By James McCallum/Aberdeen
In Formula One, where fractions of a second determine success or failure, making the best decisions in the shortest possible time is critical. Thanks to the introduction of ever-more powerful software and hardware capable of analysing massive amounts of data within milliseconds, Formula One drivers and their race teams are better placed than ever before to making these decisions – and boost performance.
Granted, F1 is still very much about the driver but it’s also one of many examples of how technological advances are transforming the way we operate and make decisions every day in order to optimise business.
The global oil industry isn’t an exception. Advances in and the widespread adoption of information technology have triggered a transformation process that will shape the industry in all its facets in the years to come. Whether it is devices such as iPads becoming a common tool to conduct real-time monitoring of what’s happening at the well site or new breeds of young engineers with backgrounds in IT entering the space, the industry is amidst an exciting period of change.
Today’s oil fields are increasingly connected from end to end, enabling companies to harvest and analyse ever-larger amounts of data generated by people and assets along the oil value chain in real time.
Digital Oil Fields as they’re commonly referred to – essentially integrated operation systems – help in reservoir and production optimisation, and drilling and well completion among other processes. They speed up and allow more accurate analysis and decision making, and improve safely levels.
The ultimate aim of the Digital Oil Field (DOF) is to overlap field and decision centre to boost output and recovery rates, and manage assets more efficiently and safely.
The oil industry’s migration into the digital sphere is part of a natural evolution. To be sure, the sector hasn’t been the fastest adopter of information systems compared to other industries.
But with the long-term energy demand curve pointing up and oil prices at comfortable levels, new technologies such as DOF have put fields that were once deemed too expensive, too deep or too remote back on the radar screen.
Not too long ago, oil companies were questioning whether they should evaluate DOF technology. Now the question goes: “how can we best optimise our return on investment in DOF?”
The same question is being asked all over the globe, including in the Middle East, a region long known for its access to “easy oil”. It may be the world’s richest hydrocarbons habitat, but as the development of new fields and maintaining or expanding output levels at existing ones is becoming more complex, the region’s national oil companies (NOCs) have begun adopting the DOF concept to enhance oil recovery.
The Middle East has been relatively slower than other parts of the world in adopting DOF solutions but this is changing. From Abu Dhabi to Kuwait, from Oman to Saudi Arabia, regional NOCs have started to embrace the concept and are now actively engaged in implementing numerous DOF projects.
Kuwait Oil Company has launched three major DOF pilot projects with a fourth one in the planning phase. Oman, a pioneer in deploying enhanced oil recovery (EOR) technologies to boost output from its fragmented and mostly heavy crude reserves, is betting on its DOF programme to ramp up production in the future.
According to RnR Market Research, the Middle East is going to be the world’s fastest-growing DOF market between 2012 and 2022, with revenue estimated to grow at a compound annual growth rate of 5.9%. This compares with 4.8% for the global market during the same period.
By 2022, the global DOF market is expected to be worth $33.3bn in terms of revenue.
Going forward, there can be little doubt that DOF will be at the core of all Greenfield projects in the region; more and more existing oil fields will be upgraded. NOCs embarking on their “digital” strategy aren’t doing so alone.
The national incumbents have always stressed the need for technology transfer as part of their decision-making on new partnerships and concessions. As such, international oil companies (IOCs) and oil field service companies, which provide the technologies around digital oil fields, will all play a role.
But the rising complexities involved in developing future oil reserves may well bring about a new era of collaboration between NOCs, IOCs and oil field service firms. By pooling their limited resources, in terms of infrastructure and skilled labor, the players will be in a better position to leverage their different capabilities.
I am happy to say that it is not too bold an assumption to make that the inclusion of DOF Knowledge transfer will undoubtedly play an increasing role in the technology transfer demanded from relationships on new concession awards across the Middle East as it will in all the major global energy supply regions
*** James McCallum is CEO of Senergy, a global energy services company with more than 500 staff worldwide, covering hydrocarbon exploration & production, alternative energy, software and training.
