The buzzword in the Oil & Gas industry today is “digitalization”. Every big organization in the industry has embarked on this key initiative of digitalizing their entire operations particularly in the upstream segment to usher maximum production through smart plant operations. Different perspectives and definitions exist on digital oil field (DOF). Let us try to understand the most common interpretation of DOF.
DOF is a capability framework that Oil & Gas organizations strive to acquire whereby they are able to manage business critical production assets in real time to maximize their efficiency and production. The aim is to unlock the hidden potential based on real-time information in managing the performance of the equipment deployed in upstream operations so that production disruptions are avoided or kept at minimum. This is the crux of the DOF concept on which organizations have initiated 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 holistic understanding of the true performance of the asset. It is worthwhile to note that leading oil supers have taken these initiatives under different names such as i-Field, Smartfields, e-Field, Field-of-the-Future, etc.
What DOF is trying to achieve?
The primary objective of DOF is centered on managing asset performance. By taking digitalization initiatives, organizations clearly want to achieve minimized cost of operating production assets. Cost efficiency, production efficiency and safe operations are the most important benefits aimed through digital efforts. Digitalization will help in better business decisions as real-time information is made available to the operators. For example, an operation call whether to perform maintenance work on a mission critical pump deployed on the production platform or defer the same can be taken through this digital initiative. Since real-time data on the condition of the equipment is made available, maintenance experts could adopt a “condition-based” maintenance strategy from conventional “time-based” approach. This will have a direct impact on the production numbers of the operations.
Value drivers of digitalization
Upstream operations require heavy capital deployment. Oil & Gas organizations can hope for better return on the capital employed only when sustained maximized production is achieved. An efficient production management and operations is not enough in upstream sector as the operating conditions in oil field are uncertain and highly dangerous, especially in the offshore environment where conditions are unknown and hostile. In that situation, companies strive to achieve operational excellence to realize the worth of their capital invested.
Secondly, oil production operations are to be performed exactly as prescribed in the standard operating procedure (SOP) of the organizations. SOP is the basic tenet of operations that is built on the best practices followed by the organizations. The best practices are developed over decades of experience by E&P companies. However, these best practices are ever evolving with the advancements in technology and software systems. Also, significant lessons are learnt on each critical incident which happened on the production platforms. These necessitate constantly upgrading the best practices that can result in improving response time to business disruptive events in the production operations. Digitalization is a significant advancement on the software segment in recent times.
Another key driver is that the upstream sector is facing the challenge of ageing workforce. Wealth of knowledge in physical production operations and nuances of effective maintenance management would perish unless this critical wisdom is transferred to the new workforce. Apart from this conventional route, it is inevitable to upscale from technological perspective so that new workforce is better equipped to achieve production excellence.
Cornerstones of DOF
Foundations of DOF are hardware, software, processes and data. From hardware perspective, digitalization enables connectivity between equipment and systems for field data capture. Connecting remote locations and installations with wireless capability and ensuring all important instrumentations are equipped with the right sensors is the first step towards digitalization.
Software is the essence of carrying the automated digital processes through the value chain. Choosing and implementing apt digital software is essential in the DOF framework. For instance, during a field visit, a technician finds out that certain equipment needs urgent maintenance so as to avert production disruption. He or she should be able to create a maintenance work request on field and automated workflows for approvals and scheduling of maintenance work to be triggered through the digital processes. The software should be capable of handling these processes.
Thirdly, business processes are fundamental to the digitalization effort. The business processes should be based on the best practices of industry and should conform to the standard operating procedure approved by the top management. Business processes should be agile when responding to dynamic business and operating environment. Also, the processes are to be measured periodically based on the process performance indicators (PPIs) set for each of them.
Finally, huge quantity of data gathered through digitalized processes is to be analyzed to unlock the potential of timely business and operating decisions. An appropriate analytical tool would help in decoding the volumes of data to construct trends and patterns that will help in predicting events. By managing these envisaged events proactively, operational excellence can be achieved.
Mitigating risks - Go digital
Upstream operations are fraught with unsafe, high risk conditions hence strict regulatory provisions govern E&P companies’ business operations. Regulations relating to the safety of workers and the environment are to be rigorously followed without any deviations. Also periodical reports are to be submitted to the regulators as a compliance requirement. These require timely and accurate information from the production operations. Digital capability enablement is a key requirement in handling unsafe conditions. Proactive and unscheduled activities can be taken up to avert major production disruptive incidents on the upstream platform. Also with the digital processes in place, an emergency situation can be handled much more effectively than in the absence of it. For example, workers present on the production platform can be evacuated in the shortest time possible and in the most efficient way with the use of digital tools such as mobility, RFID (Radio Frequency Identification) technology, etc. Hence digitalization helps in minimizing human loss by mitigating risks on board.
Digitalization – Road ahead
Robotics, drone technology, artificial intelligence, etc., are evolving digital tools that are going to be heavily deployed in the coming years. Remote area surveillance using drone technology is a hot pursuit by E&P companies, which helps them in being preemptive in taking actions and in handling unidentified risks in operations.