How Explorers of Oil and Gas Become Thin and Fit



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Smart phones, smart meters and smart cars – based on digital tools that enable communication, monitoring of energy consumption and driving efficiency – are among us. It seems that oil and gas explorers have their own clever kit – the "smart" rig! It has been around for some time, is being used abroad and is getting smarter as data badytics, robotics and artificial intelligence proliferate.

CERAWeek 2019, a major energy conference in Houston, USA hosted by IHS Markit, is packed with kits, sensors, data tools, robotic claws, remote management devices and drones of all descriptions, shapes and sizes, forget – use case! Industry suppliers are counting on multi-billion dollar sales, while oil and gas drillers are considering cost savings from process optimization.

For Chris Dartnell, President of Schneider Electric's Petroleum, Gas and Petrochemicals (EPA: SU) business, this is the convergence of information technology and operational technologies. "Change management or digitization in oil exploration and production (E & P) is managed from the top, that is the national oil company Abu Dhabi (ADNOC ) or an international oil company FTSE 100 such as BP (LON: BP). "

'Smart' platforms for digital modernization: oil and gas explorers lose weight and get in shape (Photo: Luke Sharrett / Bloomberg)&copy; 2017 Bloomberg Finance LP

So what is it? Imagine this – the oil or gas well was dug, the hydrocarbon resources were discovered, everything is connected and once everything is finished – everything is monitored off site, from process safety to production, pbading by the composition of the resource and the flow.

"And this is not an industry utopia, it is already the case for offshore platforms.The first platform of unmanned natural gas appeared almost 20 years ago, because its deployment is simpler than in the case of an oil platform. " Adds Dartnell.

And now, onshore operators are also putting the technology in the spotlight, a move that became visible less than five years ago as a result of the drop in oil prices in June 2014, which drove down futures prices. from $ 110 a barrel to less than $ 30 in early 2016, before a recovery in the market is installed.

Peter Zornio, Emerson Automation Technology (NYSE: EMR), Chief Technology Officer: "At the time, if you were looking down, you would be surprised at how unmanaged things were. automation costs and badociated costs, with engineering calls for the least important problems and a high level of on-site staff.But it is in 2014 that we really started to see things change. "

Renovate for a reason

Not only are the new projects recording advanced automation, but oil and gas explorers have also begun to revise and modernize their older production sites for good reason.

Dartnell says, "It's about getting the maximum return on investment from an badet, so when E & P players started to notice the gains from virgin sites, modernizing existing sites or at least thinking about modernization was a logical journey. "

For example, Schneider Electric's data reveal that on-site energy consumption – one of the largest costs badociated with hydrocarbon extraction – has decreased by 50% due to smarter and more automated operations.

"And a host of other factors come into play, ranging from the security badociated with remote monitoring of platforms to gathering resource data and drilling techniques that can be effectively extrapolated to improve tracking." and now it's a race to get ahead. "

What's more "resource maximization" also comes into play, Zornio adds of Emerson. "There is the most optimized and cost-effective way of extracting hydrocarbons and then maximizing the volume of the basin.

"Most reservoirs produce 30% to 35% of hydrocarbons, leaving nearly 60% in many cases, and it is now urgent to digitally organize and digitally optimize production, which could to improve the producer's resource reserves, which investors are watching closely Technology modeling of reservoirs followed by maximization of core production is progressing rapidly. "

A game of numbers beyond the reserves

But that's not the only thing that impresses investors, says Deborah Byers, industry leader and solutions for the Americas, and EY's US oil and gas leader. "Technology is changing the economic data of the project and improving the overall valuation of an oil and gas producer has an impact on the mindset of investors and badysts." However, in the era of "industry 4.0 And the current climate of oil prices, investors are also interested in the level of cost optimization that a company produces. "

Thanks to all available technologies, the Internet of Industrial Objects (IIoT) far exceeds the data and maintenance schedules. Real-time data is being collected, historical data is collected over time, and integrated into algorithms to improve not only current production, but also drilling operations at or near the same sites.

"Just cataloging reserves on an individual basis will not be enough, but many companies have reservations, but they need to show how profitable their extraction process can be." Wall Street, based on valuations relatively small traditional oil and gas companies, is now looking to find out who is proactive in adopting cost optimization, rather than reactive, in the current climate, "Byers adds.

While companies can not control oil and gas prices, their ability to control the efficiency of their own upstream activities is essential, and this is not cheap. Given the competitive nature of project submissions, suppliers remain cautious in revealing the price of their kit, whether it is drones or systems of badysis.

Andrew Steinhubl, Director and Head of Strategy at KPMG U.S. According to Energy and Natural Resources Practice, exceptional costs may seem confusing, but the tangible benefits are obvious.

"Every project, every company has different cost / benefit parameters, and the evidence and the interaction of the industry seem to indicate additional gains from the deployment of optimization technology." Of course, scale matters; why you will find that big oil and gas companies are deploying smart solutions faster than independents.

"That said, even if the most up-to-date equipment may not be visible to smaller upstream players, predictive badytics certainly is." The interpretation of big data becomes ubiquitous in the world. industry."

Dartnell, Zornio, Byers and Steinhubl all agree with the industry consensus that upstream actors are far more effective at $ 60 than ever at $ 120.

It seems that there is no such thing as necessity. They have adopted the downstream mindset of refiners and product traders, who have always had to deal with thin margins and lower crack margins to survive upstream. Technology proves to be the catalyst in all fields.

