they’ve streamlined processes for better turnaround.’
Streamlined
Axapta is said to streamline ERP by using a single business ‘logic’, one source code, one database and a comprehensive tool box. Wellpoint believes this level of integration is particularly relevant to the oil and gas industry, which is currently populated by ‘multiple, disconnected systems produced by small software vendors’.
Navision
Axapta was first released by Danish software house Navision in 1983. In 2002 Microsoft acquired Navision Axapta and Navision Attain for $1.4 billion—its largest acquisition ever.
Encompass
Earlier this year, WellPoint acquired Calgary-based EnCompass Solutions Inc. a Microsoft business solutions provider and specialist developer of Axapta-based solutions. Last month, WellPoint announced record quarterly revenues for Q2 2004 at $1,6 million, up 86% over Q2, 2003 and its highest quarterly revenues to date.
Following ExxonMobil’s ramping of its ‘R3M’ deep electromagnetic prospecting (see last month’s Oil IT Journal) Schlumberger has snapped up ExxonMobil’s contractor for EM services, AOA Geomarine Operations (AGO). AGO provides marine controlled-source electromagnetic (CSEM) and marine magnetotelluric (MMT) services for deepwater offshore exploration.
Boutte
Dalton Boutte, Schlumberger VP and president of WesternGeco, announced the acquisition at the annual meeting of the Society of Exploration Geophysicists this month saying, ‘Deep resistivity is important in determining the presence of oil and gas accumulations particularly when used with other data sources. The acquisition of AGO will extend customer benefits by adding operational expertise, domain knowledge and technology to our current service offerings.’ AGO will operate as a Schlumberger company under the leadership of president and CEO Lionel Fray.
Replace seismics?
In the SEG Q&A, Boutte made the remarkable claim that CESM ‘could replace seismic.’ Oil IT Journal could find nobody else in either the seismic or the CSEM communities present at the SEG who would endorse this view!
We decided to ‘embrace’ the Society of Petroleum Engineer’s Annual Conference and Technical Exhibition (SPE ACTE) back in 2001. So our coverage of the 2004 SPE ACTE (to appear in next month’s Oil IT Journal) is our fourth show. As a relative newcomer to the SPE, what still impresses the erstwhile geophysicist that I am is the breadth of the technology on view. I still wonder at the shiny spikiness of magnetic flux leakage ‘intelligent’ pigs, the greasy wobbliness of the shale shakers and the steely power of the blind rams.
Ring-fence?
My first conclusion was that what showed up at the SPE was a most peculiar ring-fencing of technology. One which could hardly be said to define a cultural or domain ‘silo’ in the way that geophysics defines the SPE or geology the AAPG. Now, three years later, I believe that this is indeed an eclectic community. But that in the developing field of intelligent oilfield operations, the technologies on display at the SPE are only a part of the story.
4D seismics
But first, back to our early visit to the SPE. In 2001 we had a mission. To fearlessly seek out and report on the promising new field of 4D seismics. We were disappointed. It has taken three years for 4D seismics to migrate into the mainstream of petroleum engineering— with a whole technical session devoted to the subject and perhaps more significantly, regular presentations of real-world applications on the software vendors stands. More of which next month.
Sim-opt
At that same 2001 SEG we first encountered the real time, simulation optimization movement. An equally promising new technology that seeks to combine process modeling and real time measurement to control production operations. A technology at the heart of the much-vaunted ‘e-field’ and one that a priori would seem closer to the petroleum engineer’s heart than 4D seismics. I am sorry to have to report however that in the intervening period, real time and sim-opt seem to have made little or no progress. 4D seismics has come of age, real time remains on the drawing board.
Proselytizing
4D time lapse seismics met with relatively quick take-up because of successful proselytizing—notably by BP. The message was focused and simple—use seismics to see what’s happening in parts of the reservoir that can’t be reached by other methods.
CERA Hype
The same cannot be said for real-time optimization which somehow has got caught up in, and to believe some presentations, almost defines, the e-field. This in turn has been the subject of an untold amount of industry hype—much originating in the Cambridge Energy Research Associates’ report on the ‘Digital Oilfield’. I suppose that ‘digital’ in this context is supposed to represent that which is technologically shiny, new and improved. I find the very notion ‘digital oilfield’ to be ridiculous on two counts.
Digital not new
First it just doesn’t make sense! Second, digital is not new. Seismic data has been recorded digitally for thirty years, the plain old telephone system (apart from the end of the subscriber line) for as long. Computing is nearly 50 years old and has been used in the home for twenty years. As indeed has the (digital) music CD.
Technological dinosaur?
So is the oilfield the last bastion of analog technology? A technological dinosaur waiting to be brought into the modern (digital) era? Of course not. In this month’s Oil IT Journal, announcements from Okagawa, OSIsoft and Aspen Technology report on enhancements to off the shelf digital technology that has been deployed all over the world for a decade or more.
IQPC
In this month’s Journal we have a short report from the IQPC Fields of the Future conference. What emerged there was not so much hype but exasperation at the slow take up of new technologies. Proponents complain that ‘industry isn’t ready’ or that ‘people haven’t understood the value proposition.’ In short that conservatism and stupidity are holding things up. This may be partly true. But if you contrast the successful adoption of 4D with the halting beginnings of SimOpt you have to ask, ‘Why did one great technology get near instant take-up and another get the cold shoulder?’
No installed base!
The problem is easy to recognize coming from the IT world as one of selling new technology into sites with and without an installed base. Whereas 4D seismics had relatively little competition from existing reservoir management technologies, RT SimOpt is confronted by the complexity and multi-disciplinary world of oil and gas production metering and management. There is not a single element of the RT space which isn’t already squatted by ‘legacy’ technology. Most of it is already ‘digital,’ and under constant development.
