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Offshore Engineer



Switching on to the Intelligent Oil Field
Darius Snieckus


While the promise held by individual new-generation 'intelligent' technologies to radically alter the way E&P companies exploit offshore fields continues to excite real interest within the oil and gas industry, the 'total asset awareness' potential to be gleaned from weaving together real-time drilling, 3D modelling, smart wells and their ilk into an integrated, operational whole remains in chrysalis. Darius Snieckus speaks with Bill Severns, Senior Director of Cambridge Energy Research Associates, and  senior director of digital E&P strategies about a new study that aims to advance the 'intelligent oil field' vision one step closer to reality.




Real-time drilling, intelligent completions, 3D visualisation and modelling, remote sensing, monitoring and control systems - these areas of technology, though widely foreseen by the international oil and gas industry to be fundamental to the future of E&P, might not be expected to catch the attention of someone like Bill Gates, yet his conglomerate, Microsoft, was one of 36 sponsors and 'thought leader' partners that gave their backing to a groundbreaking, year-long study into the advantages to be gained from the 'total asset awareness' promised by digitalised, remotely operated field developments.

A' multi-client study into the so-called intelligent oil field (IOF), which finished by incorporating interviews with some 150 industry and technology experts along with a review of the bolus of research already published on the subject, started quite humbly as a 'scoping exercise' on the current views of IOF, according to project leader Bill Severns. It proceeded to grow into a far-reaching report on just what it might mean to oil companies and contractors if they were able 'to monitor and manage all operational activities in real-time, regardless of location'.

'This project began back in April 2002 as a thought piece,' he explains, 'not so much as a study of the technologies involved but rather one that looked at the clients' business needs and the economics associated with [IOF] - enhanced recovery, lowering operating costs, increased production rates, reductions in capital costs.'

Not surprisingly, increased recovery emerged as top prize from the study, with 'better data, enhanced decisions and improved execution in production planning and operations' together pointing to a potential boost to the global oil and gas resource base of as much as 125 billion barrels through the IOF concept.

Cuts in operating expenditure derived from labour-saving automation, recast working processes and streamlined maintenance and operations practices, the study found, could equate to yearly savings of $4-8 billion, while curbing equipment downtime and improving well management could help debottleneck output to add a further 2-6% to the current 80-90% technical production capacity.

.....................................The economics can be compelling..........................................................................................................

For a greenfield deepwater oil development, for example, where the base NPV was $3.7 billion, applying a IOF approach could add some $505 million to the field's value, a 14% improvement; as a brownfield development, a deepwater field with an NPV of $1.78 billion could see its NPV climb by $190 million, an 11% improvement.

A greenfield shallow water gas development with an NPV of $1.5 billion, by comparison, was calculated to grow in value by 7%, or $100 million, while as a brownfield development with an NPV of $803 million, the shallow water field would see its NPV rise by $7 million, equal to a 1% rise.

.......................................More a matter of when rather than if..................................................................................................

'IOF thinking is increasingly at the back of everyone's minds,' he concludes. 'They are all coming to recognise that in the future IOF will likely become the industry modus operandi and everyone wants to be ready for it.' OE