October / November 2009 Issue 21

Subsea software andcontrol systems

Nanotechnology and the oil businessBalancing energy and climate changeTracking helicopters outside radar coverageDevelopments in oil and gas communications

™

Associate Member

DEJ21:Layout 1 22/10/2009 12:50 Page 1

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DEJ21:Layout 1 22/10/2009 12:50 Page 2

October/November 2009 Issue 21

October/November 2009 - digital energy journal

Digital Energy Journal is a magazine for oil and

gas company professionals, geoscientists, engi-

neers, procurement managers, IT professionals,

commercial managers and regulators, to help

you keep up to date with developments with

digital technology in the oil and gas industry.

Subscriptions: Apply for your free print or elec-

tronic subscription to Digital Energy Journal on

our website www.d-e-j.com

Printed by Printo, spol. s r.o., 708 00 Ostrava-Poruba,Czech Republic. www.printo.cz

Digital Energy Journal213 Marsh Wall, London, E14 9FJ, UKDigital Energy Journal is part of Finding Petroleumwww.findingpetroleum.com www.digitalenergyjournal.comTel +44 (0)207 510 4935Fax +44 (0)207 510 2344

Editor Karl Jefferyjeffery@d-e-j.com

Consultant editorDavid Bamford

Technical editorKeith Forwardforward@d-e-j.com

Finding Petroleum London ForumsJan 20-21 - New places new technologies forFinding Petroleum conference, LondonNovember 17th - Kurdistan / Iraqwww.findingpetroleum.com

Social networknetwork.findingpetroleum.com

Advertising and sponsorshipAlec EganTel +44 (0)203 051 6548aegan@onlymedia.co.uk

1

Cover photo -Schlumbergerengineerspreparing theSenTURIANelectrohydraulicoperatingsystem for adeepwatercompletionoperation.

David BamfordConsultant Editor, Digital Energy Journal

Visualisation is the mostexciting tool for collaboration

Some time ago, well actually it was many years ago, a colleague of mine was trying to

explain to me a tricky geological idea – it was probably a combined structural/strati-

graphic trap with a couple of orthogonal fault sets and cross-cutting channels – and

was growing increasingly exasperated at my inability to see what he meant. Eventually

he said, and I guess I’m paraphrasing due to the passage of time, “the trouble with you

David is that as a physicist you can’t think in three dimensions”; followed by “the rea-

son I can is because in my 1st year lab at Edinburgh, the demonstrator smashed a trilo-

bite in front of me with a hammer and told me to put it back together again!” My

thought at that exact moment was “what’s a trilobite anyway?”…..but with a deeper

perspective, of course he was quite right about my deficiency.

Now fortunately for my employer, mapping of prospects, discoveries and fields

was never left to me alone or the resulting maps would have revealed the concentric

circular or sometimes elliptical contouring produced by geophysical contractors

in…….sorry, that’s another story! Instead, when we were at our most creative and in-

novative, and thereby successful, teams of highly skilled individuals, from different

disciplines, with different specialisms, all looked at the same thing: and as the years

rolled by, we progressed from a stack of maps on a light-table and paper cross-sec-

tions, to a shared earth model and – and especially - 3D displays in a visualization en-

vironment.

Given both my unpromising starting point and my experience, for me visualiza-

tion is the most exciting tool for collaboration, giving us something we've never fully

achieved before - the ability to give all the people involved in an exploration or devel-

opment project a common mental picture of the sub-surface on which they are work-

ing, a rapid and common understanding of something they will never actually see. It’s

an immensely powerful stimulus for collaborative working styles, changing the bound-

aries of teams, and bringing together people of very different disciplines - all applying

their skills to a common objective, and as a result of the technology being able to reach

decisions in a matter of days rather than weeks or months.

Actually that last sentence sounds like “management speak”! In reality, I can re-

call every time I’ve seen a truly integrated display; for example, a review of a regional

geological framework where I could simultaneously view plate tectonic reconstruc-

tions, regional potential field maps, a regional seismic data base, seismic stratigraphic

and facies interpretations, migration pathways (“plumbing”!), gross depositional envi-

ronment maps etc. When you think about it, it’s good that I learned to look for this,

considering where I started!

This brings me to our Finding Petroleum Conference in January*. We have lined

up some excellent presentations on Exploration “Hotspots”, for example on the West

Africa Transform Margin, East Africa, the Falkland Isles, and the North Atlantic, and

we will reflect on why leadership in the world of exploration seems to be passing from

the Majors to the likes of Petrobras, BG, Tullow Oil, Anadarko Petroleum and Cairn

Energy. But I’m equally looking forward to a couple of visualization-oriented presen-

tations by ex-colleagues of mine, namely Peter Sharland who will talk about “Integrat-

ing and visualising global geoscience data – demo of an emerging Earth Model” and

David Roberts who will talk about “Visual Integration 2010” (for the benefit of ex-BP

‘insiders’ that’s ‘DM’ not ‘Tiger’!). They will be lighting the explorers’ path into the

future.

Why don’t you join me there!

*Click on www.findingpetroleum.com for more details.

DEJ21:Layout 1 22/10/2009 12:50 Page 1

Dynamic Oil and Gas Business Planning

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DEJ21:Layout 1 22/10/2009 12:51 Page 2

Contents

Paradigm’s business growth in AfricaOil and gas software company Paradigm is very pleased with its 2009 sales to companies in Africa - with more business in the first six months of2009 than in the whole of 2008

Getting technology implementedIs the oil and gas industry slow to implement new technology? Many people think so. The issue was discussed at a special session at OffshoreEurope, with audience voting and examples covering the introduction of wireless seismic and integrated asset models

Nano technology and the oil businessWe might never put robots in reservoirs, but nanotechnology can help out in plenty of other areas of the oil business – particularly enhanced oilrecovery, better catalysts and reservoir surveillance, says Shell’s chief scientist Sergio Kapusta

UK’s seismic data available via CDAUK oil and gas data management organisation Common Data Access (CDA) is how storing public seismic data, so people who need it do not haveto go to the trouble of asking for it from the person who owns it every time they want some data

Subsea control systems and softwareDo well tests without a riser at up to 10,000 feet of water; model yoursubsea flow much more accurately than you could do before; a newcontrol system for a subsea landing string; and the first off the shelfsubsea tree for up to 300 feet (90m) depth. Some of the new subseatechnologies on display at Offshore Europe

Anadarko Petroleum – using Oracle’s Primavera forproject planningAnardarko Petroleum uses Oracle’s Primavera software for projectplanning and co-ordination, including making sure it makes best useof its available rigs and avoids conflicts

Schlumberger launches Enterprise Planning SoftwareSchlumberger has made its Merak Enterprise Planning (MEP)software available on commercial release – which can be used fordynamic oil and gas corporate planning. By Saheed Kenku, globalportfolio business manager for Merak, Schlumberger

Autodesk - 3D plant design softwareAutodesk, a leader in 2D and 3D design software, has launchedAutoCAD Plant 3D 2010, bringing the benefits of model-baseddesign to mainstream plant design products

Automating Your FieldsHouston company GlobaLogix helps oil and gas companies feed fielddata into office decision making systems, so they can run the fieldsmore efficiently and intelligently

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Production

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LeadersEnergy security and climate changeEnergy security and climate change are two of the biggest issues of our time – and it doesn’t help that they arenormally discussed separately. A brave attempt was made at Offshore Europe to bring the two subjects togetherin the opening debate

Exploration

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3October/November 2009- digital energy journal

Tracking helicopters outside radar coverageOil and Gas UK has launched a system to automatically track the location of helicopters when they are outside radar coverage – collecting datafrom their transponders

Video on demand offshoreCaprock Communications has put together a service to provide video on demand offshore via satellite – including handling all the licensing

Microwave communications at Apache CorporationApache Corporation wanted faster data communications to support its drilling operations in Texas - and faster data transmission time (latency).So it chose a Mobile Broadband Trailer System from ERF Wireless, providing microwave data communications. By John Nagel, ERF Wireless, Inc.

Communications

Shell’s HSE director talks about safetySafety managers should be ready to challenge and shouldbe the kind of people with the “headroom” to run thebusiness one day says Kieron McFadyen, head of globalhealth and safety with Shell

Digital Oilfield 2.0 - it’s about the businessWe are now moving to phase 2.0 of the Digital Oilfield,where vendors are expected to not just provide technology,but also ensure that their customers achieve businesssuccess with it, says Dutch Holland, CEO, Holland & Davis

UK's EIC - updates on oil and gas projectsThe UK’s Energy Industries Council (EIC) has launched anew service called EIC Monitor, providing an update onenergy projects

RFID for oilfield operationsThere have been many improvements in reliability to RFID(radio frequency identification) tag technology for oilfieldoperations over past years, says Merrick Systems – and nowthey’re tough enough to be used on drill pipe

ConocoPhillips – using ASCI’s inventory softwareConocoPhillips has signed a deal to use inventorymanagement software purchased from Asset ManagementServices (AMS), to manage its global supply chains, bothupstream and downstream

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Energy security and climate changeEnergy security and climate change are two of the biggest issues of our time – and it doesn’t help thatthey are normally discussed separately. A brave attempt was made at Offshore Europe to bring the twosubjects together in the opening debate.

A discussion was held at the opening debate

to Offshore Europe in Aberdeen on Septem-

ber 9th, “Energy at a Crossroads,” about how

we can simultaneously manage climate

change and energy supply, on the basis of be-

ing dependent on fossil fuels for many more

years to come.

On the panel was UK Energy Minister,

Lord Hunt, and Connie Hedegaard, who is

not only Minister of Climate and Energy for

Denmark but also a main orchestrator of the

Copenhagen climate discussions in Decem-

ber 2009, pushing for an ambitious world

agreement to cut carbon emissions.

Oil company speakers were Thomas

Thune Anderson, who was CEO of Maersk

Oil until August 2009, and chairman of the

Offshore Europe; John Manzoni, president

and CEO of Talisman Energy; and Andrew

Gould, chairman and CEO of Schlumberger.

The discussion covered whether older

oil wells should have to account for carbon

dioxide emitted by the energy needed to pro-

duce them – if it means making them unvi-

able. Also, whether oil companies should be

getting into the renewables and carbon cap-

ture business.

Mr Anderson opened the conference by

saying that there had been, at the previous

Offshore Europe event in 2007, a scarcity of

oil supply, people, and maybe also a scarcity

of ideas. “When we look back at this period

we'll see it as a time of big change, from

technology, to how we do business, to our

partnerships,” he said. “So we call it energy

at a crossroads – making choices.”

Finding a way forward will be chal-

lenging work – and hopefully also reward-

ing work. “But if I have one success after

this conference – it’s that people enjoy and

love their job more than they did when they

started,” he said.

UK Energy and Climate Change minis-

ter Lord Hunt said that he does not think the

oil and gas industry is in any way ‘at odds’

with the UK government’s plan to transition

to new forms of energy, because there will

still be plenty of need for oil and gas.

“Oil and gas can and must coexist with

low carbon sources,” he said. “We couldn't

function without them. They give us space

to develop new technology and markets.”

“I believe it is in our interest to make

the most of our reserves.”

“Three quarters of our energy comes

from oil and gas, and by 2020 we don't ex-

pect that to change significantly. Your sector

supports nearly half a million UK jobs and

makes a healthy contribution to the taxpay-

er,” he said. However, ultimately, “the tran-

sition to a low carbon industry is inevitable.”

However Lord Hunt emphasised the

importance of not delaying action on climate

change. “I have not seen [UK economist]

Lord Stern’s core premise undermined: that

the longer we leave it, the more expensive it

will be,” he said.

CopenhagenConnie Hedegaard, Danish Minister of Cli-

mate and Energy, emphasized that while oil

and gas are important, “it won’t be as impor-

tant in this century as in the last one.”

This fact would be true even without

environmental issues. “Even if we didn't

have a climate crisis we would be forced to

diversify our energy supply,” she said. “No-

body would dispute there is a serious supply

issue just around the corner. By 2030 we

would need another 6 Saudi Arabias if we

continue business as usual.”

Ms Hedegaard tried to make the case

that oil company’s best financial path laid

with them accepting climate change. They

have options of “rejecting and delaying,” or

“recognising realities and dealing with

them,” she said. But in the long run, compa-

nies which reject and delay “will see rev-

enues reduced and revenues strained,” she

predicted.

Oil and gas executives should pay at-

tention to what is happening at Copenhagen,

both as private citizens interested in the fu-

ture of the world, and also because it should

be good for business, she predicted. “I am

The opening debate to Offshore Europe in Aberdeen on September 9th, “Energy at aCrossroads”

“Even if we didn't have a climate crisis wewould be forced to diversify our energysupply” - Connie Hedegaard, Danish Ministerof Climate and Energy

digital energy journal - October/November 2009

Leader

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DEJ21:Layout 1 22/10/2009 12:51 Page 4

DEJ21:Layout 1 22/10/2009 12:52 Page 5

Leader

Emissions from old wells

Talisman’s John Manzoni said that older

fields in the North Sea need more energy to

extract oil; if they have to pay carbon diox-

ide emission charges, it could become unvi-

able to continue production. This could lead

to as much as 900 million barrels of oil left

in the ground which would otherwise be pro-

duced, he claimed.

“You have to bring together objectives

of maximising energy supply and reconcil-

ing that with climate. We have to create a

good balance between those objectives,” he

said.

We could end up “farming out our

emissions to the developing world,” he

warned, for example if the West ends up with

tougher emission controls than the develop-

ing world does, so industrial activity simply

moves there.

Schlumberger’s Andrew Gould said

that for older fields, it might be the right

convinced that those who embrace this agen-

da will prosper the most.”

There are many calls to postpone action

on climate change which need to be reject-

ed, she said. “The world has been waiting

long enough – we have been discussing long

enough. We have a window of opportunity

right now. The longer we postpone action,

the bigger insecurity for business.”

Ms Hedegaard said she was pleased

that a number of countries have now ap-

pointed administrations which are more

friendly to the idea of tackling emissions in-

cluding US, Australia, Japan, Brazil, South

Africa and South Korea.

But the formal negotiations still tricky

with many people sticking to the same ne-

gotiation positions as they have for 10 years,

he said. There are also big concerns about

how much US president Obama will be able

to do, and getting commitments from China.

“I believe the political price will be

very high for the government that decides to

go to Copenhagen and not deliver,” she said.

“If you ask me if I am 100 per cent sure

that we will manage – I can't give you that

guarantee.”

“I have absolutely no plan B. As soon

as you go for plan B people have a way out.

We have to make tough decisions.”

Schlumberger’s Andrew Gould said

that it wasn’t the Copenhagen discussions it-

self that concerned him, it is how whatever

is decided up is implemented afterwards.

“Any deal out of Copenhagen will be a com-

promise deal. It comes down to individual

states’ interpretation of how they apply

Copenhagen. That’s much more difficult,”

he said.

For example, the Lisbon treaty (EU –

2007) was “full of intentions but didn’t have

the support of member states who subscribed

to it,” he said.”

Oil companies in renewablesIf an “ambitious” deal is agreed at the

Copenhagen summit, there will be a big

emerging market for offshore renewables,

predicted Denmark’s Connie Hedegaard,

which oil and gas companies should pay at-

tention to. “Your skills could be utilized to

develop offshore wind and wave.”