Ancient and modern
The world into which the modelers are selling their technology is both ancient and modern, hi tech and low tech. It is only partially within the ring-fence of the SPE. And it spreads beyond the G&G-based software units of the major vendors—as SIS president Kjell Eric Ostdahl recognized at the Paris Forum (see page 6 of this issue). For SimOpt to work, folks will have to look at other industries, notably refining, visit other trade shows, such as the metering and process control community and most importantly, to realize that there are many stakeholders beyond the reservoir community—not least HSE who need some gentle persuading that modelers are going to enhance production without blowing up the facility!
Oil ITJ—You just held the Petrosys user group meeting (PUG)—how did that go?
Hirsinger—We’ve been holding Petrosys user group meetings for the past 16 years. This time we had 23 attendees from 21 sites—mostly mature users who have been working with us for some time. Of course the Sydney meet has an Australian focus. We’ve been trying to extend the concept internationally with varying success. No one has a lot of time for meetings these days, but we are working on an internet-based international user community.
Oil ITJ—What were the hot topics at the PUG?
Hirsinger—Connectivity, with our links to Seismic Micro Technology (SMT) and Petrel, and the growing desire from users in all sized companies to get their job done within a single application.
Oil ITJ—Let’s take the connectivity issue first—are these Open Spirit (OS) links?
Hirsinger—Today these are hard-wired. But one outcome of the PUG was to focus our attention on OS-based connectivity. The emergence of Petrel (pretty well everyone is using it!) has forced us to take OS more seriously and we are evaluating it right now. We hope that OS will help us solve a long standing problem—that of connectivity with IESX and GeoFrame. Petrosys is a long-standing user of the GeoFrame dev kit—and this has presented a litany of problems—our ‘worst case’ link. There are restrictions with Solaris versions and you can’t connect to Linux from Windows. We expect OS will resolve these issues—especially Windows access, thanks to SMT’s effort.
Oil ITJ—What of the OS business model?
Hirsinger—We are treading carefully with OS. There is no doubt that the link to Petrel works. But there are bad stories! OS is tainted by the GeoShare (GS) business model. The GS half link developed by Petrosys never worked—because other half links weren’t right.
Oil ITJ—What do your clients think of OS?
Hirsinger—BHP Billiton is an OS client in its own right and is very enthusiastic. Chevron Texaco is very positive. Saudi Aramco has not been so successful. Overall today there is enough good news coming out of OS to see light at the end of the tunnel.
Oil ITJ—How far off are you from an OS-enabled version of Petrosys?
Hirsinger—Two months will see demo links and validation. Decision time will be around the SEG. Four months later we will be running with limited data types, according to what people want to share.
Oil ITJ—Isn’t this an all or nothing thing?
Hirsinger—Footprint issues (a classic GeoShare problem!) remain. A round trip footprint leaves a ‘lowest common denominator’ dataset. Another issue is versioning vs. compatibility as data models evolve. We have put a lot of effort into different versions of PPDM, Landmark, etc. We expect the same with different versions of OS. We would like to see some ‘future proofing’ here.
Oil ITJ—You mentioned earlier the desire for a single package—can you elaborate?
Hirsinger—Users increasingly want one package to do everything. Spatial data management is becoming a huge issue. Very large companies have a team to do this, but users in smaller companies have to manage their own spatial data. This is where our tools come into their own. Engineers and geoscientists are using Petyrosys for GIS. So we are putting development effort into a generic spatial data model alongside our ESRI/SDE links. We will be producing a white paper soon on spatial technology. We really have a lot of experience in this area, especially with Oracle Spatial, SDE and OpenGIS. We want to bring folks together to discuss all this.
Oil ITJ—But OS does GIS too?
Hirsinger—Yes, but we want to look in depth at the reality of all these options. GIS is the next generation of CAD. When you look at data managers in oil companies you can identify three cultures. Ex drafting GIS (who tend to have an ESRI focus). IT-oriented (G&G POSC, PPDM—precision and complexity!). And the ‘librarian’ stream—document management system oriented. All these have built their own empires and are working to carve out their share of the IT ‘cake’.
Oil ITJ—Is BP still your flagship client?
Hirsinger—BP is a good client. But we’ve also just signed ChevronTexaco’s New Orleans unit and we are working on other CTX accounts. ConocoPhillips worldwide is probably our best client today.
According to a Wood Mackenzie study of the 10 largest quoted western oil and gas companies, development expenditure on upstream projects is at record highs having risen from an aggregate of US$35 billion in 1998 to US$50 billion in 2003.
Butter
WoodMac’s Derek Butter said, ‘This has been driven by expenditure on projects in the US Gulf of Mexico, deepwater West Africa and the Caspian. We expect these high levels to be sustained over the period 2004-2006 before dipping in 2007-2008.’
Exploration
But bullish development contrasts with a sharp downturn in exploration from over US$11 billion in 1998 to around US$8 billion in 2003, resulting in a similar fall in new discoveries.
Cost savings?
Butter attributes the fall to post merger ‘cost synergies’ which have cut exploration budgets. The rise in development spending has ‘squeezed out’ exploration dollars as companies sought to reassure on financial discipline.
IHS Energy
The second report, from IHS Energy, also notes the slowing pace of exploration over the past five years, with the big three’s spend down from $5.35bn in 1998 to a paltry $3.25bn in 2003.
Production paradox
The Financial Times recently highlighted a paradoxical effect from high oil prices. Production sharing agreements mean that high prices may actually reduce oil output as pre-determined profit quotas are met by lower production thresholds!
CGG, once a major player in the tape transcription business, has thrown in the towel and will outsource future transcription and tape management services to Ovation Data Services. CGG has awarded Ovation (and its DPTS unit) a three-year, renewable contract for tape transcription services and systems, tape asset and management services, tape recovery services, scanning and digitizing software, and programming services for digital media applications.
Servos
Ovation president, Greg Servos, said, ‘We are proud that CGG has chosen us as their preferred provider for these services. We are confident that as CGG’s preferred provider we will be able to continue to meet and exceed their expectations in providing these services.’
Deaton
Derick Deaton, Executive Vice President of CGG Americas added, ‘CGG’s strategy is to provide added value to our customers and to improve operational effectiveness Ovation will be a great asset for both of those objectives.’ Ovation’s services will now be available through CGG’s 32 branches and subsidiaries worldwide.
