The show kicked off with a video of John Gibson, Landmark chairman and Chief ‘Excitement’ Officer, dressed as a hells angel, and riding on a Harley Davidson! His message is that technical to business (T2B) integration is to have a great impact on the industry, and that it will allow operators to make the ‘best decisions in real-time.’ Gibson puts his helmet on and signs off with “safety first and then go as fast as you can!”
John Wilson, Landmark VP Marketing, touted the power of real time decision making. According to ‘a study’, “If all decisions were optimized, this would lead to a 50% productivity gain in the oil industry, a $40 billion per year gain!” Wilson wants to eliminate the decision ‘fat’ in the way the industry does business. Wilson walked through the now familiar arguments of a) an ageing industry, with more and more being asked of fewer and fewer people, and b) the ‘unsatisfactory return on investment’* offered by the upstream. A newer slant was that of the relatively poor opportunities offered to IT professionals in the oil industry. Wilson argues that an IT professional might dream of becoming the chairman of SAP, SAIC or Landmark, but never of Exxon. This fact, argues Wilson, supports the outsourcing argument. The aging workforce brings a need for new blood. The new, younger hires will be inexperienced and will need intensive training to avoid their making costly mistakes. Landmark’s Knowledge offering is set to collapse training cycle times. Wilson’s second keynote addressed the state of IT/IM. Today, information management is predicated on a ‘just in case’ paradigm. Data remains a relatively intractable problem, giving pain points in finding, using and capturing the value. The new challenge is to cope with exponential growth in data volumes – from 4D, multi-component etc. Landmark’s solution, or part of it, is the e-field – real time decision support for the lifetime of a producing property. The e-field is to be enabled by bandwidth – and here Wilson sees great encouragement from the 24 million miles of fiber laid in 1999.
The presentation on Landmark’s E-Strategy was, intriguingly, given by Ben Trewin of ILEX Technologies. Trewin introduced a fictitious oil company “Great Decisions Oil & Gas” (GDOG) which featured in many of Landmark’s presentations. A farm-in offer from another made up oil co “New Economy Energy” was used to illustrate the Landmark-Petroleum Place Electronic data room. The merits of the virtual data room would be more better expressed by some real world examples, although the theory seems credible enough. Petroleum Place receives 90,000 visitors per month and was voted one of Forbes Magazine’s ‘best of B2B’ websites.
Grand Basin (GB) is now 100% owned by Landmark following acquisition out of SAIC’s stake. GB is described as an electronic workspace and will offer Application, Data and Knowledge service provision to users over Metro Area Networks and LANs. Grand Basin facilitates a Virtual Office with teams formed from distributed users In Houston, Grand Basin out sources its hardware to benefit from pro-active management of storage, operating systems etc.
Grand Basin manages the data and the interface. March 2001 saw the first three pilots of broadband pilot applications at customer locations with Landmark’s Drilling Information Management System (DIMS), the first ASP-enabled app. Rigs can connect to the ASP provider for daily reporting and operators plug into the system without specialized hardware or applications. As yet the situation with regards to data vendors is unclear, although clients can access data from IHS, Tobin etc. through Grand Basin and PetroWeb. All this does suppose a Metro Area Network (MAN) with sufficient bandwidth. Trewin considers that Houston, Calgary, Central London and soon Lagos are already MAN-capable. Better, pricing has seen dramatic change in the last year so that 100 Mbit bandwidth is “no longer prohibitive.” Pricing of ASP-supplied software “will not differ from current pricing practice.” In the medium term, there may be a move to pay for use, but Trewin recognized that this may create a problem for Landmark’s revenue stream.
Landmark’s Bill Diggons advocates continuous performance evaluation with a feedback loop passing from surveillance, production DM back into performance micro-management and financials for the big picture. This approach mandates the abandonment of the Excel spreadsheet approach to planning, and should be built up with a proper data warehouse.
