Digital Energy Day, Houston

The Society of Petroleum Engineers (SPE) Gulf Coast Section, with help from The Energy Forum organized the fourth annual Digital Energy conference in Houston earlier this month. The program was put together by the section’s Digital Energy Study Group, which ‘serves at the crossroads of two disciplines: upstream oil and gas, and information technology,’ according to group chairman Jeff Gallagher of HP. Bill White, Mayor of Houston and former U.S. Deputy Secretary of Energy proclaimed April 7 to be ‘Digital Energy Day’ in the city, describing the oil industry as ‘one of the most unsung of all technology businesses’. Speakers from Weatherford International, Occidental, Anadarko, Kerr-McGee and Shell described a variety of ongoing knowledge management initiatives. The overall impression is that progress is being made—although demarcation at the wellhead choke is a barrier to integration. Jeanne Perdue provided this exclusive report to Oil IT Journal.

Stuart Ferguson, now CTO with Weatherford International, started work at BP in 1987. He noted the oil industry’s ‘aging issue’, ‘Two-thirds of our oil comes from mature fields that produce more water than hydrocarbons. In the next ten years, we will produce ten times more water. Fields today are ten times smaller than they were ten years ago, and they are drained using fewer wells. Consolidation, and cost-cutting have not got our industry where it needs to be. We do not have a reserves problem, but in the next five years, the problem will become one of revenues. We need technology to boost productivity, increase recovery and drive down costs.’


Ten years ago, Ferguson was the ‘enemy’ of digital energy: ‘I had access to all of BP’s source code, and I was king. I never documented anything I did, and only I was able to use the programs.’ Ferguson said the five key focus areas for computer programs in the upstream oil and gas industry are: knowledge management, business efficiency, characterization and visualization, process automation, and production optimization.


Another facet of the ‘aging’ process is the fact that, ‘Fifty percent of the human years of experience in the industry will be leaving in the next five years. We need to figure out how to transfer that knowledge and experience to others without transferring prejudices. Mentoring may be even more important than knowledge management. Knowledge management cannot tell you what’s important and what’s not. It cannot tell you how to apply the knowledge.’ That being said, Ferguson emphasized that ‘the online world is a remarkable place. The is a great resource; I use the online e-library every day.’


Historically, characterization and visualization have been focused mostly on the subsurface domain. ‘The production arena has been poorly characterized. The industry needs low-cost instrumentation that you can afford to implement in the field. The problem of squeezing more oil and gas out of a field has become more important, so we will likely see a growth in virtual instruments.’


‘Integration across disciplines is still something we struggle with. The wellhead choke is like a Chinese wall in this industry. Single-well optimization is only part of the story; we need to optimize the whole network to maximize the hydrocarbons coming through and to de-bottleneck old facilities with water-handling constraints.’ Ferguson prefers ‘right-time’ over real-time, ‘Real-time is important in many applications, such as controlling equivalent circulating densities (ECD) while drilling, but a lot of wasted effort can be avoided if we consider how often we need to perform a certain task.’


Today’s hot digital energy topic is the e-field, the smart field, the Field of the Future, whichever you wish to call it. ‘The scope is enormous. And it’s always two years away. Well, bloody well get on with it, then! We need to have banks of passion and drive. I hope that this is the last Digital Energy Conference we ever have. Digital needs to become a part of the fabric of our business.’


Ron Hinn, Knowledge Management Lead at Occidental, described his company’s Communities of Practice (COPs) as ‘evolving.’ ‘We wanted them to be a benefit, not a burden,’ he said. The budget for KM at Oxy includes four people: two full-time support personnel for the two COPs, plus Hinn and an administrative support person. ‘We have a very parochial organization with a lot of silos. To share information without going through the hierarchy is a challenge.’ One key to the success of the online COPs is the peer reviews, which are cataloged – providing a record of verification that builds trust. Quick wins are critical and Oxy is aligning its KM efforts with PetroSkills’ ‘competency maps’, which have four levels of mastery per skill, and anywhere from 58 to 134 skills per discipline, depending on the job. This integration will be completed by the end of 2004. A questioner asked, ‘If I share what I know, my value decreases. How do you deal with that?’ Hinn replied that there is a range of skills in knowledge sharing built into the learning program, and senior managers hold employees accountable for sharing.


Bill Liddell, supervisor of operations technology at Anadarko, described his company’s virtual file room. A study found that staff members spent 80% of their time searching for and manipulating data, wasting more than a million hours per year. ‘We have about 800 engineers and G&G people, so if we could make just a 10% improvement in their use of time, it would be the equivalent of adding 80 more people to the staff,’ Liddell said. The goal was to provide storage and retrieval of data at the desktop within 15 seconds. The virtual file room is enabled by tagging documents with end-user developed categories. A student was tasked with assigning a proper title, date and tags to some 50,000 files. The system will be expanded to offshore and international locations.


Steve Miller, director of global information management at Kerr-McGee, describes his goal as, ‘Easy-to-use, quick access to research web sites to share ideas and tips. Integration with e-mail is important because that’s where a lot of work gets done.’ Kerr-McGee’s E&P Forum was built from Open Text’s Livelink, with a customized user interface. Users can browse categories and subscribe to a topic. Whenever there is an update, they will receive a link to the discussion via e-mail. So far there are 200 subscribers with 13 discussion forums. ‘It’s best to get things into the system fast so searches will get hits - incentives are needed,’ Miller said. ‘The system is self-service and is used by all levels of the organization over a distributed architecture with servers all over the world.’


Ed Dubnick, knowledge manager at Shell, and Kathleen Honeycutt from the American Productivity and Quality Center (APQC), did a tag-team presentation on how to assess your company’s progress on the KM continuum using a 33-question survey developed by APQC. According to Dubnick, ‘We know what KM is and how it fits in our organization, but we don’t spend the time learning about it. There’s no ownership yet. Committees have been formed, but there is low awareness and low activity. We are still trying to find senior-level management ownership.’ The APQC survey gave Shell, ‘a composite prescription to revitalize, rethink and get adequately funded and resourced.’


For Tim Tipton, technical services VP with Marathon, ‘Management of knowledge or data is a formidable task. The real value is to transfer knowledge to applied technology, which starts with a compelling need or opportunity.’ Keys to success include creativity and culture, time and temperament. ‘The volume of data generated by a single individual is staggering—data is getting more complex. We need to enhance access and utilization of the data.’ Marathon’s focus is to integrate data across disciplines through visualization. ‘Data analysis is where the rubber meets the road. Our goal should be to be more right and less wrong. The more we use error bars around our data sets, the more precise our solutions will be.’ Marathon uses cross-functional workspaces to improve communication. Oil industry information spans many scales—from scanning electron microscopy of cores through well logs to 3D seismic. ‘The key to the future is to integrate all these data so that the solutions will become much more rigorous and consistent.’

Selling short?

‘You need the right people and the right processes to foster creative moments’. Management focus used to be more on the longer-term as opposed to the current ‘quarterly report’. Today, ‘We live in an age of early adopters and fast followers—and we are selling our own technical personnel short. We are relying on others’ creativity and our own agility. Opportunity is driving innovation—and these challenges will continue. Integration will remain the key, with knowledge management and collaboration as the drivers’.

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