The US Department of Energy has awarded the New Mexico Institute of Mining and Technology (NMIMT) $4 million in grants for fossil energy R&D. The monies will support projects which ‘enhance energy security, reduce greenhouse gas emissions, and protect human health’. NMIMT will create a free, widely available, ‘fuzzy’ expert exploration tool to aid in finding new oil reserves. The tool, originally developed for the Brushy Canyon formation in New Mexico, will analyze drilling prospects and ‘reduce the risk of drilling new wells’.
AI
The Fuzzy Expert leverages artificial intelligence to ‘simulate, but not replace’, a human expert. The project is scheduled to last three years and will cost a total of $4 million—of which half will be provided by the DOE.
Greenhouse gas
Other DOE-funded projects target the health effects of fine particulates emitted from coal-fired power plants, enhanced oil and gas recovery and carbon dioxide injection and sequestration.
Brazilian state oil company Petrobras has licensed Knowledge Systems’ (KS) Drillworks Expert Suite for geopressure analysis of its exploration wells worldwide. Petrobras has been using KS’ tools for three years. The new Drillworks Expert solution offers geopressure analysis, 3D visualization, seismic velocity correction, seal integrity, compartment and wellbore stability analysis.
Rocha
Petrobras drilling advisor Luiz Rocha said, ‘We use Expert’s Drillworks Basin technology to bring together seismic, drilling, and geologic data and predict geopressures at the basin scale. This allows us to focus us on multiple target locations in the field, develop more accurate predictions, and improve our well construction.’
Drillworks 2005
KS also announced ‘Drillworks 2005’ an improved version of it geopressure toolkit which adds ‘Pressbase,’ a geopressure database, and a new leak-off test analyzer. The ‘knowledge-based real time solution’ also gives operators a 1,000 foot ‘look ahead’ of the bit during drilling to monitor and react to geopressure and stress changes.
Landmark Graphics has acquired Exprodat Technology’s Project Administrator (PA) application, one of three Exprodat-developed web-based data management tools for E&P project databases and supporting infrastructure.
Rodney
Exprodat director Bruce Rodney described PA as ‘the third leg of the stool’ which includes WOW (data browser and documenter), Corporate Data Archiver (project reporting and archival) and now Project Administrator (environment analyzer and manager).
Project environment
PA focuses specifically on the project environment. The product delivers an easier-to-manage project environment where problems are anticipated and resolved proactively, rather than reactively. The result is decreased downtime and increased productivity.
WebApps
PA is marketed as part of Landmark’s WebApps technology framework, including WOW, Corporate Data Archiver, Project Administrator, WOW for Paradigm’s Geolog and WOW for Schlumberger’s GeoFrame. PA also includes a generic file management module for analyzing disk usage across the entire file system, including both UNIX and Windows drives.
Apache Corp. has invested $1.2 million in Actuality Systems as part of a $6.5 million fund raising round for the spatial 3D visualization technology specialist. Actuality’s Perspecta 3D visualization engine is a curious, enclosed 3D display with a claimed 100 megapixel resolution.
Favalora
Actuality president Gregg Favalora said, ‘This financing will help us expand further as an imaging and visualization tool for oil and gas exploration and it adds momentum to our efforts to bring Perspecta Spatial 3D to commercial users even more quickly.’
Bahorich
Apache’s Mike Bahorich added ‘Perspecta is unique in that it enables us to view geological, geophysical and reservoir information in three dimensions as it truly exists rather than with two-dimensional displays to which industry has grown accustomed. We are looking forward to working closely with the team at Actuality to develop this promising technology for finding more hydrocarbons.’
At the SEG
Oil IT Journal saw the Perspecta at the SEG this month and was not impressed. In its current manifestation the system has little impact and suffers from its ‘crystal ball’ enclosure and intrusive refreshing mechanism. It’s hard to credit the system with a 100 megapixel resolution.
Petris Technology and Open Spirit have developed an OpenSpirit (OS) link to the Petris Winds Enterprise (PWE) data management system. The link was developed for Total’s GeoDrill application and enables data exchange between well planning, design and engineering applications. PWE customers now benefit from OS connectivity and OS users can likewise access data in PWE.
Zebra
Petris also announced an agreement with Zebra Geosciences to provide its WebDataView (WDV) well log, seismic, image and document viewing tool, as an option in PWE.WDV offers remote viewing of log and seismic data and allows user control of a wide range of on-screen layout parameter settings such as the number of traces, color/variable area/wiggle, scales, start time, curve table layout, start depth and curve colors. WebDataView also allows viewing of a host of documents and data files published in their native formats, such as Word, Excel, PDF, CGM and DWG, without data reformatting.
The fifth National Data Repository Meeting (NDR5) was held last month under the auspices of the American Geological Institute in Washington DC. NDR5’s scope has broadened beyond the oil and gas business to encompass multi-use earth science data repositories.
Diskos
Norway’s Diskos was presented by Eric Toogood (NPD). Diskos has become ‘an essential element in E&P data management strategy’. Today, around 60 Terabytes of quality seismic well data are available on-line. Toogood warned however that creating a successful NDR is not easy. The task ‘often takes much more time than first expected due to the complexity of the task and the many issues involved.’
US NDR
The AGI’s Christopher Keane contrasted Diskos with the lack of a ‘strong centralized policy or agency in the US’ that could assure preservation and accessibility of geologic data. Offshore data is held privately with eventual migration into the public domain. Onshore data remains the property of the operator and is governed by state laws. Some states operate data repositories of varying quality and scope. AGI’s ‘NGDRS’ project was established to facilitate an interconnection between these facilities and the data end users and to preserve ‘at risk’ data.
Company viewpoint
Bill Kempner presented a joint initiative between ChevronTexaco, the USGS and the AGI to preserve vintage 2D and 3D seismic data from the West Coast of the USA. The initiative sets out to create a single dataset on modern media and provide public access over the internet. Economic justification, legal and logistical details and final contracts are nearing completion.
