‘Smart’ rigs to digital retrofits: Oil and gas explorers are getting lean and fit (Photo: Luke Sharrett/Bloomberg)© 2017 Bloomberg Finance LP

So what is the fuss all about? Picture this – the oil or gas well has been dug, hydrocarbon resource has been found, it’s all connected up and once all of that is done, everything from process safety to production levels, composition of resource to flow rate is monitored offsite.

“And that’s not some industry utopia; it’s already here in the case of offshore platforms. The first unmanned natural gas platform appeared almost 20 years ago as the deployment is simpler there than in the case of an oil rig,” Dartnell adds.

And now onshore site operators are lapping the technology up too, a move that became visible less than five years ago in the wake of the June 2014 oil price slump that saw crude futures plummet from $110 per barrel prices to under $30 early in 2016, before a market recovery took hold.

Peter Zornio, Chief Technology Officer of the Automation Division at Emerson (NYSE:EMR) notes: “Back then, if you looked onshore you would be surprised how non-automated things were. They would put the minimum amount of automation in and soak the costs, with engineering call-outs for the smallest of matters and high onsite personnel levels. But 2014 is when we really started to see things change.”

Retrofitting for a reason

Not only are greenfield projects registering advanced automation, oil and gas explorers have also started revisiting and retrofitting older onstream production sites and for good reason.

Schneider Electric’s Dartnell says: “It’s all about getting the maximum return on investment (ROI) from an asset. So when E&P players started noticing the gains from greenfield sites, retrofitting existing sites or at least thinking about retrofitting was a logical pathway.”

For instance, the technology vendor’s data reveals that onsite energy consumption – one of the biggest costs associated with hydrocarbon extraction – have in some cases come down by 50% as result of smarter, more automated and optimized operations.

“And a host of other factors come into play – from safety associated with remote monitoring of platforms to data gathering on resource and drilling techniques that can be effectively extrapolated to improve further exploration. And now it’s a race to get ahead of the curve.”

What’s more “resource maximization” is a key focus area, adds Emerson’s Zornio. “There’s the most optimized and cost efficient way of extracting the hydrocarbon, and then there’s the maximization of the basin volume as well.

“Most reservoirs produce 30% to 35% of the hydrocarbon, leaving behind nearly 60% of not more in many cases. The rush is now on to digitally organize and maximize output that could lead to an upgrade of a producer’s resource reserves position, something that investors keep a keen eye on. Technology enabled reservoir modelling, followed by headline production maximization is advancing rapidly.”

A numbers game beyond reserves

But that’s not the only thing impressing investors, says Deborah Byers, Americas Sector and Solutions Leader, and U.S. Oil and Gas Leader at EY. “Technology does change the economics of the project, and an improvement in the headline valuation of an oil and gas producer does factor into investors’ and analysts’ mindset. However, in the age of ‘Industry 4.0’ and the current oil price climate, investors are also eyeing the level of cost optimization a company is bringing about.”

With all the technology that is available, the Industrial Internet of Things (IIoT) has gone way beyond data and maintenance schedules. Real time data is being gathered, historical data collected over time, and fed into algorithms to improve not just onstream production, but further drilling drives at the same site or prospects nearby.

“Just cataloging reserves on standalone basis won’t cut it. Lots of companies have reserves but they need to show how cost effective their extraction process can be. Wall Street, given the relatively lower valuations of legacy oil and gas companies, is now looking at who is being proactive in embracing cost optimization, rather than reactive, in the current climate,” Byers adds.

While companies can’t control oil and gas prices, being good at controlling their own upstream efficiencies is what it is bottling down to, and it doesn’t come cheap. Given the competitive nature of project tenders, vendors remain cagey in revealing the price of their kit whether we are talking drones or analytics systems in a multi-billion dollar automation solutions market.

Andy Steinhubl, Principal and Strategy Practice Lead at KPMG U.S.’ Energy and Natural Resources Practice, says one-off costs might appear off-putting on paper but tangible benefits are obvious.

“Every project, every company has different cost/benefit parameters. Evidence and industry interaction points to incremental returns from deployment of optimization technology. Of course, scale matters which is why you will find that oil and gas majors are deploying smart solutions faster than independents.

