2015 EAGE, Madrid

Repsol ‘non conventionals don't make sense!’ Shell’s future vision for data management. Energistics’ data myth-busting. Total, ‘data is the new oil.’ Landmark, ‘there are too many apps!’ The standards debate. IBM’s seismic processing in the cloud. A terabyte RAM ‘commonplace.’

We reported from the first plenary session of the 2015 Madrid EAGE in our ‘zeitgeist’ editorial (Vol 20 N° 5) on the (downbeat) state of the industry. The second plenary investigated ‘non technical risk’ in the upstream. Mike Daly (ex BP, now with Macro Advisory Partners) had no difficulty enumerating the multiple geopolitical risks that confront oil and gas and society in general. ‘Touchy-feely’ globalization has led to the emergence of ‘angry people’ and increased turmoil. In the west, oils are confronted with uneducated people who lack trust in government. The huge power of the individual voice has led to the ‘weaponization of everything!’ For oils, planning a 30 year investment program has become quite a challenge.

Jagoba Cubes San Salvador (Cepsa) was more sanguine. In Chinese, risk means danger and opportunity. In Arabic, Rizq is a blessing. E&P has always been a risky business with extreme environments, weather, conflict and opposition. Risk can be minimized with a proactive approach tailored to the local situation. Expectations need to be managed through communication. Some risk will inevitably materialize, but its severity can be minimized through portfolio diversification and with an upstream/downstream balance.

Catherine MacGregor (Schlumberger) looked into the use of local content (people and services), as viewed through a risk lens. Local content can drive costs up. Partnerships increase risk exposure from reputational damage. But for 35 years, Schlumberger has been developing its global workforce to the extent that Schlumberger is now ‘diverse’ at all levels of management.

Albert Paardekam (Shell) advocates proactive risk management, especially in deepwater projects. Risks need to be identified early on. Some known issues trigger severe cost escalation and poor permitting will cause delay. But true risks are harder to address. Changing regulations need to be anticipated by keeping an ear to the ground and integrating them in the risk management plan. ‘Don’t treat these as nasty things done by bad people, relish them as a challenge.’

Antonio Merino (Repsol) made a valiant attempt to address the risk of oil price volatility. The current situation reflects a move from Opec dominance to non-conventional oil price dynamics. Merino questioned the sustainability of investment in non-conventionals with their high depletion rates. US independents have a ratio of organic capex to operating cash flow at around 400%. Investing here ‘does not make sense.’ Merino observed that in a world of unlimited liquidity, finance drives production, even with breakeven at $90. If Opec continues to produce at current rates, in a couple of years we will know what breakeven means for shale!

For Marcos Gallego of HSE consultants ERM, non-technical risk is the main source of project delays and cost overruns in larger oil and gas projects. Companies lack tools for early detection as portfolio management is focused on technical risk. Climate change adaptation and extreme weather need consideration as witnessed by the recent drive to render carbon ‘unburnable’ and the statement by EU oils on need for a carbon tax. ERM maps political risks with some interesting results. Australia has moved up in riskiness, from N° 10 to N° 1, because of permitting delays due to intensive social pressures. Canada is N°2 and Denmark N° 3.

The Q&A was a rather stilted affair with questions registered online via SendSteps and filtered by the moderator. Gone are the days of a good old rant from the floor! On the question of cyber-attacks, a massive effort is underway to protect communications. Social tools present a particular risk. ‘IT says do this, don’t do that, use this.’ Getting the message out to affiliates is work in progress. Some give employees phishing drills. Multi stage firewalls and strong passwords help, but ‘this is an evolutionary race, there is no infallible system.’ Answering a question on climate change, Paardekam observed that this could not be addressed at the project level but rather at the corporate level. ‘We need to debate oil vs. gas vs. carbon capture and create a level playing field. My family says “how can you work for Shell?” They don’t understand – try having a hydrocarbon-free day. We have been battered by the bad examples and have shied away from communicating.’

We took a break from the plenaries to trawl the exhibition floor and came across Ikon Sciences CEO Martyn Millwood-Hargrave in full flow on the need for better technology to address the challenge of production decline and a forecast 40mm bopd shortfall required to meet demand in 2020. ‘We have a huge task ahead of us. Shales have been hit by the oil price collapse. We need to find high value reserves in “good rocks”.’ Enter the RokDoc/JiFi ‘revolution’ that offers pre drill geoprediction, real time model update and a ‘platform for robust science.’ Ikon has got backing from a major for its ‘Metastore,’ which blends, rock property data, analogs and analysis.