Indiana Geological Survey
John Steinmetz (Indiana Geological Survey) emphasized the importance of metadata in both geographic information (GIS) systems and as a means of building a catalogue of data for the organization.
Iowa State
Cinzia Cervato (Iowa State University) described the Chronos system, a data network for sedimentary geology and paleobiology. Beverly Blakeney-DeJarnett described the Texas Bureau of Economic Geology’s core and sample repositories and a searchable online database provided by the BEG. The BEG has also proposed a new business model for operating the Houston Research Center.
Kjell Eric Ostdahl, two weeks into his presidency of Schlumberger Information Solutions, gave a competent performance, imagining what E&P would look like ten years from now. Ostdahl noted that connecting information has not added value. Instead it has produced information overload. Now we need to ‘combine technology with process, best practice and business integration,’ to ‘connect workflows’ and generate high quality prospects in ‘days rather than months’. Service companies will work with oils to improve the quality of interpretation especially through the judicious application of 4D seismics. Instrumented wells updating a shared earth model will increase recovery up to around 70%. Finding and developing costs fell by 25% in 2000 and will halve by 2014. Single wells will reach multiple targets, seismics while drilling will look ahead of the bit. Onshore operation centers will take real time feeds from static and dynamic models. Time to first oil will be halved.
Petrel
On the SIS application front, Petrel is to be the core of SIS’ ‘seismic to simulation’ workflow—expanded to include seismics and ‘forward simulation’. Work is underway, with ChevronTexaco on a new flow simulator, ‘Project Intersect’ which will integrate with Petrel. The SIS Business Consulting Group formed one year ago now has around 100 consultants working on asset optimization, QHSE and HR. The consulting business unit will help make SIS a ‘thought leader’ and ‘turn the industry around’.
Too much G&G!
Ostdahl believes that SIS has been ‘way too focused on G&G.’ But this year has seen a renewed interest in production with new software tools—especially Decision Team’s production data mining. Moving further midstream and downstream, SIS has initiated an alliance with Aspen Technology. Schlumberger’s application portfolio is to consolidate around an ‘open framework, a single shared earth model (Seabed) with an ‘open’ application programming interface, used by SIS to develop its own applications.
Round table
A round table discussion led by the Economist’s Vijay Vaitheeswaran, author of the book ‘Power to the People,’ offered an upscale panel with representatives from the IEA, NNPC, Saudi Aramco, Oxy, Shell, Pemex and Total. Vaitheeswaran described a situation where an energy crisis and rising prices were reported as having ‘a serious effect on industry.’ This was back in 1704 when charcoal prices had doubled in a 70 year period! Thus was born the coal-fueled industrial revolution. Such events and, by implication, the situation today, reflect ‘a confluence of crisis, technology and entrepreneurship’.
Occidental Petroleum
Oxy CIO Don Moore categorizes the i-field as MOP ‘modern oilfield practices.’ These comprise virtual teams with a ‘plug and play’ workforce, ‘drill to earth model’ practices and the quest for the ‘perfect’ well production index. Knowledge networks, communities of practice and consistent E&P processes ‘bother some people’. But overall, the consistent visualization model across all assets and common look and feel ‘ease access to technical data’. Oxy is also reaping the benefits of the ‘convergence’ of geoscience and engineering tools. Standard software from multiple vendors aims to provide ‘best of breed’ tools for the job.
Shell
Shell CIO Graeme Henderson asks ‘will a new technology still be around in 10 years?’ Can staff adapt? Can it be deployed? Over the next decade, Henderson sees a move from wired to wireless, from fixed capacity to on-demand commoditization of systems, from dumb stand alone devices to smart integrated systems. These will enable the fully digital smart field, supported by the ‘loop’ of real time measurement, adapting the model and controlling the field. In one heavy oil steam injection project, micro-seismic monitors are used to aid drilling decisions on multi-branch intelligent completions—integrating e-SCADA over the vMBus. Elsewhere IT’s move to ‘utility computing’ ‘will have a remarkable impact on seismic processing’. Visualization will scale up to always-on ‘vast walls’ supporting worldwide collaboration.
Toma
Schlumberger’s Ihab Toma reported an IBM study which found that ‘industry wastes $15 billion per year on bad decisions’. These lead to oversize facilities, dry wells and other costly gaffes. SIS’ solution is to offer global connectivity and support ‘best-of-breed’ niche applications. These should be usable ‘without breaking the workflow.’ Citing the Cambridge Energy Research Associates’ Digital Energy study, Toma stated that all the CERA goals for increased production from i-field deployment have been achieved or surpassed in individual projects. But still, relatively few projects use all available technology. Fewer than one in ten wells are drilled dynamically with wellbore design and/or target adjusted during drilling. While a large amount of real time data is collected, little is done with it.
Ocean
Toma outlined SIS’ technology blueprint which has the Microsoft .NET-based ‘Ocean’ as the framework for development and production. Linux-cluster-based GigaViz is now integrated with GeoFrame (which remains SIS’ flagship ‘qualification’ tool and SIS’ largest software cost center). According to Toma, 70% of oil and gas companies already run Linux clusters. In 2005, Petrel will have a GigaViz server running over OpenSpirit. Complete seismic workflows are being built into Petrel including the new Ant horizon tracking. Petrel will be ‘Ocean-compliant’ next year. There will also be a real time WITSML feed to Petrel ‘real soon now’. Toma also spoke about Schlumberger’s alliance with AspenTech for field-to-facilities modeling—although this topic was somewhat under-represented elsewhere at the Forum.