“That said, even if state of the art kit might not be visible at smallcap upstream players, predictive analysis most certainly is. Interpretation of big data is getting ubiquitous in the industry.”

Dartnell, Zornio, Byers and Steinhubl, all agree with industry consensus that upstream players are way more efficient at $60 oil prices than they ever were at $120.

“It seems there’s nothing quite like necessity. They’ve taken the downstream mentality of refiners and product marketers – who have always had to contend with fine margins and lower crack spreads to survive – and taken it upstream. Technology happens to be the enabler across the board.”

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Smartphones, smart-meters and smart-cars– predicated on digital tools making interaction, keeping track of energy usage and driving more effective– are amongst us. It appears oil and gas explorers have their own awesome package– the ‘clever’ rig! It’s been around for a while, in usage offshore and is getting smarter as information analytics, robotics and expert system multiply.

At IHS Markit’s CERAWeek 2019, a significant energy conference in Houston, U.S., the exhibit flooring appears abuzz with a myriad of package, sensing units, information tools, robotic claws, remote management gadgets and drones of all descriptions, sizes and shapes, and lest we forget– utilize cases! Market suppliers are considering billions of dollars in sales, while oil and gas drillers are taking a look at cost savings arising from procedure optimization.

For Chris Dartnell, President of the Oil, Gas and Petrochemicals Organisation at Schneider Electric (EPA: SU), it symbolizes the confluence of infotech (IT) and functional innovation (OT). “Modification management or digitization in oil expedition and production (E&P) is being driven right from the top, whether we are speaking about state-owned Abu Dhabi National Oil Business (ADNOC) or a FTSE 100 worldwide oil business like BP (LON: BP).”

‘ Smart’ rigs to digital retrofits: Oil and gas explorers are getting lean and in shape (Image: Luke Sharrett/Bloomberg) © 2017 Bloomberg Financing LP

(** )

So what is the hassle everything about? Photo this– the oil or gas well has actually been dug, hydrocarbon resource has actually been discovered, it’s all linked up and as soon as all of that is done, whatever from procedure security to production levels, structure of resource to stream rate is kept an eye on offsite.

” Which’s not some market paradise; it’s currently here when it comes to overseas platforms. The very first unmanned gas platform appeared practically 20 years earlier as the release is easier there than when it comes to an oil well,” Dartnell includes.

And now onshore website operators are lapping the innovation up too, a relocation that ended up being noticeable less than 5 years earlier in the wake of the June 2014 oil rate depression that saw unrefined futures drop from $110 per barrel rates to under $30 early in 2016, prior to a market healing took hold.

Peter Zornio, Chief Innovation Officer of the Automation Department at Emerson (NYSE: EMR) notes: “At that time, if you looked onshore you would marvel how non-automated things were. They would put the minimum quantity of automation in and soak the expenses, with engineering call-outs for the tiniest of matters and high onsite workers levels. However 2014 is when we truly began to see things alter.”

Retrofitting for a factor

Not just are greenfield jobs signing up sophisticated automation, oil and gas explorers have actually likewise begun reviewing and retrofitting older onstream production websites and for excellent factor.

Schneider Electric’s Dartnell states: “It’s everything about getting the optimum roi (ROI) from a property. So when E&P gamers began observing the gains from greenfield websites, retrofitting existing websites or a minimum of thinking of retrofitting was a sensible path.”

For example, the innovation supplier’s information exposes that onsite energy usage– among the greatest expenses connected with hydrocarbon extraction– have in some cases boil down by 50% as outcome of smarter, more automatic and enhanced operations.

” And a host of other aspects enter play – from security connected with remote tracking of platforms to information event on resource and drilling strategies that can be efficiently theorized to enhance even more expedition. And now it’s a race to get ahead of the curve.”

What’s more “resource maximization” is an essential focus location, includes Emerson’s Zornio. “There’s the most enhanced and expense effective method of drawing out the hydrocarbon, and after that there’s the maximization of the basin volume too.

” The majority of tanks produce 30% to 35% of the hydrocarbon, leaving almost 60% of not more oftentimes. The rush is now on to digitally arrange and make the most of output that might cause an upgrade of a manufacturer’s resource reserves position, something that financiers keep an eager eye on. Innovation allowed tank modelling, followed by heading production maximization is advancing quickly.”