Similarly, the appropriate tools of the trade are E&P decision support tools such as Teras rather than the (popular) horizontal approach of Crystal Ball. The heavyweight tools benefit from built-in stochastic price forecasting and E&P fiscal modeling . Once the pain of building the data warehouse is over, the gain is evidenced by the availability of many performance metrics. All this is facilitated by data warehousing techniques such as On-Line Analytical Processing (OLAP) with ‘slice and dice’ data cubes to provide leveraged key performance indicators. Landmark has a team of T2B performance consultants ready to make this happen. Note that Landmark doesn’t sell a data warehouse as such. Although Teras has some OLAP capability, to go the whole hog you need a product like Hyperion.
Elisabetta Martina explained that Landmark has abandoned its bold attempt to provide annual ‘synchronized releases’ of its product line. The current release still bears the 98 tag, and in order to ensure a reasonable shelf life for the next official release, this has been given a 2003 ‘freshness date’ – even though its initial roll out is slotted for June 2001.
The main features of the new release are an upgrade to Oracle 8.1.6, ASP support (with Hummingbird’s Exceed 3D). The Flex License Manager is to be upgraded and an installation guide on CD-ROM will be provided. Other 2003 features include enhanced security and operating system support for Windows 2000, SGI IRIX, AIX (ProMax only). Individual products also benefit from many tweaks and enhancements. One notable area is in high-end visualization, where Open Viz now offers support for SGI Onyx 64bit multi-pipe graphics.
Colorado School of Mines professor Mike Walls gave a limpid explanation of the rationale behind risk analysis in decision-making. He believes that we traditionally think deterministically, and are happy with a single number for reserve estimates. E&P is a complex area and should take account of above and below ground risk. Decision analysis is ‘a formalization of common sense for problems that are too complex for intuitive analysis’.
Walls traced the evolution of analytical techniques from Sensitivity Analysis, through Influence Diagrams (early 1980’s) to Value of Information techniques and now Decision Analysis. From a study of US oil companies 10k reporting, Walls observed that higher risk takers were better performers. ‘Marcowitz’ Portfolio optimization is another technique, offering ‘efficient frontier’ analysis. Such tools can ‘break the disconnect’ between strategy and decisions. The very latest fad is Real Options Analysis.
Simon Glover underlined the need for efficient, well designed tools for well planning. Landmark’s Total Drilling Performance sets out to provide such an infrastructure to support comprehensive well design and daily reporting. The latter should be integrated into a knowledge management system and support learning by accurate analysis and the dissemination of best practices. Landmark’s broad drilling portfolio is ‘all integrated’ as Glover demonstrated with a walk through a deep West African project. Here metrics such as planned vs. actual depth, cost per foot, BHA runs vs. incremental depth were examined from the historical data to optimize future well design.
Simon Glover showed how real time 3D data can be used to calibrate the earth model. Resolution 3D (R3D) is a joint service from Landmark and Sperry (now part of Halliburton). R3D uses Sperry’s ‘Insite’ rig Data Acquisition system. Insite is linked into OpenWorks and replicated to NT-based databases. NT-based 3D visualization shows planned versus actual well trajectories, along with faults, surfaces and logs. Compass gives real-time collision scanning with positional ellipses - an impressive demonstration of the application of real time data acquisition and technology in the field.
Andrea Gallagher, described Open Explorer (OE) as an ‘advanced data management tool that complements and extends the data management functionality of OpenWorks.’ From a world map in OE, you can quickly check out different projects for table space used, user permissions etc. A local master dataset can be built for the area of interest by using ArcView to select wells from Iris21. A new Datastore Navigator allows foreign database browsing and selection for loading to a project. Well names can be changed to corporate standards during loading and data transfers can be time stamped.
Project transfer files are straightforward text files that can be edited and all this can be set up for automation as a UNIX cron job. The same can be done for Arthur Andersen cultural data. Zmap files can be loaded, and reports including OpenJournal documents can be geo-referenced with the Knowledge Reference System. Some clients have scanned and indexed AAPG reports. OE uses 3rd party tools from ERDAS to incorporate aerial and satellite imagery. Exprodat’s browser technology is being incorporated into OE to allow well header and other info to be accessible from the browser. ArcView Layout is used to produce draft quality displays.
* The ‘low return on investment’ argument, trotted out by many vendors, banks and consultants may well turn out to be something of a canard. BP has just reported sustained internal ROI of over 20% for the 15 months to March 2001!
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