Shell
Peter Kapteijn (Shell) proselytized enthusiastically for real time production optimization. Shell’s ‘value loop’ involves a circle of four ‘assets’, physical, data, models and decisions. A significant value loop for Shell is the Smart Field (SF) built around an integrated Data and Control Architecture (DACA) linking real time data with asset teams. Today the SF is hampered by masses of inconsistent data, poor models, spasmodic optimization efforts, laborious decision making and poor uncertainty handling. This leads to ‘reactive rather than proactive’ reservoir management. Ten SF pilots are underway including the deepwater Gulf of Mexico Mars field, Brunei’s ‘East Asset’ and the Norwegian Ormen Lange gas field which is ‘completely smart*’. Kapteijn reports that all Shell’s smart field tests have beaten CERA’s digital oilfield forecasts. Better still, the cost of ‘smartness’ is dropping all the time. Ten years ago, a distributed control system (DCS) cost $15-25k/well: today around $5k. Shell’s integrated services platform will be built with components from Invensys (ArchestrA), SIS (Ocean) and Microsoft (Longhorn)**.
Nintendo
Kapteijn concluded his presentation with a compelling ‘Nintendo’ simulation performed for Shell by the Delft Technical University. A video showed water injection and oil production monitored and modeled in real time. A ‘dynamic mode’ allows for optimization, changing settings of valves as encroachment is anticipated. Such actively managed flood patterns can lead to 20 % more recovery and 50 % less water to dispose of. The more complex the reservoir, the better this works. Kapteijn asked, ‘Can industry afford not to do this?’
Seabed
Schlumberger lead data modeler Jay Hollingsworth unveiled the new Seabed data model architecture. Seabed represents a shift from ‘data-centric’ to ‘i-enabled’ processes. Hollingsworth’s brief was to supply a single logical data model that would support ‘everything’. Seabed is a ‘configurable’ database for Schlumberger’s next generation applications and information management. Unlike existing E&P databases, Seabed will leverage Oracle’s technology to the full—particularly the extensions available in Oracle 9 and 10. All new Schlumberger developments will deploy Seabed. But the technology itself is ‘not for sale’. Notwithstanding this, Seabed was presented elsewhere at the Forum as a future replacement for Finder. Today, products like SeisManager and ReservoirManager already use the new database.
Best of
In designing Seabed, Schlumberger took the best of POSC’s Epicenter and the PPDM Association’s model. The result is a modular design, separable to stand alone units by domain, by level of detail and by function. Uncertainty is ‘completely embedded’—forming a ‘third dimension’ in the Seabed data model.
eSearch
Steve Darell (Iron Mountain) described the ‘tight partnership’ between SIS and Iron Mountain which has resulted in eSearch V2.6, the current release. This resulted from the marriage of Iron Mountain’s Open RSO and Schlumberger’s AssetDB. The web-enabled tool offers multiple criteria search and order—by well, geographic area, permit etc. and interfaces with multiple data sources. Full text ‘Google-like’ searching across all digital assets is now possible. Information is stored independently of its location. Total’s home-grown DocXplo asset management system has also contributed to the product’s evolution. An API allows for integration with third party portals and applications such as Documentum.
Roadmap
Dean Quigley presented Schlumberger’s IT roadmap to the future which targets ‘wider integration with downstream systems’. The foundation is the aforementioned Seabed, with Ocean supporting the drilling and production tools. A souped-up version of the OpenSpirit middleware will assure connectivity with legacy applications—particularly GeoFrame. Today’s ‘silos’—Finder, LogDB and SeisDB—will be replaced with more ‘open’ systems built around Seabed and Open Spirit data access. The plan is for ‘smooth evolution’ rather than abrupt change. Finder will transition ‘when you chose to’ and it will be a ‘one button push’ operation, ‘providing Finder has not been customized!’.
ChevronTexaco
Mike Hauser presented ChevronTexaco’s (CTX) vision for the ‘i-field.’ Even on a high-end Gulf of Mexico asset people still spend 50 to 80 % of their time manipulating data before making a decision. Hauser believes we have to ‘fix processes so as not to be inundated by data’. Today, we have lots of information from automation systems and down hole feeds and ‘we don’t do anything with it’. CTX’s i-field initiative sets out to help assets identity opportunities, to link solutions to assets and fill technology gaps with R&D. Hauser also finds the CERA numbers conservative and sees the i-field as the ‘next wave for a major change in our industry’. CTX does not believe in ‘pilots,’ these do not garner sufficient commitment for success. i-field successes have been reported from the MP41 GOM platform—equipped with wireless technology—and an artificial intelligence (AI) test on the Cymric steam injection project in California where an AI scheduler has standardized complex procedures on the 1Y field. CTX’s partners include Schlumberger, SAIC and Microsoft—described by Hauser as ‘companies who have kind of got it!’
Avocet
Amy Howell showed how the SIS/AspenTech alliance is making possible combined modeling of the reservoir and production facilities. The Avocet Field Asset Modeler takes fluid compositional forecasts from the simulator and feeds AspenTech’s Hysys facilities model. Real-world development options can be leveraged to maximize NPV over the life of a field.
* The Norsk Hydro-operated Ormen Lange may be ‘smart’ but the Financial Times described it recently as a ‘byword for inconsistency in reserves booking’!
** A surprise, as Longhorn,
Microsoft’s next operating system, is due for release towards the end of 2006!
This article has been taken from a longer report produced as part of The Data Room’s Technology Watch Reporting Service. More from tw@oilit.com.
Trudy Curtis is now CEO (and CIO) of the PPDM Association. Curtis was previously ‘acting’ CEO.
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Schlumberger has opened a ‘Technology Hub’ on the campus of the Gubkin Russian State University, Moscow.
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Chad Deaton has been appointed CEO of Baker Hughes.
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GE Energy’s oil and gas division is to set up a training center in Atyrau, Kazakhstan in cooperation with Groupe CIFA.
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Geotrace has appointed Matt Gaskamp as senior systems administrator to its Houston Imaging Center. Gaskamp was previously with Paradigm Geophysical.
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Helix RDS employees Anette Poulsen and Russ Gilbert have won awards for services to the Aberdeen section of the SPE.
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Knowledge Systems has named Russell Smith as global sales manager.
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Bart Vos has left Jason Geosystems to joint Pinnacle Technologies.
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Kjell Erik Ostdahl is president of Schlumberger Information Solutions following the departure of Peter Goode who is to head up Vetco International.
