DEJaugsept08:Layout 1 21/08/2008 14:55 Page 1

Red Spiders -
technology to cut the
cost of intelligent
wells

What if we could choose

our own assignments?
Tuning an oil and gas
company
September / October 2008 Issue 14

A shortage of satcom capacity?

Using simulators for training
Associate Member
Managing human resources better ™
DEJaugsept08:Layout 1 21/08/2008 14:57 Page 2

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DEJaugsept08:Layout 1 21/08/2008 15:00 Page 1

Leader Contents
What if people could choose their assignments?
People can be extremely motivated when they have the freedom to choose which projects to
work on based on how they feel they can add value, and unexpected innovation happens when
you allow open collaboration to achieve a goal, says John Gibson, CEO of Paradigm 3
Exploration and drilling
Intelligent wells – slashing the costs by 75 per cent
Red Spider Technology says it will be launching a new intelligent well system which has the
potential to cut 75 per cent off the cost of systems currently on the market 6
Collaborative well planning
September / October 2008 Issue 14 Gary Schottle, drilling and completions director for Landmark, sheds light on how collaborative
well planning can help clients efficiently develop the most productive reservoirs in complex

Digital Energy Journal

drilling environments such as Colorado’s Piceance Basin 12
213 Marsh Wall, London, E14 9FJ, UK Rowing across the Indian Ocean
www.digitalenergyjournal.com In April 2009, Michelle de Groot, daughter of the president of Dutch geoscientific software
Tel +44 (0)207 510 4935
Fax +44 (0)207 510 2344
company dGB Earth Sciences Paul de Groot, is planning a charity row across the Indian Ocean 13
Lowering the cost of high performance computing
Editor A new microchip from NVDIA promises to let you have high performance computing in your
Karl Jeffery
jeffery@d-e-j.com
desktop PC for under $10,000 14
Texas Instruments - new projector chip
Technical editor
Keith Forward
forward@d-e-j.com
Texas Instruments has launched a new projector chip, which can create much clearer and
brighter projections than others on the market, the company claims 16
Subscriptions Oil and gas production
Karl Jeffery
jeffery@d-e-j.com Caesar Systems – helps you make PIDX – first Aberdeen meeting
decisions PIDX, the e-commerce committee of the
Advertising sales Houston software company Caesar Systems has American Petroleum Institute, held its first
Alec Egan software to help oil and gas exploration and meeting in Aberdeen on July 9th, with 50
Tel +44 (0)207 510 4944 production companies solve their toughest participants including representatives of
aegan@onlymedia.co.uk
challenge – good decision making 21 Chevron, ENI and Shell 38
Splitting up the allocations Tuning E&P companies like a
Digital Energy Journal is a magazine for people Working out who should get what out of the process manufacturing plant
returns on an oilfield can get very complex, Can you imagine your oil and gas company

24 Chesapeake and Oracle PeopleSoft 40

in the upstream oil and gas industry who would
like to keep up to date with the latest industry
IT and communications technology, services,
opinion, practise and lessons learned.
Each issue of Digital Energy Journal print maga-
zine is mailed to 2,000 oil and gas executives,
with a further 500-1000 copies distributed at
trade shows, as well as being downloaded ap-
prox 2,000 times as pdf.
Subscriptions: £195 a year for 6 issues. To sub-
scribe, please contact Karl Jeffery on jeffery@d-
e-j.com. Alternatively you can subscribe online
at www.d-e-j.com
Front cover:
Testing out the
new eRed device
which can block
or unblock
downhole
tubing after
specific time
intervals, or when certain pressures are
reached. From left to right: Michael Christie,
Stuart Gordon and Mike Reid (see page 6).
Printed by Printo, spol. s r.o., 708 00 Ostrava-Poruba,
Czech Republic. www.printo.cz
EnergySys has developed software which
should make it easier to manage
Jindal Drilling to use SpecTec’s
maintenance and purchasing software
Jindal Drilling of India has signed a contract with
SpecTec Asia Pacific to install its AMOS
maintenance and purchasing software on
two new jack-up drilling rigs being built at
Keppel Yard in Singapore
Invensys simulators for safety
Invensys is pioneering the use of simulators,
combining human factors and virtual reality, for
improved safety, integrated operator training
and as an aid in the design of oil and gas
facilities
Offshore simulation
Featuring the Offshore Simulator Center in
Ålesund, Norway and a new offshore
simulation focus at Kongsberg
Making digital energy work
Houston change management consultants
Dr Dutch Holland and Bob Bobst give their
advice
Communications
Warning – possible satcom shortage
Increased demand for satellite capacity,
particularly for cellular backhaul, means that
oil and gas companies can no longer take its
availability for granted in West Africa, South
America and the Middle East, warns James
Trevelyan, head of enterprise sales at Arqiva
September/October 2008 - digital energy journal
being as finely tuned as a process plant?
US oil and gas company Chesapeake Energy
recently started using Oracle's PeopleSoft
software to help manage people aspects of
the business, including human resources,
payroll and benefits administration 44
26 BP and Crystal Ball
BP uses Oracle’s Crystal Ball software on
nearly 90 per cent of its new wells, to help
keep its costs and schedules on track 45
Shipdex – a new standard for data
28 A standard has been developed for technical
data for ships, drilling rigs and offshore
platforms, which should enable technical
information to be supplied electronically 46
29 Communicating
value
oil and gas asset
UK software company Palantir Solutions has
developed a standard way for oil and gas
companies and their lenders to put a value
34 on their assets, even if they disagree on what
the oil price will do 48
Satcom technologies must evolve
In order to provide effective satellite
communications services to oil and gas
companies, you need to have an in-depth
understanding of their increasingly complex
49 and comprehensive needs, says Broadpoint’s
new President and CEO, Errol Olivier 50
1
DEJaugsept08:Layout 1 21/08/2008 15:01 Page 2

4TH INTERNATIONAL
INTERNATION
NAL CONFERENCE
CONFERENCE ON INTEGRATED
INTEGRATED OPERATIONS
OPERATIONS IN THE
T PETROLEUM
PETROLEUM INDUSTRY
INDUSTRY
TTRONDHEIM,
RONDHEIM, NORW
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1. Breakthrough processes and technologies for IO – challenging traditional practices

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DEJaugsept08:Layout 1 21/08/2008 15:02
What if people could choose their
assignments?
Linux and Wikipedia have taught us two valuable lessons. First, that people can be extremely motivated
when they have the freedom to choose which projects to work on based on how they feel they can add
value. And second, that unexpected innovation happens when you allow open collaboration to achieve a
goal. Are these lessons that the oil and gas industry should take to heart? John Gibson, CEO of Paradigm,
thinks they might be.
In his concluding keynote speech at the
Digital Energy conference in Houston,
Texas on May 20th, John Gibson, CEO of
oil and gas software company, Paradigm,
raised an interesting question.
What kind of unexpected innovation
could occur, he asked, if people in oil and
gas companies could choose their projects
based on their own interests and where
they thought they can add the most value?
It works for Wikipedia and Linux, Mr Gib-
son noted.
In his speech, Mr Gibson suggested
that staff would be much more motivated
and feel that they were making a real con-
tribution if this were the case, and teams
and individual competencies would be al-
located more effectively, as well.
The talent pool could be expanded,
allowing retired experts to also get in-
volved in projects. Students and postgrad-
uates could respond to a company’s invi-
tation and apply their skills to solve diffi-
cult industry problems.
To make his case, Mr Gibson pointed
to the vast amount of available data our in-
dustry collects, noting that only a fraction
of it is currently used to make decisions to
efficiently identify, develop and produce
reserves.
“For a simple 3D offshore wide az-
imuth survey, there are often two hundred
terabytes of data,” he said. “We drop it
down to a couple hundred gigabytes to do
the interpretation. It’s the standard ap-
proach and method.
“I think within the next five years
you’re going to see us take advantage of
all two hundred terabytes of captured da-
ta. To do this, it means we will have to fun-
damentally change our approach. I think
there are some real breakthroughs re-
quired, and that are imminent.”
Mr Gibson admits that opening inno-
vation to a broad self-selecting communi-
ty of talent wouldn’t be the easiest thing
to organize in a company with 20,000 peo-
ple.
But, he suggests, since the current
system is hardly perfect, perhaps a differ-
Page 3
ent method of organization is in order.
When you consider that managers of-
ten don’t have a deep understanding of the
problem—and certainly don’t know what
the solution is—Mr Gibson’s suggestion
that people self-select based on what they
have a passion for, and where their capa-
bilities lie, rather than being assigned to
jobs based on what managers feel is best
for them, seems to make sense.
GoldCorp.
In his speech, Mr. Gibson told the story of
Goldcorp, the Vancouver company that
found gold by publishing its information
on the Internet1.
Goldcorp had a 55,000 acre asset in
Red Lake, Ontario, and a $100M market
capitalization. The company was taking a
conventional ‘proprietary’ approach to
their data—drilling core holes, bringing
core data back to the office, analysing it
with a team of geologists, and then identi-
fying prospects where they needed more
data. It would have taken them a couple of
years, or more, to determine where to en-
gineer shafts to mine the gold.
Rob McEwen, the company’s new
CEO, had no background in mining. He
had, however, recently attended a confer-
ence and heard about how the computer
operating system Linux is created and
maintained by people collaborating and
self-selecting which projects they work on,
based on their interest and expertise.
Mr McEwen asked Goldcorp’s geo-
physicists to put their data on the web.
Goldcorp put up $575,000 in cash rewards
to people who could come up with good
prospects. Within weeks, more than 1,400
people were working to locate prospects
on the company’s 55,000 acres.
“That included ex-military people,
engineers, college professors, grad stu-
dents, retired mining professionals, school
teachers. Anybody that could get on, they
signed up and attempted to solve this prob-
lem,” Mr Gibson said.
“People worked on it part-time; they
played with their grandchildren, they did a
September /October 2008 - digital energy journal
Leader
“I think, in some ways, the more senior
someone is, in an organisation, you realize
that the only thing that matters is
performance.” - John Gibson, CEO of
Paradigm
little fishing, then they went in and prospect-
ed for Goldcorp over the Internet.”
As a result of implementing this
method of organization, McEwen had 110
prospects submitted that were not previ-
ously identified by his personnel. 50
turned out to be major producers for Gold-
corp.
As a result of using this approach, the
corporation produced eight million addi-
tional ounces of gold, and the company’s
market capitalisation went from $100m to
$20bn.
But Mr Gibson points out that Mr
McEwen had to overcome cultural issues
in order to implement his plan.
“We often see our data as propri-
etary,” Mr Gibson said. “He broke through
there to say that the data is not what’s pro-
prietary.
“I think, in some ways, the more sen-
ior someone is, in an organisation, you re-
alize that the only thing that matters is per-
formance.
“As an industry, we’re not defining
our companies in terms of performance,
but instead, and perhaps incorrectly, we
3
DEJaugsept08:Layout 1 21/08/2008 15:03 Page 4