Andrew Gould, CEO of Schlumberger,

said, “I’m not sure appeals from politicians

for oil and gas companies to join the renew-

able industry are the right ones. John D

Rockefeller did not come from the whaling

industry. I’m not sure our skill sets are the

ones that will be required. But of course we

have a contribution to make.”

Thomas Thune Anderson acknowl-

edged that whilst skills in the oil and gas in-

dustry are not an exact fit with the renew-

ables industry, “there are many areas where

E&P companies have a sensible role to play.

We can’t just say, we are in renewables,” he

said.

Lord Hunt noted that despite stating

that the oil and gas companies shouldn’t nec-

essarily get into renewables, Schlumberger’s

Andrew Gould had then gone on to make a

persuasive case for the industry’s role in car-

bon capture and storage.

“That was a wonderful example of how

our skills are transferable,” he said. “And the

subsea skills are exactly the kind of skills we

want to access.”

Smaller companiesThere was a discussion about whether the

North Sea is becoming dependent on small-

er oil and gas companies and if this is en-

couraged by the UK Government.

Lord Hunt said that the UK government

did not want to dictate which companies

should be active on the UK continental shelf,

but would just want to ensure that whoever

was active gets appropriate support.

Mr Anderson said that smaller compa-

nies often have a specific focus – eg they get

very good with a certain technology, or good

looking for specific geological features. But

the danger is that they don’t have the breadth

of experience to cope with whatever happens

along the way.

“I’m always amazed by the capability

of smaller players to apply ideas – as the

original players get older and imaginations

have shrunk,” said Schlumberger’s Andrew

Gould. “Mega fields have been found by

people on acreage that was picked over by

majors for years and years.”

“But the North Sea is an extremely

complex place to operate. It’s not easy for a

small player to adapt to that quickly.”

Thomas Thune Anderson, CEO of Maersk Oil until August 2009, and chairman of OffshoreEurope (left); John Manzoni, president and CEO of Talisman Energy (right)

“Oil and gas can and must coexist with lowcarbon sources. We couldn't function withoutthem. They give us space to develop newtechnology and markets.” - UK EnergyMinister, Lord Hunt

digital energy journal - October/November 2009

Leaders

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DEJ21:Layout 1 22/10/2009 12:52 Page 6

in Europe wants to move it 200km – it’s OK

because the pipelines exist. But in the US –

the electricity users are in the East and stor-

age is in the Rockies. You’d have to move it

by train.”

Mr Gould says that Schlumberger is in-

volved in more conversations with utilities

(power generation companies), particularly

in the US and Australia, than oil companies

about carbon capture and storage.

Carbon dioxide is not the only emission

the oil and gas industry has to deal with –

there will also be increasing amounts of hy-

drogen sulphide, since 60 per cent of Middle

Eastern reserves contain it, said Mr Gould.

Lord Hunt said that the UK wants to de-

velop four industrial scale carbon capture

and storage projects in the ‘next few years’,

enabling it to have an independent evalua-

tion of the technology in 2020. This can lead

to retrofitting all existing power stations with

carbon capture and storage, as well as requir-

ing all new power stations to install it.

The program is not necessarily going to

be limited to just coal, he said; it can also be

used on gas power stations. “We think it’s

vitally important. Many people in this room

will be thinking about CCS,” he said.

Talisman’s John Manzoni said that in

Canada, where he lives, “they definitely

need CCS to bury carbon from the upgrad-

ing process – but it needs technology devel-

opment. The result will be that prices go up.

But I think it’s absolutely imperative.

Thomas Thune Andersen said that he

did think carbon capture and storage would

happen. He said his biggest fear is that the

pressure which certain environmental groups

are putting on government not to encourage

carbon capture, saying it is an excuse not to

do other things, is successful.

The contribution of the oil and gas in-

dustry should be its ability to handle the car-

bon dioxide, he said.

thing to allow them to produce their last bar-

rels of oil (even it takes a lot of energy to

produce them) and give them some kind of

exemption from carbon emission rules. “It

has to be adapted to the circumstance,” he

said.

Lord Hunt said that if the agreement in

Copenhagen is “the one we want,” then car-

bon dioxide emissions can be expected to get

more costly in 2013. The cap is due to tight-

en.”

“I’m not going to forecast carbon

prices,” Lord Hunt said. “We haven’t seen it

as a role of government to establish a price.

We had a rather loose-ish first phase. But if

there is a good deal in Copenhagen – so Eu-

rope can go for harder target – that ought to

have an impact on the carbon price.”

“I don’t know the answer to the ques-

tion of older fields – its one we have to de-

bate. We need a stable regulatory regime but

with some flexibility.”

Lord Hunt emphasised that there is no

point in trying to restrict carbon emissions

and then creating get out clauses. “The me-

chanics we’re using is that carbon should

come at a price – and the incentives are

working in the right direction. Sometimes

there are tensions and if we raise the targets

by 30 per cent that has a number of conse-

quences. There are trade offs,” he said.

However “we know we will rely on oil

and gas for many years – and we have to

make sure we have the regulations and in-

centives right.”

Thomas Thune Anderson said that the

most important thing is minimise overall car-

bon dioxide emissions from the industry –

and where there are emissions look at how

much ‘value’ the com-

pany is getting in re-

turn for them. Maersk

Oil has held discus-

sions about this. “My

wish is that these dia-

logues will continue.

Look at where can

you make a differ-

ence,” he said.

Mr Gould was

asked how carbon

dioxide emission con-

trols could make an

impact to Schlum-

berger’s activities in

the oil and gas indus-

try. “The biggest

emissions we have are

from hydraulic fracturing,” he said. “We

could make them electric but it would not be

profitable.”

Malcolm Webb, chief executive of Oil

and Gas UK, noted that the oil and gas in-

dustry has calculated that there might be 900

million barrels of oil not produced due to

carbon controls, which would otherwise

have been produced – however the UK gov-

ernment had calculated a different figure.

India and ChinaThere were questions about how to get India

and China involved in reducing emissions,

when all they get out of it is a slower path to

industrialisation.

“We’ve been very active in discussions

with India and China. They see developing

economies as responsible for greenhouse gas

emissions,” said Lord Hunt. And “these gov-

ernments also face serious environmental is-

sues already.”

“I think it is possible to reach a deal –

but part of the deal is about money. A deal is

possible but will it be a hard deal or a lowest

common denominator deal.”

Carbon captureOne of the areas Schlumberger anticipates

making a big contribution to reducing emis-

sions is in helping with carbon dioxide stor-

age.

Issues which still need to be resolved

with carbon capture include figuring out a

regulatory framework, working out who will

take responsibility for storage sites and ac-

cept the long term liability, as well as creat-

ing the financial incentive to do it.

But “we remain optimistic carbon cap-

ture and storage will succeed,” Andrew

Gould said.

The carbon capture and storage tech-

nology is “understood,” he said. “But there’s

a huge issue of transportation. One project

“I’m always amazed by the capability ofsmaller players to apply ideas – as theoriginal players get older and imaginationshave shrunk” - Andrew Gould, CEO,Schlumberger

Connie Hedegaard, Danish Minister of Climate and Energy and UKEnergy Minister, Lord Hunt

7October/November 2009- digital energy journal

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DEJ21:Layout 1 22/10/2009 12:52 Page 7

Paradigm's business growth in AfricaOil and gas software company Paradigm is very pleased with its 2009 sales to companies in Africa - withmore business in the first six months of 2009 than in the whole of 2008.

Oil and gas exploration software company

Paradigm is very pleased with its 2009

sales in Africa, reporting more business in

the first six months of 2009 than to the

whole of 2008. The company attributes this

growth to its focus on Africa, the match be-

tween Africa's complex geology and its

technology, and the fact that many of its

clients in Africa are leading the industry in

their use of technology.

"We see Africa as somewhat of a jew-

el in our crown right now," says Richard

Jefferies, Paradigm executive VP for Eu-

rope, Africa and the CIS. "We will contin-

ue to make steady investment in this vast,

challenging, yet rewarding continent. I ful-

ly expect to see African organisations ap-

pearing in our top 10 customers in the not

too distant future. The key will be not to

get impatient and overstep the investment

curve."

“In early 2008, Paradigm put together

a strategy specific to Africa. It created a

dedicated Africa sales team, re-balanced its

Nigeria operations to focus on our major

clients, and initiated a program for Angola

which brought on board our first Angola-

based employee in 2008. “With over 50

countries and 2000 languages, you can't

treat Africa as one market.

“For example, Nigeria and Angola are

major OPEC producers, focusing on the

highly prospective and productive Gulf of

Guinea, Niger Delta and West-Central

Coast. Nigeria and Angola are very differ-

ent, with their own unique characteristics;

both countries are at the core of our African

business, but in very different ways.

“Moving away from West Africa, we

are focusing our business development ac-

tivities on Algeria, dominated by the na-

tional oil company (NOC), Sonatrach, and

then in the discrete opportunistic markets

of Southern Africa, Madagascar and the

Rift Valley,” he says. “We have a plan of

development and execution for each seg-

ment of our African territory.

“Local content is extremely impor-

tant. Our team in Nigeria is 100 percent

Nigerian, and our business development

manager in Angola is Angolan. Not only

does this make sense from a language and

cultural point of view, it also demonstrates

commitment to the local economy.”

Geology and technologyThere is a good match between Paradigm’s

technology and the geological diversity of

the region, Mr Jeffries says.

“In looking at a cross-section through

the Gulf of Guinea, moving towards the off-

shore, the geology transitions through four

principal zones, dominated by shale diapirs,

compressive folding, thrusting and anticli-

nal deformation.

“All four geological settings are

prospective and require different interpre-

tive approaches from a broadly disciplined

team of explorationists,” he says.

Moving east from the heartland of

Africa’s oil economies, the East African

Rift Valley is “becoming more and more

prospective; it is hard to think of a more

structurally complex, and indeed tectonical-

ly active, setting for exploration,” he says.

“The need for accurate, fault-sealed

models is paramount to understanding the

geological reservoir uncertainties and to the

creation of development plans that have ful-

ly incorporated all aspects of potential

risk.”

Paradigm’s Rock and Fluid Canvas

software is designed to work well with

these kinds of complex and diverse rock

structures, covering the whole exploration

and development life cycle, and to create

better images of previously hard-to-image

prospects.

Client technology leadershipParadigm tends to be most successful when

working with clients who are themselves

technology leaders, Mr Jeffries says.

An obvious example is Statoil, which

has had technology leadership as an impor-

tant element of its long term strategy since

being established in 1972.

“We see all around the world that Par-

adigm tends to be most successful where

the subsurface technical challenges are ad-

dressed by innovative clients who are tech-

nology leaders. “Paradigm has had a long

and successful relationship with StatoilHy-

dro, going back many years, such that they

are today one of our most strategically im-

portant clients,” he says.

Along similar lines, Angola’s Sonan-

gol and Somoil are “making every effort to

embed high science and best-in-class tech-

nology in their DNA,” he says. “Today So-

nangol and So-

moil are invest-

ing in Paradigm

leading edge in-

novations, such

that we see a

long and mutual-

ly rewarding fu-

ture in Angola.”

BusinessclimateThere are many

big investments

going on in

Africa despite

the world’s cur-

rent economic issues.

“Many of our African clients do seem

to be less impacted by the financial crisis

than our European ones,” he says. ““There

appears to be a different dynamic in finance

and access to credit in Africa, versus the

more traditional European markets.”

“It is difficult to pinpoint exactly what

that is attributable to, but some factors are

likely to be home generation of capital and

the gradually maturing political and bank-

ing infrastructures in countries like Nige-

ria.

“Gas is featuring as an increasingly

strategic natural resource in the West

African offshore, and money from China,

India and Russia is still being pumped into

Africa, fuelling the need for constant in-

vestment in the best technology.”

Even smaller indigenous oil compa-

nies are slowly taking a more global view

of available technology, he says. That

trend,coupled with a drive to educate the lo-

cal workforce and to repatriate as much of

the value-adding “knowledge” work as pos-

sible, feeds the demand for new technolo-

gy.

Paradigm has historically been seen as

a smaller competitor to organisations such

as the major oilfield service companies, but

Mr Jefferies believes this is changing. “We

are no longer considered small. We are

competing extremely successfully. We are

not encumbered with a massive, capital in-

tensive services giant over us, so we can be

more nimble. We are that ‘breath of fresh

air.’ Our value is fewer wells, not more.”

Richard Jefferies,Paradigm executive VPfor Europe, Africa and theCIS

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Steve Jacobs, president of RMI, an oil and gas

marketing consultancy company in Houston,

is on a Society of Petroleum Engineers (SPE)

panel to try to accelerate the rate of accept-

ance of new technology. “It’s a pretty thank-

less task I might add,” he said.

Mr Jacobs put together a discussion ses-

sion at Offshore Europe ("From Bright Ideas

to Implementation," 10am Sept 10 2009) to

discuss ways to get new technology used, in-

cluding discussions of the implementation of

wireless seismic devices and integrated asset

models.

The oil industry has been fast to adopt

new technology when it sees an obvious ben-

efit, he said. It is the “second largest user of

computers in the world after the entertainment

industry.”

If a technology could be developed

which would enable 40 to 60 per cent oil re-

covery, that should be adopted quickly as

well. “The argument for peak oil would be

pretty moot,” he said.

If a technology has an enormous bene-

fit, you can expect much faster take up. For

example the first Measuring While Drilling

(MWD) technology introduced in 1978 had a

high additional cost ($4,000 to $5,000 a day),

poor reliability for nearly 10 years after its in-

troduction, but a massive benefit. “We

weren’t drilling in the wrong direction for

10,000 feet,” he said.

Meanwhile logging while drilling

(LWD) did not have such a great additional

cost, but initially did not have such a great ad-

ditional benefit – because logging by wireline

gave more accurate results. So the take-up

was not so fast.

Technology companies might be better

off trying to work out what oil companies are

prepared to pay for, than working out what

they say they want, Mr Jacobs said.

“If you can do something which does

something people need, it can have a fast

adoption,” he said.

“Many service companies have an incre-

mental view – bring in incrementally better

technology at a disproportionately higher

price. That’s not technology – it’s just busi-

ness.”

True to the theme of implementing new

technology, the audience was given handheld

voting machines, which they used to say

which kind of company they were from. Of

an audience of 50 people, 40 per cent were

service providers, 33 per cent from oil opera-

tors and 22 per cent from other and 4 from

academies.

The audience was asked what they think

is the most important technology for the fu-

ture, with options including improved seis-

mic, automated drilling, enhanced CTD

coiled tubing drilling, wireless telemetry,

nano technology, multifrac horizontals, smart

completions, enhanced EOR, look ahead

LWD.

Audience said enhanced EOR 26 per

cent; nanotech 23 percent; seismic 20 per

cent, with a small number going for the re-

maining options.

The audience was asked if they thought

oil companies focussed too much on incre-

mental innovation. 64 percent said there was

too much focus in incremental innovation, 8

per cent said there was too much ‘break-

through’ innovation and 28 per cent said the

balance was about right.

When asked what they thought was the

main obstacle to breakthrough innovation, 19

per cent said a conservative strategy, 36 per

cent said a short term focus, 26 per cent said

a risk averse climate, 9 per cent said linear de-

velopment proceses and 9 per cent said too

much internal orientation.

Introducing wireless seismicChris Friedemann, senior VP corporate mar-

keting with ION, talked about his company’s

experience introducing a new technology –

wireless seismic geophones.