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PGS has appointed Rune Eng president of PGS Marine Geophysical. Eng replaces Diz Mackewn who is now senior VP of Geophysics.
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Randy Stilley has quit his position as CEO of Seitel. Chairman Fred Zeidman is to assume the CEO role on an interim basis.
There was an air of dissatisfaction with the past, and pessimism for the future, about the IQPC Fields of the Future (FoF) Conference held in Aberdeen last month. Marrying information technology with production operations is proving a hazardous task!
Schlumberger
Schlumberger’s Harvey Cox set the scene in his keynote by observing that, in the upstream industry, $15 billion a year is wasted ‘through poor quality decision making.’ This amounts to some 25% of total spend. Despite this, Cox claimed that IT-enabled work processes had dramatically lowered the cost of producing the barrel oil equivalent and that this trend would continue. E-enablement will connect people, process and technology in an ‘operational process,’ with information captured and re-used to ‘increase the value of the operations in real time’. This will need a convergence of new business processes, standards, work practices, change management, oilfield and software technologies, data capture, management and delivery, plus IT systems and integration. All of which will create a ‘virtuous circle’ capable of delivering tangible additional value creation from an oil or gas asset.
BP Norway
In his strategic perspective on fields of the future, Morten Heir (BP Norway) blamed slow progress on ‘people resistance’. Another challenge is persuading companies to capitalize on existing technologies, much of which is under-utilized. Indeed this is unlikely to change with $50 oil as the premise now is to minimize interference with wells so long as their output was deemed acceptable. The prevailing Norwegian attitude was that intelligent (smart) wells were too high risk.
Shell
Shell smart fields program manager Peter Kapteijn said, ‘If I have to have a bunch of computer programmers rewriting programs every time I want to change some minor element of workflow, that’s not right. What you need is a process that is easily configurable by supervisors and management.’ Kapteijn said that Shell’s smart fields team had started to deliver model-based control processes which are especially relevant to today’s complex reservoirs. One smart well in Brunei combined five hydrocarbon-bearing payzones in a single well using ‘smart’ completions technology. But to get it right, it was necessary to develop a model that mimicked the likely behavior of this well and to use real well performance data to update the model. The result was a 20% hike in recovery. This was achieved by hooking the well up to a device that communicates data, stores the data and suggests an optimization procedure. Once this has been implemented, ‘you look at the response of the reservoir and find out whether the model that you’ve used to decide on what to do is in fact correct’*.
Invensys
According to Calvin Cobb, VP global hydrocarbons, Invensys has devoted a great deal of effort to the Field of the Future, with particular focus on real-time production management. Specifics include: production visibility, well measurement and allocation, flow assurance, production optimization, remote operations, production/market integration. Invensys’ previous real-time initiative, based on WonderWare, provided the company with an understanding of the immense complexities inherent in the FoF. This early work evolved into ArchestrA, Invensys’ proprietory integration framework that now forms the backbone of its real-time integrated operations.
ChevronTexaco
According to ChevronTexaco’s Zuwa Omoreigie, many oil companies are transitioning from the ‘initial vision and hype phase’ to real projects delivering real value. But the oil industry lacks the capability to develop needed IT-based technologies internally. There will be increasing reliance on service companies for advancements in measurement and technical applications. Omoreigie concluded ‘The path to transformation will not be top down, we’re looking for asset pull, success stories and internal/external momentum to drive transformation. We will need full co-operation at asset level to identify opportunities and develop solutions and we will need champions at executive level to ensure long-term commitment to transformation.’
* See also Kapteijn’s talk in our report from the Schlumberger Forum on page 6.
Malaysia’s national oil company Petronas has awarded Roxar a software and services contract worth $1.73 million. Roxar is to supply Petronas’ E&P unit with its Irap RMS geomodeling software. Irap RMS is used for 3D reservoir interpretation and optimization, mapping, modeling, flow simulation, well planning and workflow management.
Toennesen
Roxar regional manager Morten Toennesen said, ‘This agreement is a milestone for us in the Middle East and Asia Pacific (MEAP) region as it recognizes our expertise and commitment to working in partnership with our customers to help them to optimize reservoir performance and maximize the value of their assets.’
Expansion
Roxar recently announced expansion plans for its MEAP operations to service its growing client base. Customers in the region include Saudi Aramco, the ADNOC group of companies, Kuwait Oil Company, Dubai Petroleum Company, PetroVietnam, and Santos and global accounts ConocoPhillips, Total and BP.
SGI and Landmark conducted a technology tour de force at the Denver SEG this month. Using a dataset loaned by Marathon and Landmark’s Geoprobe interpretation software, SGI demonstrated a purpose built graphics supercomputer at the Denver Planetarium. The system was built around a 64 processor SGI Onyx4 with 4 graphics processing units, 512GB system memory running a 64 bit version of GeoProbe. The seismic data visualized was 400GB in size, a world record according to Landmark.
Crawford
Sharon Crawford, computer-aided interpretation supervisor with Marathon said, ‘Marathon has many very large datasets used to characterize complex reservoirs and currently geoscientists are limited in the amount of data they can visualize at one time. The ability to visualize multiple attributes over an entire area will give a better understanding of the overall picture.’ Oil IT Journal found the display lacked impact. This was probably due to the ‘dilution’ of the 14 megapixels over the vast expanse of the Planetarium. Looking upwards from a reclining seat to see down into the earth is also an awkward ‘metaphor’..
Schlumberger Information Solutions (SIS) and Houston-based ‘full service’ data center CyrusOne have signed an agreement to provide outsourced IT infrastructure services to the N. American oil and gas industry. The deal extends SIS’ petrotechnical computing infrastructure solutions into a ‘Tier 1 data center space,’ the highest level of security, power, connectivity and monitoring. The agreement includes managed computing services backed by a ‘100 percent availability and security guarantee.’
Domeracki
Dan Domeracki, SIS’ North America business manager said, ‘Providing managed computing infrastructure services optimized for petrotechnical computing is just one example of how SIS is helping our customers meet industry challenges. As the demand for secure, reliable and flexible computing increases, our partnership with CyrusOne positions SIS to provide more flexible, cost-effective secure computing solutions.’