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DEJaugsept08:Layout 1 21/08/2008 15:03
are defining terms of intangible things like
proprietary data.”
Mr Gibson emphasises that what is
really important is how a company per-
forms at producing properties efficiently
and effectively and getting the product to
market at the lowest possible cost.
“Thinking in terms of Goldcorp,” he
says, “[Does the oil and gas industry] have
the right models in place to deliver afford-
able energy that the world is demanding
today, or is there a different way of doing
it?”
Encyclopedias
Mr. Gibson also shared another story of
how collaborative innovation works in the
case of Wikipedia’s competition with En-
cyclopedia Britannica2.
At one point, said Mr Gibson, Ency-
clopedia Britannica was stating publicly
that it was better than Wikipedia.
A university decided to test this state-
ment. They began by comparing articles,
and determined that there was only a four
to five percent difference in the quality of
the material. There had to be some other
dynamic differentiator, so they introduced
error into Wikipedia by inserting obsceni-
ties into a large number of Wikipedia arti-
cles, and in less than 90 seconds, all of the
obscenities had been removed.
“So now you’re Britannica, and
Register to receive regular copies of
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Page 5
you’re trying to publish once a year, some-
thing that takes a dolly to move back and
forth to your home, and that’s the process-
es that you put in place and the legacy that
you have,” Mr Gibson said.
“Then you have a network of unpaid
people that have a passion and have self-
selected to do this kind of work. So, with-
in 90 seconds of you goofing up an article,
they’ve got it fixed because they have ac-
countability for it.”
InnoCentive
The final example of a collaborative prob-
lem-solving model that Mr. Gibson cited
is that of InnoCentive, an Eli Lilly spinoff
founded in 2001.
InnoCentive connects companies, ac-
ademic institutions, and public sector and
non-profit organizations with a global net-
work of more than 145,000 registered
“Solvers” from 175 countries.
”Seeker” organizations post chal-
lenges on the InnoCentive website, offer-
ing awards of between $5,000 and $1M for
a successful solution provided by a mem-
ber of the Solver community3.
InnoCentive has categories for many
different disciplines, from medicine to
manufacturing to the oil and gas industry.
Thousands of problems are presently post-
ed on its website.
“InnoCentive allows a company that
September /October 2008 - digital energy journal
Leader
can only afford 2,000 researchers to in-
crease the talent pool and deploy 20,000
researchers on a problem,” Gibson said.
When it comes to delivering the en-
ergy that the world is demanding today,
Gibson concluded, we need to ask, “Do we
have the right process and organizational
models in place? Is there a different way
of doing it?”
If the examples he referred to in his
speech are any indication, it’s clear that he
might know the answer.
References
1
Wahl, Andrew: Most innovative CEO
2006: Rob McEwen, US Gold Corp.;
Canadian Business Magazine,
http://www.canadianbusiness
.com/innovation/article.jsp
?content=20061009_81416_814
16
2
Tapscott, Don and Williams, Anthony
D. (December 2006): Wikinomics:
How Mass Collaboration Changes
Everything, Portfolio
3
Wikipedia: InnoCentive;
http://en.wikipedia.org/wiki
/InnoCentive
5
DEJaugsept08:Layout 1 21/08/2008 15:03
Exploration and drilling
Intelligent wells – slashing the costs by
75 per cent
Red Spider Technology, a well technology company founded in Aberdeen in 2003, says it will be launching
a new intelligent well system which has the potential to cut 75 per cent off the cost of systems currently
on the market.
It will achieve these savings by removing
what the company feels is superfluous fea-
tures provided on the intelligent well sys-
tems currently on the market, taking the
product to its bare bones and making instal-
lation simpler and quicker – a sort of plug
and play concept.
However it will still perform the most
important function of an intelligent well: the
ability to control the flow from different lat-
erals into the main well bore, and to be pow-
ered and controlled from the surface.
Red Spider has managed to do this by
designing the equipment to have only the es-
sential features. “We’ve taken out all the
bells and whistles and shrunk it down,” says
Gary Smith who heads up International Mar-
keting and Technology at Red Spider. “This
can shave an enormous amount off the man-
ufacturing cost.”
“You get feature creep as these tools
evolve,” he says. “We said, let’s take out all
the features which might only be required
once in ten years.”
Having a simpler product also means it
is much simpler and quicker to install, he
says.
Reducing the cost of intelligent well
technology should make it much more ac-
cessible.
Many oil companies have avoided in-
stalling intelligent well systems on some of
their wells, due to the high CAPEX cost,
which is driving them to think much more
carefully about whether they actually want
the systems. If the upfront cost is lower, the
eRED circuit board
6 digital energy journal - September/October 2008
Page 6
decision will be easier to make.
“There are many wells producing 100-
1000 barrels a day –they can’t sustain the
capital expenditure associated with an intel-
ligent well installation,” he says. “But they
could benefit from flow control. That’s
where we see there’s a sizeable market.”
“As soon as the equipment gets cheap-
er, people can start putting it in every well
that would benefit from it,” he says. “You
then get to a situation where reservoir and
completion engineers have to justify why
they wouldn’t put it in the well.”
As well as its cost effective intelligent
isolation and control valve called ‘Simplus’,
Red Spider will launch a higher end intelli-
gent well offering equivalent to those cur-
rently on the market by other manufacturers
called ‘Optimus’.
Accepting the 2008 Sir Ian Wood award for
Going wireless innovation at the Grampian Award for
Red Spider has started work to crack the nut Business and Enterprise.
which nobody has managed to crack yet –
creating an intelligent well system which can
work wirelessly.
Having wireless intelligent wells would world.”
be very attractive, because there would be, “You’ve got a well flowing which caus-
in effect, no limit to the number of zones or es a lot of noise – it’s not like a wireless or
laterals that can be controlled and run from mobile phone when you’ve just got air and
a single well head; with hydraulic lines, ambient temperature to worry about,” he
there is a firm limit, because of the number says. “It’s pretty fraught with problems.”
that can fit through the well head. The lines “If you can communicate then ultimate-
transmit hydraulic power to the flow con- ly, you could end up with flow control
trol valves in order to open and close them. valves that could receive instructions and
Its first step along that road is the de- even think for themselves,” he says. “That’s
velopment of a valve called eRED which can the direction we’re going in,” he says.
be set to open and shut, by applied pressure, “We’ve got to go down that road – and see
after a certain time, or when the pressure where it takes us.”
around it reaches a certain level. eRED
draws power from a battery, and has an op- The company
erating life of 3-6 months. Red Spiders currently has 40 staff members,
Red Spider is looking into utilising oth- including two people at an office in Dubai,
er technologies which would avoid the need and 6 in Norway, the remainder at head of-
for a hydraulic lines such as batteries which fice in Aberdeen. The staff include engi-
can charge themselves up by flowing liquids neers, production, sales and assembly test-
over a turbine. ing personnel.
Sending wireless data communications “We’ve got big plans,” says Mr Smith.
through a long well full of fluid is also not “We see ourselves becoming a medium sized
easy. player in 5 years, with 2, to 300 people.”
“There’s high pressure and high tem- The company recently won the Sir Ian
perature,” says Mr Smith. “You’ve got one Wood Award for Innovation at the Grampian
of the most hostile environments in the Business Awards, which are given every year
DEJaugsept08:Layout 1 21/08/2008 15:38
Exploration and drilling
for small and medium sized companies in
Aberdeen district.
Red Spiders does not do any manufac-
turing in house; it is all subcontracted to oth-
er companies, mainly in Scotland.
“We’ve been in companies where
they’ve had in house manufacturing facili-
ties, and it can become a beast that needs to
be fed,” he said. “It tends to become a busi-
ness within a business and something where
the team have limited experience in running.
So we made a conscious decision not to go
down that route – leave it to the people who
are experts at it”.
Third party manufacturers can often
manufacture tools as fast as they can be
made in house, he says.
The company may start working with
local manufacturers near its Dubai and Sta-
vanger offices as well.
The eRED
The company’s newest product to the mar-
ket is eRED, a tool which, when installed,
creates a temporary plug to the downhole
flow (ie works like a downhole tap),and is
more easily operated than conventional tech-
nology such as prong and plug.
Engineers might want to temporarily
plug the well while equipment is installed,
tested or changed and the eRED helps them
do that efficiently by removing cost , time
and associated risk.
It was designed to be installed during
a completion or intervention process and re-
moved at the end. However several opera-
tors now intend to use the device for liner
and completion deployment and the leave
the device in situ once it has completed its
purpose. The eRED is powered by a battery
which can last 3-6 months.
The conventional way of installing a
plug is to run the plug body first (with a hole
through the middle) in the one trip, and then
do a second trip to drop a prong (a vertical
metal bar with seals) through the middle of
the plug, to block flow through the tubing.
With the eRED, all of this can be done
in one trip; the device is run on the plug body
and deployed into the well. open or closed
The eRED can be programmed to open
and close after a specific time interval, or
when the pressure above or below it reaches
a certain point. You can also send it com-
mands from the surface to open and close,
by adjusting the pressure of the fluid in the
tubing above it.
So, for example, it can be programmed
to open when the pressure applied above the
device has been between two pressure val-
ues for a certain amount of time.
The aim is to help companies cut back
on rig time. For example, a normal operation
Page 7
www.senergyltd.com
Michael Christie with the eRED
to install a plug will take 6-12 hours, at rates
of as much as $400,000 per day these opera-
tions can become very expensive, and the
risk increases with the complexity of the job.
The tool has its own onboard comput-
er, which can store well data such as time,
temperature and pressure, above and below
the seal. This data can be downloaded once
the unit is retrieved.
It has been tested in temperatures of 0-
125 degrees, differential pressure of up
to10,000 psi, and operating with sand and
debris packed above the seal
“Originally it was just going to be an
open and close device, but people said, can
you do this, can you do that,” says Mr Smith.
“We ended up with a dozen different appli-
cations that we never thought of and as a
consequence have made the tool multi open
and close to accommodate them.”
Tasks which might need a temporary
block to flow include installing a blow out
protector, setting a production packer, test-
ing tubing, isolating zones for testing, firing
perforating guns, pressure testing a well be-
fore fracing, isolating and opening multilat-
eral legs.
Red Spider sees eRED as a first step to-
wards making devices for the well which can
receive commands to open and close from
the surface.
Red Spider aims to eventually integrate
the eRED with wireless and acoustic com-
munications technologies, which can send a
command to the valve to open and close
from the surface, or upload the data.
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DEJaugsept08:Layout 1 21/08/2008 15:38 Page 8
Exploration and drilling news
Stingray fibre-optic monitoring goes
deepwater
www.stingraygeo.com
Stingray Geophysical will be conducting a
deepwater field test of its fibre-optic reservoir
monitoring solutions during the second half of
2008 jointly with Bergen Oilfield Services.
This is part of a project to commercialise
Stringray’s seabed fibre optic seismic reser-
voir monitoring system, sponsored by BP,
ConocoPhillips and StatoilHydro.
Schlumberger’s Carbonate Advisor’
analysis service
www.slb.com
Schlumberger has released a new ’Carbonate
Advisor’ analysis service, which provides a
systematic analytical framework to deliver a
comprehensive petrophysical evaluation of
carbonate rocks, including a petrophysics
analysis and a productivity analysis.
The system integrates information from
magnetic resonance and elemental capture
spectroscopy, logs and core data, to produce a
single, complete formation evaluation of car-
bonate reservoirs.
In field tests in a wide variety of carbon-
ate reservoirs, relative permeability and water
saturation measurements from Carbonate Ad-
visor matched discrete core analysis data.
These continuous measurements permitted a
more accurate prediction of fluid flow leading
to better production performance, said
Schlumberger.
Hess to use range of Schlumberger
software
Hess Corporation of New York has signed an
agreement with Schlumberger to use a range
of its geological, geophysical, reservoir engi-
neering, economics, drilling, and production
software.
Hess will deploy GeoFrame reservoir
characterisation, Petrel seismic to simulation,
ECLIPSE reservoir simulation, Merak project
economics, and OFM and Drilling Office soft-
ware.
The agreement includes data manage-
ment services and enhanced application and
workflow support worldwide.
Schlumberger acquires Integrated
Exploration Systems
Schlumberger has acquired Integrated Explo-
ration Systems (IES), a supplier of petroleum
systems modeling software and services for the
exploration and production industry.
IES specialises in the modeling of the gen-
eration, migration and entrapment of oil and gas
using the industry-leading software PetroMod.
The technology is used to estimate undis-
covered hydrocarbons in frontier basins and to
enable oil and gas companies to mitigate risk in
exploration prospects.
IES employs 40 people, most of whom are
in Aachen, Germany. The Aachen location will
become a Schlumberger Center of Excellence
for Petroleum Systems Modeling.
IES expertise will be combined with West-
ernGeco and Schlumberger technology to give
customers a fully integrated exploration service.
The company said the combination of sur-
face seismic data with Schlumberger measure-
ment technologies, integrated with petroleum
systems modeling from IES and other risk man-
agement technologies, would lead to reduced
uncertainties and enable customers to better
manage their exploration risk.
Wavefield Inseis to conduct large 3D
seismic survey for BP Libya
www.wavefield-inseis.com
Wavefield Inseis has received a letter of interim
arrangement from BP Exploration Libya Ltd.
for one of the world's largest 3D seismic acqui-
sition and onboard processing contracts ever to
be awarded.
The survey, which will take place in
Libya's offshore Sirt basin, will be acquired with
Wavefield's latest 3D vessel Geowave Endeav-
our and is expected to take approximately 1 year
to complete.
According to the company, the contract
will incorporate the industry's largest ever on-
board processing project that includes SRME
(surface related multiple elimination) and full
Pre-Stack Time Migration.
Paradigm donates software to South
Korean University
www.pdgm.com
Paradigm SeisEarth Next Generation
Interpretation
Paradigm has donated its SeisEarth and GO-
CAD reservoir engineering and seismic inter-
pretation applications to the department of geol-
ogy at Kyungpook National University (KNU)
in South Korea.
The software will be installed on two
workstations within the department of geology,
giving students hands-on experience with Para-
digm software.
SeisEarth is a multi-survey seismic inter-
pretation solution for volume interpretation,
H111 08
DEJaugsept08:Layout 1 21/08/2008 15:38 Page 9

accuracy

“ We not only avoided

obstacles—we dramatically
increased reservoir contact.”

risk

Navigate the unknown

without missing a turn.
Our Drill-to-the-Earth Model SM workflow does more than help ensure
precise wellbore placement. It refines earth models to let you adjust well
paths in real time—and maximize reservoir exposure. Change the way you
work: Increase the accuracy of your wellbore placement and reduce the
risk of running into trouble areas.

From exploration to production, the Digital Asset™ environment’s integrated

workflows allow you to fully realize the highest asset performance possible.
For more information, go to www.halliburton.com/digitalasset.

Make decisions. Not compromises.™

© 2008 Halliburton. All rights reserved.