Aware that new technologies take 35

years on average to reach 50 per cent pene-

tration in the oil and gas market, ION wanted

to look for ways to accelerate adoption as

much as it could.

It decided that a good way to do this was

to involve two oil companies, BP and Apache

Corporation, in the field trials. As well as get-

ting them involved in an early stage, both

companies committed $8m each to spend on

the wireless geophones.

This meant that it had a budget to build

10,000 stations for the field trial – otherwise

ION would probably only have built ‘hun-

dreds’, he said. Having a large number of sta-

tions was important in being able to see how

far the system could go.

BP wanted to find ways to really “chal-

lenge” its reservoir development and improve

the subsurface image. “They asked, how will

we use the

data to im-

prove the im-

age,” he said.

Since

the first trial,

the system

has been

used many

times, in-

cluding in

China and

Mexico.

There is

something of

an art to

building

good rela-

tionships

with oil com-

panies, Mr

Friedemann

says. “You

don’t need to have senior management falling

in love with your product, but you do need

someone within the oil company who thinks

it is a good idea and encourages his colleagues

to see things the same way.”

You also need people to accept that they

are working with an unproven technology and

things might go wrong. “It needs a lot of up-

front relationship / trust building,” he said.

“You have to acknowledge the real likelihood

of setbacks.”

In hindsight, it might have been better

to field test it on a smaller scale rather than

go for a big project at the start, he said.

Some oil companies say that they will

only get involved in the technology develop-

ment stage if they can have ownership over

the intellectual property, but that means it

would be impossible for the technology com-

pany to sell it to anyone else.

One of the biggest horrors when trying

to introduce new technology is the oil com-

pany procurement manager, he said – they

will often try to use methods to reduce expen-

diture which really don’t work with new tech-

nology.

“Typical procurement metrics don’t ap-

ply. When the procurement guys show up and

try to drive cost out, you just can’t do that.

They are not quite set up to work with new

technologies that are emerging. We are really

scared of this,” he says.

Exploration

“Many service companieshave an incremental view –bring in incrementally bettertechnology at adisproportionately higherprice. That’s not technology –it’s just business.” - SteveJacobs, president of RMI

Getting technology implementedIs the oil and gas industry slow to implement new technology? Many people think so. The issue wasdiscussed at a special session at Offshore Europe, with audience voting and examples covering theintroduction of wireless seismic and integrated asset models.

October/November 2009 2009 - digital energy journal

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DEJ21:Layout 1 22/10/2009 12:52 Page 9

(subsurface, surface, financial). This is known

as ‘explicit’.

Reservoir engineers tend to end up be-

ing the primary custodians of the Integrated

Asset Models (IAM), possibly because they

have the most expertise with models in gen-

eral, he said.

There are many success stories already,

for example Petrobras in Ecuador reckons it

could increase production by 20 per cent as a

result of using an integrated asset model, to

identify which wells to do workovers on and

plan its drilling campaign.

ConocoPhillips used an IAM model for

a water alternating gas development in Alas-

ka, where it needed to decide how much wa-

ter and gas to inject in a number of different

wells. This was on the basis that all the pro-

duced gas needed to be ultimately re-injected

(none of it was exported), all produced water

was re-injected, and there were constraints on

the energy available to compress the gas

across the entire field.

BP used the system to model a 500-well

onshore gas field, which had 30,000 horse-

power of mobile compressors, to work out

how it could get the best flow with the injec-

tion gas compression power available.

StatoilHydro used IAM to model a wa-

ter alternating gas flooding scheme on its

Snorre B field, and claims an improved net

present value of the field of 30-35 per cent.

“We had to create a simplified reservoir mod-

el so it would run much faster,” he said.

Pemex used a system in Mexico on a

well which had slugging problems, where

slugs were constraining the amount of pro-

duction which was possible.

The audience was asked if they thought

full field optimisation models, from “pore to

pump”, with real time data being fed in the

model to continuously optimise it, would be a

“reality” in the next 5 years. 54 per cent said

yes, 46 per cent said no.

When asked if they were more likely to

adopt integrated asset models in their compa-

nies as a result of listening to the speech, 83

per cent said yes.

ties engineers have a model of the surface

equipment and the mass flow rates of fluid

through it and the energy required to operate

it; and the economists have an economic mod-

el for the business.

“But it’s the same asset – and it all has

the same sensitivities and uncertainties,” he

said. “The system is all connected – any

change affects what happens upstream and

downstream.”

Communications between the models

and departments is normally done “with a lot

of manual work and effort.”

There are plenty of questions which

come up regularly which need co-ordinated

input from all of the models to be able to an-

swer. For example, working out how much in-

jection water is required and how it should be

distributed, or working out a program for

drilling new wells to ensure use of the pro-

duction facility is optimised.

But there have also been plenty of prob-

lems with putting together Integrated Asset

Models.

There are different attitudes towards

time – production engineers are only interest-

ed in the instantaneous flow rate (i.e. in litres

per second) but reservoir engineers are more

interested in what will happen over the next

few years. “That was a major challenge for a

long time,” he said.

A recent development is simplified

“proxy” models, which can model what is

happening in the reservoir much faster than

standard models. They do the modelling in

less resolution, but the trade-off is welcome

because high resolution models update them-

selves too slowly.

Integrated Asset Models, which bring

everything together, were first built in 1993,

and are now used in around 20 per cent of

wells, Mr Ella estimates.

There are two different ways to do it.

One method (called ‘implicit’) builds a gigan-

tic model with everything included. The sec-

ond method, which is much easier to imple-

ment practically and becoming more com-

mon, is to try to connect to individual models

When doing partnerships with oil com-

panies, two is probably the right number. “In-

volving more than two is likely to prove chal-

lenging.”

Mr Friedemann was asked what he

would do differently if he had a chance to do

it again. “We got pulled into the field trial a

little earlier than we wanted to. We would

have liked to be one year later so we had a

chance to evolve the equipment,” he said.

“We got a minor black eye because some per-

formance metrics weren’t where people

thought they should be.”

The investors were very supportive of

the new development before the economic

meltdown. “We were seen as a company that

spent a lot on R&D and became a growth sto-

ry,” he said.

Although some investors were expect-

ing a much faster up-take than ION was able

to achieve – with mass adoption within 2-3

years, like the iPod.

The audience was asked if they thought

technology diffusion rates in oil companies

was accelerating. 51 per cent thought it was

accelerating, 41 per cent said they thought it

was staying the same and 7 per cent said slow-

ing down.

The audience was asked if they thought

onshore seismic was tougher than offshore.

57 per cent said they thought onshore was a

greater challenge, 21 per cent said the same

as offshore, and 21 per cent said it was less of

a challenge.

Integrated asset modelsRichard Ella, production business manager

for EAF at Schlumberger Information Solu-

tions, talked about his efforts encouraging oil

companies to install Integrated Asset Models

(IAM) – where you have the reservoir, pro-

duction facilities and economics of a well in

a single computer model.

It is common for the same oilfield’s op-

erations to be captured in three separate mod-

els, for subsurface, surface and economics.

The geoscientists and engineers have a com-

mon earth model of the reservoir; the facili-

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Exploration

DEJ21:Layout 1 22/10/2009 12:52 Page 10

Nano technology and the oil businessWe might never put robots in reservoirs, but nanotechnology can help out in plenty of other areas of theoil business – particularly enhanced oil recovery, better catalysts and reservoir surveillance, says Shell’schief scientist Sergio Kapusta.

The reality of nanotechnology is per-

haps a little different to the expectations, but

it is not hard to see some areas where it can

make a big difference to the oil business,

said Sergio Kapusta, chief scientist and man-

ager engineering innovation and technology

with Shell Global Solutions, in a luncheon

talk during Aberdeen’s Offshore Europe ex-

hibition.

Nano technologies have already been

used to help make stronger and lighter mate-

rials, with improved corrosion / erosion re-

sistance, for example in carbon fibre materi-

als for aircraft. Nano technologies have also

been used to make better membrane water

filtration systems.

Nano technologies have been used to

make better coatings, to make them more

scratch resistant, or to make them oil wet or

water wet (ie determine whether oil or water

will stick to them preferentially).

In the oil business specifically, nan-

otechnologies could be used to make better

catalysts for chemical reactions, or used for

enhanced oil recovery (finding ways to push

more oil out of the reservoir and into the

wells), and for better surveillance (working

out what is happening in the reservoir).

Still, nano technology materials are be-

ing priced at dollars per gram – a long way

to oil company typical pricing models of

cents per barrel. “So there are a couple of or-

ders of magnitude to be reduced in the

price.”

Plenty of other technologies have seen

very fast cost reductions in the past, he said,

and the same might happen with the cost of

nanotechnology. For example, the price of

digital calculators has fallen in recent years

from very expensive to so cheap they are

hardly worth charging for.

In-house expertiseShell is making careful choices about which

technologies it wants to develop in house

and own - mainly technologies which will

find their biggest application in the oil and

gas industry, but might not be so useful to

other industries.

The main area of nanotechnology

which Shell is interested in are developing

new catalysts for chemical reactions. “That’s

where the core of the business is,” he said.

“We will be there at the start.”

“We have an extensive research pro-

gram looking at how to do better enhanced

oil recovery,” he said.

SurveillanceNano technologies could also be used for

reservoir surveillance, tracking what hap-

pens in oil reservoirs between oil wells.

“We can’t see very far into the well-

bore,” he said. “Seismic doesn’t have the

resolution we would like. We don’t know

where our injected chemicals are going. We

take very wide guesses.”

This is analogous to a doctor working

on a patient buried 5000m underground, with

only two cables from the ground down to the

patient, and no idea what was happening in

between them, he said.

Medics are already using supermagnet-

ic nano particles in human bodies, which can

be interrogated as they pass through the

body, providing data about parts of the body

which have never provided data before.

It would be helpful if nano particles

could be used inside reservoirs, for example

to take enhanced oil recovery (EOR) chemi-

cals to the right places, or help steer drill bits

into oil reservoirs. “None of this is being

done today. We have laboratory studies on

core samples, but they are far from any ac-

tual realisation,” he said.

“It would be good if we could deliver

emulsifier and foamer to precisely the place

that it is needed- but we’re still far from

that.”

Nano particles can act as antennas – so

(for example) they could be designed to sit

on the interface between oil and water, and

tell people exactly where this interface is.

Another possibility is combining nan-

otechnology with biotechnology – which

could enable biological chemicals already in

the reservoir to act as ‘enhanced oil recov-

ery’ chemicals, helping push more oil out.

Shell is part of a group of companies

called the Advanced Energy Consortium, set

up at the University of Texas Bureau of Eco-

nomic Geology, investigating the use of nano

technology for reservoir surveillance.

Companies in the Advanced Energy

Consortium are oil and gas companies (BP,

Conoco Phillips, Marathon, Shell, Total,

Petrobras, Occidental) and service compa-

nies (Halliburton, Baker Hughes and

Schlumberger).

It is currently making studies on the

flow of nano particles through rock – to esti-

mate how much nano particles injected into

one well could be retrieved from another

well – for example if they were used for sur-

veillance.

Studies have been made on small core

samples, showing that all of the nano parti-

cles passed through the cores can be re-

trieved. But there is a big difference between

core samples and an entire reservoir. “We

don’t know what forces are in effect, many

particles get stuck in the pores,” he said.

Nano robotsMr Kapusta said that putting nano robots in

reservoirs, an idea mentioned in the indus-

try, “is more sci-fi than reality.”

Consider that oil and gas reservoirs typ-

ically contain pores which are 100nm to

1000 nm across (0.0001 to 0.001mm) – so

any nano particles would need to be under

100 nano metres so they could move through

the pores.

Designing a robot which can fit a pow-

er system, movement and data communica-

tions into 100 nm does sound quite hard –

and even if it could be achieved, there is a

question about the cost.

There would be a further question

about how the data sent out by millions of

tiny robots in the reservoir would be man-

aged – and of course how the nano robot

would survive in the harsh conditions of the

reservoir.

“I get articles every day about usingnanotechnology to improve lithiumbatteries,” he said. “I expect you will see largeimprovements in lithium batteries in the next5-10 years.” - Shell’s chief scientist SergioKapusta

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Broader ideasThere are many broader ideas about how nano

technology could help in the oil and gas in-

dustry, such as with improved coatings, sen-

sors, water treatment. “These are more open,”

he said.

Stronger materials could be useful in all

areas of oil and gas industry – for example in

making stronger downhole seals.

Nano enhanced materials can already be

10 to 20 per cent better than what went be-

fore, but Mr Kapusta expects a lot further de-

velopment. “I expect 100 per cent improve-

ment when we learn how to do these things,”

he said.

In carbon capture, there have been de-

velopments of new materials with metal or-

ganic frameworks which can absorb carbon

dioxide much better than any other material,

he said. “But it is very expensive. The appli-

cation for this are fantastic but we need to do

it at lower cost. It can’t compete with tradi-

tional ways of carbon capture tools.”

Nano sensors can be developed which

can determine the oil saturation in rock, by

showing you were the oil-water interface is,

or tell you what the acidity is.

Nanotechnologies could also have a less

UK’s seismic data available via CDAUK oil and gas data management organisation Common Data Access (CDA) is how storing public seismicdata, so people who need it do not have to go to the trouble of asking for it from the person who ownsit every time they want some data.

Common Data Access, a UK organisation

which is part of the Oil & Gas UK associa-

tion, is now collecting releaseable 2D and

3D seismic data, so it can make it available

to whoever wants it much more easily than

getting it from the original source.

Under UK regulations, seismic data is

released to anyone who wants it after 4 or in

some cases 3 years.

CDA aims to create benefits to both the

provider and the user of the data - and has

estimated that the direct savings from the

system could be £1.1m a year.

Currently, if you want publicly avail-

able seismic data, you still have the trouble

of going to the oil company which did the

survey, finding the right person to speak to,

and getting a copy of their tapes from their

archives. It can take several weeks, take a lot

of hassle and you’re not even sure if you’re

getting the right data at the end.

“We can do it in 3 days and its quality-

checked,” says Malcolm Fleming, chief ex-

ecutive, Common Data Access.

Mr Fleming envisages that if the data

is easier to access, companies will be able to

do more extensive analysis of seismic data

leading up to a license round. “It could have

an impact on the whole shelf,” he says.

The organisation has spent March to

September 2009 gathering and loading data,

and reckons it has 15 per cent of all the data

available. It is starting with the data which

is most in demand.

By December 2009, it hopes to have a

further 5-10 per cent completed, with data

from more than 750 different surveys. So

far the database size has reached “several

terabytes,” says Mr Fleming.

The system currently only covers

processed data – the raw data files are still

too large to comfortably handle within our

current business model, Mr Fleming says.

The system will cover the process of

managing licenses for the data – member

companies will only need to sign one data li-

cense with CDA for any data they want, not

a separate one for each seismic file they want

to access.

CDA will also quality check the data,

so users will know the quality standard of

the data before licensing it.

A fee is charged for downloading the

data on media – although CDA does not aim

to make any profit on it. The database is op-

erated by Schlumberger.

Members of CDA will be able to down-

load seismic data directly – and if the files

are too big to download, CDA agrees to put

it on tape and have it on their desk within 3

days. Non-CDA members will be able to re-

ceive data on tape within the 3 week guide-

line (as set by agreement between industry

and the UK government). Joining the CDA

Seismic DataStore costs £12,000 a year.

