The buzzword in the oil & gas industry today is “digitalization.” Every big organization in the industry has embarked on a key initiative to digitalize their entire operations (particularly in the upstream segment) to maximize production via smart plant operations. Different perspectives and definitions exist on the digital oilfield (DOF). Let us try to understand the most common interpretation of DOF.

Defining the Digital Oilfield (DOF)

DOF is a capability framework that oil & gas organizations acquire to manage business critical assets in real time to maximize their production efficiency. The aim is to manage the performance of equipment deployed in upstream operations using real-time information so that production disruptions are avoided or kept to a minimum. This is the crux of the DOF concept on which organizations have initiated a portfolio of digital projects.

A more formal definition of DOF is a real-time view of an asset where engineering, operations, maintenance and finance converge into integrated business processes and possess a holistic understanding of the true performance of the asset. It is worthwhile to note that leading oil supers have undertaken these initiatives under different names such as i-Field, Smartfields, e-Field, Field-of-the-Future, etc.

What DOF Hopes to Achieve

The primary objective of DOF is centered on managing asset performance. (Learn more about managing assets in the article Asset Integrity Management Key for Smart Operations.) By undertaking digitalization initiatives, organizations clearly want to minimize the cost of operating production assets. Cost efficiency, production efficiency and safe operations are the most important benefits of digital efforts.

Digitalization improves business decisions because real-time information is available to the operators. For example, a decision whether to perform preventive maintenance work on a mission critical pump deployed on a production platform or to defer the same can be made through this digital initiative. Because real-time data on the equipment's condition is readily available, maintenance experts can adopt a condition-based maintenance strategy instead of a conventional time-based approach. This will have a direct impact on the production numbers of the operation.

Value Drivers of Digitalization

Upstream operations require heavy capital deployment. Oil & gas organizations can hope for a better return on their capital only when maximized production is sustained. An efficient production management and operations is not enough in the upstream sector because the operating conditions in an oil field are uncertain and highly dangerous, especially in the more hostile offshore environment. In that situation, companies strive to achieve operational excellence to realize the worth of their invested capital.

Secondly, oil production operations are to be performed exactly as prescribed in the standard operating procedures (SOP) of the organization. SOPs are the basic tenet of operations, which is built on the best practices followed by the organization. The best practices are developed over decades of experience by exploration & production (E&P) companies. However, these best practices are ever evolving along with advancements in technology and software systems. Also, significant lessons are learned from critical incidents that occur on the production platforms. These necessitate constantly upgrading the best practices, which results in improving the response time to disruptive events in the operations. Digitalization is a significant advancement for the software segment.

Another key driver is that the upstream sector faces the challenge of an ageing workforce. The wealth of knowledge about the physical production operation and the nuances of effective maintenance management would perish unless this wisdom is somehow transferred to the new workforce.

Cornerstones of DOF

The cornerstones of DOF are hardware, software, processes and data. From a hardware perspective, digitalization enables connectivity between equipment and systems for field data capture. Connecting remote locations and installations with wireless networking and ensuring all important instruments are equipped with the correct sensors is the first step towards digitalization.

Software is essential for carrying the automated digital processes through the value chain. Choosing and implementing appropriate digital software is essential in the DOF framework. For instance, during a field visit a technician may discover that certain equipment requires urgent maintenance to avert a production disruption. The technician should be able to create a maintenance work request while on the field. Automated workflows to approve and schedule the maintenance work are triggered through digital processes. The software should be capable of handling these processes.

Third, business processes are fundamental to the digitalization effort. The business processes should be based on the best practices and should conform to the standard operating procedures approved by the management. Business processes should be agile when responding to a dynamic business and operating environment. Also, the processes should be periodically measured based on the process performance indicators (PPIs) set for each of them.

Finally, huge quantities of data gathered through digitized processes are analyzed to facilitate timely business and operational decisions. An appropriate analytical tool helps to decode the volumes of data and construct trends and patterns that will help to predict events. By managing these envisaged events proactively, operational excellence can be achieved.

Mitigating Risks with DOF

Upstream operations are fraught with high-risk conditions, therefore strict regulatory provisions govern E&P companies’ business operations. Regulations related to worker safety and the environment must be rigorously followed without any deviations. Also, periodic reports must be submitted to regulators as a compliance requirement. These require timely and accurate information from the production operations.

Digital enablement is a key requirement for handling unsafe conditions. Proactive and unscheduled activities can be undertaken to avert disruptive incidents. Also, with the digital processes in place an emergency situation can be handled much more effectively. For example, workers on the production platform can be evacuated in the shortest possible time and in the most efficient way with the use of digital tools such as mobility and RFID (Radio Frequency Identification) technology. Hence digitalization helps to minimize human loss by mitigating risks onboard. (Discover more about mobile technology in Mobile Tools: A Disruptive Technology for Oil & Gas Operations.)

The Future of Digitalization

Robotics, drone technology and artificial intelligence are evolving digital tools that will be commonly deployed in the coming years. Remote area surveillance using drone technology is a hot pursuit of E&P companies, which helps them be proactive when handling unidentified risks in operations.