H111 08 DEJ i dd 1 8/14/08 4 06 34 PM

DEJaugsept08:Layout 1 21/08/2008 15:38 Page 10
Exploration and drilling news
reservoir characterisation, reservoir imaging and
well planning.
GOCAD is a solution for reservoir engi-
neering and geologic and seismic interpretation.
Shell, Qatar Petroleum and Imperial
College research carbonate reservoirs
www.imperial.ac.uk
Shell, Qatar Science & Technology Park
(QSTP) and Imperial College London have an-
nounced plans to collaborate on research into
further understanding carbonate reservoirs,
which constitute the vast majority of hydrocar-
bon reservoirs across the Middle East, and CO2
storage.
Researchers will characterise carbonate
reservoirs in detail and develop computer mod-
elling and simulations to establish an in-depth
knowledge of rock structures and the way fluids
like oil, water, and natural gas and CO2 move
within them.
This will improve understanding of how
these rocks trap gas and fluids. With this knowl-
edge, researchers will be able to propose new
CO2 management plans and processes, and
identify suitable carbonate rock formations to
potentially store CO2 emitted from power sta-
tions, the group said.
The venture will be funded by Qatar Pe-
troleum, the Qatar Science & Technology Park,
and Shell, who will contribute together up to
$70 million over a 10-year period.
The aim is to provide the foundation for
new CO2 storage technologies that can be ap-
plied in Qatar, elsewhere in the Middle East and
beyond.
Hess contract for Paradigm
www.ggs-spectrum.com
Hess Corporation has signed a multiyear con-
tract for Paradigm software, training and onsite
consulting services for its exploration and pro-
duction operations worldwide.
Paradigm will provide a its suite of geo-
physical and petrophysical applications for
workflows, ranging from seismic data process-
ing, imaging and petrophysical analysis to stan-
dard and advanced geophysical subsurface data
interpretation and formation evaluation.
Paradigm will provide training, both on-
site and from regional Paradigm support cen-
ters, as well as onsite application support to Hess
Corporation employees, and onsite consulting
services, such as data migration and workflow
best practices.
Landmark launches integrated product
release ’R5000’
www.halliburton.com/landmark
Landmark has made a synchronous software re-
lease, dubbed R5000, which includes upgrades
to more than 70 products spanning multiple dis-
ciplines within the E&P domain.
Applications which have been updated in-
clude DecisionSpace, OpenWorks, PowerView,
GeoProbe, OpenWells, Nexus, and FieldPlan.
The R5000 release is the culmination of a
multi-year integration effort to bring all Land-
mark applications in all exploration and produc-
tion disciplines to a common technology plat-
form.
The release includes a new Software De-
velopment Kit (SDK) to help application ven-
dors to create integration between products to
R5000 solutions and build custom workflows.
Paradigm releases Interpret 2008
www.pdgm.com
Oil and gas software company Paradigm has
launched a new software tool, Interpret
2008, for design and analysis of pressure
transients obtained from a variety of tests on
exploration, appraisal and production wells.
It includes new functionality for per-
forming deconvolution for improved analy-
sis clarity, and a new option for fitting gradi-
ents in multi-session Wireline Formation
Test (WFT) analysis.
The package also offers data compati-
bility with Paradigm Geolog formation eval-
uation software, enabling the sharing of field
and analytical data for improved model con-
struction and deeper analysis of results.
Paradigm releases Geolog 6.7
Geolog 6.7 well module showing new
coherency plot and cross-plot broken down
on a per facies basis
Paradigm has released Version 6.7 of its Ge-
olog petrophysical analysis, well data man-
agement and geological interpretation soft-
ware.
The new version focuses on four areas
of new development: support for the gener-
alist and geologist, improved usability
through newly designed user interface and
workflows, creation of the foundation ele-
ments for 3D petrophysics and development
of additional tools and analysis techniques,
the company says.
It has a new module combiner that en-
ables users to more easily build, execute,
record and play back workflows.
The software strengthens Paradigm Ge-
olog's multilog analysis and rapid quality
DEJaugsept08:Layout 1 21/08/2008 15:38
Exploration and drilling news
control (QC) capabilities with multiple
cross-plot and histogram views and compos-
ite coherency plots and spidergrams, which
are ideal for development fieldwork.
Additionally, Paradigm has extended
the current geosteering solution with 3D
model support and a refresh capability, al-
lowing the drilling engineer to evaluate the
impact of real-time updates on the 3D mod-
el.
Landmark new AssetObserver version
www.halliburton.com/landmark
Landmark has released a new version of its
AssetObserver web-based data monitoring
and integration application, which allows
production experts to access and integrate
data from a range of sources and monitor
complete workflows and assets in real time.
The new version has been integrated
with the IncuityEMI platform, allowing it to
read, update and delete data from almost any
third-party or proprietary data source.
California-based Incuity Software is a
leading provider of business intelligence
software to the manufacturing industry.
AssetObserver is a component of Land-
mark’s DecisionSpace for Production suite,
a production solution that offers integrated
data access, data management, workflow
construction, visualisation, collaboration,
and real-time optimisation.
SMT sales manager
www.seismicmicro.com
SMT, a leading provider of PC-based geo-
physical and geological interpretation soft-
ware, has appointed of Bill Stephenson as
Vice President of Sales, Americas. Mr
Stephenson was previously senior director
of sales at Symantec.
GeoMechanics launches 3D
geomechanics services
www.geomi.com
GeoMechanics International (GMI) has
launched a new service that provides 3D me-
chanical simulations of the stress field
around salt structures.
GeoMechanics says the service avoids
possibly unrealistic assumptions that are of-
ten used for wellbore stability analyses, such
as the vertical stress being a principal stress.
It is therefore capable of providing a far
more reliable prediction of safe mud weights
than a standard analysis, says GeoMechan-
ics.
"Recent application of this service in
exploration wells in the Gulf of Mexico
showed that the prediction of the frac gradi-
ent was significantly improved and the salt
exit location could be optimised from a sta-
bility aspect," said the company.
Page 11
ffA opens new London office
www.ffa.co.uk
ffA, a leading provider of 3D seismic analysis
software and services to the oil and gas indus-
try, has established new office premises in cen-
tral London.
The company says the new office will sup-
port its planned growth, help it to capitalise on
market opportunities and strengthen its cover-
age and support to clients world-wide.
The new office is located in central Lon-
don, just off Trafalgar Square, and will be in full
operation from the 2nd June 2008.
Spectraseis extends collaboration with
StatoilHydro
www.spectraseis.com
Spectraseis, the Swiss-based low frequency
spectral analysis technology company, has
announced plans to extend its technical col-
laboration with StatoilHydro in the field of
low frequency (LF) passive seismic technol-
ogy.
Spectraseis researches and applies tech-
nologies to acquire and analyze low frequen-
cy (<10 Hz) seismic background waves con-
tinuously present in the Earth's subsurface in
order to identify spectral attributes indicat-
ing the likely presence or absence of hydro-
carbons within a survey area.
The collaboration will include the
analysis of passive seismic surveys.
StatoilHydro has also expressed inter-
est in joining a newly formed Joint Industry
Project (JIP) established by Spectraseis and
the Swiss Federal Institute of Technology
(ETH Zurich).
The JIP has been set up to further ad-
vance the understanding of LF passive seis-
mic technology for enhanced applications in
the detection of hydrocarbon reservoirs.
Spec-
traseis has
also ap-
pointed Vas-
sil Bliz-
nakov as
Chief Fi-
nancial Of-
ficer. Mr
Bliznakov
previously
worked for
Schlum-
berger,
where he Spectraseis has appointed
Vassil Bliznakov as Chief
was in
Financial Officer
charge of
the compa-
ny's business in Continental Europe and part
of a management team responsible for a
budget of $400 million over 22 legal entities
in 32 countries, and 1100 employees.
DEJaugsept08:Layout 1 21/08/2008 15:04
Exploration and drilling
Collaborative well planning
A recent conversation with Gary Schottle, drilling and completions director for Landmark, a product
service line of Halliburton, sheds light on how collaborative well planning can help clients efficiently
develop the most productive reservoirs in complex drilling environments such as Colorado’s Piceance
Basin.
Colorado, which is also home to large oil-
shale deposits, has one of the biggest accu-
mulations of natural gas in North America.
Although exact amounts are almost im-
possible to gauge, the 6,000-square-mile
basin is thought to contain at least 200 to 300
trillion cubic feet of natural gas.
Although reserves are enormous, the
Piceance Basin’s sandstone has low perme-
ability and relatively small drainage area, in-
creasing the complexity, difficulty and cost
of development projects in the area.
However, as hydraulic fracturing tech-
nology advances and oil and gas prices rise,
E&P companies are starting to develop the
more unconventional projects that were not
previously economically feasible.
Aside from the technical well planning
challenges, the Piceance Basin presents an-
other distinct consideration – an incredibly
diverse and abundant wildlife population.
This requires operators to minimize
surface disturbance and environmental im-
pacts by limiting the number of pads placed
in each field and by carefully selecting each
pad’s location.
Operations may also have to be restrict-
ed during certain times of the year to accom-
modate breeding or migration patterns.
Optimising field development
In this environment, prolonged well-plan-
ning cycles or well miscalculations can cost
operators millions of dollars. With limited
production intervals, forward-thinking op-
erators are turning to collaborative well
planning to enhance production while re-
ducing drilling, completions and operating
costs.
“In order to optimize production in the
basin, operators may need hundreds, even
thousands, of wells, many of which must be
directionally drilled from existing well pads
to minimize surface land disturbance,” Mr
Schottle explained.
“In our experience in the Piceance and
similar, complex basins, a more comprehen-
sive approach to well planning – one that fo-
cuses on collaboration among the geo-
science and engineering disciplines – allows
operators to quickly create and assess mul-
tiple development options and make proac-
tive decisions during the planning phase,
12 digital energy journal - September/October 2008
Page 12
rather than reactive decisions
after issues crop up, enabling
operators to avoid the ‘build
first and sort out the problems
later’ processes of the past.”
New well-planning tech-
nologies can go a long way to
improve proactive decision-
making, but operators are
finding that the lack of quali-
fied personnel is creating a
knowledge gap that consider-
ably lengthens the learning
curve.
For those that do not
have the personnel resources
to plan and drill a large num-
ber of wells quickly, Land-
mark’s consultants can devel-
op comprehensive plans based
on their extensive experience
in complex, unconventional
Landmark's AssetPlanner software, which can be used to
assets and their knowledge of look atmultiple planning scenarios quickly on a new well.
the company’s software.
“Success in the Piceance
Basin is predicated on imple- Technology and expertise
menting the right processes from the begin-
ning. Our experience in similar, unconven- In the Piceance Basin, Mr Schottle has seen
tional assets has allowed us to develop a time and again how understaffed operators
number of proven methodologies to help op- struggle to plan large numbers of wells.
erators optimize field development,” Mr “In this industry, there is such a short-
Schottle said. age of experienced people, which limits our
“Landmark’s consultants develop com- clients’ capacities to plan properly.
prehensive, technology-independent plans “Considering the volume of wells some
that provide solutions to the issues operators of these operators are planning to drill, you
face and the problems they encounter work- can see how a poorly planned well can
ing in such a complex drilling environment. quickly become a liability rather than an as-
For example, we perform detailed sce- set,” he said.
nario analyses, identify pay zones, optimize “Many of the operators in the Basin are
subsurface and surface facilities, overcome required to drill within a certain period of
challenges and reduce risk. It’s more than time to avoid losing their leases, or alternate-
just the software, although our software is ly, they need to keep their rigs busy or risk
state-of-the-art.” losing them to someone else.
Schottle has seen collaborative well “Landmark’s institutional knowledge,
planning lead directly to more informed de- along with its deep understanding of the
cision-making because it leverages an entire technology operators are using, enables us
asset team’s expertise. to provide end-to-end service by helping our
The approach enables team members to clients assimilate all relevant data, then plan
collaborate using integrated workflows to in a collaborative environment to come up
utilize multidisciplinary data and create safer with the optimal systematic approach to
well plans, reduce nonproductive time and solve these resource issues,” Mr Schottle
compress the field-development planning said.
process. Disparate data and multiple software
DEJaugsept08:Layout 1 21/08/2008 15:04
packages that don’t efficiently talk to each
other have long been issues for operators, but
Landmark’s DecisionSpace® infrastructure
enables operators to establish cohesive
workflows using Landmark products, opera-
tor-created applications and offerings from
other vendors in an integrated data environ-
ment.
The result can lead to improved devel-
opment plans and, ultimately, increased op-
erational efficiencies.
Insight to execution
Landmark’s well planning applications in-
clude AssetPlannerTM software, which looks
at multiple planning scenarios quickly;
TracPlannerTM directional well planning
technology, which fine-tunes processes such
as pad orientation and slot allocations; and
Engineer’s Data ModelTM project database
software which provides a platform for de-
tailed operations and engineering workflows
to plan, drill and service wells.
Rowing across the Indian Ocean
Michelle de Groot, daughter of dGB Earth Sciences president Paul de Groot, is looking for sponsorship for
a row across the Indian Ocean, to raise money for Aqua for All, which provides safe drinking water and
sanitation for the third world.
In April 2009, Michelle de Groot, daughter
of the president of Dutch geoscientific soft-
ware company dGB Earth Sciences Paul de
Groot, is planning a charity row across the
Indian Ocean, which will take 70 to 80 days.
Ms de Groot (22 years old) will row
from West Australia to Mauritius, together
with partner Mark de Vries (27).
The money will be donated to Dutch
charity Aqua for All (www.aquaforall.nl),
which sponsors projects to provide safe
drinking water and sanitation for the third
world, using expertise from the Dutch water
Page 13
Exploration and drilling
Collaborative well planning software
provides 3-D visualization of the subsurface
environment in a system that can capture
and integrate numerous types of data, in-
cluding seismic, logging, surface topogra-
phy, and offset well data -- including non-
productive time and operations data -- then
quickly generate multiple development sce-
narios.
“We offer an integrated data model en-
abling all of the disparate disciplines to see
their information in the same 3-D visualiza-
tion environment,” Mr Schottle said.
“Having access to that information in
one place is critical to communication, col-
laboration and the decision-making process.
“By applying a common well-planning
workflow, engineers and geoscientists bet-
ter understand each other’s constraints and
how they affect well planning.”
With an unconventional and challeng-
ing environment like the Piceance Basin,
operators that take advantage of current
industry.
Members of the charity recommending
council include Thony Ruys (ex-Vice Presi-
dent of the Board of Heineken) and Jacques
Schraven (ex-Chairman of the Confederation
of Netherlands Industry and Employers).
If you might be interested in providing
sponsorship, either through your company as
an individual, you can find out more on the
website www.roeienvoorwater.nl,
click on 'contact' and then send an e-mail us-
ing the form provided.
September/October 2008 - digital energy journal
technology in conjunction with consulting
and infield services to help plan, manage
and execute their plays can expect opera-
tional and financial performances that sur-
pass those who don’t.
“Halliburton Project Management uti-
lizes its technology strengths, expertise and
infrastructure to take the notion of collabo-
rative well planning a step further by pro-
viding differentiated infield services to our
clients.
“We can provide everything from well-
site supervision to integrated services to a
full range of oilfield management services
such as project planning, well construction
and execution, and coordination of procure-
ment and logistics,” Mr Schottle said.
“There is an innate fusion between our
Consulting and Project Management groups
that allows them to work collaboratively
with each other and allows the operator to
realize both technical and financial goals.”
13
DEJaugsept08:Layout 1 21/08/2008 15:04
Exploration and drilling
Lowering the cost of high performance
computing
A new microchip from NVDIA promises to let you have high performance computing in your desktop PC
for under $10,000.
Imagine if high performance computing was
so cheap that you could have your own su-
per powerful computer sitting on your desk,
rather than queue up your high performance
computing jobs in a data centre.
This is getting closer and closer, thanks
to a new microchip being released by Cali-
fornian company NVIDIA.
For £4,000 / USD 8,000, you can install
four NVIDIA graphics processing units
(GPUs) in your desktop computer, which
gives you about 100 times more processing
power than would have been available in a
1990s mainframe computer, which would
have cost $80,000 to $100,000, according to
NVIDIA’s Andy Keane, general manager of
Tesla computing products.
You can even install them in your lap-
top (although it is 10 inches by 4 inches in
size, there is probably a limit to how many
you can fit in).
Some users are thinking about switch-
ing off their data centres, because people
have enough computing power on their
desks to do what they want now, Mr Keane
says. “The GPU is a room sized computer
in one chip.”
Many people in the oil and gas indus-
try believe that if they had better access to
faster computers, they could probably find
more oil and gas, according to a recent Mi-
crosoft survey; but they haven’t been given
access to it, presumably because a decision
was made that the outcome would not justi-
fy the expense.
But if the expense reduces, then the de-
cision to provide high performance comput-
ing gets much easier.
Steve Purves, technical director of ffA,
a company which provides high performance
seismic analysis software, observes that
there seems to be a psychological bar at
around $10,000 / £5,000 at many oil and gas
companies for a personal high performance
computer. If the price drops beyond that lev-
el, the decision to give someone their own
powerful computer seems to get much easi-
er.
“Not everyone is going to get a
$100,000 computer,” says Mr Purves.
By having faster computers, you can
see your results straight away, rather than
create processing jobs, send them to a cen-
tre, and have a look at the results a few hours
14 digital energy journal - September/October 2008
Page 14
later. You can create views of the subsurface
which you can walk around and look at from
different angles, rather than wait several
hours for the computer to draw a new view.
And besides, everybody knows what is
going to happen to the amount of data peo-
ple have to deal with in coming years – it
will grow exponentially. That means we will
need faster and faster computers to deal with
it.
“Oil companies are trying to scale up
exploration – and this means processing
more data and generating more prospects,”
says Mr Purves. “That’s where software
tools come in.”
The amount of information continues
to increase, as resolution of surveys increase.
“Interpreters will need to find a way to deal
with it,” he says.
Mr Keane observes that big computing
centres have got bigger and faster over the
past few years, and mobile phone technolo-
gy is also racing ahead, but technology for
the humble workstation has not moved so far
ahead.
Latest chips
The latest chip to be launched is the Tesla 10
series.
The Tesla T10P processor has 1.4 bil-
lion transistors, 1 teraflop of processing
power (double the speed of its previous chip,
the Tesla 8), and 240 processing cores.
It has 4 GB of memory (compared to
1.5 GB on the Tesla 8).
The standard computer package is 1
unit in size and contains 4 GPUs, so you get
4 teraflops altogether 16 GB of memory, and
960 cores. It uses just 700W. A single GPU
will use just 160 W.
The previous chip, the Tesla 8, was
launched in late 2006.
The chip has been widely used in many
different applications, including medical im-
aging, astrophysics, weather forecasting,
clothing design and finance. The US Nation-
al Center of Atmospheric Research believes
it can halve the time taken to make a weath-
er forecast using the chips.
It can perform many different tasks in
parallel, something that can’t be done on a
standard central processing unit (CPU) you
might find on your normal desktop.
You have to write code especially for
The NVDIA Graphics Processing Unit (GPU):
turns your laptop into a supercomputer
the chip, but it uses standard coding lan-
guages, such as C. “We stick to the language
standards everyone knows,” says Mr Keane.
It is possible to have a GPU and CPU
on the same computer, and then use them
separately – the GPU for special tasks, and
CPU for general running of the computer.
Big computing centres
If four GPUs in your desktop is not
enough and you want to build a computing
centre, you will get much more processing
for your dollar, and kilowatt, by using GPUs
than standard CPUs (as found in most PCs
and servers).
US financial consultancy Hanweck es-
timates that 12 GPUs would have equivalent
processing power to 600 CPUs, but take up
just 6 units of rack space (compared to 54).
The hardware would cost $42,000, instead
of $262,000, and have an annual cost of
$140k instead of $1.2m (calculated on a stor-
age cost of $1,800 per unit per month, for
rack and power charges).
Using its 12 GPUs, Hanweck Associ-
ates regularly scans the entire US options
market in under 10 milliseconds, something
which would normally take 60 traditional 1
unit servers, the company believes.
If you want to build a 100 teraflop data
centre, you could do it with 1429 CPU
servers, each providing 0.07 teraflops, with
four teraflop CPUs in each one (at estimated
cost of $3.1m and power consumption of 571
Kw); or you could do it with 25 servers each
with 4 GPUs, providing 4 teraflops per serv-
er, with a total cost of $310,000, and total
power consumption of 27kW.
There is also a physical limit to how
fast you can get using CPUs, because the
time taken for all the communications be-
DEJaugsept08:Layout 1 21/08/2008 15:04 Page 15

