New Approaches to an Old Industry – Smart Oil and Gas Field of the Future


While oil and gas prices fluctuate with the latest economic report, the challenges facing companies extracting those fuels are less volatile. Instead, those challenges could best be characterized as complex and well-known.

Without smart, integrated solutions, companies could waste tens and hundreds of millions of dollars a year. However, there are intelligent strategies that can be implemented within a Smart Oil and Gas Field to recover hydrocarbons through more cost-effective and enhanced approaches.

Industry veterans know the most accessible oil and gas has already been recovered.

And with that, I pose these questions:

  • What can oil and gas companies do to maximize profitability in networks of small wells?
  • How can engineers and operators benefit from data monitoring without drowning in excess statistics from hundreds of wells?
  • How can the field knowledge of experienced workers be transferred into systems that help key personnel make the best decisions?

To place those questions in context, we need to acknowledge the realities of today’s oil and gas field operations. It is commonplace to see the intentional operation of wells that have flow assurance challenges and reservoirs with relatively short lives. This is especially true for shale oil, gas deposits and turbidites.

This article focuses on the best practices to address those challenges by adopting methods from other industries. The two key strategies that hold transformative power for the Smart Oil and Gas Field are called the Field as a Factory (Faaf) and production surveillance approaches.

Both approaches require a reevaluation of the interaction between systems and knowledgeable workers. The overarching goal is: Delivering only the right information, within the right context, at the right time, to the right people to achieve the most effective results with a Smart Oil and Gas Field.

What’s a 21st century Field as a Factory?

The FaaF approach borrows lean manufacturing principles from the automotive, aerospace and consumer goods industries. The best practices are designed with the recognition that the addition of wells is frequent and there are corresponding changes to the gathering systems, treatment plants and utilities.

For example, in the Middle East, there is a successful execution of the FaaF approach where more than 70 Smart Oil and Gas Fields are integrated into one system with a national remote operations center. There are a variety of local control and monitoring systems. Every time wells and infrastructure are added or modified, the system displays, alarms and reports on more than 1 million field data points while more than 10,000 displays are altered by using standards with a high degree of configuration automation.

The FaaF approach has been in the works for the past two years, developing out of a financial and human resource necessity. The growth in oil and gas extraction from shale formations is a major driver of this practice. In past decades, companies could recover oil and gas from a few large diameter wells that would last for many years.

In today’s business climate, oil and gas are being extracted from small pockets underground. This reality has forced companies to drill literally thousands of small wells in which each might only last for up to six years. This FaaF approach is currently being adopted in the United States, Canada and Australia due to shale formations found in these countries.

Prescriptive data will propel timely decisions

A major advantage of the FaaF framework, coupled with production surveillance, is the emergence of prescriptive data – information that is systematically screened, bringing only valuable and actionable information to the attention of operators.
The system alerts workers when specific wells within the Smart Oil and Gas Field—out of a total of hundreds or thousands—are registering major changes in terms of the flow of oil, gas and water.

This configuration automation is critical as it allows the system to recognize patterns in pressure measurements and ratios of oil, gas and water. The automated system can quickly perform the calculations engineers and other technical staff previously had to complete manually over lengthy periods of time.

One large energy company in the USA estimated that its technical staff was spending up to 70 percent of its time finding and processing information. This heavy portion of data gathering and analysis minimized the staff’s ability to take steps that would continually improve business performance.

The transformative data-based approach has a multiplier effect when it comes to business benefits.

Building a reservoir model is an iterative process. Of course, this begins with one set of information that produces the first version of the reservoir model; from which the field development plan is built. The FaaF principle allows operators to quickly obtain actual and trusted information that can be fed to reservoir engineers to update not only the reservoir model, but also re-define the field development plan, if necessary. The outcome is a model of the Smart Oil and Gas Field that is brought up to speed more rapidly and reliably.

Antidotes to gas pressure loop changes

When best practices are employed in production surveillance it’s much more feasible for operators to address gas pressure loop challenges in a timely and effective manner. After all, production surveillance also was borrowed from a lean manufacturing principle, specifically modelling and simulation from the supply chain.

Today, companies experience multiple challenges in maintaining optimal flow from wellheads, associated gathering systems and processing facilities. Production surveillance solves these issues by enabling flow assurance from different completions that use rigorous on-line simulation from well risers to custody transfer points, coupled with manufacturing intelligence and workflow. These highly automated and trustworthy production management systems have the ability to keep pace with continuous drilling.
Yet, one of the main dilemmas in managing a reservoir is discovering how to increase the oil recovery factor. Even by applying enhanced oil recovery (EOR) techniques, mature fields retain too much oil at the end of the life-cycle of a reservoir. This is mainly due to various reservoir properties and drop in reservoir pressure due to depletion of fluids.

One popular method to recover oil in such reservoirs is by using the gas lift method. An operating company can use part of the produced gas to re-inject it in wells, which can benefit from an artificial lift. Gas is compressed and pumped at high pressure at various well depths to lighten the liquid column and allow the fluids to flow to surface. The gas produced from this process is then recycled to continuously support this artificial lift method. However, even such oil recovery method may fail due to gas availability issues or compression station failures.

The tremendous value of production surveillance is that statistics are gathered and systematically analyzed so that operators of a Smart Oil and Gas Field can be alerted much earlier in the process when a flow problem is about to occur. This presents operators with better options to address the situation before the flow drops to a very low level. An early warning system allows operators to make better decisions about when to use a gas lift. It also helps operators to precisely time the closure of a valve, so a well can be shut down to allow pressure to build up again naturally. Operators who close valves at the right time will extend the life spans of wells and those actions will have a huge impact on company bottom lines. Better treatment of a reservoir only results in increased production; thus, increasing the final recovery factor of a field.

Data monitoring and knowledge transfer

When one takes a holistic view of the industry, many oil and gas fields are deemed economically unfeasible to produce from. Oil and gas wells around the world face far more operational difficulties today as they need to be drilled in extremely remote locations compared to those in service 10 to 20 years ago. This new industry environment means that operators need access to more advanced data monitoring systems in order to operate Smart Oil & Gas Fields efficiently. Once economically unfeasible reservoirs need to be reevaluated in the light of new technological enhancements available to the operators today.

On top of production challenges, there is an apparent skills shortage in the oil and gas industry. The rapid expansion of oil and gas in the last decade, coupled with the fact that universities are finding it difficult to produce enough graduates to meet the industry demand, makes knowledge management a key challenge in the industry. This promotes the case of utilizing advanced data capture and analytics techniques to promote knowledge management.

This will allow companies to maximize impact of employees who are experts in their fields. It is important to embed much of their knowledge into automated data systems that will remain prominent and continue to innovate the Smart Oil and Gas Field long after they retire. Even the most knowledgeable leader can only spend so much time helping other co-workers, whereas solutions can educate an entire industry.

A transformation of work

Currently, a transformation of work is unfolding. Information is being incorporated into automated data systems. These systems can and will increase the effectiveness of workers and the Smart Oil and Gas Field as a whole by providing the right information at the right time.

The return on investment of both FaaF and production surveillance is clear. These strategies can yield millions of dollars in increased revenue annually. Simultaneously, they can save a company millions of dollars in expenses because they enable decisive action on the front end of developing problems.
With intelligent solutions in place, companies can lead the industry to better understand how to operate Smart Oil & Gas Fields most effectively, collecting key information and industry best practices to share along the way.