McLane
CyrusOne VP Blake McLane added, ‘The partnership with SIS is a natural fit for our industry practice. Combining the depth and breadth of services offered by both organizations, addresses the ever changing and demanding technology requirements of the oil and gas industry. We are confident that the complementary offerings from SIS and CyrusOne will allow our clients to focus on and improve their core operational processes.’
Grant Prideco/Novatek’s jointly developed drill string Ethernet has been successfully tested in a 6,400 feet commercial well lasting 500 drilling hours. The test established a 1MB/s data link with above-ground receivers. The next step is to test the technology at higher-temperatures in a second, deeper well.
Real-time
IntelliPipe, whose original development was funded by the US DoE, provides real-time logging kick detection over a bidirectional communication link. Data can be collected at multiple points along the length of the drill string.
Landmark Graphics has formed a strategic alliance with Edinburgh Petroleum Services (EPS), now a wholly-owned part of Weatherford’s eProduction Solutions unit. The alliance will integrate EPS’ ReO network optimization, nodal analysis, and material balancing technologies with Landmark’s Engineer’s Desktop and Real Time Surveillance technologies. EPS MD Laurence Ormerod said, ‘Our experience in production optimization coupled with Landmark’s drilling and production solutions, lets operators manage the entire asset as one system, driving field performance and optimizing the hydrocarbon value chain from the reservoir to the point of sale.’
Production optimization
‘This integrated application suite will support well design, drilling operations, material balance determinations, gas lift design, network optimization, and production surveillance,’ said Ormerod. Landmark’s Desktop Navigator and Engineer’s Data Model will provide a single user environment and data source for the new application suite.
Tecplot Inc. has just released a new version of its reservoir engineering visualization and plotting software Techplot RS. Tecplot RS, which was developed with help from ChevronTexaco, allows data from multiple reservoir simulators to be viewed and plotted along with observed data such as production rates and formation tests. New in Tecplot RS V 5.0 is the ability to handle extremely large data files, reduced memory usage, speed optimizations resulting in performance improvements, and simplified access to plotting functionality.
No data limit
The removal of the 2GB file size limit allows users to access massive datasets on 32-bit Linux and Windows platforms. 64-bit versions of Tecplot RS are now available for Linux and UNIX, providing even greater data management resources.
Faster
Many operations are now ‘three to five times faster’. A grid preprocessing and a ‘restart’ function have been added. These speed-up data loading data and give finer control over the loading of selected time-steps and variables. Pricing begins at $3,500.00 for a single-seat license. Multi-platform network licenses are also available.
Pipleline software specialist GeoFields has released a new tool for High Consequence Area (HCA) analysis of gas pipelines. RiskFrame HCA calculates potential impact zones (PIZ) according to the US Office of Pipleline Safety (OPS) categories. RiskFrame HCA then analyzes the potential impact on identified sites. According to OPS rules, gas pipeline operators must identify high consequence and risk areas as part of a comprehensive integrity management plan.
Schaaf
GeoFields president Brad Schaaf said, ‘By combining our technology leadership in liquid HCA analysis and experience with major gas transmission operators, we developed RiskFrame HCA Analyst to meet the unique requirements of gas transmission rules.’
Flexible
RiskFrame HCA runs atop PODS, APDM and client-specific pipeline data models, provides geo-processing capabilities leveraging ESRI’s ArcGIS 9.0 Engine. The tool can operate as a stand-alone product or as part of an enterprise data management solution.
Aspen Technology has expanded its strategic alliance with Microsoft to embrace AspenOne, its latest solution for enterprise operations management (EOM). AspenTech has agreed to deploy key ‘current and future’ Microsoft technologies across its product portfolio. These include SharePoint Portal Server, BizTalk Server, SQL Server Analysis Services and SQL Server Reporting Services.
Johnson
Microsoft industry manager Charles Johnson said, ‘Our companies can now jointly address areas such as enterprise operations management with solutions that ensure optimization and automation of business processes through improved communication and collaboration delivered by Microsoft’s integrated platform.’
Marketing
The alliance also includes joint marketing initiatives aimed at accelerating market awareness and acceptance of EOM solutions. These bridge the gap between ERP and the control systems (DCS/PLC) that manage plant processes. Aspen’s client portfolio includes BP, ChevronTexaco, ExxonMobil, Shell, and Total.
IHS Energy has just released a range of self-contained wireless devices for oilfield data collection. iNodes brings ‘affordable automation’ to mature onshore fields and ‘streamlines’ ongoing automation projects for a broad range of oilfield assets.
Boone
IHS Energy VP Doug Boone said, ‘With iNodes, the benefits of wireless automation are now within reach for the vast majority of onshore fields where trenching has been such a formidable economic obstacle. Operators will find these smart sensors to be significantly less expensive in terms of hardware, maintenance and installation.’ According to Boone, the ‘exorbitant’ outlay associated with field automation can outweigh the benefit of gathering real-time production data from lower-producing assets.
Solar panel
iNode devices are powered by an integrated solar panel and communicate through bi-directional radio or satellite. iNodes products include pressure monitors, flow meters and tank level gauges. Communications leverage the Modbus Gateway which allows a remote terminal unit (RTU) or existing radio infrastructure to retrieve data from any iNodes sensor. According to Boone, the economics of automation now make sense for wells with production as low as 5 BOE/day, based on increased production, greater operational efficiencies, less downtime, better revenue protection and reduced environmental and health/safety risks.
Murphy Oil Corporation has completed implementation of P2 Energy Solutions’ Entelligent Enterprise Resource Planning (ERP) suite. Entelligent is an oil and gas specific ERP solution built around PeopleSoft EnterpriseOne financials. Entelligent supports joint interest accounting and authorization for expenditure applications. P2 Energy Solutions assisted Murphy with analyzing its business needs and implementing its defined solutions, including system configuration and setup, data conversion, testing, training, and risk and readiness assessment.