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Exploration and drilling
tween the chips weighs things down. With
GPUs you can get much faster.
Computer games
NVIDIA started life as a manufacturer of
chips for computer games – in 1995 it made
the graphics card for Sega Saturn gamepads.
Computer games and subsurface simu-
lation have plenty of things in common.
Both create a simulation of the real
world; both generate images in 3D; and both
have plenty of real time interactivity.
Many geophysicists and geologists
have spotted that their children have more
powerful computers in their games consoles
than they do at work.
A lot of seismic modelling is still done
in 2D slices, to reduce the amount of com-
puter power needed. “It’s that mainframe
mentality,” says Mr Purves.
ffA
ffA, which does 3D seismic analysis soft-
ware, is working together with NVIDIA to
develop high performance computing capa-
bilities for its seismic volume imaging and
3D visualization software SVI Pro.
Oil and gas customers include Hess,
Total, CGG / Veritas, Headwave, Acceler-
ware, and Seismic City.
ffA believes that the computational per-
formance will help improve its workflows
for seismic volume interpretation.
At ffA, the computer chips are being
Texas Instruments - new projector chip
Texas Instruments has launched a new projector chip, which can create much clearer and brighter
projections than others on the market, the company claims.
Texas Instruments has launched a new high
resolution projector chip – called WUXGA
with a resolution of 1920 x 1200 which is
higher than full HD, with its 'Digital Light
Processing (DLP) technology, which can
provide much clearer images in oil and gas
collaborative working centres, and also head
much less maintenance than other chips on
the market.
It should help companies create much
more appealing large displays, which are
more pleasant to look at, and which can con-
vey more information, more clearly, and
which can combine many different images
and windows on the same screen.
The image is created inside the chip,
and then the hardware around it projects the
image onto a display.
The technology is capable of using up
16 digital energy journal - September/October 2008
Page 16
used to put to-
gether 3D im-
ages, working
on data sets as
much as 200gb
at once.
ffA makes
software which
can extract
faults and com-
plex structures
in the data, so it
needs all the
data processing
it can get. It
works on the
post stack seis-
mic data.
Using the
new chips, it A screenshot from ffA’s advanced seismic volume imaging and 3D
can provide re- visualisation software SVI Pro, which will use NVIDIA CUDA to deliver
al time process- enhanced performance
ing – in other words, the user can see the re- the chip is its scalability – you can start with
sults of what they are doing straight away, one, and then add more and more as your
rather than send the data to a processing cen- needs increase.
tre and wait a few hours. “We can get the re- He also likes the flexibility- software
sults in front of the user in real time,” says which runs on NVIDIA chips can also run
Mr Purves. “We want to hide the comput- on other chips. “We’ve always been cautious
ing.” about locking ourselves into hardware,” he
Or, as NVIDIA’s Mr Keane says, “It’s says.
like the difference between looking at the “We will develop for this quite aggres-
photo and looking at a movie.” sively over the next 18 months,” says Mr
ffA has been recommending that its Purves. “This computing capacity is a way
customers install NVIDIA chips for 5 years. to design software differently. It will change
Mr Purves says that what he likes most about the way you do your work,” he says.
to 6 colours, instead of the standard 3 colours
used on most of projectors - it has yellow,
cyan and magenta in addition to the normal
red green and blue.
"That lets us do more accurate and
more colourful image," says John Reder of
Texas Instruments. "This is an approach
many of the highest photo printers use."
The projector also has the best contrast
ratio, he says.
Another advantage is that projector
cooling system does not have any filter, and and goes out of the top of the chip, so it can
so no filter cleaning is required; standard be cooled from the bottom.
projectors recommend that the filter is "With other display technologies, the
cleaned every 100 hours of use, which can light passes through the chip, so you have to
be a hassle. blow air through the chip to cool it," he says.
The projector avoids the need for filters WUXGA projectors based on DLP
by sending the cooling air along a different technology available now are projection de-
path. Light comes in at the top of the chip sign F10 and projectiondesign F30.
DEJaugsept08:Layout 1 21/08/2008 15:04 Page 17
DEJaugsept08:Layout 1 21/08/2008 15:04
Oil and gas production news
Halliburton acquires remaining shares
in WellDynamics
www.halliburton.com
Halliburton has reached an agreement with
Shell Technology Ventures Fund 1 B.V. to
acquire its 49 per cent interest in intelligent
well company WellDynamics.
This means that Halliburton, instead of
owning 51 per cent of WellDynamics, will
own the company outright.
WellDynamics has approximately 510
employees with principal offices in Houston,
Texas, and Aberdeen, U.K. Its SmartWell
technology has been deployed in over 300
wells worldwide.
WellDynamics has already combined
SmartWell with the WellSolver software de-
veloped by Halliburton’s software division
Landmark, which can be used for modeling
the reservoir. By using SmartWell and Well-
Solver together, you can model and optimise
the well continually.
Invensys supplies equipment to
University in Kazakhstan
www.invensys.com
Automation company Invensys Process Sys-
tems (IPS) has agreed to provide equipment
to the Kazakh-British Technical University
in Kazakhstan, to help engineers learn how
to use automation equipment. It will fully
equip a technical laboratory to use InFusion,
its Enterprise Control System.
It will provide twelve personal comput-
ers, fifteen large-screen monitors and three
servers, as well as a bank of micro con-
trollers for automated systems.
IPS has also agreed to fund a perma-
nent Chair of Computing and Software at the
university.
IPS now has offices in both Almaty and
Atyrau, Kazakhstan, and its goal is to ensure
that by 2010, more than 80 percent of its em-
ployees in Kazakhstan will be Kazakh na-
tionals.
LIOS Technology 5 Year Shell DTS
contract
www.lios-tech.com
LIOS Technology has secured a 5 year con-
tract from Brunei Shell Petroleum the Far
East to supply its Distributed Temperature
Sensing (DTS) systems for downhole well
monitoring using fibre optics.
The contract was awarded after a 2 year
field evaluation period.
The technology can be used to continu-
ously monitor temperature in the wells, en-
abling full coverage of complex and multi-
lateral wells with a single optical fibre ca-
ble. The data can be sent from the well in
WITSML format, so it can integrate easily
with data collection and archiving systems.
18 digital energy journal - September/October 2008
Page 18
Test your data management maturity
with Paras
www.paras-consulting.com
UK oil and gas consultancy Paras has
launched a free online data management ma-
turity assessment tool.
Users are presented with a series of
questions about how good their data man-
agement is. From the answers, Paras will tell
you how good your data management is
compared to the industry average, and which
areas you are particularly strong or weak at.
The tool is part of Paras’ new website,
which includes a range of case studies, pa-
pers and past presentations.
CriticalControl integrates gas
production databases
www.criticalcontrol.com
Canadian gas database company Critical-
Control Solutions has announced plans to in-
tegrate together its three databases of gas
production information, ScanGas, Netflow
and ProTrend, into one database called
ProStream.
By the end of 2008, the ProStream
database will contain production data asso-
ciated with more than 100,000 measurement
points making it the largest consolidation of
measurement data in Canada, the company
claims.
ScanGas is a measurement and analy-
sis service used by gas producers to deter-
mine their gas production from gas wells
which are monitored using gas chart
recorders;
NetFlow is a web based measurement
and control application is used to track gas
production and manage electronic devices at
gas wells which are monitored using elec-
tronic flow measurement devices.
ProTrend is validation and analysis
service, is used to manage gas composition
data associated with gas wells and other
measurement points.
Merrick releases new eVIN version
www.merricksystems.com
Houston oil and gas technology company
Merrick Systems has launched a new version
of its field data capture system, eVIN 2008,
which is used for capturing daily well infor-
mation on approximately 25% of the produc-
ing wells in the United States and 15%
worldwide.
Pocket PCs are used to capture field da-
ta with error checking, data validation and
graphing built in.
Using can link with any external data-
base in the office in addition to the core ta-
bles associated with production accounting
systems.
eVIN allows field operators to compare
on a daily basis actual versus forecasted per-
formance of a particular tank battery or gas
meter, validating the forecasting process and
allowing for adjustments in order to reach
production targets.
The new application, eVIN 2008, is
currently being deployed at Exco Resources
(XCO), a Dallas based independent oil and
gas production company with approximately
15,000 active wells in the United States.
Exco is using a combination of hand
held and Tough Book PCs running eVIN for
over 300 pumpers on a daily basis.
Absoft sets up oil and gas practice
www.absoft.co.uk
Aberdeen
SAP consul-
tancy Ab-
soft has es-
tablished a
new busi-
ness prac-
tice dedicat-
ed to the
North Sea
oil and gas Don Valentine, head of
industry. Absoft’s new oil and gas
The business practice
company
has always done a lot of work with the North
Sea oil and gas industry, but now it will serve
the industry with a dedicated team.
The head of oil and gas is Don Valen-
tine, who has spent the last 10 years imple-
menting SAP in the oil and gas industry.
As part of the move, the company has
set up a dedicated training facility at its
premises in Bridge of Don, Aberdeen.
StatoilHydro uses OSISoft in
‘Operation North’
www.amitec.no
StatoilHydro has agreed to use OSIsoft’s PI
information management system on its ‘Op-
eration North’ area, which includes a num-
ber of fields in the Norwegian Sea and Bar-
ents Sea, 20 per cent of its total Norwegian
production.
PI will be installed and implemented in
conjunction with the production stop at
DEJaugsept08:Layout 1 21/08/2008 15:05 Page 19

