Streamline Processes from Wellhead to Revenue with the Internet of Things

Stephane Lauzon, Director, Oil & Gas Industry

Brian Forbes, Partner, AT Kearney
May 7, 2015

2015 SAP SE or an SAP affiliate company. All rights reserved.

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Trends shaping the oil and gas industry

Low oil prices driving

focus on operating best
practices and efficiencies

Cloud growing rapidly

hybrid cloud
landscapes are reality

Shift from capital

expenditures (CAPEX) to
operating expenditures
(OPEX)
Increasingly complex
Industry
and distributed asset
trends
portfolios, business
partnerships, and ecosystem
Hydrocarbons remain key
with re-orientation of
global supply chain
Continued regulatory,
compliance, and security
challenges

2015 SAP SE or an SAP affiliate company. All rights reserved.

Technology
trends

Business intelligence
and advanced
analytics
Single consistent view
of business systems
(IT) and operational
systems (OT)
Mobile, simple access
to information

Internal

The march towards the digital economy continues

Functional

Process

2015 SAP SE or an SAP affiliate company. All rights reserved.

Enterprise

Network

Internal

Our connected future

Connected
drilling

Connected
refining
Connected
oilfields

Connected
fuels
Connected
bulk logistics

Connected
cars

Connected
projects

Connected workforce
2015 SAP SE or an SAP affiliate company. All rights reserved.

Internal

Many oil and gas companies manage reservoirs, wells, and facilities
separately, resulting in suboptimal performance
Asset Management

Example

Facilities
Management

Facilities are not designed / operated to

handle hydrocarbon volumes produced from
reservoir via the wells

Load shed schemes are not designed to

minimize production deferment during
unplanned outages

Reservoir
Management

Artificial lift mechanisms are not designed /

operated to accommodate expected
changes in reservoir dynamics

Lost
Compressor

Lost
Compressor

Wells
Management

Reservoir damaged from poor asset management

When asset components are optimized individually - rather than collectively - the assets overall
potential is not fully realized
5

Data-intensive integrated asset management systems can help by improving the

quality of managerial decisions
Asset Management
Application of IoT
Feed forward Path

Measured Disturbances

Unmeasured Disturbances

Manipulated Inputs

Internet of Things

Unmeasured Outputs

Standard processes
Multivariate algorithms and asset models
Predictive analytics
Cased-based reasoning
Integrated management teams
Collaborative online working environments

Feedback Path

Determine how outputs

should impact
manipulated inputs

Measured Outputs

Determine which outputs

should / should not be
monitored

These systems should evolve over time as cause-effect relationships change with system health
and/or depletion
6

Integrated Asset Management

Some have manually integrated various data houses to better inform decisions but
this was expensive and cumbersome
Business case for improving data flows & analytics
Improvement for gas-producing assets1
Monthly
Production

Client Examples

Improvement for liquids-producing assets1

Monthly
Production

15% uplift via

improved data
flows & analysis

5% uplift via
improved data
flows & analysis

Actual
production
Actual
production

Forecast

Forecast

Month

Month

Still, our experience suggests improving data flows & analytics through these methods could
improve production by 5-10% (depending on data availability)
7

Stephane Lauzon
Director, Oil & Gas Industry
stephane.lauzon@sap.com

Brian Forbes
Partner, AT Kearney
brian.forbes@atkearney.com

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Appendix

Integrated Asset Management

Many oil and gas companies manage reservoirs, wells, and

facilities separately, resulting in suboptimal performance
Asset Management
Typical Structure & Effects

Example

Broken data flows

Asset components
Management teams
Facilities
Management

Facilities are not designed / operated to

handle hydrocarbon volumes produced
from reservoir via the wells

Load shed schemes are not designed

to minimize production deferment
during unplanned outages

Reservoir
Management

Wells
Management

Lost
Compressor

Lost
Compressor

Artificial lift mechanisms are not

designed / operated to accommodate
expected changes in reservoir dynamics

Managerial decisions for facilities are made without full information about the
managerial decisions being made with respect to wells & reservoirs and so on ...
f(facilities) + g(wells) + h(reservoirs) <<< f(facilities, wells, reservoirs)