Upgrade
The five-month implementation was a joint effort between Murphy and P2 Energy Solutions. The availability of the Entelligent software enabled Murphy to upgrade from PeopleSoft character-based EnterpriseWorld software to PeopleSoft EnterpriseOne Web-enabled. The upgrading assures Murphy of continued support and enhancements from both PeopleSoft and P2 Energy Solutions.
Joyner
Marilyn Joyner, Manager of Information Systems and Programming for Murphy Oil said, ‘With Entelligent software we can maintain all of the functionality of our present system, enhance its functionality and maintain a seamless interface with EnterpriseOne. Having Entelligent and EnterpriseOne on the same platform gives us access to business information in a cost-effective manner. P2 Energy Solutions’ contribution was integral to this project.’
Derr
P2ES COO Trent Derr added, ‘PeopleSoft offered existing clients a migration path from their character-based tools to the new web-based user interface. Our Entelligent software enabled Murphy to take advantage of this migration opportunity by adding energy-specific functions to the base PeopleSoft ERP solution. Murphy is our second PeopleSoft World client to migrate and we look forward to other clients following their lead.’
The American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE) have established an Intersociety Exploratory Committee on the potential establishment of a program for the Certification of Petroleum Reserves Evaluators.
Enron scandal
Recognizing concerns since the Enron scandal, recent reserves writedowns and the passing of the Sarbanes-Oxley Act has caused these societies to evaluate the merits, interest and importance of establishing a Voluntary Certification Program for Petroleum Reserves Evaluators.
Tearpock
AAPG representative Dan Tearpock said, ‘There has been a lot of publicity regarding reserves writedowns and concerns about the reliability of disclosures. From the standpoint of oil and gas companies and their investors, to Wall Street and the SEC, reserves are an important part of everyday life in the energy industry.’
SPEE
The Texas-based Society of Petroleum Evaluation Engineers was established in 1962 to ‘promote petroleum evaluation engineering, to foster the spirit of scientific research among its members, and to disseminate facts pertaining to petroleum evaluation engineering among its members and the public*.’
*Here the SPEE hasn’t done a very good job—this is the first time we’ve come across the organization!
Yokogawa Electric Corporation has been awarded a contract by Shell ExxonMobil joint venture Nederlandse Aardolie Maatschappij (NAM) to equip the giant Groningen gas field with Foundation Fieldbus instrumentation and control systems.
Biggest ever
The contract is for the replacement of a conventional DCS with a state-of-the-art digital control system based on Fieldbus technology proposed by Yokogawa.
The contract, valued at €38 million is though to be one of the largest Fieldbus-based digital control systems in the world. Ultimately, 29 clusters and 296 gas wells will be controlled and operated remotely from a central control room. Fieldbus technology reduces both the amount of wiring required for equipment installation and the number of field devices that must be installed. In addition, it reduces the amount of engineering work such as start up, construction and field work, and enables both predictive maintenance and remote troubleshooting.
Cost reduction
Fieldbus is seen by NAM as an enabler to operational and maintenance benefits. It is anticipated that NAM will be able to reduce its operational and maintenance costs by more than 1 million euro over the next five years.
10th anniversary
Fieldbus, an open, non proprietary system celebrated its 10th anniversary this month. Fieldbus regroups instrumentation vendors and oil majors including ExxonMobil, Saudi Aramco and Shell.
French e-procurement specialist CC-Hubwoo has signed a memorandum of understanding with Trade Ranger which plans for the acquisition, by CC-Hubwoo, of Trade Ranger before the end of the year. The value of the transaction is between $12 and $23 million-worth of CC-Hubwoo stock and cash, contingent upon the future value of Trade Ranger’s contracts, working capital and cash.
cc-Chemplorer
Trade-Ranger is an electronic marketplace specializing in providing e-procurement solutions for the oil, gas and chemicals industries. Trade-Ranger’s customer base includes ConocoPhillips, ENI, Repsol YPF, Shell, Statoil, and Total. CC-Hubwoo, created in July 2004 by the merger of Hubwoo-Avisium and cc-Chemplorer, provides on-demand electronic procurement solutions and MRO supplier network management to companies like Total, BASF, EDF, Michelin and Volkswagen. CC-Hubwoo manages a network of more than 8,500 connected suppliers in 44 countries and posted pro-forma sales in excess of € 22 million (Euro) in 2003.
Wilson
Trade Ranger president and CEO John Wilson said, ‘We have successfully proved the concept of e-procurement in a variety of experiments and pilot projects. The company has fulfilled its original mission to connect a group of powerful buying organizations with a growing pool of global suppliers. It is time now to build a company with more diverse offerings to meet the growing expectations of our customers. The combination of our two companies will create one of the world’s largest electronic trading and catalogue content hubs for indirect materials, leading the trend in the consolidation of marketplaces.’
Real-time Performance Management (RtPM) specialist OSIsoft, Inc., has just announced key enhancements to its PI-ACE (Advanced Computing Engine) and PI System. OSI Soft also announced the availability of RtAlerts, an online event monitoring and alert management system that proactively notifies users about important events and condition changes in their plant or process.
Saucier
OSIsoft VP marketing, Michael Saucier said, ‘Every feature of our RtPM Platform is designed to meet the needs of today’s agile enterprise. We have worked closely with our customers to create and enhance products that are tightly integrated with industry needs so that customers can easily access and analyze real-time information.’
PI System
OSIsoft’s PI System powers the RtPM platform, which provides ‘event-driven management of the business decision cycle’. The next generation of PI includes several patches and adds new performance enhancements. Customers that have moderately to heavily loaded PI Systems will experience a nearly two-fold performance increase in retrieving and storing data, enabling more users to get the data they need even under heavy load.
Colyer
Microsoft process industry guru Chris Colyer commented, ‘Companies seeking to improve operational efficiencies are turning to vendor solutions that allow them to access information over the internet. OSIsoft acknowledges this trend and has developed its Real-time Performance Management solutions using Microsoft .NET technology—enabling customers to significantly improve communication and collaboration.’