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Oil and gas production news
Kristin/Tyrihans in September/ October this
year, followed by implementations at Åsgård
A, Åsgård B, Norne and Heidrun fields. The
contract has an option for two more fields,
and the frame agreement is valid for four
years with an option for a six year extension.
The data from all of the oilfields will
be handled by one large server, instead of
one server per asset, as in previous similar
implementations, in order to reduce the ad-
ministrative burden.
The software was supplied by Amitec
of Norway.
The software can be used to gather,
store, structure, distribute and present the re-
al-time information to the various applica-
tions and disciplines.
StatoilHydro will use the software to
increase collaboration between different dis-
ciplines offshore and onshore, through bet-
ter use of real-time data and integrated oper-
ations.
Expro acquires CiDRA Corporation
www.exprogroup.com
Expro International Group has agreed to ac-
quire the oil and gas metering business of
CiDRA Corporation, based in Connecticut,
for USD $60.5 million.
The new business will be called Expro
Meters, and will develop, manufacture and
sell a range of flow meters for the oil and gas
market, in addition to providing production
testing services on a rental basis.
The non-intrusive, clamp-on design of
the flow meters enables them to be deployed
on new or existing installations, and helps to
lower both the technical risks and operating
costs associated with flow measurement,
says the company.
Broadpoint appoints CapRock presi-
dent as CEO
www.broadpointinc.com
Oil and gas communications company
Broadpoint has appointed Errol Olivier as its
new President and CEO, following his retire-
ment from a 17-year career at satellite and
telecommunications provider, CapRock
Communications, where he served as presi-
dent and COO.
At CapRock, Mr Olivier led the com-
pany’s return to private ownership, leading a
buyout from owner McLeodUSA. He went
on to grow the company’s revenues by more
than 400 percent in recent years, leading
business units operating in North America,
South America, Asia, Africa, and the United
Kingdom.
He also previously served as the vice
president of CapRock’s enterprise business
group, managing sales and marketing for all
of the company’s strategic markets. During
20 digital energy journal - September/October 2008
Page 20
his tenure he pioneered the first successful
multi-tenant maritime satellite telecommu-
nications business strategy in the Gulf of
Mexico and expanded it globally.
Schlumberger acquires exclusive
rights to BabelFish
www.slb.com
Schlumberger has acquired exclusive distri-
bution rights in the upstream oil and gas in-
dustry for the BabelFish production integra-
tion software from ISS Group, Australia.
BabelFish is a framework that enables
integration of diverse data from many differ-
ent systems, such as production operation
systems, field equipment and management
applications.
The software displays the data in a use-
ful way, to mirror the organisation’s opera-
tional environment. This means that produc-
tion engineers and managers can monitor
and adjust operations systems.
The BabelFish tool works well togeth-
er with Schlumberger’s Avocet production
data management, surveillance, analysis and
modeling solutions, the company says.
Moblize launches WITSML data server
www.moblize.com
Moblize, a Houston company specialising in
real time collaboration services for oil and
gas, has launched a new software solution for
collecting and managing data from oil and
gas wells, in standadrd formats such as
WITSML.
The software, called DARP (decision
and results with Peer), collects and stores re-
al time and historic data in variety of formats
(like WITSML, WITS, LAS,Modbus, csv,
text, OPC) from multiple vendors.
The software runs on a special comput-
er in a box unit, which can be located at a rig,
on producing wells or in the office. The soft-
ware has an analysis tool to assess the quali-
ty of the data.
The data can be accessed using any
WITSML compliant data viewer or interpre-
tation system whether at rig site or office lo-
cation.
WITSML, which stands for Well Infor-
mation Transfer Standard Mark-up Lan-
guage, is an emerging standard format for
communicating real time well information
back to company offices and now being
adopted by BP, Statoil, Shell, Total and oth-
ers.
Information which can be communicat-
ed by WITSML includes SCADA (automa-
tion) data; logging while drilling; measuring
while drilling; mud logging, and data from
field devices and maintenance systems.
By using this software, it should be eas-
ier to enhance interoperability between the
variety of expert interpretation software
packages, and to avoid being tied into soft-
ware products from a single manufacturer,
says Moblize CEO Amit Mehta.
Tundra licenses DO2 Technologies for e-
invoices
Tundra Oil & Gas Partnership (Tundra) has
signed a multi-year agreement to license so-
lutions to automate and streamline its invoic-
ing and accounts payable processes from
DO2 Technologies (DO2), a provider of elec-
tronic invoicing technology.
Tundra Oil & Gas Limited is a private-
ly owned company based in Winnipeg, Cana-
da, with oil production in Manitoba and
Saskatchewan.
Tundra selected DO2's electronic in-
voicing applications to automate its invoic-
ing process and provide additional value in
the areas of automated price reconciliation
and early payment discounts, the company
said.
Tundra and DO2 will begin implemen-
tation of a broad suite of DO2's products that
provide functionality for not only electronic
invoicing, but also the management of paper
invoices (scanned invoices) within the elec-
tronic invoicing workflow, the management
of early payment discounts, and the reconcil-
iation of invoices against contracted prices.
DO2's platform, OpenInvoice, auto-
mates the process of invoice generation, re-
ceipt, adjudication and approval, and stream-
lines traditional labor-intensive paper-based
workflow processes.
Tundra also licensed OpenInvoice Ear-
lyPay, which integrates with OpenInvoice to
allow users to identify and manage invoices
that are subject to earlypayment terms.
Additionally, Tundra also licensed
OpenInvoice Pricebook, which automatically
compares contract terms to every line item
on incoming invoices to ensure proper pric-
ing, and OpenInvoice Image, which manages
scanned paper invoices and fully electronic
invoices through the same workflow, provid-
ing a completely paper-free environment.
Roxar completes four-year software
deal with StatoilHydro
Roxar has signed a Letter of Intent (LOI) for
a four-year global software contract for the
full suite of its reservoir modelling solution,
IRAP RMS, with StatoilHydro.
The contract, valued at approximately
US$5.9 million (NOK 30 million) per annum
is one of the largest ever contracts for Rox-
ar's software division.
Roxar has previously held software
agreements both with Statoil and Hydro, and
the new contract represents an annual rev-
enue increase for Roxar of about 10%.
DEJaugsept08:Layout 1 21/08/2008 15:05
Caesar Systems – helps you make
decisions
Houston software company Caesar Systems has software to help oil and gas exploration and production
companies solve their toughest challenge – good decision making
Houston company Caesar Systems has re-
cently launched a new version of its Petro-
leum Ventures and Risk business simula-
tion software (PetroVR), which helps staff
at oil and gas companies prepare analysis
for decision-making, integrating a wide
range of different input data, and involv-
ing all of the expertise in the company.
The Caesar Systems software is, the
company believes, different to other deci-
sion assistance software in the market, be-
cause of the integration of a wide range of
data inputs it can do.
For example, the Caesar Systems
software can crunch data about the subsur-
face, with data about the surface, such as
about facilities, drilling, tax, contracts,
deal terms, and also different possible
causes of downtime, catastrophic events.
Many Digital Energy Journal readers
will have seen software which helps make
relatively simple decisions using proba-
bilistic analysis, or ‘what-ifs’ (ie – how
your yearly profits will change if the oil
price drops to $80).
Many companies restrict themselves
by modelling their businesses too narrow-
ly, the company believes.
“A lot of the companies approach de-
cision making from the perspective of hav-
ing a lot of different parts and summing
them up,” says CEO Victor Koosh. “The
problem with that approach is you don’t
see the interdependencies between the
parts.”
“What we’re helping to do with the
software is structure that complexity – and
giving ways to visualise and inspect, so
people can find out and understand the op-
tions,” he says.
“We could have a reservoir engineer
talking to a facilities engineer, saying if we
use this different design, maybe our pro-
duction can be lower, but our metrics are
going to be better,” he says. “So can we
spend the money in this particular way. By
doing this type of analysis – you are able
to increase your confidence.”
It can be used to plan specific fields,
or work out strategies for particular coun-
tries, or how to enter new businesses.
Page 21
Oil and gas production
Users can plug in data from a range
of different areas, including the subsur-
face, surface infrastructure, and capital, or,
as the company puts it, the ‘entire oppor-
tunity lifecycle’. Using all of this differ-
ent data, users can put together different
scenarios and compare them.
The system integrates with some oth-
er software packages including reservoir
simulators.
The first step of using the tool is to
decide which questions you want to an-
swer.
The software will then help you put
together different scenarios, of possible
answers to the question, depending on
what happens to different variables. You
can get answers, such as the maximum ca-
pacity you can get, and what impact dif-
ferent constraints (e.g. a shortage of staff)
could lead to.
This will help you plan the system so
Making software to help with decision
you maximize your flexibility. making - Victor H. Koosh, Chief Executive
The software does not necessarily Officer of Caesar Systems
aim to come up with a single perfect an-
swer; instead it aims to help provide infor-
mation which people can use to understand on capital employed and other metrics as-
the situation better, and have more confi- sociated with our investment profile.”
dence in their understanding, which they “As we are gearing up because of the
can then use in their decision -making. high energy demand – the pressures on un-
The software is perhaps not the best derstanding and creating the effectiveness
tool to use for a purely technical decision, and efficiency are going to continue to in-
but most major decisions in the industry crease.”
come to taking a comprehensive view on “The total capital spend is signifi-
future financial / political / chance factors cantly increasingly.”
(e.g. tax, costs, prices, weather, accidents,
political problems), as well as estimations Company
of likely production made on a fairly rudi- Caesar Systems has grown from having ten
mental level. employees just 2 years ago to having 30
now. The company was also a finalist in
Managing capital better the Platts risk management award last
Many people believe that the oil and gas year. “We’re taking our business to a new
industry could manage its capital much level,” says Mr. Koosh.
more effectively; it just hasn’t had the The software company was founded
right tools and methods to do it. in 1996 by a petroleum engineer named
“There’s been a huge pent up demand Jerry Blinten, who was familiar with many
for an integrated approach to understand- of the difficult decisions that people at oil
ing our business,” Mr. Koosh believes. and gas companies have to make.
“The industry hasn’t been a centre of Mr Blinten had been involved in proj-
excellence around capital management,” ect evaluations around the world, includ-
he says. “We’ve been beaten up on return ing the Permian Basin, Gulf Coast, North
September/October 2008 - digital energy journal 21
DEJaugsept08:Layout 1 21/08/2008 15:05 Page 22

Oil and gas production

Sea, West Africa, Gulf of Suez, Arabian
Gulf, and the former Soviet Union, work-
ing with Schlumberger and Amoco.
Mr. Blinten had become quite famil-
iar with the risks associated with major
projects, and started developing a software
tool which could be used to automatically
analyse the risks, considering the most im-
portant exploration, engineering and finan-
cial uncertainties, to enable the evalua-
tions to be made faster, better and more ac-
curately.
After creating the first software tool,
called Petroleum Ventures and Risk
(PetroVR), the company went on to create
a range of different tools for petroleum
managers, geoscientists, engineers and
economists.
What he created is, in effect, not one
tool, but a range of different tools which
can be used to perform a wide range of dif-
ferent analysis.
Now, most of the world’s oil majors
are using the software, including
Anadarko, BHP Billiton, BP, Chevron,
ConocoPhillips, Murphy Oil, Occidental
Oil & Gas, PDO, PFCEnergy, Pioneer Nat-
ural Resources, Shell, Sonatrach, Total and
TransMeridian.
It is currently helping two companies
allocate around $100bn of investment.
Consulting support
Caesar Systems does not pretend, as many
other software companies do, that its soft-
ware is so simple you can take it out of the
box and it will immediately give you a big
range of useful data.
“There’s no question that we have to
educate our customers as to how to use the
tool set – it’s only as good as the use you
make of it,” he says.
The company has been recruiting a
number of specialist consultants, who can
work with customers and help them to get
the most out of the software – and this is
one of the fastest growing parts of the
business.
These consultants “are all top notch
E&P professionals who understand the
challenges of the industry- people who
have worked in O&G solving these prob-
lems and trying to come up with solu-
tions.”
The consultants help train the cus-
tomers “in how to use the tool set most ef-
fectively,” he says. “They work with them
to understand their problems and chal-
lenges – to help them come up with cre-
ative solutions.”
“It gives us the ability to then trans-
form our client companies and implement
The "Monte Carlo on Scenarios" feature, new in PetroVR version 6.1, illustrates comparison of
probabilistic results from multiple scenarios, ensuring compatibility among the scenarios.
Graphical displays show probabilistic differences between scenarios that reveal the statistical
density.
the best practises that we’ve all been de-
veloping.
Version 6.1
The company launched version 6.1 of its
Petroleum Ventures and Risk business sim-
ulation software in February 2008, with a
number of new features.
The new version has functionality for
users to do Monte Carlo simulations on its
scenarios, so it can work out the probabil-
ity of different outcomes.
There is a new ‘simple rig mode’ that
can do a quick ‘first pass’ assessment of a
rig scenario without complete definitions.
There is a way to display decision
trees, which show the path the decision
should make.
Improved communication
Many customers find that by using the
software they can improve internal com-
munications.
There are often very complex deci-
sions which need to be made in a project,
involving competing interests (such as in-
creasing potential upside, decreasing risk,
decreasing spend).
The Caesar Systems software can dis-
play these complex choices as graphs
which people in the company can look at
together; this can be a much better way of
resolving conflicting interests than having
a meeting with the different parties, when
the person with the best personal commu-
nication skills often wins.
“We often have hundreds of users
with a given company,” he says. “You
have different people working on the dif-
ferent tools and they all come together. Or
you can have people from different places
using the same tool.”
Decisions often tend to come down to
complex trade-offs (for example over risk
and potential return), but using the soft-
ware tools can make this much easier to
see clearly.
“You can choose to do many things –
whatever you choose to do has conse-
quences – understanding how your choic-
es impact the consequences is the key to
success.”
“You’re then able to put management
in place – to attempt to get the optimal, or
get as close as possible to your desired
outcome.”
“When you come up with the scenario
jointly – that’s a much more powerful
methodology – than individuals coming up
with the pieces,” he says.
Some companies build workflows
around the software, so a range of differ-
ent people involved in a decision making
process are given specific tasks to com-
plete, questions to answer, or information
to look at, and ‘gates’ which need to be got
past for the project to progress.
The Caesar Systems software can be
adapted to accommodate these work-
flows.