There were no standards or data management sessions at this year’s EAGE so it was refreshing to sit in on Shell’s booth presentation of its ‘future vision’ for data management. Shell was joined by representatives from Energistics, Landmark, Schlumberger and Total. Matthias Hartung showed a video of Shell’s 2012 cleanup of its Gulf of Mexico Mars data. Now, all major projects involve a data manager. The debate ranged widely over topics that will be familiar to readers of Oil IT Journal. For Hartung, data management is a non-competitive issue. All companies need trusted data, now seen as a corporate asset and as offering attractive career opportunities. There is no difference between data management and geoscience or engineering as regards career possibilities. And there is no room for Shell vs. Exxon or Schlumberger vs. Halliburton standards. Standardization is the ‘next innovation’ and there is strong demand from industry.

Jay Hollingsworth (Energistics) set out to kill a data management ‘sacred cow.’ Users have never spent 60% of their time looking for data. But when data comes back from the geotechs or third parties, it often doesn’t match, causing much work sorting out the mess. The key is better metadata that is automatically created, stored and transferred by the programs that use the data. Enter Energistics’ energy subset of ISO 19115 for metadata. Witsml, ETP, Ppdm and ISO 15926 also ran. While there is room to harmonize these, ‘it is not like we are starting from scratch.’

Evelyne Tourte described how Total has introduced a new ‘geo-information’ job title alongside its geoscientists. Total and Shell are to sponsor an MSc in oil country data management to be taught at the IFP School with a distance learning parallel track to be given by Heriot Watt University. Tourte observed that along with the standards, industry now has a huge amount of data and need better data science to get more value from data. Tourte also argued for a move from a ‘hairball’ data architecture towards smoother, data-enabled workflows. ‘Data is the new oil.’

Chandra Yeleshwarapu (Landmark) said, rather disarmingly for a software vendor, ‘there are too many apps.’ It is hard to make sense of data that is constantly being changed by apps. It is a big challenge to managing the workflow continuum. ‘We throw people and tools at users, the industry goes up and down, resources come and go. That’s the real data challenge!’

Stephen Warner (Schlumberger) wants to move the focus from end user technology onto more asset team-focused solutions. Information needs to be easily accessible, maybe from hosted content. It is an exciting time in technical data management with more standardization and contextual search.

There ensued a wide ranging discussion where something of a consensus emerged that it was preferable to provide a geoscientist with the IT wherewithal required for data competency rather than vice-versa. Having said that, views on the role of data management and how data services should be provided ranged widely. Yeleshwarapu observed that standards take a long time to prescribe and by then industry has moved on. Standards’ evolution needs to keep pace. Hollingsworth reported a ‘chicken and egg’ problem in that data providers don’t want to supply in a standard form and app developers won’t support standards that aren’t used. However a few companies do actually include standards in their contracts.

Dissecting the 1,000 plus papers for software use cases we came up with the following sampler. IBM reports successful use of a high performance computing cloud environment for seismic processing with ‘similar or even lower’ turnaround times to those achieved on site. Saudi Aramco is using Micro-CT core scans along with FEI’s digital rock technology to investigate the internal fabric of tight formations. The methodology is mature and moving from R&D to operations. Repsol has used Rockfield Software’s Elfen geo-mechanical software to make 3D prediction of stress distribution above a deepwater salt diapir.

Emerson/Roxar was not actually exhibiting, opting for an ambush marketing approach from a nearby office location to promote its forthcoming move to a computational cloud. The Linux cluster-based geomodeling and ‘big loop’ optimization solution is currently being developed in collaboration with Statoil.

Schlumberger was showing off its Oil Sim training program and simulator that targets operators, governments and emerging NOCs. The upstream learning simulator is also used to identify leaders, team players and communicators in your midst, and to see who cracks under pressure.

Finally, Sharp Reflections’ Bill Shea tells us that a terabyte of RAM is now commonplace in a workstation meaning that a large pre-stack data set can be analyzed in memory. Prestack Pro performs multi-azimuth analysis for unconventional frac analytics.

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