A numbers video game beyond reserves

However that’s not the only thing impressing financiers, states Deborah Byers, Americas Sector and Solutions Leader, and U.S. Oil and Gas Leader at EY. “Innovation does alter the economics of the task, and an enhancement in the heading evaluation of an oil and gas manufacturer does element into financiers’ and experts’ state of mind. Nevertheless, in the age of ‘Market 4.0’ and the existing oil rate environment, financiers are likewise considering the level of expense optimization a business is producing.”

With all the innovation that is readily available, the Industrial Web of Things (IIoT) has actually gone method beyond information and upkeep schedules. Actual time information is being collected, historic information gathered gradually, and fed into algorithms to enhance not simply onstream production, however additional drilling drives at the exact same website or potential customers close by.

” Simply cataloging reserves on standalone basis will not suffice. Great deals of business have reserves however they require to demonstrate how expense reliable their extraction procedure can be. Wall Street, provided the fairly lower evaluations of tradition oil and gas business, is now taking a look at who is being proactive in accepting expense optimization, instead of reactive, in the existing environment,” Byers includes.

While business can’t manage oil and gas rates, being proficient at managing their own upstream effectiveness is what it is bottling down to, and it does not come inexpensive. Provided the competitive nature of task tenders, suppliers stay cagey in exposing the rate of their package whether we are talking drones or analytics systems in a multi-billion dollar automation options market.

Andy Steinhubl, Principal and Technique Practice Lead at KPMG U.S.’ Energy and Natural Resources Practice, states one-off expenses may appear off-putting on paper however concrete advantages are apparent.

” Every task, every business has various cost/benefit specifications. Proof and market interaction indicate incremental returns from release of optimization innovation. Obviously, scale matters which is why you will discover that oil and gas majors are releasing clever options quicker than independents.

” That stated, even if cutting-edge package may not show up at smallcap upstream gamers, predictive analysis most definitely is. Analysis of huge information is getting common in the market.”

Dartnell, Zornio, Byers and Steinhubl, all concur with market agreement that upstream gamers are way more effective at $60 oil rates than they ever were at $120

” It appears there’s absolutely nothing rather like requirement. They have actually taken the downstream mindset of refiners and item online marketers– who have actually constantly needed to compete with great margins and lower fracture infect endure– and taken it upstream. Innovation occurs to be the enabler throughout the board.”

” readability =”166
71477369769″ >

Mobile phones, smart-meters and smart-cars– predicated on digital tools making interaction, keeping track of energy usage and driving more effective– are amongst us. It appears oil and gas explorers have their own awesome package– the ‘clever’ rig! It’s been around for a while, in usage offshore and is getting smarter as information analytics, robotics and expert system multiply.

At IHS Markit’s CERAWeek 2019, a significant energy conference in Houston, U.S., the exhibit flooring appears abuzz with a myriad of package, sensing units, information tools, robotic claws, remote management gadgets and drones of all descriptions, sizes and shapes, and lest we forget– utilize cases! Market suppliers are considering billions of dollars in sales, while oil and gas drillers are taking a look at cost savings arising from procedure optimization.

For Chris Dartnell, President of the Oil, Gas and Petrochemicals Organisation at Schneider Electric (EPA: SU), it symbolizes the confluence of infotech (IT) and functional innovation (OT). “Modification management or digitization in oil expedition and production (E&P) is being driven right from the top, whether we are speaking about state-owned Abu Dhabi National Oil Business (ADNOC) or a FTSE 100 worldwide oil business like BP (LON: BP).”

.

.

‘Smart’ rigs to digital retrofits: Oil and gas explorers are getting lean and in shape (Image: Luke Sharrett/Bloomberg) © 2017 Bloomberg Financing LP

.

.

So what is the hassle everything about? Photo this– the oil or gas well has actually been dug, hydrocarbon resource has actually been discovered, it’s all linked up and as soon as all of that is done, whatever from procedure security to production levels, structure of resource to stream rate is kept an eye on offsite.

“Which’s not some market paradise; it’s currently here when it comes to overseas platforms. The very first unmanned gas platform appeared practically 20 years earlier as the release is easier there than when it comes to an oil well,” Dartnell includes.