It will be a similar project to DISKOS

in Norway, which also stores seismic data.

Until now, CDA has maintained two in-

formation stores: DEAL, which provides in-

formation about the wells, seismic surveys,

licenses and infrastructure data for the UK

continental shelf, telling you what data is

available, running on the Schlumberger

Seabed data model; and Well DataStore,

which provides information about wells.

Mr Fleming says he sees his role as a

manager of data management, or a “data

manager manager.”

Companies will not be obligated to pro-

vide data to CDA – but if they don’t share it

through CDA they will have to handle the

cost and hassle of providing it directly to

other companies that ask for it.

In future, CDA anticipates storing com-

panies seismic data which is not publicly

available – because it can probably manage

the data more effectively than the companies

can themselves, and when the 3-4 years are

up and the data needs to be made public, it

can be done automatically.

In future the database might also be ac-

cessible directly via other software applica-

tions, so they can work on it directly (rather

than just downloading individual files).

Making it easy to access publicly available UKseismic data - Malcolm Fleming, chiefexecutive, Common Data Access

expected impact on the oil industry in terms

of reducing demand for oil – by helping make

better batteries for electric cars, or helping

produce much lighter cars made of composite

materials, which need less oil to propel them.

“I get articles every day about using nan-

otechnology to improve lithium batteries,” he

said. “I expect you will see large improve-

ments in lithium batteries in the next 5-10

years.”

A critical factor with batteries is how

fast they can be charged up. “The speed of

recharge increases as you decrease the size of

the particles,” he said.

digital energy journal - October/November 2009

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Subsea control systems and softwareDo well tests without a riser at up to 10,000 feet of water; model your subsea flow much more accuratelythan you could do before; a new control system for a subsea landing string; and the first off the shelfsubsea tree for up to 300 feet (90m) depth. Some of the new subsea technologies on display at OffshoreEurope.

AX-S – well intervention at 10,000 feetwith no rig or riserExpro, an international specialist in well flow

management, has developed a new subsea

well intervention system called AX-S, en-

abling well intervention at up to 10,000 feet

of water without a rig or a riser.

The AX-S system is 33.5m tall, weighs

220t and is rated for operations at up to

3,000m. It is deployed onto a subsea tree with

an active heave-compensated fibre winch

from a monohull vessel, and is remotely con-

trolled from the surface like a ROV. The sys-

tem comprises an integrated set of subsea pres-

sure-contained packages comprising well con-

trol, wireline tools, wireline winch and fluid

injection functions.

The well control package (WCP) is the

dual safety barrier containing industry-proven

7 3/8inch shear seal and gate valves. If any

safety issues arise, the operator has time to

identify the problem as the system is a fully-

enclosed pressure housing with no dynamic

seals between wellbore and surrounding envi-

ronments.

Positioned directly above the WCP is the

tool storage package (TSP). The TSP contains

eight tool pockets which are located around

the inner circumference of the package. The

tools are swapped on the seabed and as they

are held in a pressure retained housing, no

pressure testing is required after each tool

change.

The tools are run in the well by the wire-

line winch package (WWP). The pressure

housing means issues such as hydrocarbon

leaking into the surrounding water and water

seeping into the well are all but eliminated.

The winch has 25,000ft of mono-conductor

which conveys the various intervention tools

into the well. The fluid management package

is the final subsea section and can deploy gly-

col fluid into the system to flush out hydrocar-

bons which are then circulated back into the

well or subsea production system. Depending

on the specific customer needs, sea water can

be mixed with the fluid in variable ratios as

required.

A control cabin on the vessel has a com-

puter generated interface which is used to in-

struct the various packages on a fully automat-

ed basis. All the hydraulic power is generated

in the AX-S system so there is no requirement

for a hydraulic line going back to surface. To

ensure operations are safe and effective, video

cameras and an ROV are an integral part of

the system.

The control system is designed to be self

healing, so if one communications channel

breaks the data can go down another path. The

system can be controlled on the surface with

touch screen panels.

The system is lowered onto the ocean

floor in four sections, with a maximum weight

per section of 75 tons. Restricting each load to

75 tons, means the handling equipment on the

boat does not need to be so substantial.

Subsea wells have typical recovery rates

of 10-15 per cent of the total oil thought to be

in the reservoir, compared to typical recovery

rates of 30-50 per cent for typical land wells.

The recovery rates on subsea wells are low be-

cause of the difficulty in working on the well

to increase production.

With Expro’s technology, it will become

much less expensive to do well interventions

on subsea wells. These interventions will ulti-

mately improve recovery rates to a level simi-

lar to land wells.

Since the initial idea in 2002, Expro be-

gan a research a development programme in

2003, a feasibility study was completed in

2004 and since then the design and testing has

been ongoing.

Expro uses technology developed in oth-

er industries to help - for example, it uses fi-

bre rope instead of cable to lower the equip-

ment to the seabed, because it is lighter - a les-

son learned from the salvage industry.

The system has been tested to 10,000psi

and also been tested for vibration and high

temperature. "So it's not going to fail in serv-

ice," says Matthew Law, engineering project

manager for AX-S with Expro.

The first field trial is scheduled to take

place in the North Sea in June 2010.

New multiphase flow modellingsoftware availableA new multiphase flow modelling software is

available on general release from Kongsberg,

building on an estimated $20 m of research

funded by Total and ConocoPhillips at the

SINTEF research organisation in Trondheim.

The software is already being used by

Total and ConocoPhillips, but is now released

for commercial use.

The software was designed to model typ-

ical subsea flow lines, typically running at a

long distance along the seabed and then sud-

denly turns to rise to the surface, with several

kilometres of vertical height.

Having good multiphase flow models is

very important in avoiding slugs (e.g. large

volumes of liquid in the gas flowline) which

can come up to the platform and cause enor-

mous problems.

If you know what kind of conditions can

cause slugs, you can try to tweak the flowrates

and pressures to avoid them.

The software calculates the dynamic flu-

id flow in three dimensions, and can simulate

Kongsberg software - model complex flows in subsea flow lines which run along the seabed forlong distances then rise to the surface

13October/November 2009 - digital energy journal

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and visualise waves, slugs, droplets and bub-

bles.

It can also help you manage the flow to

try to reduce hydrates, which can solidify out

of the liquid and gas flowing through the pipe

and block it.

Total and ConocoPhillips invested in the

new technology because they were struggling

to adequately model multiphase flow in these

complex conditions with the technology avail-

able, says Chris Ruigrok, head of sales, multi-

phase flow solutions, with Kongsberg Oil and

Gas Technologies. "It is difficult to accurately

simulate multiphase flow in the risers with

current tooling."

The system calculates in more detail than

the competitors, Mr Ruigrok claims. "The

main aim is to predict liquid hold up more ac-

curately," he says.

The project combines together detailed

calculations of oil and gas flow based on the

fundamental physical and chemical properties,

with real experimental data from the SINTEF

Multiphase Flow Laboratory, where there is a

12 inch diameter flowline setup with a 70 m

vertical riser.

20 people have been working full time

on developing it since 2002.

"Experimental data is very expensive but

it's also very important," says Mr Ruigrok.

Kongsberg has established a new busi-

ness unit called Multiphase Flow Solutions to

industrialise the technology, and look for ways

to combine it with other product offerings, for

example its K-Spice software which can mod-

el oil and gas process plant and control sys-

tems.

Setting the software up is fairly simple -

you type in the shape of the pipeline (in terms

of x, y, z co-ordinates at different lengths along

it), you type in the data about the pipe and its

contents - diameter, pressure, fluid tempera-

ture at start, outer temperature, heat transfer

co-efficient, description of the fluid and start

(ratio of gas, oil and water) and estimate of

pressure in the well. The simulator then works

out everything else.

If you want to see if you can reduce slug-

ging with a choke in the pipeline, you can see

how well this will work.

Schlumberger - new subsea landingstring electrohydraulic operatingsystemSchlumberger has launched a new subsea

landing string electrohydraulic operating sys-

tem called SenTURIAN*, which is used dur-

ing completion installation and well testing

operations.

SenTURIAN is a key component of the

subsea landing string and is deployed during

operations performed from a dynamically po-

sitioned vessel. The system provides verifica-

erdeen, the SVXT is destined for harsh shal-

low-waters (i.e. S-Series) up to 90m deep. GE

expects it will find a market in the UK North

Sea and Asia Pacific, among other places.

The new Tree on Mud-line (TOM)

equipment merges horizontal and vertical tree

technology, reducing weight by 20%, reduc-

ing height, and also delivering essential func-

tionality in a pre-engineered, pre-configured

'modular' way. By assessing its entire cus-

tomized shallow water tree portfolio designed

and built over the last 30 months and incor-

porating the around 85% common denomina-

tor elements, GE is confident that the new

SVXT unit will offer customers enormous

benefits.

Firstly, GE says, by offering all cus-

tomers pre-engineered quality solutions we

will improve clarity during equipment speci-

fication. This in turn streamlines the supply

chain with rigorously qualified and validated

products, and also speeds on-time delivery,

driving faster execution in pre and post order

phases. Importantly senior engineering ex-

pertise is freed-up to focus on customers' most

challenging customisation requirements and

problems.

Having CapEx and OpEx in mind,

makes off-the-shelf equipment attractive to

both buyer and seller - the buyer gets the

equipment at potentially lower cost with es-

sential elements built-in, thereby reducing up-

grade, repair and maintenance needs over the

long-term, while the seller gets potentially

more profit through efficiency gains.

But it only works if the buyer is prepared

to accept that a predominantly standardised

piece of equipment meets most of the needs,

something which Manuel Terranova, senior

VP, subsea product platform, GE Oil and Gas,

calls the "standardisation battle".

tion of installed equipment functionality and

enables fast acting well control in the event of

an emergency situation.

The compact design of SenTURIAN

makes it easy to handle and operate, and the

small diameter umbilical allows for safer and

faster deployment. The overall configuration

enables efficient operations and results in

valuable rig time savings.

The innovative design incorporates pres-

sure balanced accumulators which are more

efficient and shorter than conventional de-

signs. This reduced length allows for the ac-

cumulators and solenoid valve manifolds to

be incorporated in one single unit.

Electrical signals are sent from the sur-

face to operate the solenoid valves and allow

the stored hydraulic pressure to be transferred

from the accumulators to the desired subsea

or downhole function.

It is compatible with all Schlumberger

SenTREE* subsea test trees, third party tub-

ing hanger running tools, and downhole equip-

ment.

SenTURIAN can send and receive data

from the surface, so it can provide instructions

and send back telemetry feedback from sub-

sea and downhole equipment.

The standard configuration is capable of

operating in water depths up to 15,000 feet

(4,572m) and pressures up to 15,000psi. The

systems modularity allows for upgrade to meet

project specific requirements.

Schlumberger claims that it is the first

and only in-riser electrohydraulic operating

system that is designed and certified in accor-

dance with the International Electrotechnical

Commission's IEC 61508 SIL 2 reliability

specifications for safety-related systems, cer-

tified by TüV Rheinland. Its design enables

compliance with ISO 13628-7 standards by

providing electronic redundancy and teleme-

try feedback.

SenTURIAN was used in the first deep-

water well completed offshore India, then sub-

sequently on a total of 29 completions in In-

dia and the Gulf of Mexico. This includes four

jobs in a high pressure environment.

If there is ever a need to disconnect the

landing string (eg because of a storm), it can

close all the subsea test tree valves and dis-

connect the landing string in under 15 seconds

safely, following a pre-determined sequence

of operations.

*Mark of Schlumberger

GE new SVXT S-Series subsea treeGE Oil & Gas has developed a new subsea

tree that has a streamlined pre-configured de-

sign and promises to be massively more effi-

cient than conventional predecessor subsea

trees.

Designed and manufactured in Ab-

Schlumberger engineers preparing theSenTURIAN electrohydraulic operating systemfor a deepwater completion operation

digital energy journal - October/November 200914

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A typical scenario, he says, is when the

client’s engineer initially scoping the equip-

ment, comes up with a list of demands that

the equipment must meet, and the contractor

works out how much it will cost to meet the

demands.

With a standardised piece of equipment,

GE can explain that it can have the standard

equipment for a certain price, but if it needs

the extra special valve then it could mean ad-

ditional cost and potential time delay.

If a company procurement manager gets

involved alongside the engineer, the discus-

sion may get easier, he says. "The procure-

ment manager says to the engineer, do you re-

ally want that valve? It's an extra $2m and an

extra month’s wait," he says.

The SVXT tree is designed for wells

producing up to 50,000 barrels a day, and for

shallow waters of up to 90 m depth.

Normally oil and gas companies need to

use deepwater equipment for anything over

50m, so if the water is 50m to 90m deep, they

can have even bigger cost savings by being

able to use shallow water equipment.

The unit weighs 15 tonnes, compared to

25 tonnes for most shallow water trees, Mr

Terranova says. Keeping the weight down to

15 tons enables it to be deployed directly from

the jack-up rig, without special vessels re-

quired.

The company designed the SVXT from

a 'blank sheet of paper', not by tweaking its

existing designs.

It was also designed from the start as a

system, rather than looking at individual com-

ponents and putting them together. "If you do

design from a components mindset, the holis-

tic functioning system can easily become an

afterthought," says Mr Terranova.

This means that, for example, the final

SVXT unit has a lower weight - it is also per-

fectly balanced when it is hung from a cable

(i.e. being lowered to the seabed) and it does

not need any additional ballast to keep it lev-

el.

Special consideration has been given to

enabling operators to see what they are doing

when making connections to the tree unit, be-

cause there is often a lot of mud swirling

around in harsh shallow waters.

The unit therefore has cameras installed,

pointing at the connections, so you don't nec-

essarily need an ROV (remote operated vehi-

cle).

Control systemA whole new control system has been de-

signed for the tree.

The company employs a number of con-

trol engineers with experience working in the

aviation industry, that know how to make sys-

tems super-reliable.

Reliability is very important, because

"you would lose the well and your business

reputation if you can't operate the tree safe-

ly," Mr Terranova says “GE puts environ-

ment, health and safety first – this protects our

mandate and licence to operate”.

The control system opens and closes

electro hydraulic valves, which manage the

flow of fluids out of the well.

The control system is housed in a "pod",

which can be removed, refurbished and rein-

stalled if necessary.

Special consideration was given to de-

signing a system that would be ‘future proof’

- using standardised electronic components as

much as possible.

Subsea equipment usually has lots of

custom-designed electronics, Mr Terranova

says, including custom designed microchips,

data communications protocols, control sys-

tems at the surface and circuit boards, which

can cause many problems later when some-

thing needs to be replaced and it isn't avail-

able, or no-one knows how to do it given the

time lag with equipment designed to operate

for a generation or more”.

However, the GE tree uses the UNIX

operating system, and communications in

TCP/IP protocol. "In 20 years, Ethernet will

still be a standard," he says.

The unit has the some of the same cir-

cuit boards that GE installs in its wind tur-

bines, with around 70,000 in operation.

The chipset maker undertakes to main-

tain records of what has gone into the chips -

the "bill of material" - for 18 years.

The unit has redundant circuit boards, so

if a circuit board fails the control system can

continue operating.

It is normally possible to update soft-

ware features; however, it is hardware up-

grades that can usually cause the most prob-

lems, Mr Terranova says.