Reservoir damaged from poor asset management

When asset components are optimized individually - rather than collectively the assets overall potential is not fully realized
Source:

A.T. Kearney analysis

33

Integrated Asset Management

Data-intensive integrated asset management systems can help

by improving the quality of managerial decisions
Asset Management
Application of IoT
Feed forward Path

Manipulated Inputs
Internet of Everything
Standard processes
Multivariate algorithms and
asset models
Predictive analytics
Cased-based reasoning
Integrated management teams
Collaborative online working
environments

Measured Disturbances
Backpressure
Ambient temperature
Flow Restrictions
Injection Fluid Restriction

Unmeasured Disturbances
Reservoir Rock Heterogeneity
Reservoir Fluid Distribution
Scheduling

Flow Choke
Unmeasured Outputs

Zone Control

Well flowing pressure

ESP Speed
Reservoir pressure
Gas Lift
Reservoir Saturation
Solvent Injection
Flow Impairment
Water Injection
Zone Multiphase Flow
Heat Injection
Drainage Area
Gas Injection

Feedback Path

Measured Outputs
Tubing Head Pressure

Determine how outputs

should impact manipulated
inputs

Tubing Head Temperature

Multiphase Flow

Determine which outputs

should / should not be
monitored

Solid Production, Water Analysis

These systems should evolve over time as cause-effect relationships change

with system health and/or depletion
Source:

SPE; A.T. Kearney analysis

34

Integrated Asset Management

Some have manually integrated various data houses to better

inform decisions but this was expensive & cumbersome
Business case for improving data flows & analytics

Client Examples

Improvement for gas-producing assets1

Improvement for liquids-producing assets1

Monthly
Production

Monthly
Production
5% uplift via
improved data
flows & analysis

15% uplift
via improved
data flows &
analysis

Actual
production
Arps
forecast

Actual
production
Arps
forecast

Month
0

8 10 12 14 16 18 20 22 24 26 28 30 32

Month
0

8 10 12 14 16 18 20 22 24 26 28 30 32

Still, our experience suggests improving data flows & analytics through these
methods could improve production by 5-10% (depending on data availability)
Note 1: These results were for matured oil & gas fields in the United States and Canada and leveraged existing SCADA applications in the field; differences in results between gas and
liquids-producing assets is largely explained by differences in data collection methods typically employed across North America.
Source: A.T. Kearney

35

Integrated Asset Management

To help overcome these difficulties, SAP & A.T. Kearney are

leveraging the internet of things to analyze real-time data
Exceptions & surveillance dashboards
Home screen (customizable)

Exception dashboard

Home screen interface is fully customizable, meaning variations of the same

data sources can be configured to individual roles & responsibilities
36

Integrated Asset Management

Dashboards have been structured to allow users to quickly drill

down into problem areas and effectively identify their root
causes & surveillance dashboards
Exceptions
Exception dashboard

Production trends (vs. targets)

This data can be accessed via tablets in the field - and can even be triggered
electronically with RFID technologies
37

Integrated Asset Management

Collaborative tools - modelled on social media platforms improve communications between petrotechnical professionals
Exceptions & surveillance dashboards
Collaborative message boards

Asset intervention dashboard

Communications can quickly be turned into actions via linkages to asset

management systems
38

Integrated Asset Management

Financial data are also considered - in terms of actual vs.

budget targets via timing and consumer of the expenditure
Exceptions & surveillance dashboards
Interventions dashboard

Budget and workover schedules

This allows managers to link needs to actions to costs in real-time

39

Integrated Asset Management

Individuals can track more targeted areas of the budget - e.g.

specific to their areas of responsibility - to help manage costs
Exceptions & surveillance dashboards
Detailed budgets by asset

Individuals assets

The improved transparency across the asset improves both productivity and
bottom-line performance
40