And now onshore website operators are lapping the innovation up too, a relocation that ended up being noticeable less than 5 years earlier in the wake of the June 2014 oil rate depression that saw unrefined futures drop from $ 110 per barrel rates to under $ 30 early in 2016, prior to a market healing took hold.

Peter Zornio , Chief Innovation Officer of the Automation Department at Emerson (NYSE: EMR) notes: “At that time, if you looked onshore you would marvel how non-automated things were. They would put the minimum quantity of automation in and soak the expenses, with engineering call-outs for the tiniest of matters and high onsite workers levels. However 2014 is when we truly began to see things alter.”

Retrofitting for a factor

Not just are greenfield jobs signing up sophisticated automation, oil and gas explorers have actually likewise begun reviewing and retrofitting older onstream production websites and for excellent factor.

Schneider Electric’s Dartnell states: “It’s everything about getting the optimum roi (ROI) from a property. So when E&P gamers began observing the gains from greenfield websites, retrofitting existing websites or a minimum of thinking of retrofitting was a sensible path.”

For example, the innovation supplier’s information exposes that onsite energy usage– among the greatest expenses connected with hydrocarbon extraction– have in some cases boil down by 50 % as outcome of smarter, more automatic and enhanced operations.

“And a host of other aspects enter play – from security connected with remote tracking of platforms to information event on resource and drilling strategies that can be efficiently theorized to enhance even more expedition. And now it’s a race to get ahead of the curve.”

What’s more “resource maximization” is an essential focus location, includes Emerson’s Zornio. “There’s the most enhanced and expense effective method of drawing out the hydrocarbon, and after that there’s the maximization of the basin volume too.

“The majority of tanks produce 30 % to 35 % of the hydrocarbon, leaving almost 60 % of not more oftentimes. The rush is now on to digitally arrange and make the most of output that might cause an upgrade of a manufacturer’s resource reserves position, something that financiers keep an eager eye on. Innovation allowed tank modelling, followed by heading production maximization is advancing quickly.”

A numbers video game beyond reserves

However that’s not the only thing impressing financiers, states Deborah Byers, Americas Sector and Solutions Leader, and U.S. Oil and Gas Leader at EY. “Innovation does alter the economics of the task, and an enhancement in the heading evaluation of an oil and gas manufacturer does element into financiers’ and experts’ state of mind. Nevertheless, in the age of ‘Market 4.0’ and the existing oil rate environment, financiers are likewise considering the level of expense optimization a business is producing.”

With all the innovation that is readily available, the Industrial Web of Things (IIoT) has actually gone method beyond information and upkeep schedules. Actual time information is being collected, historic information gathered gradually, and fed into algorithms to enhance not simply onstream production, however additional drilling drives at the exact same website or potential customers close by.

“Simply cataloging reserves on standalone basis will not suffice. Great deals of business have reserves however they require to demonstrate how expense reliable their extraction procedure can be. Wall Street, provided the fairly lower evaluations of tradition oil and gas business, is now taking a look at who is being proactive in accepting expense optimization, instead of reactive, in the existing environment,” Byers includes.

While business can’t manage oil and gas rates, being proficient at managing their own upstream effectiveness is what it is bottling down to, and it does not come inexpensive. Provided the competitive nature of task tenders, suppliers stay cagey in exposing the rate of their package whether we are talking drones or analytics systems in a multi-billion dollar automation options market.

Andy Steinhubl, Principal and Technique Practice Lead at KPMG U.S.’ Energy and Natural Resources Practice, states one-off expenses may appear off-putting on paper however concrete advantages are apparent.

“Every task, every business has various cost/benefit specifications. Proof and market interaction indicate incremental returns from release of optimization innovation. Obviously, scale matters which is why you will discover that oil and gas majors are releasing clever options quicker than independents.

“That stated, even if cutting-edge package may not show up at smallcap upstream gamers, predictive analysis most definitely is. Analysis of huge information is getting common in the market.”

Dartnell, Zornio, Byers and Steinhubl, all concur with market agreement that upstream gamers are way more effective at $ 60 oil rates than they ever were at $120

.

“It appears there’s absolutely nothing rather like requirement. They have actually taken the downstream mindset of refiners and item online marketers– who have actually constantly needed to compete with great margins and lower fracture infect endure– and taken it upstream. Innovation occurs to be the enabler throughout the board.”

.

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