22 digital energy journal - September/October 2008

DEJaugsept08:Layout 1 21/08/2008 15:05 Page 23

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DEJaugsept08:Layout 1 21/08/2008 15:06
Oil and gas production
Splitting up the allocations
Working out who should get what out of the returns on an oilfield can get very complex, when you have
lots of wells, lots of investors, and complexities such as gas being used for lift as well as being produced.
EnergySys has developed software which should make it easy to manage.
When you have one well and two owners
with a 50 per cent stake, it is relatively easy
to work out how much each one gets – you
just divide the profits by two.
But if there are more wells, more own-
ers, stoppages to production, and lots more
complexity, for example gas being used to
provide lift to the oil production, as well as
being produced, then it rapidly gets too
complicated to work it all out manually. Fur-
ther, there’s a need to keep all of the histor-
ical information and audit trails.
UK company EnergySys has launched
a new version of its software tool, ENER-
GYSYS 4, which aims to make it easy to
keep track of and report product ownership.
The software understands who owns
what percentage of each well, and also
knows how much each well is producing
every minute of the day, so it can calculate
how much money needs to be paid to in-
vestors.
You can get different views on the da-
ta, for example see how much production
there has been from one field incorporating
a number of different wells, or seeing how
much production should be allocated to in-
dividual investors on different days.
The software also has functionality to
work out how performance will change in
the future for different partners, based on
anticipated decline rates.
Put it on the web
The software is also available on the inter-
net, so you can give your partners a login
and they can see at a glance how much prod-
uct they’ve been allocated, and how the
amount has been calculated, to save you
having to explain it to them with long tele-
phone calls.
You can give your partners rights to see
(and edit) whatever parts of the system you
want them to see.
The cost for this service is £500 per
user per month, including support and up-
grades, with all of the software hosted on-
line and full data backup.
Alternatively users can host the system
themselves; in which case, EnergySys will
provide an appliance with all software and
hardware ready set up, all they have to do is
switch it on and plug it into their network.
EnergySys offers to upgrade to all the
24 digital energy journal - September/October 2008
Page 24
hardware every three years, and can also up-
grade the software remotely if the customer
gives EnergySys permission.
Using it yourself
The software also has sophisticated report-
ing functions, which should be useful for the
company operating the field.
There are tools to put together a range
of different graphs. You can also set up reg-
ular reports to be sent to you by e-mail.
The software will also put together
standard documents for regulators, in exact-
ly the right format.
The software can be used for other ap-
plications where oil flow needs to be divid-
ed between different partners.
It can also be used to play with ideas –
see how much money different partners
would get from a project, according to a cer-
tain proposal, with the production declining
at a certain rate.
It can be used for pipelines and tank
storage.
Customers
Companies that use EnergySys software in-
clude BG, Total, ExxonMobil, Atlantic LNG,
BTC and SCPC.
The biggest target market is people
who are trying to manage their allocations
and reporting using Excel, but it is getting
increasingly complicated to do. These peo-
ple need good tools that support auditing
and versioning, but have previously not
been able to afford the cost of enterprise
systems. ENERGYSYS is designed to de-
liver all of the functionality they need at a
PC price.
Doing it faster
EnergySys recently built software for oil
company Baku-Tblisi-Ceyhan pipeline,
which links Baku in Azerbaijan on the Black
Sea coast, with Ceyhan in Turkey.
The software application was used to
forecast and allocate how much product
each of the partners would get, who owned
the product in which parts of the pipeline,
and included tank farm management.
However if the latest version of the
software had been available, the job could
have been done much faster, says EnergySys
managing director Peter Black.
“Using ENERGYSYS 4, we reckon we
Use Energysys 4 to keep track of the
production from different fields, and who the
revenue should be allocated to
could have done it in a tenth of the time, and
20-25 per cent of the cost,” he said.
Easy to set up
EnergySys has taken pains to ensure that the
software is as easy to set up as possible, with
a common complaint about rival software
packages being the complexity of setting
them up.
“People say the biggest challenge with
hydrocarbon accounting and production re-
porting is the cost, configurability, and time
to deploy,” said Peter Black, managing di-
rector of EnergySys.
“We've done a lot of work around con-
figurability, so it’s faster, simpler and cheap-
er. We want to make it as easy as possible
to configure.
Companies can type in their business
rules in a spreadsheet and then upload them.
The software has a ‘personality’ layer,
with all the special customisations; this
means that the software can be updated
without affecting people’s settings.
The software has a sophisticated audit
tracking function on it; if anyone makes a
change, they have to fill in a form saying
why they made the change, and the software
records who made the change and when.
You can lock down data files from the
past, so people can’t change anything.
Daily production data can be input in-
to the software from your company histori-
an system, or you can upload the data as a
text file.
EnergySys does not offer services to
configure the software, but it does have part-
ners it works with who can set it up for you.
DEJaugsept08:Layout 1 21/08/2008 15:06 Page 25

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Oil and gas production

Jindal Drilling to use SpecTec’s

maintenance and purchasing software
Jindal Drilling of India has signed a contract with SpecTec Asia Pacific to install its AMOS maintenance
and purchasing software on two new jack-up drilling rigs being built at Keppel Yard in Singapore.

The rigs, currently being built at Keppel

FELS Singapore, will complete construc-
tion in early September, and will be char-
tered out to India’s Oil and Natural Gas
Company (ONGC), and operated offshore
Mumbai. $350m is being invested in
them.
Jindal has been running rigs since
1988, as part of an exclusive operating al-
liance with Noble Drilling Corporation of
the USA, but this is the first time it has
owned rigs itself.
SpecTec will supply its AMOS main-
tenance and purchasing software, and also
database construction, training and imple-
mentation. The software will also run on
Jindal’s office in Mumbai.
The software, originally designed for
use in the maritime industry, is designed
to work on low bandwidth data communi-
cations between the vessel and the office.
The maritime industry generally has
to make do with very low bandwidth data
communications (64 kbps is normal), and AMOS project kick-off meeting. From right to left: Narayan Ramaswamy (deputy project
manager-operations with Jindal Drilling); P. Bhat (chief engineer, Jindal Drilling), P.V.George
the connections are not always on, they (chief engineer, Jindal Drilling), V.K.Nagpaul (director and projects head jack-up rigs, Jindal
connect for a few minutes every day. Drilling), Chinta Srinivasan (Project Manager, SpecTec), and P.B. Kumar (deputy project
This means that any software running manager-operations, Jindal Drilling).
on both ship and shore has to be able to
manage without both sites being able to
continually access the same database. engineer at Jindal Drilling, and project workflows, design and development of
Instead, parallel databases need to be manager for evaluation of the SpecTec customized purchase forms and templates,
maintained on both ship and shore, with software, says that one of the main rea- building databases for the two rigs, deliv-
updates sent as required between the two, sons he chose SpecTec was because of the ery and commissioning of the software in-
as highly compressed e-mail attachments. company´s reputation and because it knew cluding AMOS Replication, and providing
Most customers on oil platforms the software was proven. training to both rigs and base office per-
have become accustomed to always using “AMOS and SpecTec are well known sonnel.
VSAT satellite communications, but even in the industry and I’m sure that we could SpecTec runs database building cen-
so, as bandwidth gets tight and more peo- not be wrong in selecting AMOS,” he tres in Manila and Shanghai, where staff
ple fight over it, the ability to run software says. create databases from the technical infor-
which does not need high bandwidth is “We have high hopes that AMOS will mation supplied by the shipyard and
something oil companies are starting to help to take Jindal to the next level in the equipment suppliers (nearly always on pa-
appreciate. operation and management of our rigs”. per).
This is not the first project SpecTec A common mistake when implement-
has done for the oil and gas industry; it al- Implementation ing software is that people forget that the
so builds databases for a number of US The project kick-off took place on March quality of the database is often a lot more
drilling rigs, and provides software for 2008, with discussions between Jindal and important than the quality of the software.
Italian oil and gas contractor Saipem, as SpecTec about the maintenance and pur- The database is a much more critical fac-
well as providing software for FPSOs in chasing procedures and processes to be in- tor in whether or not the customer gets the
Asia and Europe. corporated into the AMOS database. value from the software that they are look-
Aniruddha Patnaik, senior drilling The two companies also discussed ing for.

26 digital energy journal - September/October 2008

DEJaugsept08:Layout 1 21/08/2008 15:06 Page 27

Oil and gas production

“The database is a total key for the
whole project,” says SpecTec’s project
manager Chinta Srinivasan.
SpecTec is putting effort into under-
standing Jindal’s workflows, “We need to
understand their current flow of work and
how their hierarchies are there, so we can
incorporate a similar flow in the system,”
he says.
The systems and databases should be
delivered to Jindal by August / September
2008.
Once the database has been made,
SpecTec will commission and install the
software. “There are a lot of intricacies –
making all the connections work,” he says.
Discussions are underway about con-
necting the software to Jindal’s financial
system, a Microsoft Navision ERP system.
The main reason Jindal chose
SpecTec, Mr Srinivasan says, is that it is
proven and very stable, with many cus-
tomers using it, particularly in the maritime
industry.
Purchasing software
For purchasing, Jindal will be able to raise
requisitions on the rigs, and send data back
to the AMOS system in the office. The pur-
chasing department will be able to exam-
ine them, approve them, and send requisi-
tions out to the right vendors.
The expected delivery dates can be
automatically put in the system, so the rig
personnel know when to expect delivery.
Once the quotes come back from the
supplier, office staff can do a quick com-
parision of pricing and delivery terms, and
then an approval can be issued to the sup-
plier.
The suppliers deliver the goods to a
transit warehouse in Mumbai, and from
there they can be put on the next boat go-
ing out to the rig. However they are not
counted as ‘received’ in the software until
they arrive on the rig.
Once the goods arrive onboard, the
staff on the rig let the computer system
know what has arrived, so staff on shore
can check it. There is no paper transferred
between the rig and the office.
Invoices can be sent by the supplier to
the shore office, and then issued for pay-
ment.

CSIRO uses microseismics to track

drilling
Researchers at Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) have
successfully tracked the location of a drill bit at 300m depth (984 ft) and 1200m (3900 ft) horizontal
distance from the drill site using microseismics.

www.csiro.au
The drilling was into a coal seam in
Queensland, to produce coal seam gas.
Coal seam drilling needs to be very pre-
cise, and it is not unusual for the drill bit
to miss the target, CSIRO says.
But by using geophones on the
earth's surface to pick up the sound waves
(seismic) created by the drill bit, calcula-
tions could be made of the drill bit's exact
location, enabling it to be steered more
precisely into the gas.
CSIRO believes that the technology
could be used in other exploration and
mining operations.
Minerals Down Under Microseismic
Tracking the location of a drillbit using microseismics
Team leader, Dr Xun Luo, said the drill
string and bit were navigated sub-horizon-
tally towards the target gas production
well situated approximately 1200m from noisy and contaminated by periodic elec- tify the drill bit location and were able to
the test drilling site. trical noise signals," said Minerals Down intercept the target borehole at the first at-
Getting a usable signal to noise ratio Under Microseismic Team leader, Dr Xun tempt.”
was a challenge, even with a number of Luo. “However, we applied a sophisticat- The initial trial and future research is
geophones being used. ed filtering and cancelling algorithm wtih being supported by one of the leading pro-
"The seismic data was still rather the result that we could successfully iden- ducers of coal seam gas in Australia.

September/October 2008 - digital energy journal 27

DEJaugsept08:Layout 1 21/08/2008 15:06 Page 28

Oil and gas production

Invensys - virtual reality simulators for plant

design and safety
Invensys is pioneering the use of simulators, combining human factors and virtual reality, for improved
safety, integrated operator training and as an aid in the design of oil and gas facilities.

Invensys has developed an integrated approach

to simulating a virtual plant which combines an
interactive 3D virtual environment with process
and control system simulators that mimic how
a real plant operates.
Wearing stereoscopic headgear, and using
a control device similar to the ‘Wii’ handheld
wand, an operator can move around the virtual
plant and interact with equipment.
This means that the plant can be tested out
before it is built, and scenarios for safety and
operator training purposes can be performed in
a safe environment in order to learn the best
way of dealing with events, expected or unex-
pected.

Integration with the DCS

Virtual simulators can be linked so that a team
of operators in the control and in the field can
work together to perform a task exactly as they
would in the real world.
Crucially, as the virtual simulation is
linked to Invensys Process Systems' DYNSIM
dynamic simulation tool, changes made in the
virtual environment will affect the running of
the plant in a realistic way.
Simulators for all major DCS (distributed
control system) and PLC (programmable logic
controller) systems are supported, including
Emerson DeltaV, Honeywell TDC and Yoko-
gawa Centum.
For example, if an operator in the field
simulation closes a valve somewhere in the
plant, the control room simulator will show the
reduction in flow rate, pressure increase etc.
The control room staff can then interact
with the process control simulator to take some
action, or they can contact the operator to open
the valve again.
In a more complex scenario, teams can
train to respond to normal or abnormal events,
some of which would not be possible to simu-
late in real life, and the different plant behav-
iours and operator interactions can be better un-
derstood.
Situations can also be pushed further until
a disaster happens, and the sequence of events
that led up to it can be factored into the risk as-
sessment.
“In practice, this means that all those ab-
normal situations that an operator feared and
never dared to test in reality can be tested and
that different plant behaviours and operator in-
Simulating plant design and operation - an operator can walk around the virtual plant and
interact with equipment such as control valves; the changes will be reflected in the control
room simulator.
teractions can be understood,” explained Maur-
izio Rovaglio from Invensys Process Systems.
Facilities design
The virtual environment is also a useful tool for
design; being able to experience the layout and
operation of a facility such as an oil platform
before it is built can lead to improvements in
efficiency.
It is a relatively simple process to create a
realistic virtual representation from the 3D de-
sign, with much of the procedure automated.
In just a few weeks, the virtual model can
be created with realistic textures and sounds as
the virtual operator moves about.
As operators perform common tasks in a
training scenario, it then becomes much easier
to spot where efficiency gains can be made.
For example, two valves that are often
used in conjunction may be sited a large dis-
tance away from each other; having to move
backwards and forwards in the virtual environ-
ment makes it clear that this would slow down
a procedure.
This experience can be fed back to the de-
sign team who can make changes if possible,
moving the two valves next to each other.
“As VE technology grows and devel-
ops, more and more process expertise will
be embedded within it, improving the entire
lifecycle of production plants and storage
sites,” said Mr Rovaglio.
Design for safety
Recent studies have shown that more than 90%
of major accidents in high-risk sectors such as
chemical and petrochemical production can be
attributed to human error and poor training.
Invensys believes that it is necessary to
improve the way in which such plants are oper-
ated throughout the entire lifecycle.
“The strength of VE is that all aspects of
plant safety can now be tested and experiment-
ed with, not just for the sake of training, but to
help risk assessors better identify hazardous
scenarios and, above all, to ensure that decision-
makers make the right decisions at the right
time,” said Mr Rovaglio.
Vithualis
Invensys is the lead simulation technology
provider for an EU project called
VIRTHUALIS, which is focussed on combin-
ing human factors and virtual reality to improve
safety and operator training.
The VIRTHUALIS project is due to com-
plete in May 2009.
www.virthualis.org

28 digital energy journal - September/October 2008

DEJaugsept08:Layout 1 21/08/2008 15:06 Page 29

Oil and gas production

Offshore simulation - special feature

The Offshore Simulator Center in Ålesund, Norway has developed a non-proprietary simulator that
integrates bridge, deck and rig simulations to improve safety in offshore operations such as anchor
handling.