Remote monitoringGE also offers remote monitoring services,

assessing the stream of data from the unit and

translating the information into performance

driven actions that operators can act on.

"We want to be able to say "you've cy-

cled that valve 400 times - after 200 more cy-

cles you have a risk of failure"," he says. "We

can tell customers what the remaining life ex-

pectancy is in that particular system. This

prognostic approach is critical to keeping our

equipment in great shape and ultimately help-

ing operators drive greater profitability."

GE has a great deal of expertise in

equipment remote monitoring - it conducts re-

mote monitoring for its jet engines, locomo-

tives, medical scanners, turbo compressors

and power generation equipment.

The company has a specialist remote di-

agnostic centre in Nailsea, near Bristol in the

UK. The ‘Subsea Monitoring & Remote

Technology Center’ (or SmartCenter) is a re-

mote-access data hub connected to subsea

field control and instrumentation facilities

around the world.

The new state-of-the-art facility will of-

fer assistance & services to the field at every

stage of development - from installation &

commissioning, through field start up and on-

wards into routine operation for operational

support, condition monitoring, diagnostics,

and production optimisation.

"When you have separators and com-

pressors on the seabed, you need to know

what's happening on a real time basis," Mr

Terranova says.

The new subsea tree from GE Oil & Gas: promising improved efficiency available "off the shelf"

15October/November 2009 - digital energy journal

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Anadarko Petroleum – using Oracle’sPrimavera for project planningAnardarko Petroleum uses Oracle’s Primavera software for project planning and co-ordination, includingmaking sure it makes best use of its available rigs and avoids conflicts.

Anadarko Petroleum, one of the world’s

largest independent oil companies with an-

nual revenues of $15.9bn, uses Oracle’s Pri-

mavera software to help make best use of its

drilling rigs, avoid conflicts and keep its ex-

ploration teams co-ordinated with its drilling

teams, with all data kept in a central data-

base.

Anardarko has operations in the Gulf of

Mexico, onshore in the US, Algeria and Chi-

na, among other places.

It uses Oracle’s Primavera P6 solution.

Partly as a result of using the software,

“we are working in a much more collabora-

tive environment,” says John Reno, project

management professional, area project advi-

sor, with Anadarko Petroleum Corporation.

“Oracle’s Primavera P6 Enterprise

Project Portfolio Management gives us

shared resources across multiple entities,

which is critical when scheduling the high-

value assets we operate,” he says.

ChallengesThe company has seven deepwater drilling

rigs in its fleet: three dynamically posi-

tioned, three semisubmersible moored, and

one semisubmersible dynamically posi-

tioned.

Storms and unexpected currents can

mean schedules need to be changed very

quickly.

In 2006 it acquired two companies,

Western Gas Resources, which has assets

and infrastructure in the Rocky Mountain re-

gion, and Kerr-McGee, which has operations

in deepwater Gulf of Mexico and other parts

of the world.

Anadarko had to work out how to

merge the assets and systems together, to

make best use of its available rigs.

It has to match each drilling target with

the vessel best suited to drill it, based on the

rig’s limitations and drilling capacity.

The restrictions are quite complex. For

example, dynamically positioned rigs can

work in bad weather or shifting currents,

even during the hurricane season, whilst

moored rigs must be specific distances from

existing platforms and pipelines during the

hurricane season.

The rigs are used in delineation drilling,

development drilling and completions.

A particular challenge is integrating the

work of different departments and avoiding

conflict.

“For example, an installation vessel

can’t be installing subsea flowlines while the

drill ship is drilling in the same area,” says

Mr Reno. “The integrated schedule allows

us to easily identify these conflicts and plan

accordingly.”

“It also allows us to identify when we

need long lead-time components for our sub-

sea infrastructure projects, some of which

must be ordered 18 months in advance.”

“Every month of production is worth

millions of dollars, so it’s important that we

have tight integration between the various

areas of our operations,” he says.

SoftwareOracle’s Primavera P6 Enterprise Project

Portfolio Management is used to manage the

complex schedules. “As volatile as the rig

schedules can be, this integration enables the

construction schedules to tie in all critical

completion dates, making requirements and

progress visible,” says Mr Reno.

The solution is also used for Anar-

darko’s planning sessions, which takes place

in its “operations intelligence centre,” where

the different stakeholders involved work to-

gether to refine the scheduled activities.

“With this system, we can get everyone

together to review and update schedules and

project items,” says Mr Reno. “We can pri-

oritize drilling activities on multiple rigs,

and we can build in our lease expiration

dates. We can, for example, do ‘what-if’

analysis to prepare for unforeseen changes

in rig availability.”

The software is used to co-ordinate the

activities of different departments, identify-

ing interface points and possible conflicts.

In the future, Anardarko expects to in-

tegrate its project management tools more

with back-office systems including docu-

ment management and enterprise resource

planning.

It also plans to expand its use of Pri-

mavera’s web-based capabilities, integrating

Primavera dashboards with the company’s

existing dashboards for use by people within

various levels of the organization.

“Today, we are working in a much

more collaborative environment,” says Mr

Reno. “The fact that everything is in one en-

terprise database delivers connectivity across

regions, zones, and asset areas.

“In all, the solution’s project integra-

tion capabilities add tremendous value to

Anadarko.”

Oracle in oil and gasOracle has developed a number of different

software tools for the oil and gas industry.

It’s software is used by 49 of the world’s top

50 energy companies, and over 200 E&P

companies. It is the only software company

on the US National Petroleum Council.

Oracle also participates on the board of

PPDM (Professional Petroleum Data Man-

agement Association), and collaborates with

the SPE (Society of Petroleum Engineers) IT

Technical Committee, PESA (Petroleum

Equipment Suppliers Association) and Texas

A&M University’s Oil & Gas RFID Solution

Group.

Its Business Intelligence Suite can be

used for analysis and reporting, combining

information from multiple sources, includ-

ing operational, production, PI, supply chain,

HSE, and financial data. Companies can

analyse each well, asset and field at any

time.

It also has a number of partnerships

with other software companies.

digital energy journal - October/November 200916

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Schlumberger launches EnterprisePlanning SoftwareSchlumberger has made its Merak Enterprise Planning (MEP) software available on commercial release –which can be used for dynamic oil and gas corporate planning.By Saheed Kenku, global portfolio business manager for Merak, Schlumbergerwww.slb.com/merakep

Creating innovative solutions requires vision

and the technology to make them happen.

When Schlumberger first envisioned

the “Living Business Plan” - a dynamic,

event-driven or evergreen corporate plan-

ning methodology - it was clear that technol-

ogy innovation was still required to make it

a reality.

The Living Business Plan is now an ac-

cessible reality with the release of Merak*

Enterprise Planning (MEP), a complete en-

terprise planning solution based on standard-

ized, commercially available technology that

provides a collaborative platform for oil and

gas business applications to generate valu-

able planning information in context.

That information is generated by a ro-

bust and efficient calculation engine and is

captured in an open, accessible, relational

format.

For more than two decades, project

evaluation solutions and specialist planning

applications have been vital components in

oil and gas corporate planning.

However, for the most part, oil and gas

corporate planning processes remain

lengthy, cumbersome, potentially error prone

and often ineffective in responding to mar-

ket and operational realities.

These issues highlighted the need for a

robust enterprise solution to facilitate corpo-

rate planning and address the key challenges.

An alliance between Schlumberger and

Microsoft is making the difference to deliv-

er the solution that enables oil and gas com-

panies to realize the full benefits of a Living

Business Plan.

Though MEP has just been released

commercially, the solution has already un-

dergone field tests with three oil and gas

companies headquartered in different geo-

graphic regions - a large integrated oil com-

pany, a national oil company and a mid-size

independent oil company.

Traditional PlanningAny oil and gas company executive or sen-

ior staff member usually has a horror story

about tedious, time-consuming planning,

forecasting and budgeting activities.

Typically done annually, the workflow

involves a sig-

nificant slow-

down to daily

operations as

the work force

gathers infor-

mation in dif-

ferent formats,

from different

tools across dif-

ferent disci-

plines, from

technical staff

to planners to

finance and the

board, which is

time consuming

and often error

prone.

The information is (somehow) ana-

lyzed, summarised and rolled up to make

significant strategic investment decisions for

the coming year.

Resulting documents, plans and data

are often outdated before the planning

process is over. And if market or operational

assumptions change drastically - as they did

late in 2008 - this process doesn’t allow for

companies to easily regroup and re-evaluate.

Needs evergreen dataThe Living Business Plan proposes that cor-

porate planning for oil and gas companies

can be an ongoing, evergreen process with

better results and minimal impact to daily

operations.

The key to enabling the Plan is technol-

ogy that simplifies capture, update and ac-

cess to planning data, and leverages planning

data for maximum value to the company.

Having evergreen data allows business-

es to quickly respond to changing economic

and operational circumstances. Capturing

actual data consistently with the plan allows

benchmarking of performance and making

necessary adjustments as required.

Gather data automaticallyKey problems with traditional planning in-

clude the time required to gather and trans-

mit data for analysis, and the interruption it

causes to daily operations.

New synchronization technologies al-

low data from business units and asset teams

around the world to be transmitted and up-

dated - either on demand or at pre-scheduled

intervals - and stored in a central planning

database.

Automation of data gathering mini-

mizes interruption to the work force and im-

proves data accuracy and reliability.

Powerful computers With the terabytes of technical and business

data required for long-range business plan-

ning and multiple scenarios, calculations can

be intensive and time-consuming. Tradition-

ally oil and gas companies have had to

choose between accuracy and performance.

Do you summarise technical and busi-

ness data to simplify your corporate roll up?

Results come quicker, but valuable details

are usually lost which, across an entire or-

ganization, can potentially skew results.

Now it is possible to preserve accuracy

and calculation rigor from the project to the

enterprise level through the efficiencies

gained by the parallel calculation engine in

MEP.

During field testing, the solution re-

duced the time for a company’s entire enter-

prise planning roll up from 16 hours to just

a little over three hours.

Merak Enterprise Planning (MEP) enables the Living Business Plan, adynamic, event-driven or evergreen corporate planning process thatallows companies to quickly adapt to changes and addresses challengesin the traditional corporate planning process

17October/November 2009 - digital energy journal

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Production

18

approval criteria.

New project proposals are automatical-

ly routed to the manager for approval, ap-

pearing in the manager’s dashboard, where

their performance against the criteria is vi-

sually displayed. The manager can then effi-

ciently approve the project proposals, or

identify issues and collaborate further to re-

solve them.

In field testing MEP demonstrated the

potential to halve project process time, in-

crease confidence in results (due to reduced

economist workload and enabling a stage

gate approval process) and reduce a two-

month report generation time by at least

75%.

Integrate data streamsThe corporate planning process relies heavi-

ly on integrating a wide variety of data from

disparate data sources.

MEP addresses integration on several

levels.

First is the integration of the myriad of

data types required and organizing them into

their logical relationships. This data includes

production forecasts, reserves, economics,

financials, general asset information and

more.

Second is the integration and resolution

of the same type of data from different

sources.

While companies strive to standardize

on a single solution for specific processes,

in reality, different systems still exist (for ex-

ample, in the specific case of recent acquisi-

tions) for the same information. MEP has

technologies to integrate data from the vari-

ous sources.

Third is the integration of actuals with

plan information in the appropriate context,

e.g., production, revenues, operating and

capital expenditure etc. This capability al-

lows for continued monitoring and adjust-

ments as required.

During field testing, the solution en-

abled integration of economics data from

multiple third-party systems and general as-

set information from a proprietary system.

Intelligent data cubeAll of the planning data that is being auto-

matically gathered and updated is stored in a

central database with a data structure spe-

cially designed for fast analysis of data in re-

al time.

The OLAP (online analytical process-

ing) Cube allows data to be stored along

multiple dimensions unique to the industry,

thereby creating and preserving context.

For example, evaluations may be cap-

tured with information about their strategic

themes, approval stages and for various

commodity price scenarios.

Creating and preserving this context

makes it possible to ask and answer subse-

quent questions without having to go back

and collect more data. The efficient use of

time periods and organizational levels is al-

so important.

For example, many oil and gas compa-

nies would expect the first year of the long-

range plan to translate into the budget, albeit

at a finer level of detail and specified month-

ly.

Share informationWith MEP, advanced visualization technolo-

gies can be utilized to mine valuable busi-

ness insights in multiple dimensions, secure-

ly across the enterprise.

Collaboration technologies can also

bring significant efficiencies to various as-

pects of the process.

For example, evaluation and approval

of new project proposals can be greatly sim-

plified - an asset manager can designate stan-

dard metrics (e.g., production, capital invest-

ment, operating costs, cash flow and govern-

ment share) and specify quality control or

Advanced visualization technologies from Tableau Software can be used to mine valuablebusiness insights in multiple dimensions, securely across the enterprise

Saheed Kenku is the global portfolio busi-

ness manager for Merak software at

Schlumberger Information Solutions, a

position he has held since January, 2008.

He has over 12 years of experience in the

oil and gas industry focused mainly on pe-

troleum economics and corporate plan-

ning solutions.

During this time he has held various con-

sulting, marketing, business development

and management positions and been re-

sponsible for several projects around the

globe. He holds a bachelors degree in

Chemical Engineering from the Universi-

ty of Birmingham and a Masters degree in

Petroleum Engineering from Imperial

College, London.

digital energy journal - October/November 2009

Saheed Kenku, global portfolio businessmanager for Merak at SchlumbergerInformation Solutions

DEJ21:Layout 1 22/10/2009 12:52 Page 18

Production

October/November 2009 - digital energy journal 19

Autodesk - 3D plant design softwareAutodesk, a leader in 2D and 3D design software, has launched AutoCAD Plant 3D 2010, bringing thebenefits of model-based design to mainstream plant design products.www.autodesk.com/autocadplant3d

Autodesk produces 2D and 3D design soft-

ware for the manufacturing, building and en-

gineering and media and entertainment mar-

kets, including the world's leading computer

aided design software AutoCAD. The compa-

ny claims it has over 9 million users in total.

AutoCAD Plant 3D 2010 can be used to

design process plants in 3D models as well as

2D piping and instrumentation schematics.

The solution is designed to help the typically

small teams which work on operation, main-

tenance and expansion of plant facilities.

There is already 3D design software on

the market for the process plant industry but

Autodesk believes that the existing software

is so expensive and complicated it could only

be used on the largest or highest budget proj-

ects.

With the launch of the new solution, Au-

todesk is making software accessible to small-

er projects, such as retrofits, upgrades and ex-

pansions on tight budgets. Autodesk says it is

'democratising the technology'.

"Autodesk has never been a niche play-

er. We see it as a key part of our role to refine

high-end and complex technology to make it

both usable and useful for the mainstream

market," says Abel Smit, senior director sales

and business development, plant solutions

with Autodesk SA.

In particular, the new 3D plant design

software can easily be used on 'brownfield'

projects - working on old plant - because users

can quickly build up a model of the plant they

already have,

even if they

don't have any

of the designs in

digital form.

It looks

similar to Auto-

CAD software

which many

people are fa-

miliar with, the

company says.

The soft-

ware can be

used to work out

how different

plant items can

fit together, us-

ing standard part

catalogues or by

adding in draw-

ings of specific

pieces of equipment, covering the piping,

equipment and support structures. And draw-

ings can be produced quickly using the soft-

ware.

If you already have the CAD drawings

of the parts you are putting together to build

the plant, you can use the software to incorpo-

rate those as well.