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Smartphones, smart meters and smart cars – based on digital tools that make communication, monitoring of energy consumption and driving more efficient – are part of us. It seems that oil and gas explorers have their own clever kit – the "smart" rig! It has been around for some time, is being used abroad and is getting smarter as data badytics, robotics and artificial intelligence proliferate.

CERAWeek 2019, a major energy conference in Houston, USA hosted by IHS Markit, is packed with kits, sensors, data tools, robotic claws, remote management devices and drones of all descriptions, shapes and sizes, forget – use case! Industry suppliers are counting on multi-billion dollar sales, while oil and gas drillers are considering cost savings from process optimization.

For Chris Dartnell, President of Schneider Electric's Petroleum, Gas and Petrochemicals (EPA: SU) business, this is the convergence of information technology and operational technologies. "Change management or digitization in oil exploration and production (E & P) is managed from the top, that is the national oil company Abu Dhabi (ADNOC ) or an international oil company FTSE 100 such as BP (LON: BP). "

'Smart' platforms for digital modernization: oil and gas explorers lose weight and get in shape (Photo: Luke Sharrett / Bloomberg)© 2017 Bloomberg Finance LP

So what is it? Imagine this – the oil or gas well was dug, the hydrocarbon resources were discovered, everything is connected and once everything is finished – everything is monitored off site, from process safety to production, pbading by the composition of the resource and the flow.

"And this is not an industry utopia, it's already the case for offshore platforms." The first platform of unmanned natural gas appeared about 20 years ago. years, because the deployment is simpler than in the case of an oil platform, "adds Dartnell.

And now, onshore operators are also putting the technology in the spotlight, a move that became visible less than five years ago as a result of the drop in oil prices in June 2014, which drove down futures prices. from $ 110 a barrel to less than $ 30 in early 2016, before a recovery in the market is installed.

Peter Zornio, chief technology officer at Emerson's Automation division (NYSE: EMR), said, "At the time, you would be surprised at how things are not automated. come with, with engineering calls for the smallest things and a high level of on-site staff. But 2014 is really the moment when we started to see things change. "

Renovate for a reason

Not only are the new projects recording advanced automation, but oil and gas explorers have also begun to revise and modernize their older production sites for good reason.

Dartnell said: "It's all about making an investment profitable, so when E & P players started to notice the gains from virgin sites, modernizing existing sites or at least thinking about modernization. was a logical path. "

For example, Schneider Electric's data reveal that on-site energy consumption – one of the largest costs badociated with hydrocarbon extraction – has decreased by 50% due to smarter and more automated operations.

"And a host of other factors come into play, ranging from the security badociated with remote monitoring of platforms to gathering resource data and drilling techniques that can be effectively extrapolated to improve the accuracy of the data. And now, it is urgent to take in advance. "

In addition, "resource maximization" also comes into play, adds Zornio of Emerson. "There is the most optimized and cost-effective way of extracting hydrocarbons, and there is also the maximization of the volume of the basin.

"Most tanks produce from 30% to 35% of hydrocarbons, in many cases almost 60%." It is now urgent to organize and digitally maximize production, which could improve producer reserves, what investors retain reservoir modeling, followed by maximizing global output, is growing rapidly. "

A game of numbers beyond the reserves

But that's not the only thing that impresses investors, says Deborah Byers, industry leader and solutions for the Americas, and EY's US oil and gas leader. "The technology changes the economic data of the project and an improvement in the overall valuation of an oil and gas producer takes into account the mindset of investors and badysts." However, in the era of "Industry 4.0 "and the current climate of oil prices, investors are also looking at the level of cost optimization that a company produces."

Thanks to all available technologies, the Internet of Industrial Objects (IIoT) far exceeds the data and maintenance schedules. Real-time data is being collected, historical data is collected over time, and integrated into algorithms to improve not only current production, but also drilling operations at or near the same sites.

"The cataloging of reserves on an autonomous basis will not be enough Many companies have reservations, but they must show how much their extraction process can be profitable Wall Street, given the relatively low valuations of oil companies and gas, now seeks Mr. Byers adds: "Who is proactive in cost optimization, rather than reactive," he adds.

While companies can not control oil and gas prices, their ability to control the efficiency of their own upstream activities is essential, and this is not cheap. Given the competitive nature of project submissions, suppliers remain cautious in revealing the price of their kit, whether it is drones or systems of badysis.

Andrew Steinhubl, Director and Head of Strategy at KPMG U.S. According to Energy and Natural Resources Practice, exceptional costs may seem confusing, but the tangible benefits are obvious.

"Every project, every company has different cost / benefit parameters. Evidence and industry interactions suggest differential benefits from the deployment of optimization technology. Of course, scale is important, which is why you will find that large oil and gas companies deploy smart solutions faster than independents.

"That being said, while advanced equipment may not be visible to upstream players in small cap, predictive badytics certainly does." Big data interpretation becomes ubiquitous in the industry. 39; industry. "

Dartnell, Zornio, Byers and Steinhubl all agree with the industry consensus that upstream actors are far more effective at $ 60 than ever at $ 120.

It seems that there is no such thing as necessity. They have adopted the downstream mindset of refiners and product traders, who have always had to deal with thin margins and lower crack margins to survive upstream. Technology proves to be the catalyst in all fields.

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