The Offshore Simulator Center (OSC) is

part of the Møre cluster, a group of offshore
companies including shipowners, ship de-
signers, shipyards, equipment suppliers and
Ålesund University College that turned over
NOK 31 billion in 2006.
The cluster forms a tightknit communi-
ty, taking a co-operative approach which it
believes will make it the world’s leading and
most innovative cluster, with a choice of the
best suppliers around.
The Norwegian government gave the
area the status of Norwegian Centre of Ex-
pertise Maritime, and it has ambitious plans
to expand, aiming to increase its turnover to
more than NOK 100 billion by 2016.
The OSC was founded by Rolls-Royce
Marine, Farstad Shipping, the Norwegian
Marine Technology Research Institute (Mar-
intek) and Ålesund University College in
2004 and each organisation takes a 25% The bridge operator station at the Offshore Simulator Center (OSC) in Ålesund, Norway. A
stake. simulation of the deck of an offshore support vessel and a rig in light seas can be seen.
The center was born out of problems
with safety and efficiency of operations that veloped on request and available only to the on the deck so that the seamen felt like they
several members of the Møre cluster were customer. were really on a vessel and had good train-
having to deal with. The simulator is able to integrate the ing possibilities,” said Mr Andersen.
“Farstad was having accidents during various aspects of anchor handling opera- Some of the features available are an
anchor handling operations where seamen tions, so that the bridge crew, deck crew, rig advanced weather system modelling differ-
were injured,” said Øyvind Andersen, man- winch and rig crane operators and ROV op- ent sea conditions, PSV (Platform Supply
aging director of the OSC. erators can work together in an unified train- Vessel) and subsea ROV (Remote Operated
“Rolls Royce was concerned about its ing scenario. Vehicle) under water operation capabilities
winches breaking down, possibly because of “This means entire crews may thereby and a heavy lift crane simualtor.
lack of training. It was having complaints be trained in a wide variety of incidents and
from customers.” emergency situations and their performance Farstad
Simulator training was seen as an ef- and commitment to safety improved,“ said Farstad recently announced a new NOK 30
fective way to improve safety and test equip- Mr Andersen. million simulator centre in Perth, Australia,
ment in ‘real’ situations. The simulator realistically models ship which it will use to recruit and train crew for
The OSC simulator was developed as a behaviour, from propulsion systems to sta- its global operations.
non-proprietary system, with the core func- bility and deck layout. Farstad was concerned about its safety
tionality available to anyone who wants to “One of the major challenges we had record, and wanted to reduce the number of
buy it, although specific functionality is de- was to get the physics right for equipment major incidents that caused loss of time and

Simulating manual or automatic hose Anchor handling simulation on the deck of Simulating the deck stations with a realistic
connection on a platform supply vessel. an offshore support vessel. joystick controller.

September/October 2008 - digital energy journal 29

DEJaugsept08:Layout 1 21/08/2008 15:06
Exploration and drilling
injuries in operations.
Human resources is one of Farstad’s
biggest challenges, and the simulator has
improved training, resulting in one of the
best safety records in the industry. This helps
to attract crew to the company.
Bourbon
Bourbon Offshore has an ambitious plan to
expand its fleet and double its workforce by
2010.
It needed a solution to standardise
training across its fleet and has two anchor
handling simulator training centres with the
OSC.
The first, in Marseille, France opened
in 2004 with a DP (dynamic positioning)
simulator accessible to all seafarers and ship-
builders.
This was then extended with the Bour-
bon-Hydro Offshore Oil Training Center
with a simulator for anchor handling tug sup-
ply (AHTS) vessels and helicopter landing
officer training.
Another identical centre will open later
this year in Manila in the Philippines.
Attracting quality officers is a problem
for all vessel operators with the current crew
shortages, and Bourbon sees the simulator as
a way to enhance its training and operational
safety therefore making it a more attractive
Kongsberg Offshore Simulators
Kongsberg has announced a new focus on offshore simulation and launched new anchor handling and
dynamic positioning simulators at Offshore Northern Seas 2008.
Kongsberg is a major supplier of dynamic
positioning systems, automation and surveil-
lance systems, process automation, satellite
navigation and hydroacoustics.
“This gives us a valuable advantage for
development of maritime simulators,” says
Kongsberg.
The company believes its experience in
maritime electronics allows it to build more
accurate and realistic simulators, and to un-
derstand the needs of maritime training.
“The need for personnel training in the
offshore sector today is significant. Simula-
tion for training, procedure and mission
planning and desicion support represent the
needs of the industry and are therefore inte-
grated parts of the training.”
“Due to the escalating costs, many pos-
sible risks and difficult access to offshore
marine assets for “live” training with real
equipment in real environments, simulation
30 digital energy journal - September/October 2008
Page 30
Anchor handling operations are some of the most dangerous at sea
employer.
Rolls Royce portable simulator
The OSC has also developed a PC-based
portable simulator for Rolls Royce which
can be used to train on its Safer Deck Oper-
ations (SDO) system.
The SDO uses rail mounted cranes that
can assist with heavy lifting during anchor
handling operations anywhere on deck,
while the operator stands safely out of the
way.
under realistic circumstances is a safer and
more cost-efficient training solution.”
Kongsberg’s simulator software is fully
scalable; it can be supplied as full mission
or part task trainers as well as desktop appli-
cations and web-enabled solutions.
“The flexibility of the system enables
self-study on or off training facilities, in-
creases the quality and reduces the cost of
training.”
A comprehensive software library of
vessel models, propulsion plants, cargo sys-
tems, navigation instruments and application
specific functionality allows solutions to
meet a broad variety of teaching objectives.
Offshore simulation focus
Kongsberg has brought all its simulator ex-
perience together in a new Offshore Simula-
tion Department.
The offshore simulation portfolio will
The simulator uses the same joystick
control unit as the real thing and realistically
simulates the movement of the cranes and
equipment on deck.
Since it is on the vessel, it is much eas-
ier for crew to find the time to train, and it is
often used as a video game, with crew com-
peting to perform a task safely in the fastest
time.
The system was first installed on the
Olympic Octopus and has now been deliv-
ered to more than 20 vessels.
Anchor handling operations at night in rough
seas - the Kongsberg simulator features more
realistic wave patterns and more detailed
graphics
offer a coherent simulation package to cus-
tomers, with increased collaboration.
“We place real value on collaborating
with our customers. The implementation of
our Maritime Offshore Simulation strategy
will enable us to concentrate solely on the
often specialised training requirements of the
DEJaugsept08:Layout 1 21/08/2008 15:06 Page 31

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DEJaugsept08:Layout 1 21/08/2008 15:07 Page 32

Oil and gas production

offshore industry,” says Lars Erik Hilsen,
Vice President, Simulation and Training,
Kongsberg Maritime.

New anchor handling simulator

Kongsberg has developed a new anchor han-
dling simulator (AHS) which meets the
training needs of both the navigator and the
winch operator.
Kongsberg says it has achieved new
levels of realism with detailed object models
of vessels and equipment, more accurate
physical interaction equations and high res-
olution graphics.
The AHS uses a new ‘line’ model to
represent wires, ropes and chains more real-
istically and a new hydrodynamic model for
The simulator instrumentation looks, functions and feels like the real equipment used in the
more accurate vessel stability calculations. offshore industry. All relevant controls and functions are included making the simulation of
The graphical engine now includes re- anchor handling operations highly realistic.
flections from objects and more realistic
wave patterns. • Operation of different types of AH basic and advanced DP simulators.
“For the anchor handling simulation we equipment “There is a clear and growing need for
have had a close cooperation with Maersk, • AH operations with offshore drilling high quality DP Operator training as errors
one of the biggest Anchor Handling compa- units and other anchored floaters during DP operations often lead to expensive
nies in the world,” says Kongsberg Mar- • Retrieve and run anchors using all downtime, or incidents resulting in damage,
itime’s Product Advisor, Geir Lilje. common types of equipment pollution, injury or even fatalities,” com-
“They have described possible scenar- • Find the optimal positions/designs of ments Soren Einar Veierland, Business Man-
ios with respect to big and small accidents, handles and instruments ager, Offshore Simulation and Training,
which has helped us ensure that the simula- • Towing and accurate positioning of Kongsberg Maritime.
tor caters for every possible scenario and semisubmeribles and jackups The simulators provide training for
eventuality.” • Deck operations and procedures most types of DP vessels and configurations
Kongsberg’s anchor handling simulator including supply vessels, shuttle tankers,
features: New Dynamic Positioning simulator drillship and semi-submersible platforms.
• Ship manoeuvring Kongsberg has also launched a new range of

Subscribe to Digital Energy

Journal - just £195 per year
DEJaugsept08:Layout 1 21/08/2008 15:07 Page 33

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Oil and gas production
Making digital energy work
How should you set about making sure you new digital technology implementation works and gets
used? Houston change management consultants Dr Dutch Holland and Bob Bobst give their advice.
By Dr Dutch Holland and Bob Bobst from Holland & Davis of Houston.
Not only is digital energy’s potential huge, it is
coming of age and maturing.
However many management processes
needed for realising digital energy’s potential
are not as mature as the technologies.
Companies should re-focus on maturing
their key digital energy-related processes.
As digital energy gets increasingly “hot-
ter,” and IT and R&D shops virtually overflow
with new project possibilities, saying “no” or
“not now” to the business user becomes more
difficult.
The solution is Portfolio Management as
a mature business concept.
Stages to make it work
While Project Management is a critical busi-
ness discipline, other success factors must be
present internally before digital energy proj-
ects can be completed with the expected busi-
ness results: value delivered on-time and on-
budget.
Let’s examine each of the phases and fac-
tors.
First, an oil company needs a vision and
a supporting business strategy that acknowl-
edges and commits to the importance of digital
energy innovation and provides a context for
digital energy innovation planning.
Without such a vision, innovation advo-
cates will not have the credibility they need to
get good digital energy technology into play.
Second, tying in with No. 1, is that the
company needs a technology strategy which
supports the business strategy and vision and
provides a framework for prioritizing and se-
lecting digital energy innovation projects. Al-
though it’s common for companies to have an
IT strategy, they frequently do not have an
over-arching vision for what the technology
can do for the business.
Third, the company needs a methodolo-
gy for collecting and screening digital energy
innovation ideas to harvest the best prospects
for future development. That includes having a
specific methodology for viewing the data,
looking both at new ideas and the potential
users.
Not only should there be a methodology
for identifying the technology for develop-
ment, but the alternatives as well. Then, in the
context of the business vision, the company
must delineate operational advantages for each
new technology.
34 digital energy journal - September/October 2008
Page 34
Fourth, the company must have a
methodology for ranking/prioritizing digital
energy innovation projects. The purpose is (a)
to provide a balance across the cost, risks and
rewards spectrum and (b) to incorporate con-
sideration of resource availability (e.g., budg-
et, personnel, facilities) for development and
implementation.
In this context, business users are the
“customers” and they need support to help
them understand what it is reasonable to want
or expect from new technology or what it is
possible to get.
Fifth, the company needs project selec-
tion criteria for innovation that ensure one of
two situations. One, business/asset customers
(i.e., users) are committed and ready to imple-
ment each successful digital energy innovation
project. Two, the potential for rapid accept-
ance of a new technology by asset managers is
substantial.
Regardless of a technology’s potential, it
cannot succeed without a user willing to put
forth a clear implementation plan. In terms of
time, people and money, what will be required?
And that “commitment to implement” must be
a critical determinant of whether or not the
project commences.
Sixth, for each digital energy innovation
project, the company must have formally iden-
tified and charged a Sponsor – or business Ex-
ecutive in Charge (EIC) -- who sets compre-
hensive objectives for the project, explaining
the project rationale and clearly establishing
both measures of success, and sensible con-
straints and boundary conditions.
The EIC should be on the asset side, rep-
resenting the one who owns the incentive to
implement the digital energy innovation.
Meanwhile, the asset management con-
cept has changed globally, from central owner-
ship of all producing assets to today’s decen-
tralization and motivation of regional asset
management.
However, instead of organized deploy-
ment of very expensive digital energy systems,
local asset managers are being given tacit per-
mission to “adopt the digital energy innova-
tion” or to “opt out” if they wish, resulting in
an uncertain value proposition as well as a
lengthy adoption cycle that extends over years.
Development phase
For openers, the company should vest account-
“Technology cannot succeed without a clear
implementation plan” - Dr Dutch Holland,
Holland & Davis
ability for each digital energy innovation proj-
ect in a project manager.
This manager will lead the multi-func-
tional team, establish plans, track progress,
costs and schedule and keep management in
each business unit informed of project status
through successful implementation.
That means all the way through technical
implementation and continuing until the new
technology is in day -to-day operation in the
asset - not “stopping early.”
Two, the company should utilize multi-
functional teams (project management, asset
operations, IT development, IT maintenance,
et al) for managing and tracking digital ener-
gy innovation projects to ensure that all stake-
holders provide input, participate in reviews
and understand/accept decisions made.
In particular, users and developers must
jointly understand such factors as: basic func-
tionality and benefits, user interface require-
ments, hardware and operating system com-
patibility, and interfaces with other programs.
But, since there are likely to be multiple
user locations and because having numerous
Commitment Required
Business user “commitment to implement”
a digital energy application, as evidenced by
a written implementation plan, is an ab-
solute threshold requirement for commenc-
ing a project.
DEJaugsept08:Layout 1 21/08/2008 15:07 Page 35

