A common problem in the oil and gas industry is a mature asset that needs more attention than the asset team is capable of providing.

In one recent case, the team leader was managing a mature asset that needed a thorough engineering study (the last one had been done eight years prior), but he did not have the staff to execute the project inhouse and was unhappy with the current batch of available consulting options. He considered them either too expensive at US $1,200 to $3,000 per man day, unavailable (“I can start in six weeks”), or inflexible in their work methods (“I only know one software package”).

iEngineers execute classical subsurface interpretive and engineering work over the Internet using the customer’s native software and data platforms.

The Challenge

The team leader needed to have an existing Petrel model updated due to the acquisition of an adjacent field. He needed to have this model history-matched and upscaled and simulated in Eclipse. Ultimately, he needed to know where to drill the next three infill wells.

To solve this problem, he tried a rising class of consulting engineering companies that are classified as “iEngineers.” iEngineers execute classical subsurface interpretive and engineering work over the Internet using the customer’s native software and data platforms. This concept is the logical extension of the “telecommuting” practiced by almost all E&P engineers today, where people are working on desktops in one location with big servers and data systems in another location.

iEngineering Is Not Outsourcing

iEngineering companies differ significantly from outsourcing in that all work is executed on the customer’s software platforms using remote access tools such as Citrix or ThinAnywhere. Outsourcing can be thought of as “sending work overseas,” iEngineering should be thought of as “flying in day workers over the web.” Using the customer’s software platforms ensures work consistency,work processes and methodology control, information security increases, and ultimately lower cost per project versus traditional consulting service providers. In a typical iEngineering engagement, the customer and consultant must agree on three critical issues: communication, access, and expectations. In the example, the team leader and consultant agreed on all three. Regarding communication, the consulting team leader (a reservoir engineer with 15 years of modeling experience) flew to the customer’s office for the first two weeks of the three-month project to ensure a smooth kickoff. There also were scheduled biweekly project review telemeetings using Webex, in which the consulting team presented a milestones progress Gantt chart, technical issues update, and project process issues. Outside of the weekly meetings, the asset team leader and iEngineering team leader remained in frequent email and telephone contact. The IT group helped establish secure remote logins to the necessary Petrel and Eclipse licenses. The licenses and project data were placed in a secure “demilitarized zone” that was established separately from the E&P company’s core network. All consultants working on the project were required to provide photo identification information and formally register as users with the IT department. To manage expectations, the oil company and team lead agreed to a “walk before you run” work arrangement. For the first few weeks, the iEngineering team reviewed every decision point. Once a level of trust and comfort was established, the team was able to scale back the level of approval to what was termed, “Ask if you get lost.” As the weeks progressed, the relationship became relaxed. A change in direction encountered during the second month required an extension of the project scope and budget. When the project ended, the remote team prepared its technical conclusions and a draft of the final report for review. The asset team leader led a management presentation teleconference during which the iEngineering team lead presented a 15-minute overview of the technical recommendations for the field. Management was interested in this alternative work arrangement and asked the asset team leader about the “real-world challenges” of the project. He outlined the initial start-up problems concerning data availability and agreement on reporting requirements.

A New Alternative

The key takeaway is that for mature assets in need of re-engineering work, an alternative source of consulting talent now is available. Accessing and using this talent leverages existing software and hardware investments made by all E&P companies, but it does require an adjustment to a modified work arrangement. In practice, this alternative consulting arrangement has resulted in:

Faster start times – Due to increased availability of employee consulting engineers in these new companies, customers are able to begin projects without delay;

Greater consistency – By definition, iEngineering projects use the customer’s existing software and data platforms to execute the interpretive and engineering work. This greatly increases the transparency and consistency of the consultants’ work with the processes and norms of the customer. It also reduces the “black box” situation in which a project report is delivered, but the customer does not know how the results were obtained; and

Lower cost – iEngineering companies are global by nature. Their customers, staff, and employees are located worldwide. This built-in access to the global talent marketplace has resulted in a significant reduction in skill-equivalent day rates. In several known cases, total project costs were 40% to 60% less than the traditional alternative, while quality and delivery times were maintained.

A Transformative Opportunity

To date, iEngineering companies have mostly executed traditionally defined projects, including seismic interpretation, geomodeling, simulation, decline analysis, and well data entry using traditionally sized consulting teams of three to seven people. However, the potential exists for transformative change within the industry. Resource constraints and high day rates have limited the scope of projects that could be conceived and executed. With access to fundamentally unlimited resources, the scope and scale of what is possible could change within the industry. Now, when an asset team manager arrives at the office on a Monday, there could be 20 trained petrophysicists waiting and ready to tackle “a big problem.”