AutoCAD Plant 3D 2010 has already

been used by Veolia Water Solutions to put a

bid together for a water treatment plant in Sin-

gapore, and by EnergySolutions, a company

which develops services for the nuclear ener-

gy industry.

Across the oil and gas industry as a

whole, Autodesk has tools for visualisation,

equipment design and plant design.

AutoCAD is used by nine out of 10 en-

gineers, the company claims.

This is the first time Autodesk has devel-

oped software for piping design. The compa-

ny set up a plant design group about three

years ago to develop the software.

Automating Your FieldsHouston company GlobaLogix helps oil and gas companies feed field data into office decision makingsystems, so they can run the fields more efficiently and intelligently.

GlobaLogix has built its business by helping

energy companies turn their operational data

into actionable information. Information that

can be used to prevent mishaps and shut-

downs, and run operations more efficiently

and intelligently.

The company has seen extraordinary

growth since it was founded in 2004. Glob-

aLogix now has 100 employees and claimed

1300 per cent growth in 2007, 50 per cent

growth in 2008, and a further 50 per cent

growth is expected in 2009, despite the

downturn. The company has been involved

in projects all over the US, Mexico, and off-

shore, and even a coal bed methane field in

Australia.

The company believes it has found its

niche by combining several useful skills and

services in one package – offering services

that follow the data path from the wellhead

to the Web site to help customers remotely

monitor their oil and gas assets and proac-

tively address problems.

To do this, the company employs teams

of project managers, field technicians, elec-

trical, communications and IT engineers. It

also has programmers and information man-

agement experts skilled in working out ex-

actly what information and reports energy

professionals in different roles need, so

GlobaLogix can provide them with exactly

the actionable information they are looking

for to do their job – whether in terms of

Designing oil and gas plant with AutoCAD Plant 3D

DEJ21:Layout 1 22/10/2009 12:52 Page 19

Production

20 digital energy journal - October/November 2009

alarms if something is going wrong, or re-

ports showing performance over a period of

time.

The company also provides a lot of

consultancy. “We spend a lot of time with

the clients evaluating what’s already there,”

says Jim Fererro, co-founder and vice presi-

dent,” and presenting plans that incorporate

existing equipment into new systems.”

“Most companies have made some in-

vestment in automation technology, but are

not necessarily getting the most out of it. We

begin by looking at what they have already

bought, and then determine how we can

weave that together into an infrastructure

that gives them the end product they need.”

Many customers appreciate the fact that

they can work with one team with all the

necessary skills, and all have an understand-

ing of the business, Mr Fererro says. “With

GlobaLogix, you don’t ever have a situation

where an IT guy is developing a screen when

he’s never actually seen a compressor. The

programmer who works on the SCADA sys-

tem is on the same team as the field techni-

cians, both working for the same project

manager.”

Some companies also choose Glob-

aLogix because it can install a standard sys-

tem across all of their wells in the world –

and this is better than working with separate

companies for each region to automate their

field operations.

GlobaLogix also helps companies in-

corporate their well data into their Enterprise

Resource Planning (ERP)systems, where

they also manage other business data, such

as accounts and personnel information.

By tying the data about employees in

the ERP with data from the wellsite, it is pos-

sible to operate more efficiently. For exam-

ple, a company could track field operations

staff in the field, and quickly find out where

the nearest person with a specific skill set is

to the wellsite when there is an alarm.

The right dataWorking out which data to capture in a SCA-

DA system to meet the needs of people in

various oil company roles is often the pri-

mary challenge, especially when the cost as-

sociated with the data stream is considered.

The company accountants are concerned

with different data than the operations or en-

gineering groups.

“Sometimes it’s assumed that all data

can be captured,” he says. “Sometimes they

start with a wish list – the client wants every-

thing every millisecond. Then when they un-

derstand what the cost is – they reduce that

by 90 percent.”

“A lot of our activity gets into helping

them prioritize what has value.

We start off by spending a lot of time

really understanding what they’re trying to

do with the data – and then establish the pri-

ority – which of these areas are causing the

most pain right now,” he says. And of course

different people have different priorities.

“[for example] Geologists’ interest in data is

very different from production managers,”

he says.

GlobaLogix will often look at the data

people have been collecting by hand – and

work on the basis that it indicates the high-

est priority data, and the first which should

be automated.

As one example of GlobaLogix work,

in one offshore project, the customer was

collecting large streams of data and sending

them back to the office. The bandwidth re-

quired was expensive and unsustainable.

GlobaLogix got involved and in talking to

the engineers evaluating the data, realized

that real time data was only important when

the data points started changing. “We devel-

oped algorithms that monitor rate of change

of data points,” he says.

“For that project, we only actually

transmit data in high speed packets when

there’s information that’s changing. Other

times they just get a pulse of information

saying everything is staying the same. This

leads to a significant reduction in communi-

cations costs.”

Data Transmission and InfrastructureGlobaLogix works independently of any one

technology product or vendor so a key

strength for customers is that the company

can work with existing and new equipment

to custom make a solution to the problem at

hand. For example, for the communications

component of a data automation system,

GlobaLogix can install a wide range of dif-

ferent communications options, depending

on which one is better for the project, includ-

ing WiFi, WiMAX,Microwave, serial radio,

Ethernet radio, satellite and DSL.

The company can also store data on site

if there is ever a problem with the communi-

cations link (e.g. due to equipment failure or

solar panels being out of action for a while

due to a snowstorm).

The field data (e.g. from tank level

gauges, flow meters and compressors) can

be provided from the equipment in a variety

of different protocols, including MODBUS,

fieldbus, Hart or proprietary protocols.

Regardless of the collection method,

data is generally brought into a SCADA (su-

pervisory control and data acquisition) sys-

tem. SCADA is software which understands

the equipment language, and turns it into

useful information for people, including vi-

sual displays and reports.

The SCADA system will also sort out

alarm priorities, ensuring that if there is more

than one alarm at once, the user is alerted to

the most important one first.

Future GrowthIn general, most customers understand the

benefit of automatic data capture more than

they did a few years ago, Mr Fererro says,

and this has helped spur GlobaLogix’ rapid

growth.

“We’ll continue to expand our business

to offer customers the data automation serv-

ices they need to improve their operations,”

Mr Fererro says. “Our company is built on

the idea that an oil or gas field can operate

as smoothly as the most efficient factory

floor and we’ll keep working towards that

goal.”

A complex piece of plant generates a large amount of data - GlobaLogix helps you convert thatto useful information in the office so you can make decisions

DEJ21:Layout 1 22/10/2009 12:52 Page 20

Production

October/November 2009 - digital energy journal 21

Shell’s HSE director talks about safety

Shell wants its safety managers out in the

field challenging what people are doing, not

“waiting for the phone the ring,” said Kieron

McFadyen, head of global health and safety

with Shell, speaking at a breakfast meeting

during Aberdeen’s Offshore Europe event.

“One of the biggest ways we can get im-

provements is people taking the time to en-

gage with staff on site. We need to put our-

selves in the environments that we create,”

he said.

“A few years ago, I did one hour safety

visits (to platforms) on a monthly basis. But

this is not good enough. It’s at 10pm at night

that people tell you that the system doesn’t

work. You have to let the helicopter go home

and stay overnight.”

Shell has had a traffic light system for

its safety for many years – red, amber, green.

The “red” issues are normally obvious and

need as much management support as possi-

ble. But the “green” problems might indicate

complacency and need continuous challeng-

ing. So the motto is “support the red and chal-

lenge the green,” he said.

Most of all, the best way people can

maintain safety is by continuing to work to-

gether and learning from each other, and get-

ting out there, he said. You have to make sure

that safety is everybody’s “number one

choice.”

“There’s no quick fixes and panaceas –

at the end of the day its plain hard work.”

Shell expects everybody to take respon-

sibility for their own safety – it is not some-

thing you can depend on your managers to

sort out for you, because there are many

things they don’t know.

Root causes“Going back, we find 80 per cent of incidents

are due in a large part by failure to comply

with safety rules (looking at root causes),” he

said. “We need to impose zero tolerance for

rule breaking, and make rules clear.”

Shell recently completed a project to

identify which incidents had the most poten-

tial accidents, then set clear rules which must

be followed by all Shell employees and con-

tractors. For example, don’t phone and drive.

“If you choose not to follow the rules, you

choose not to work for Shell,” he said.

If the rules are broken there are also

consequences for the people managing the

staff who broke the rules.

A major focus is “process safety,” he

said – ensuring that facilities are well de-

lost time injury

is. “One plat-

form had 10

years without a

LTI, but it was-

n’t a very good

standard,” the

questioner said.

Mr Mc-

Fadyen replied

that Shell aims

to look at a

range of differ-

ent indicators –

including lag-

ging indicators

(which tell you

what has hap-

pened such as a

lost time injury)

and leading indicators (which indicate what

is currently happening which might lead to

an accident in future).

Examples of leading indicators include

the number of overdue inspections, how

much of the maintenance budget has been

spent. “This is everyday stuff, its vigilance,”

he said.

DrugsOne delegate involved in the offshore indus-

try said that the biggest safety problem is

drugs and alcohol. After his company imple-

mented a zero tolerance drugs and alcohol

policy, it “lost 50-60 great people,” he said.

Mr McFadyen said it came down to

people supporting their colleagues but also

being able to challenge them. “You should be

able to say to people, “This is not right”,” he

said.

“And if people feel the need to be heard

and they’re not being heard – they need to be

able to get to me.

BureaucracyMr McFadyen was asked about how to avoid

safety regulation turning into an overly com-

plex bureaucracy which can get in the way

of achieving safety objectives.

“At times we’ve been a bit overly com-

prehensive – which leads to complexity,” he

said. “If you’re a contract operator and want

to understand what we want, you have to sift

through all that stuff. We have a tendency to

overcomplicate, we need the right balance.

“But my worry is that we may overly

simplify, which is worse.”

signed, properly operated and maintained,

with multiple barriers which could prevent a

chain of events leading to a loss of contain-

ment.

Typically 50 per cent of oil and gas in-

dustry fatalities a year come from road acci-

dents. “At Shell we drive 2bn km a year – of-

ten in the most challenging environments. It’s

been the no 1 cause of fatalities,” he said.

“We started a road safety expertise cen-

tre – with a road safety global manager,” he

said.

“We aim to reduce road travel - more

transport by bus, accommodation near work

sites. More use of rail and water. It works.”

“We have in-vehicle management sys-

tems in all our vehicles – which can monitor

behaviours.”

In Sakhalin, Shell’s efforts to encourage

seat belt wearing had an impact beyond its

own employees. “We helped Sakhalin police

to improve seat belt wearing rates from 5 per

cent to 85 per cent – with rapidly increasing

traffic,” he said.

Supply chainShell has calculated that 95 per cent of fatal

incidents have involved its supply chain part-

ners. “It’s clearly an area where we can make

a big difference,” he said.

Shell recently held a meeting to discuss

safety management with its major contractors,

and many of them had suggestions of what

Shell could to improve safety management.

“It was the best meeting – but it was

tough for Shell to be there,” he said.

“The suppliers said making clear re-

quirements would help them. They also

wanted to get involved,” he said.

Safety equipment One delegate from a personal protective

equipment (PPE) manufacturer asked him

what he thought PPE manufacturers could do

to contribute more to safety.

“I can’t comment specifically on PPE,

but my call to all those in the Safety arena to

make sure that in our efforts to try and pro-

tect people, we should be mindful not to

overcomplicate things for people.”

“I worry that with some of our basic

safety things we make it more complicated

than might be necessary.”

LTI –a good indicator?One delegate asked how good an indication

of overall safety the number of years without

Safety managers should be ready to challenge and should be the kind of people with the “headroom” torun the business one day says Kieron McFadyen, head of global health and safety with Shell.

“There’s no quick fixes andpanaceas – at the end ofthe day its plain hardwork.” - Kieron McFadyen,head of global health andsafety with Shell

DEJ21:Layout 1 22/10/2009 15:18 Page 21

Digital Oilfield 2.0 - it’s about the businessWe are now moving to phase 2.0 of the Digital Oilfield, where vendors are expected to not just providetechnology, but also ensure that their customers achieve business success with it, says Dutch Holland,PhD, Holland & Davis LLC.

Digital energy technology was once known

more for being new, exciting and promising

than for actually re-shaping how the oil and

gas industry works on a daily basis. The Dig-

ital Oilfield (DOF) concept, having been in

play for awhile, lets companies be more or-

ganized, more focused and operate with less

waste.

What is new today about DOF is how

decision-makers view and manage it.

The new business model is for vendors

discovering they need to take their customers

all the way to the bank. They must be able to

work with a client who is diagnosing a field

and determining what digital technology can

do, all the way through planning and execu-

tion – to ultimately deliver business value.

Practically speaking, providers must

move away from extolling and supporting the

next “sexy” app and transform themselves to

be able to provide complete solutions all the

way to client success.

No simple challenge, this means that no

longer can an app be “dumped by the door”

by solution providers with the comment:

“Technically, it does everything it’s supposed

to. If your (oil and gas client) engineers can’t

use it - well, that’s beyond the scope of our

assignment or responsibility.”

A more-timely expression to replace

“DOF project” may be a “business transfor-

mation project enabled by DOF technology.”

When companies focus primarily (or ex-

clusively) on getting technology up and run-

ning in the organization, they are actually

steering their people in the wrong direction.

Companies should re-title the box in

which they have been working and start re-

directing digital technology resources more

toward achieving business results.

Another major shift among solution

providers (or vendors) is they have expanded

their business pitch and, without modesty, are

saying they can cover the solutions landscape

from A to Z.

Essentially that entails going from diag-

nostics to design, to development of applica-

tions and infrastructure, getting systems ready

for the company, getting the company ready

for the systems and infrastructure and even,

in some cases, managing DOF infrastructure.

That means they are either capable of

supporting each oil and gas company all the

way from diagnosis to operations ... or they

are not.

Solution providers are making all the

“right comments” for DOF 2.0 success but

they have to do more than just talk, they have

to “walk the talk.” In order to serve their cus-

tomers from A to Z they must have major new

organizational/business competencies put in-

to place.

Unfortunately for some vendors, trans-

forming the way they operate, especially if

they are product-oriented, may prove to be a

Herculean task which is to say utterly daunt-

ing or even impossible.

Why? To “walk the talk,” providers

must embrace and become proficient in all

three elements of the transformation para-

digm: technology, processes, and people.

They must be able to modify customer

technologies, help modify their customers’

work processes as well as helping customers

align their people and performance systems

that oil and gas companies currently utilize to

manage them.

Organisational changeA multi-part model, Engineering Organiza-

tional Change, already exists for vendors to

mature their business to the DOF 2.0 level.

Instead of letting customer RFPs slowly drag

them into the new era, they can proactively

engineer their way to a more mature opera-

tion.

First, it is critical to tackle a transforma-

tion initiative to mature a provider’s way of

working with a “project mindset.” Therefore,

providers must begin by forming an internal

project to effect the change i.e., turning the

initiative into a disciplined project to mature

their organization’s services to be able to

serve customers from A to Z.

Second, DOF providers must develop

and communicate a broader vision to their as-

sociates/employees. In one respect, they

should let employees see themselves in the

near future engaged with the customer in

technology, work processes and people align-

ment. And this is perhaps the biggest change

because previously the vision would have on-

ly seen solution providers and customer em-

ployees working solely with the technology.

