Digital oilfields, silos, laggards and irritation

Oil IT Journal editor Neil McNaughton sees encouraging signs of silo boundary-breaking ventures from the vendors, but gets mildly irritated by some engineering old chestnuts.

Trawling through Schlumberger CEO Andrew Gould’s presentation to the Howard Weil Energy Conference last month looking for IT related gems, I was disappointed. IT barely got a mention. I think that this is a kind of a Freudian slip, because notwithstanding the huge additional reserves that digitization of this and that are supposed to be generating out of thin air (q.v. CERA et al.), what really turns on Schlumberger’s investors is hardware of the wireline, seismic and production tool variety.


In fact there is a very considerable historical silo wall inside of both the major vendor’s shops, between their traditional revenue generating activity and their relatively poor relations, the software units—for Halliburton, Landmark, and for Schlumberger, Information Solutions. What makes the situation even more interesting is that a lot of software that is closely tied to the tools is kind of marooned on the wrong side of the silo boundary and may or may not be aligned with the software arm’s standards, visualization paradigms, or marketing.

Old chestnut

I have discussed this in previous editorials and if I am bringing up the old chestnut again, it is because, despite a lot of talk to the contrary, silos define the industry and crossing the silo boundaries in a meaningful way is an event worthy of note. In fact I witnessed two such events in the past couple of months, one at the AAPG and the other at the SPE Digital Energy conference in Houston this month.


In both cases the ‘killer app’ is the geosteering and measurement while drilling (MWD) combo which is getting a lot of traction as high tech applications like coiled tubing drilling and artificial lift are commoditized. There is a pressing need to see where the drill bit is in relation to the earth model. In other words, to mash up software from opposite sides on the intra-vendor silo wall.


At the AAPG, Halliburton was showing a blending of workflows from its Sperry MWD unit with Landmark’s applications. This is leading to a rethink about cross-silo workflows and the likelihood that Landmark’s DecisionSpace will bring more logging and tool-specific applications into the Landmark software fold. The idea is to support complex drilling activity like dual over-under wells (tar sands) with targeted modeling tools.


On the Schlumberger booth at the SPE Digital Energy show I spotted a similar approach to the same problem. A twin screen display showed a Petrel 2007 model on one large screen in ‘landscape’ mode with a second ‘portrait’ mode screen showing MWD log information streaming in from the Interact server (again on the other side of the silo wall). Of course what is really amazing about this is not so much the technology, but that this has taken so long. But that is part of the nature of silo walls. They are good at keeping things apart.


On the topic of silos, it seems churlish to address similar observations in the direction of the Society of Petroleum Engineers itself, whose Digital Energy conference does a good job of bringing in folks from further flung fields from business intelligence to process control. But I have to say that it is a shame, and indicates how ‘siloed’ we still are, that there is so little recognition in the PE community of seismic and visualization technology. There is an irritating tendency to defer to other industries—financial services, defence/intel with the implication that ‘we’ are laggards.


The ‘laggard’ pitch was popular a year or two ago, although I was never very sure why. Today it is a positive embarrassment as the PE community is having to turn its vest around and claim technology leadership in order to entice new grads away from, well, financial services inter alia! On the topic of irritation, I would like to suggest that it is time we stopped talking about the ‘digital revolution.’ The oil and gas business has ‘digital’ for 40 years. In 1970, seismic companies were already donating their obsolete digital recording systems to my bewildered teachers. For IT excellence, engineers would do well to at achievements in geophysics and even their own modeling community before business intelligence. For the digital oilfield, the communities to watch are plant and process control, themselves a positive maze of silos cultures and complexity!

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