A real-time discussion involving several locations collaborating on operations at StatoilHydro’s Sleipner field in the North Sea was displayed on a big screen to demonstrate IO at work.

Integrated operations is the use of real-time communication to link remotely located experts, creating connectivity that enables the free exchange of ideas by decision-makers and improves interaction among disciplines within a project. IO connects platforms, specialization centers and individuals to improve collaboration, resulting in better, faster and more informed decisions.

The fact is that the technology available today can dramatically improve operations. Connectivity is available, and bandwidth is no longer a limiting factor. Sensors can provide operations data in real time, and high-speed computing can turn that data into usable information that remotely located experts can use. Tomorrow’s operations will not look like those from a decade ago. IO in oilfield operations has the potential to fundamentally change exploration and production.

Many companies are investing significant capital to create digital oil fields because of the return on investment. In the interest of finding the way forward in this new arena, many businesses implementing IO are looking to one another for lessons learned from real-life operations.

The second annual Intelligent Energy conference, held in Amsterdam, The Netherlands, Feb. 25 through 27, provided a forum for those discussions. Three plenary sessions, 24 posters and more than 100 papers presented the current applications and future possibilities of IO.

The conference opened with committee co-chairs, Sjur Bjarte Talstad of StatoilHydro and Satish Pai of Schlumberger, explaining what is meant by IO, a concept that is often expressed in other terms, including iField, eField, digital oil field, and intelligent energy. The co-chairs also outlined the ways IO has changed the operating environment — creating immediate access to data, allowing contact with a broader resource of human capital and knowledge and automating repetitive and dangerous tasks to improve safety and the environment.

IO today

Pai and Talstad demonstrated IO in action with a look at operations being carried out in several global locations. Real-time discussions were video-linked to Amsterdam and displayed on a big screen so conference participants could see how communication takes place among widely placed personnel.
One of the examples was the Shell-operated Groningen gas field in The Netherlands, now being operated as an “intelligent field.” Groningen, Europe’s largest gas field, has been in operation for more than 40 years. According to Gerard de Graag, operations team lead for Shell on Groningen West, who addressed the conference from the central control room at Groningen, the control room monitors operations consisting of 25 gas treatment locations and more than 300 gas wells, which ultimately produce more than 60% of Holland’s domestic gas.

With sustained long-term production a critical issue, Shell began a renovation project 10 years ago to change over from gas free-flow to gas compression. The project, which will be completed in 2009, encompasses the complete renovation of 25 wells, all of which will be outfitted with electronic systems that will make production faster, cleaner, more economical and safer, de Graag said.

The new approach also will require fewer people. “In 1986 more then 50 persons were needed to operate this field,” de Graag said. “Today, we do it with four.” With the IO system in place, he said, “We are ready for another 25 years.”

Three additional site-specific examples demonstrated how different types of field operations are benefiting from this new approach to field management. The sites included BP’s Azeri-Chirag-Gunashli field in Azerbaijan, StatoilHydro’s Sleipner field in the North Sea, and Petrobras’ northeast assets in the Campos basin offshore Brazil.

Using IO, looking ahead

The first plenary session at the conference featured speakers from companies taking the lead on IO. They included Helge Lund, StatoilHydro chief executive officer; Amin Nasser, business line head of exploration and production at Saudi Aramco; Ben Verwaayen, chief executive of BT (British Telecom); Malcolm Brinded, executive director of E&P at Royal Dutch Shell; and Andrew Gould, chairman and chief executive officer of Schlumberger. Together, these industry leaders talked about the progress made thus far in implementing IO, how the new approach has improved operations and the obstacles that must be overcome to realize its full potential.

The biggest issues, of course, are not the successes to date, but the way the industry needs to approach IO to make the most of it moving forward.

According to Lund, the challenge will be to learn to do things in a different way, but the advantage will be a broadening of resources and an expanded knowledge base for StatoilHydro. “New work processes and interaction by means of integrated operations will facilitate the sharing of knowledge between Norwegian experts, suppliers and local operators in other countries.”

Schlumberger’s Gould took Lund’s observations a step further, talking about “harnessing regional strengths” and creating “more and more collaboration and connectivity” to allow the industry to contend with the challenges of such things as harsh environment drilling and producing unconventional oil and gas. He identified information integration in the field as one of the most significant hurdles but underscored his belief that most of the issues in the industry can be mitigated or resolved using IO.
Verwaayen of BT believes that the arrival of IO marks the beginning of a new way of doing business. “In a digital world, time and distance are dead,” Verwaayen said. “All of the business models went out of the window with the arrival of the Internet.”

According to Verwaayen, the question the industry has to ask itself is if it can adjust to this change. The biggest challenge will be effecting modifications in management. Adjusting to this new way of thinking constitutes a “massive disruptive change,” he said. In practice, that means “what was done in the past simply won’t help solve the problems of the future.”

Saudi Aramco’s Nasser discussed IO in terms of a burgeoning global population, noting that present production levels and current production methods cannot keep pace with population growth. The increase in population from 2008 to 2050 will equal the total world population in 1950. Though alternative fuels will be important to meeting future energy needs, he said, “The fact is that most of the demand will have to be met by traditional hydrocarbon sources.”

Nasser gave examples of ways Saudi Aramco is applying IO to its long-term production goal to increase its resource base from 730 billion bbl of discovered resources to 900 billion bbl.

Brinded of Royal Dutch Shell agreed with Nasser on the subject of meeting accelerating demand. That objective was one of the “three hard truths” Brinded identified as challenges facing the operating companies. The other two are reducing CO2 emissions and contending with the fact that the industry is rapidly approaching the end of “easy oil.”

“We’re at an exciting inflection point,” Brinded said, noting that new technologies will continually change operations, decrease human intervention and enable complex reservoir development.

Brinded presented data for both brownfield and greenfield installations that illustrate the value of IO, explaining how fields that are “born smart” are at an advantage from the outset.

Technology tomorrow

StatoilHydro is not only drawing on the expertise of its own specialists in implementing IO, it is looking to other companies. “We have never been more dependent on working together for success,” Lund said.

Gould amplified Lund’s comments on partnering with his observation that all of the technology that will further the industry’s aims is not necessarily in hand. Gould argued that the industry needs to look beyond oil and gas. The aerospace industry, for example, is much further ahead in terms of partnering and collaboration, he said. “Our industry has to do a lot more adaptation of technology from other industries.”

Technology, in Verwaayen’s opinion, is not the biggest obstacle. Social adaptation and business model innovation will be the biggest challenges because implementing IO requires “a different way of thinking.”

Fortunately, that “different way of thinking” is something that is part of the world new graduates bring with them. The multitasking skills they have grown up with are the very skills that are needed in the digital oil field. Verwaayen said these skills could go some distance in addressing how the oil and gas industry will attract new blood.
Shell’s Brinded illustrated this point with his comments that email, faxes and shared drives are the “old approach” to doing business. The new, smart ways of working play to the strengths of young people. “They are already hard-wired with some of the soft skills.”

IO will be one of the most important instruments in the tool kit as the industry looks to the future, but it is a tool that many already are learning to use.

In his closing comments about Saudi Aramco, Nasser summed up the attitude of the entire panel toward IO: “Our commitment to intelligent fields is real and tangible,” he said.