Additionally, providers need to develop

and communicate how their organization will

support customers in the DOF 2.0 era. That

support is expansive --from diagnostic to de-

sign, to infra-

structure, to

system and

business

readiness,

sometimes

even to opera-

tions, i.e.,

from A to Z.

Third,

the providers’

internal work

processes will

need to be al-

tered or

added. Now

they will have

to break the

mold and add

work process-

es that go be-

yond software

selection, im-

plementation and systems integration to

processes and methodologies that focus on

preparing customers for the use of the tech-

nology to create business value: increased

production and maximized recoverable re-

sources.

Fourth, the providers’ internal

tools/technology will have to be altered or

added to support A to Z work processes,

which might include adding models and sim-

ulations that detail the business readiness

process and collaboration tools that can be

used both by customers and other vendors (a

sticky situation for most providers).

And fifth, providers must alter their peo-

ple management systems by setting up new

organizational leadership structure with Value

Creation (as opposed to “Technical Opera-

tions”) as the focus. Additionally, new value-

oriented job descriptions must be written,

business readiness people must be brought on

board, employees must be trained on business

value/readiness ... from A to Z. Getting busi-

ness user feedback will be critical.

For providers willing to invest in trans-

forming their own competencies, three goals

can be achieved: longer-lasting customer re-

lationships, they can more likely keep their

“seats,” and they can keep the door open to

selling the next round of whiz-bang digital

technology and services.

“When companies focusprimarily (or exclusively) ongetting technology up andrunning in theorganization, they areactually steering theirpeople in the wrongdirection.” - Dutch Holland,CEO Holland & Davis

digital energy journal - October/November 200922

Production

DEJ21:Layout 1 22/10/2009 12:52 Page 22

The UK’s Energy Industries Council (EIC)

has launched a new service called EIC Mon-

itor, providing an update on energy projects,

taking information from EIC’s substantial

projects database.

EIC Monitor can provide very useful

information such as indications of economic

recovery, the number of new projects look-

ing for contractors, growth in renewable en-

ergy projects, which industry sectors have

been hardest hit by the recession and so on.

The data is pulled out of EIC DataS-

tream, possibly the world’s most comprehen-

sive database of energy industry projects

which are available for contract, who is bid-

ding on them, contract values, and who has

won them.

You can easily search for different con-

tractors, regions, or contract types. For ex-

ample, if someone is planning a trip to Abu

Dhabi, they can see all the projects out there

currently out to tender, or they can instantly

see every project BP is working on.

Much of the information is either pro-

vided by, or verified by, the original client.

EIC has built up contacts at most oil compa-

nies and contractors around the world, and

they are happy to provide the information,

because EIC helps them pass the informa-

tion around, says Matt Smith, Scottish Mem-

bership Manager with the EIC. “We’ve got

personal contacts at every oil company in the

world,” he says.

The database has about 7,500 active

projects on it at any time, and 5 full time

staff working on maintaining it in the Lon-

don Head Office plus one in each of the

EIC’s overseas offices. Some projects have

been tracked over as long as 6 years. EIC has

been tracking projects since the organisation

was founded in the 1940s, but gradually mi-

grated the system from one based on paper

and physical meetings to an electronic sys-

tem over the past decade.

You can set projects as your

‘favourites’ and get an e-mail if there is any

update. You can study which parts of the

world have the highest value projects on ten-

der, for example when considering where to

set up the office.

EIC has over 580 members – all UK

companies involved in supplying goods and

services to the energy industries (or non UK

companies with a UK subsidiary), from

companies employing under 10 people to

enormous contractors. The member compa-

nies employ an estimated 1 million people

in total and have an aggregate turnover in ex-

cess of £100 billion.

EIC is headquartered in London with a

number of offices around the world, includ-

ing Houston, Rio de Janeiro and Dubai.

There are 50 staff members.

The organisation also runs a large num-

ber of events to help its members win busi-

ness – for example, if there is a big project

going out to tender, it will invite the project

director to make a presentation, so the po-

tential contractors can find out more. It also

runs training sessions and international trade

missions and organises the UK pavilion at

10 international exhibitions each year.

UK's EIC - updates on oil and gas projects

RFID for oilfield operationsThere have been many improvements in reliability to RFID (radio frequency identification) tag technologyfor oilfield operations over past years, says Merrick Systems – and now they’re tough enough to be usedon drill pipe.

It is easy to see the appeal of installing RFID

on oilfield equipment. It allows engineers,

managers and the C-suite alike to keep track

of where equipment is and where it has been.

RFID technology is widely used in

many industries such as retail, medical,

transportation and packaging, but new tech-

nologies now allow RFID tags to survive the

harsh environments of oilfield operations –

extreme temperatures, pressures, corrosion,

abrasives and vibrations, as well as be read-

able through drilling mud and dirt.

The problem, says Steve Ball, RFID

Business Manager with Houston-based Mer-

rick Systems, is that many companies tried

RFID in the past – back when tags weren't

tough enough for the oilfield – and gave up

on it once the tags failed.

Through many years of research and

development, Merrick has developed a sys-

tem it says is tough enough for the oilfield

industry. Now is the time for those who were

frustrated by RFID in the past to have anoth-

er look at it.

“In oil and gas you need hard, robust

tags that can stand up to an extreme environ-

ment,” Mr Ball says. “They are going to be

painted, sand blasted, they need to be read-

able through mud, and they need to be reli-

able when used over and over again.”

Merrick’s patented tags have been de-

signed to survive pressure up to 20,000 psi

and temperatures of 360 degrees F, making

them suitable for rigs and drills. They can al-

so withstand high corrosion, meaning they

will outlast the life of the asset they are at-

tached to.

Over the longer term, oil companies

might aim to have their entire inventories

tagged – and many companies are already

starting along this path.

“There's a lot of design work and engi-

neering that's gone into developing and test-

ing these tags and making sure they are sur-

vivable,” said Kemal Farid, Merrick’s CEO.

“We’ve invested many years to getting

where we are today.”

“The adoption curve is long - it is happen-

ing steadily but slowly,” said Mr. Farid. “We're

still in the early part of the adoption cycle.”

The Merrick drill tag

Merrick’s RFID tags are about the size of a

5 cent piece, with a hole in the middle, so

they can be affixed to the tool joint of drill

Merrick's radio tag for drill pipe is actuallyinserted within the body of the drill pipe andpainted over (two tags are visible in thispicture)

23October/November 2009 - digital energy journal

Production

DEJ21:Layout 1 22/10/2009 12:52 Page 23

pipe.

“You just drill a small pocket in the tool

joint, thread the hole and you screw the tag

into it,” said Mr. Farid. “People can attach it

to almost any kind of surface—it’s a very ro-

bust mounting”.

“They've been designed to stay affixed

to drilling equipment during their typical use

or extreme use for that well,” said Mr. Ball.

“We've had the tags survive drilling through

the most abrasive formations.”

Merrick’s portfolio of tags can be in-

stalled on risers, drill pipe, downhole tools,

flow iron, logging tools, wireline tools and

any surface or subsurface equipment. “Some

of our tags are going through testing, some

are in production, some are already in cus-

tomer pilots, and some are in full operation”

said Mr. Farid.

The cost of each tag is in the “tens of

dollars” range, Mr Farid said – more expen-

sive than tags used in a normal retail envi-

ronment because they have to be ruggedized

to meet the industry’s needs.

Once Merrick developed a tag that was

tough enough for drill pipe, customers start-

ed asking for the same tags to be installed on

all of their heavy duty equipment and risers.

One Gulf of Mexico diving company

approached Merrick after testing a range of

different identification methods on equip-

ment, including standard RFID tags and

stick-on labels, and had not found them ro-

bust enough. “The customer went through

extensive testing for every tag out there,” Mr

Farid said.

However this customer found that Mer-

rick’s tag, developed for drilling, would suc-

ceed where the other tags failed.

“It can be painted over, you can get

grease on it - it can be inset into a mechani-

cal iron configuration, it can be part of the

skid,” he said. “You can install one tag that

will last the life of the equipment, so you’re

not always replacing and re-associating tags

in the database.”

RFID’s application is meeting global

demand — Merrick currently has projects in

the US, North Sea, and in the Middle East.

There are rigs using its systems in China,

Brazil and West Africa, among other loca-

tions.

BenefitsSo far, oil companies have realized many

benefits from the data generated by the ra-

dio tags.

At a basic level, the system is used to

track the location of items – to improve man-

agement of the items themselves, and track

maintenance history and requirements, cur-

rent location, and usage history.

Many oil companies benefit from track-

ing riser inspection and maintenance infor-

mation using RFID technology to make sure

what goes in the hole will get the job done.

“The inspection information is record-

ed on an intrinsically safe handheld device,

then uploaded to our system on the rig,

which in turn transmits to the ERP system,”

said Mr. Ball.

The system can also be used to keep

track of the history of specific pieces of pipe.

For example, if a dogleg has been drilled,

one length of pipe has been fatigued and

probably needs to be pulled out of service

when the drill pipe is removed. RFID allows

engineers to track that usage and ensure that

the fatigued pipe is replaced with a more

suitable joint. The benefit of RFID is that

the removed joint can be utilized in a less se-

vere location in the drill string to fully uti-

lize the life cycle of that pipe joint.

“You collect history about how the

pipe's been used that tells you whether or not

it’s appropriate for the drilling operations,”

said Mr. Farid.

The system also makes it possible to

configure more complex drill strings. When

building a string, engineers put together dif-

ferent types of pipe at different depths. If a

pipe is mislabeled or its usage hasn’t been

tracked properly, it can be placed in the

string incorrectly, causing the string to fail.

“This system can help ensure your drill

string is being built as planned, with the right

pipe in the right order,” said Mr. Farid.

“This may also turn out to be a very im-

portant technology in automated drilling,”

he said. “If you have automated equipment,

it needs to be able to correctly identify the

piece of equipment it’s picking up - ensur-

ing the right piece of equipment is used in

the right order. You have to use RFID for that

- you don’t use barcodes.”

There are also safety benefits to RFID

because it makes it easier to set up systems

to monitor that the right equipment is being

used for the current job.

Choosing your standardTags aren’t one size fits all – There is a range

of different RFID technologies available to

meet specific needs, including passive tags,

which can be scanned manually, and active

tags, which are battery-powered and active-

ly send out signals for scanners to pick up.

There is also a choice of low and high fre-

quency which affects the distance at which a

tag can be read. More advanced systems can

integrate with a GPS (global positioning

satellite receiver), for near real-time asset

tracking.

But in the oilfield, the most appropriate

technology is probably the most robust one

– no batteries in the tags, and low frequency

data – which means the data is less suscepti-

ble to interruption from paint, mud, drill flu-

id and dirt.

Lower frequency tags are also most

suitable for achieving accurate reads at short

distances of equipment that is close togeth-

er, like on a pipe rack, Mr. Ball said.

A high frequency data tag might be ap-

propriate if you want to (for example) track

items in a truck by scanning a pallet as it

drives past a reader. However, because of the

asset orientation, varying distances and

speeds at which the tags will scan, the relia-

bility of scanning can be compromised.

Higher frequency tags are also less

likely to be readable through grit. It is also

not possible to mount a high frequency tag

directly on metal because of interference –

for example, tollway tags that use higher fre-

quencies must be mounted on the glass

windshield.

“I think the complexity of the different

frequencies and types of tags available is

contributing to the long adoption cycle. En-

gineering groups, IT departments, produc-

tion companies and drilling companies are

all getting up to speed on their options,” said

Mr. Farid.

Merrick has a variety of different tag

types in its system, including its own designs

and off-the-shelf products. It uses standard

RFID communications systems to ensure

that its products are compatible with other

systems.

Data managementData read from the tags can be kept on stand-

alone software, or integrated with mainte-

nance management systems or riser manage-

ment systems.

“We brought our experience from the

last decade and a half with field computing

in oil and gas production environment when

we launched this tool,” Farid said.

Merrick’s software tool can integrate

with a company’s enterprise asset manage-

ment system (such as SAP or Oracle), and

can run on mobile devices, so users can ac-

cess data literally from the field.

Merrick also provides a range of asso-

ciated consulting service, to help customers

determine what equipment they will track,

how they will install the tags and how they

will get the best out of the information.

RFID’s early adopters are finding that

the technology has many potential uses that

are still being uncovered. Mr. Farid added,

“Once you have the ability to electronically

identify a piece of equipment and know what

it is, the applications are limitless - this is re-

ally going to be able to change the game of

drilling operations and asset traceability.”

digital energy journal - October/November 200924

Production

DEJ21:Layout 1 22/10/2009 12:52 Page 24

ConocoPhillips – using ASCI’s inventorysoftwareConocoPhillips has signed a deal to use inventory management software purchased from AssetManagement Services (AMS), to manage its global supply chains, both upstream and downstream.

The deal follows a three year trial of the soft-

ware by ConocoPhillips at three of its largest

upstream sites; Alaska, Indonesia and North

Sea.

AMS is a subsidiary of supply chain

management company Advanced Supply

Chain International (ASCI).

The specific software tool purchased is

called OAS – Inventory, developed by Aus-

tralian company Oniqua Enterprise Analyt-

ics.

Put simply, the software helps you

make sure you have the optimum amount of

inventory in your storage at any time – not

too much that you have more capital tied up

than you need to (and higher storage

charges), but not too little that you risk run-

ning out of an important item and not hav-

ing it available in storage. It also helps you

ensure you are not purchasing items you no

longer needs. The software can integrate di-

rectly with purchasing systems, maintenance

management systems and enterprise resource

planning (ERP) systems.

“When working with a customer, we

usually see some areas where they are over-

stocked and other areas they are under-

stocked,” says Mike Schwarz, business de-

velopment manager of ASCI.

ASCI estimates that companies can

typically reduce their inventories by 15 to 25

percent by using the software – and of course

the additional benefits that come from hav-

ing something readily on hand which you

might otherwise have run out of, are very

hard to quantify.

“The software’s return on investment,

calculated in terms of money saved by not

having it tied up in inventory, over cost of

the software, is usually in “double digits”,”

Mr. Schwarz says.

The software gathers together all avail-

able data about the company division’s con-

sumption habits of various items, to try to

predict what will be needed in future.

To make an analogy with your home re-

frigerator – imagine a software system which

would gather data about your orange juice

consumption habits over the past three years

and how often you go to the supermarket –

it could probably make a good guess of how

many gallons of orange juice you should

purchase on your next trip so you never run

out, and also ensure you never end up throw-

ing out of date orange juice away, or run out

of space in your refrigerator. It could do the

same for everything else you purchase as

well. For busy families, particularly who of-

ten buy groceries online, this could be quite

helpful.

Companies using the software can have

between 10,000 and 400,000 individual

items they need to manage inventory of,

rather more than you probably have in your

kitchen cupboards.

“There are a number of other inventory

management software packages on the mar-

ket,” says Mr. Schwarz, “but they are main-

ly geared for predictable manufacturing op-

erations – so are not so suitable for oil and

gas plants which have much more vari-

ables”.

Of course, it is impossible to perfectly

predict how much inventory you need in

storage when you don’t know what you will

need tomorrow – even with the best soft-

ware. But ASCI’s tools help users refine

things until they feel they have the right bal-

ance.

