In a lower-for-longer environment, many oil & gas companies are considering ways to capitalize on the promise of the Industrial IoT (IIoT) to eliminate barriers to efficiencies, embed expertise in work processes and begin the path to operational excellence.
The opportunity is substantial: A recent study conducted by Emerson and industry benchmarking firms of U.S. onshore producers showed that unconventional oil & gas operators who move from average to top-quartile performance can capture up to $7 billion in profits annually by adopting IIoT technologies.
While the approach of starting in focused areas is becoming widely considered the best approach for IIoT, Emerson estimates that an average operator who adopts a comprehensive digital transformation strategy could see profitability improve by as much as 10 percent.
The analysis shows that the influential factors impacting potential performance improvements include increased production, lower lease operating expenses (LOE) and reduced safety risk. Improvement in these areas are what matter most to liquids-weighted unconventional oil & gas operators and helps them achieve top quartile performance. Top quartile, defined as achieving operations and capital performance in the top 25 percent of peer companies, requires changing historic work processes across multiple functions.
Specifically, Emerson identified ways that unconventional oil & gas companies can adopt technologies that quickly improve operations in a scalable way by:
- Optimizing with automated production surveillance, production modelling and analytics, and implementing produced fluids management techniques to reduce lost and unaccounted-for production
- Having visibility to costs on a per-well basis, improving equipment reliability by leveraging analytics and automation diagnostics to lower LOE
- Using prescriptive instead of reactive maintenance to improve health, safety, security and environmental compliance (HSSE) and reduce personnel exposure
By harnessing the power of the IIoT, advanced automation systems gather real-time information from a pervasive sensing layer and securely feed that data to robust standard analytics applications, arming experts with the insight they need to respond quickly to changing conditions, no matter where they are. This provides operators the diagnostic capabilities and data insights to make better decisions and reduce risk.
“There’s broad knowledge among operators about improving production, yet understanding how to consistently achieve real, sustainable savings is not as clear,” says Chris Amstutz, vice president, oil & gas industry programs at Emerson Automation Solutions. “For example, operators should consider automating gas lift injection rates, implementing a systematic approach to produced fluids management such as precise vapor control, and leveraging wireless connectivity to save production time.”
Digital transformation offers unconventional oil & gas companies a way to maximize production, lower LOE, and reduce safety risks, among other benefits. Emerson’s Operational Certainty Consulting Group advises operators to develop a practical blueprint that focuses on gaining actionable and timely insight into well performance, enabling the workforce with remote field intelligence, and reducing LOE by optimizing work processes and logistics.
That blueprint turns into action by leveraging Emerson’s PlantwebTM digital ecosystem which offers a comprehensive portfolio of IIoT hardware and software solutions that combine remote sensing, predictive analytics, and advanced diagnostics to help unconventional oil and gas companies make better production decisions.
Plantweb’s automated production surveillance applications include integrated well testing, automated choke control, surface control management, well and lift optimization, and tank management tools. Production modeling analytics, including integrated reservoir modelling, give operators a continuously updated view of seismic data and well performance. Emerson’s produced fluids management applications are designed to minimize manual measurement practices, which can prevent spills, reduce losses, and lower salt water disposal costs.
To help users get the most out of their IIoT investments, Emerson also offers connected services that let personnel work directly with process control experts to interpret data and troubleshoot problems from anywhere in the field. “This kind of standardized, closed-loop approach eliminates efficiency barriers and fully leverages expertise,” says Amstutz. “The potential pay-off is enormous.”