The software takes into consideration

how critical a certain item is to the running

of the plant when determining the optimum

stocking level. It also takes into considera-

tion how long it can take to obtain a part di-

rectly from a supplier if needed, even if it

gets stuck in customs for 10 days on the way.

“It is easy to update the software with

plant changes that will affect its consump-

tion habits – such as pieces of the plant be-

ing decommissioned,” ASCI says.

But most importantly, users should not

have to spend time sorting through individ-

ual component orders – they just tell the soft-

ware what has changed since last month at

their plant, and the software changes the or-

ders automatically.

“The inventory analyst is presented

with the capability to go in and model dif-

ferent scenarios - e.g. if they know in a

month they are going to use more of a cer-

tain item than is anticipated by the usage his-

tory,” says Mr. Schwarz. “We put a lot of

business rules and business logic into the

software.”

The system can also be installed at

brand new sites (with no purchasing activi-

ty) – it can start off with an estimate and re-

fine it as it goes along.

Finding Petroleumnetwork.findingpetroleum.comJoin our social network!

“The software’s return on investment,calculated in terms of money saved by nothaving it tied up in inventory, over cost of thesoftware, is usually in “double digits”, - MikeSchwarz, business development manager ofASCI

Production

DEJ21:Layout 1 22/10/2009 12:52 Page 25

Tracking helicopters outside radar coverageOil and Gas UK has launched a system to automatically track the location of helicopters when they areoutside radar coverage – collecting data from their transponders.

UK oil and gas industry association Oil and

gas UK, together with the UK’s National Air

Traffic Services Ltd (NATS), have built a

system to track helicopters going to offshore

platforms by their transponder data, when

they are outside normal radar coverage.

Radar can be used to track the helicop-

ters up to around 100 miles off the Scottish

coast, but most of the platforms offshore Ab-

erdeen are around 200 miles away.

Until now, when the helicopters were

outside radar coverage, they reported their

positions to Aberdeen air traffic control ver-

bally every 10 minutes or every 20 miles.

This means that if they have an acci-

dent just after providing a position report,

the authorities won’t know about it until 10

minutes later, and the rescue operation needs

to look through 20 miles of sea to find it.

It also means that the helicopter posi-

tions are being tracked manually (at Ab-

erdeen, using a system of plastic strips on a

board), rather than by computer.

But with the new system, authorities

will be able to keep continuous track of the

helicopters, with a number of position re-

ports every minute. So if there is a problem

and the helicopter stops transmitting, the au-

thorities will have a much more precise idea

about where it is – and they will also be able

to give its more precise position to nearby

helicopters which might be able to provide

equipment.

At the same time, the very high fre-

quency (VHF) voice communications net-

works for communications with helicopter

pilots have also been upgraded, with 3 more

VHF stations installed.

£5.3m was spent on the multilateration

and improved VHF systems. There will also

be ongoing cost to support the system and

pay for satellite and fibre optic communica-

tions from the platform.

Following the helicopter tragedy in Ab-

erdeen on April 1st 2009, a helicopter Acci-

dent Issues Task Group has been set up at Oil

and Gas UK, chaired by Bob Keiller, CEO

of

Production Services Network, an 8,500

employee company headquartered in Ab-

erdeen. Mr Keiller is also co-chairman of Oil

and Gas UK.

There are about 90 round trip helicop-

ter flights from Aberdeen each weekday, and

there can be 15 helicopters in the air at the

same time.

Helicopters go out from Ab-

erdeen airport to the offshore plat-

foms along fixed routes, with 3 de-

grees separation between them, (like

motorways of the air). Each route is

alternatively in bound and outbound

– so for two helicopters to be travel-

ling outbound, the closest they can

be is 6 degrees apart.

Helicopters normally travel

outbound at 3,000 feet (sometimes

1,000 feet) and inbound at 2,000

feet.

MultilaterationThe system works by calculating the

position of helicopters from the vari-

ation in time their transponder radio

signal reaches at least three different

receivers, a process called multilat-

eration.

All helicopters carry transpon-

ders which broadcast their call sign

and altitude continuously.

Transponder receivers have

been installed 16 different offshore

platforms, in four clusters of four.

You need 3 receivers to calculate the

position of a helicopter - the fourth will pro-

vide redundancy.

The data is sent back from the offshore

platforms using whatever communications

options are available – fibre optic or satel-

lite.

Each receiver has a GPS system, which

can provide super-accurate time information.

The time the transponder signal was received

is sent back to shore together with the

transponder information.

The project was in a trial phase during

September 2009, to try to work out exactly

what coverage is available.

Concentration: staff at Aberdeen Air Traffic Control track the positionof helicopters going to and from offshore platforms

The helicopters need to be tracked by the control towerwhen they are outside radar coverage (blue area). Theirtransponder data is picked up by receivers on NorthSea offshore platforms (pink area is radio coveragearea). This data is then sent back to the control towerby satellite or fibre optic cable

digital energy journal - October/November 200926

Communications

DEJ21:Layout 1 22/10/2009 12:52 Page 26

Video on demand offshoreCaprock Communications has put together a service to provide video on demand offshore via satellite –including handling all the licensing. By Eduardo Correa, Caprock

Offshore quality of life has changed dramati-

cally over the past two years.

What was once a brief, periodic phone

call to family members has evolved into crew

morale services that provide a constant link

between remote personnel and those back

home.

Whether it’s keeping in touch with

friends and family through email or online

social networks like Facebook, now more

than ever remote crew members are capable

of staying updated on the latest happenings

in their personal lives. As on-site technology

progresses, it’s only fitting that communica-

tion providers are finding new ways to keep

the crew up-to-date on the latest in entertain-

ment as well.

Live television service to offshore sites

such as drilling rigs, maritime vessels and

FPSOs has been an added feature that some

providers have offered onboard crews for

many years.

While it’s provided the crew with a

great outlet for relaxing and re-connecting

with the world back home, it does have its

limitations.

The number of TV stations has been

limited because of the bulky equipment re-

quired to add additional channels. At the

same time, with the crew working long hours

and night shifts, they often miss their favorite

shows and don’t have the opportunity to

record them for when they are free.

While on-demand entertainment pro-

vides an answer to these challenges and no

longer restricts viewers to what’s currently

showing on live TV, it has yet to be fully uti-

lized offshore as it is onshore, even though

there is a greater need as crew’s yearn to be

connected to the world back home.

CapRock Communications has part-

nered with a variety of equipment and enter-

tainment providers to deliver vast content

possibilities through its video-on-demand

service.

The crew can select from thousands of

movies, TV programs and music options and

the trick-play capabilities such as pause, fast

forward, rewind and seek help make navigat-

ing the content that much easier.

Leveraging CapRock’s digital network

also brings a host of added benefits. It en-

ables quick channel changing, provides

closed caption options and offers interactive

program guides for live TV, formerly un-

available with analog systems.

And while it sounds like a system with

so many added benefits may require more

equipment, digital networks actually require

less equipment, freeing up critical rack space

and reducing maintenance and operational

costs.

Additionally when a rig or vessel ar-

rives in a new region, there’s no hassle to

switch out the equipment as there are no ge-

ographical limitations with CapRock’s digi-

tal network.

Beyond improving crew morale, the

most compelling benefit of the on-demand

service is that content is easily licensed and

managed by CapRock.

Owners and operators now have a legal

means to distribute the content digitally that

does not violate any copyright laws—no

more shipping DVDs and dealing with the

stringent legal issues behind watching and

distributing these movies on vessels.

CapRock is the first licensed provider

of video-on-demand content for the offshore

energy market. The content is contained and

managed on servers and comes licensed to

play, perfectly legal to use and can be ac-

cessed while a vessel is en-route or posi-

tioned in any location of the world.

CapRock’s new crew infotainment sys-

tem not only provides a means for video-on-

demand services but also integrates live TV,

music, DVD players and corporate applica-

tions including ROV feeds, CCTV and Rig

TV into a consolidated media console.

Using an easy television graphical in-

terface, users select with the remote control

which content from the entertainment system

to view. The interface is similar to what you

would find on the menu screen of a hotel tel-

evision—users can choose to watch movies,

play games, view TV and listen to music.

Further than providing the crew with a

much-needed connection to the outside

world, the corporate capabilities of the enter-

tainment system are almost endless. Video-

on-demand also enables remote personnel to

watch training videos and classes.

Since everything is digital, almost any

of the company’s media files can be played

on any television onboard the rig, including

required training and safety videos.

Companies can even set requirements on

when and how often these corporate videos

must be viewed before an employee can ac-

cess additional content on the television.

The infotainment system allows for ex-

tremely advanced reporting and user controls

such as controlling viewing times for each

television (disabling video functions during

shifts), controlling channel access per televi-

sion and requiring users to watch certain con-

tent before accessing other content.

Management can even see the time and

date that the employee watched the content

for reporting and documentation. Having

these on-site training options available re-

duces travel costs by decreasing the need to

bring remote personnel back onshore for

mandatory training.

The infotainment system also allows rig

personnel to utilize televisions as monitors

for viewing rig activity and projects. When

configured with additional remote streaming

capabilities available from CapRock, man-

agers and technicians can monitor video

sources from other areas of the rig or even

outside of the rig quickly and easily.

Designated users can turn on the televi-

sion and view CCTV camera feeds from

around the rig, which not only heightens the

security of the vessel, but also helps ensure

the safety of its staff.

Other video content feeds, such as those

from remotely operated vehicles (ROVs), al-

so can be streamed through the televisions.

Specialists can watch the video feed of a sub-

sea riser being repaired in real-time without

ever leaving the break room or their living

quarters.

The technology available to the offshore

market continues to impact the quality of life

and the quality of work onboard these ves-

sels.

What’s most interesting is how we’re

finding ways to utilize onshore technologies

in the offshore world to not only improve

crew morale and standards during break time,

but also in how these technologies are being

applied to further crews’ professional devel-

opment and capabilities.

Caprock - making video on demand availableon offshore platforms (photo courtesy USCoastGuard)

27October/November 2009 - digital energy journal

Communications

DEJ21:Layout 1 22/10/2009 12:52 Page 27

Microwave communications at Apache Corp.Apache Corporation wanted faster data communications to support its drilling operations in Texas - andfaster data transmission time (latency). So it chose a Mobile Broadband Trailer System from ERF Wireless,providing microwave data communications. By John Nagel, ERF Wireless, Inc.

During the course of 2008, ERF Wireless and

Apache Corporation have worked together to

develop a mobile, high-speed microwave IP

communication system, to support Apache's

drilling operations.

Microwave communications provide a

much faster data communication rate, and data

communication speed (lower latency) than is

available using VSAT.

ERF supplied a communications system

housed in a trailer, which it calls its Mobile

Broadband Trailer System (MBTS).

Apache Corporation wanted to install a

new communications system, because it was

upgrading its suite of drilling engineering soft-

ware and data management tools. Initial testing

and implementation indicated a need for in-

creased bandwidth and communication system

reliability.

This testing and implementation resulted

in a search for alternatives to the rig operators’

conventional satellite and landline systems, the

traditional solutions used for rig communica-

tion.

It needed a network that would provide a

real-time, continuous communication link from

remote rig sites to corporate servers located in

Houston.

Advanced well-logging and real-time col-

laboration with corporate resources housed in

distant cities requires communication links with

higher bandwidths and lower latency rates than

were available.

The nature of the land-based rig site is no-

madic, with drilling periods that generally range

from 14 to 75 days. The operation moves from

one remote location to another within days, ne-

cessitating the ability to easily reestablish a

high-speed communication link to be used by

the operating company, drilling company and

other subcontractors on the site.

Traditionally, each remote drilling and

production site was limited to a low-speed,

high-latency satellite communication link. This

link was often very expensive and could not

easily accommodate real-time collaboration in-

volving the transfer of high-bandwidth files or

any applications requiring high-capacity band-

width. Cellular coverage, if available, did not

have the speed or capacity to support advanced

third-generation digital services.

ERF Wireless, Inc., a Houston-based

wireless internet service provider, collaborated

with key Apache personnel to deliver more than

10 times the bandwidth (128 kbps to 1.5 Mbps)

and less than one-eighth of the latency (60 ms)

of traditional Very Small Aperture Terminal

(VSAT) systems—all on a nomadic trailer plat-

form.

The Mobile Broadband Trailer System fa-

cilitated real-time, continuous communication

between key personnel at the remote wellsite

and corporately secured servers at Apache’s

Houston headquarters, enabling drilling and

geophysical experts to access drilling and well

data in real time.

The increased transmission speed of criti-

cal decision-making data saved overall rig time,

reduced risk and exceeded the requirements set

by the Apache drilling group, thereby provid-

ing more efficient workflows.

The faster broadband speeds allow more

complex software applications to be run from

the wellsite than was possible with traditional

VSAT connections. It is also possible to expand

this service from a point-to-point connection to

a WiFi cloud coverage, allowing several loca-

tions to connect simultaneously without a re-

duction in bandwidth or an increase in latency.

This could provide an economic method to bet-

ter monitor permanent well and surface sensors,

allowing for better field production manage-

ment.

In addition, Apache documented that the

new broadband was delivered at a cost in line

with traditional VSAT services.

Fast decisionsAdopting a high-capacity network for data

transmission from the field would naturally re-

sult in less administrative time on several lev-

els, leading to a more productive drilling

process.

Larry Rader, drilling technical advisor for

Apache’s Central Region, called upon Pat

Moller, Apache process control systems advi-

sor, for assistance.

Mr Moller had incorporated the use of

high-speed microwave networks for packet

transport in the company’s production Supervi-

sory Control And Data Acquisition (SCADA)

networks.

Although the packet sizes were much

smaller in the SCADA reporting, the concept

of network speed could be applied to the

drilling side of Apache, which required faster

networks and lower packet latency rates to han-

dle voluminous information flow.

ERF Wireless was already providing

high-speed internet to Apache’s Forbes Field

office 50 miles from Lubbock, Texas. This par-

ticular field office was located more than a mile

off the local roads. The service provider was

able to offer more than 5 Mbps of internet band-

width to the site via its microwave broadband

network—typical of its Permian Basin network

speeds.

Realizing the need for better communica-

tion capability in the oil and gas field, the serv-

ice provider began to pursue a strategy where-

by the MBTS that it already used for emergency

response situations—an unfortunate but com-

mon occurrence across the Gulf Coast over the

last several years—could be customized to ad-

dress these communication needs. This produc-

tion field office became the initial test bed for

microwave communication for Apache’s

drilling operations.

After initial testing, Rader said, “I am see-

ing Internet connection speeds at this field of-

fice as fast as those I experience in my corpo-

rate offices in downtown Tulsa, Oklahoma.”

Monitoring the linkERF Wireless also provides a monitoring serv-

ice that tracks the performance of each piece of

communication equipment continuously.

Personnel at the company’s Network Op-

erations Center, located at its corporate offices,

have the ability to spot a problem prior to the

customer’s detection and to repair the link re-

motely.

The commitment to Apache is to have the

communication links operational as quickly as

possible, while maintaining a 99.95% reliabili-

ty index during drilling and production opera-

tion periods.

ERF Wireless has developed a mobilemicrowave communication trailer system forthe oil and gas industry

digital energy journal - October/November 200928

Communications

DEJ21:Layout 1 22/10/2009 12:52 Page 28

“Embedding Energistics open standards into our E&P products allows Landmark to reduce R&D costs and enhance connectivity with our global customers.”

Paul KoellerPresident Landmark Software & Services, Halliburton

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