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DEJaugsept08:Layout 1 21/08/2008 15:07
Oil and gas production
users on the team is impractical, one person
with a good interpersonal network and high
credibility in the user community should rep-
resent user interests in general, not just his/her
own personal perspective.
Three, the company should utilize a
“stage and gate” process for managing and
tracking innovation projects. From a project
management point of view, is the project on
budget and on schedule and is the progress to
date sufficient to warrant moving on to the next
stage of development? From the business per-
spective, is the original innovation still perti-
nent or have the users’ needs and priorities
shifted and the intended value vanished? Thus,
does the digital energy project still make sense
and is everyone ready to move on?
This process on the one hand reduces re-
visions and recycles and ensures appropriate
progress. On the other hand, it expeditiously
kills projects that no longer deserve business
support.
Effective Gatekeepers are integral to the
success of stage and gate processes. There
should be at least two types of Gatekeepers:
technical and commercial.
They must establish clear expectations
for issues to be judged during the Gate Re-
views (e.g., budget, schedule, technical viabili-
ty, commercial viability, commitment to im-
plement, user readiness, forward plan). And the
Gatekeepers must be held accountable for
making good decisions.
Implementation Stage
The Implementation Stage includes five as-
pects.
One is that the company’s top manage-
ment should take two specific actions. They
should set clear usage expectations and state
“out loud” several times during project imple-
mentation that all affected managers and em-
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36 digital energy journal - September/October 2008
Page 36
ployees are expected to support and utilize the
digital energy innovation.
It is not necessary that all potential users
adopt the new digital energy innovation; how-
ever, it is necessary that sufficient users “sign
up” to be consistent with the original project
justification.
Two, an ongoing problem with digital in-
novations is that development people are work-
ing in a back room, not really visible. They
could be making progress but successes would
not be known to others as progress in building
a new platform or a plant that everyone sees.
The company needs to keep personnel in-
formed about digital energy innovation proj-
ects that may affect their business/functional
units, their roles/duties and their interactions
with other units.
Three, the company needs to keep affect-
ed personnel informed about, and mobilized
around, a new innovation’s implementation
schedule including milestones, required train-
ing, support systems and deadlines.
Four, the company should insist that all
affected personnel participate in awareness,
system use, and work process training as rele-
vant to their various roles, learning how to use
the new application and how to make money
with it
Five, the company should hold
business/functional unit managers accountable
for effective implementation and deployment
of new digital energy innovations and for de-
livering the benefits expected. Unfortunately
accountability for harvesting business results
from IT innovation projects is too frequently
not assigned to these managers the way it is for
a refinery technology innovation.
And, six, the company needs to measure
outcomes of digital energy innovation projects
in terms of both results and the effectiveness
of the portfolio/project management system it-
self. Again, the real test is whether or not the
innovation makes money -- a technical success
but a business failure?
Special considerations
There are three special considerations for digi-
tal energy.
One, when a new and exciting technolo-
gy emerges, usually a flurry of project requests
and people appears. So, there must be an ef-
fective way to sort through these.
Two, there must be a clear implementa-
tion and deployment strategy that identifies
users and gets their commitment. It is particu-
larly important in the Digital Oilfield (DOF)
that, as part of user project requests, the user
submits an implementation plan.
That plan should show management’s
commitment and allow gatekeepers to under-
stand the resource impact. If not, that project
should receive a lower score than projects that
can.
Three, decide whether process or politics
will rule and proceed accordingly.
Call to action
Digital energy is exploding with promise, but
mature business processes like portfolio man-
agement are needed to leverage the huge op-
portunities. Otherwise, companies are left with
mushy projects that actually decrease business
results and limit careers.
Therefore, companies must invest now in
work processes for getting good business re-
sults with minimum employee exposure.
About the authors
Dutch Holland, PhD, & Bob Bobst are
with Houston-based Holland & Davis
www.hdinc.com
DEJaugsept08:Layout 1 21/08/2008 15:07 Page 37

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Expert Speaker Faculty featuring:
At Energy IQ’s 4th annual in Asia, gain expert insights on:
• Chief Knowledge Officer E&P
• Governance of information management while ensuring high levels of ENI ITALY
data quality for accurate decision-making
• Technical Knowledge & Data
• Increasing end-user efficiency and accessibility to data through optimum Management Head
GIS and automatisation techniques MEDCO ENERGI
• Head of Data Management Services
• KM implementation techniques that enable smooth workflow, seamless
TOTAL E&P INDONESIE
integration of information and knowledge retention
• Chief Geologist
• The future of data and knowledge management: Strategic focus on TRANSWORLD EXPLORATION
creating operational centres, clear-cut strategies on data to oil & gas • Director (Gas & Production)
applications and smart field management DW GAS
• Data Management Analyst
CONOCOPHILLIPS
It was a good conference – some excellent presentations and the format/ • Data Analyst
balance was good. Well done and see you another time! CHEVRON
Subsurface Manager, CS MUTIARA
• Operations Leader – Real Time
TALISMAN ENERGY
• Supervisor – AFK Unit
Data Management & Governance 2008 was developed in association SAUDI ARAMCO
with an industry Advisory Board led by:
• Data Manager
Radian Hartama, Chief Geologist, TRANSWORLD EXPLORATION SHELL AUSTRALIA
• General Manager- Reservoir Engineering
Tati Magdalena Sahea, Head of Data Management Services RASHID PETROLEUM
TOTAL E&P INDONESIE
• Editor
Chulatep, Senior Officer- Knowledge Management, PTTEP ASIA UNPLUGGED
• Practice Director & Management Consultant
Rosetti Olga, Data Analyst, CHEVRON AVANADE
Adam Claxton, Group Data Administrator, ORIGIN ENERGY

Code: 12072.002 Researched & Developed by

To register or enquire for the conference
please fill in your details and fax it to +65 6720 3804

Name:
Job Title:
Company: Media Partner
Address:

Telephone: Fax:
Email:

T: +65 6722 9388 F: +65 6720 3804 E: enquiry@iqpc.com.sg W: www.dataknowledgemanagement.com

DEJaugsept08:Layout 1 21/08/2008
Oil and gas production
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15:07 Page 38
PIDX – first Aberdeen
meeting
PIDX, the e-commerce committee of the American Petroleum
Institute, held its first meeting in Aberdeen on July 9th, with 50
participants including representatives of Chevron, ENI and Shell.
PIDX, which
stands for Pe-
troleum Indus-
try Data Ex-
change, was
formed to de-
velop and pro-
mote the im-
plementation
of electronic
standards for
the oil and
natural gas in-
dustry.
The
meeting in- At the PIDX launch in Aberdeen: From left to right, Jean-Pierre Foehn,
cluded presen- Amalto Technologies; Kreg Anderson, Smith International; and Robert Cody,
tations and Chevron Corporation
discussion
about electronic invoicing, implementa- number of invoices with very little human
tions of a ‘procurement to pay’ end to end intervention.
e-commerce system, internal change man- A panel discussion with representa-
agement improving visibility of spending tives from Chevron, sparesFinder, ENI,
(ie knowing what you are spending), re- Shell and Hubwoo talked about how to get
ducing transaction costs, gaining greater the most benefit from e-commerce imple-
purchasing efficiency, expanding the use mentations.
of e-commerce, and using standard PIDX “We invite all to attend our meetings
transactional documents. or contact us,” said Chris Welsh, Chair-
Chevron presented a case study about man of PIDX Europe and managing direc-
how it managed to handle an increased tor of Eirô Consulting. “
From left to right: Robert Cody, Chevron Corporation; Paul Mayer, sparesFinder Ltd; Terry
Thomas, Schlumberger; Cristina Lastaria, ENI; Ekaterina Mazanova, Shell International and
John Boardman, Hubwoo
DEJaugsept08:Layout 1 21/08/2008 15:08 Page 39

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DEJaugsept08:Layout 1 21/08/2008 15:09
Oil and gas production
Tuning E&P companies like a process
manufacturing plant
Can you imagine your oil and gas company being as finely tuned as a process plant (e.g. refinery, chemical
etc.), with all inputs finely optimized, all operations continuously monitored, and an output which is
predictable, stable, safe and profitable?
Many readers might think that their oil and
gas company is fairly well optimised.
But many other readers will have had
experience of morale shattering inefficiency
at their oil and gas company.
You know the kind of thing – headquar-
ters taking months to make simple decisions,
good opportunities not being taken up be-
cause of the difficulty in making decisions,
and unexpected edicts being issued from
head office saying that the company must
change its operations to meet a new target.
But if oil and gas companies used a
software simulation approach to model their
business similar to the way process simula-
tors are used to model chemical plants, soft-
ware company 3esi believes, they could tune
and optimise their operations in a similar
way.
Management would always have really
good information about what is going on, so
they can make fast decisions, and carry them
out smoothly, and never miss any opportuni-
ty due to poor decision making processes.
And what if some of the people who de-
veloped simulators for process manufactur-
ing plants also developed business simula-
tors for oil and gas?
With 3esi, this is exactly what has hap-
pened.
The CEO of 3esi, Wayne Sim, co-
founded the company which made the most
widely used software for simulating and tun-
ing process manufacturing plants, called
Hyprotech, in 1979.
Hyprotech grew to become the 10th
largest software company in Canada in terms
of revenue, and the biggest in terms of prof-
it. Its Hysys software is “used by just about
every chemical engineer in the world, and is
on the curriculums of 7,000 universities,”
Mr. Sim says. Hyprotech was sold to Aspen
Technology in 2002.
Chemical plants and refineries use so-
phisticated software to build a simulation of
the plant and the business, which can than
be used to optimize everything, and inform
operators and managers if something is
straying from the optimum parameters, so it
can be adjusted.
The input variables for a process plant
are capital (capital costs / operating costs);
40 digital energy journal - September/October 2008
Page 40
execution capacity (the plant you already
have, the people you have); resources
(equipment, feedstock, energy, water, cata-
lyst, spare parts, maintenance); constraints
(land, feedstock, plant capacity, inventory
costs, product and feedstock prices, regula-
tion), and output (product, safety, pre-
dictability).
Similarly, the input variables for explo-
ration and production are capital (capital
costs and operating costs); reserves (the oil
and gas you have access to), your execution
capacity, resources (staff, equipment, ener-
gy); constraints (limited helicopters, bed
space on platforms, gas lift capacity, regula-
tory, politics etc.) and output (production,
safety, predictability).
The primary goal in either business is
to maximize capital efficiency (return on
capital employed) given fixed execution ca-
pacity, fixed resources and time within an
environment of constantly changing con-
straints.
Fine-tuning an exploration and produc-
tion company can be a lot more complex
than fine-tuning a chemical plant. “It’s a lot
easier to convince a plant to do something
than convince a person,” Mr Sim jokes.
But oil and gas companies should prob-
ably be thinking more about ways to be bet-
ter organised and co-coordinated.
In past, having a successful oil and gas
company might have depended more than
anything on picking the right spot to drill,
and having the right relationships with local
politicians.
But in today’s more complex business
environment, success is more likely to come
from optimising your allocation of capital
and resources, to get output which is stable
and predictable, staff which are happy, and
an operation which keeps clear of con-
straints.
Getting a clear picture
Some of the biggest problems oil and gas
companies experience is getting the right in-
formation so they can make decisions, and
then carrying those decisions out.
To quote an unnamed oil executive
from Western Canada, “A forecast update in
our industry is like counting children in a
Can you use software to 'tune' an oil and gas
company, the same way as you 'tune' a
petrochemicals plant? 3esi CEO Wayne Sim
thinks you can
playground – they move so quickly that it
makes the task almost impossible.”
Typically, says 3esi’s CEO Wayne Sim,
companies do their planning using spread-
sheets exported out of the main software
packages used by different departments (for
example, the accounting software, reservoir
engineering software, and production man-
agement software).
They then link these spreadsheets to-
gether in a complex way, to get an overall
view of the business.
The whole system is “high mainte-
nance, unscaleable and unwieldy – a brittle
inconsistent solution,” he says.
It gets more complex when the head of-
fice is setting targets and trying to get its as-
sets to meet them, as the focus goes from
(say) reducing costs to improving produc-
tion.
Individual asset managers are expected
to manage their portfolio against these con-
tinually changing targets set by head office,
and people at head office are expected to re-
port to senior management about how on
track the company is.
Meanwhile, reserves decline at differ-
ent rates than expected, there are rig sched-
uling problems, staff shortages, political
problems, terrorist attacks, and price
changes; and decisions need to be made
quickly. How can a company possibly keep
DEJaugsept08:Layout 1 21/08/2008 15:09 Page 41

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DEJaugsept08:Layout 1 21/08/2008 15:10
Oil and gas production
an accurate real time picture of where it is,
just using spreadsheets?
The problem is not getting access to the
data, but finding ways to rationalise and un-
derstand the data and converting it into in-
formation to support the decision making
process. “That’s where I think they need
help,” says Mr Sim.
If the company has a computer model
with a clear and accurate understanding of
where the company is, it is easier to find the
answer to questions.
For example, should companies reserve
(and commit to) a rig 12 months before they
need it, and get a better rate when they are
not 100 per cent sure they are going to need
it? Or should they try to find a rig 3 months
before they need it, when they are sure they
will need it, but there might not be one avail-
able, and if there is one available, will they
have to pay through the nose for it?
Or, if a rig is delayed, what impact will
that have on the rest of the business, and how
well is the company using its available re-
sources?
esi.manage
3esi’s flagship software tool is called
esi.manage, which builds a computer model
of everything which is going on in the com-
pany, capital, operating costs, production, re-
serves and resources, which people can use
to make business decisions.
esi.manage integrates with the software
tools which people in different departments
/ disciplines use in their daily jobs (e.g. SAP
for accounting, AFE systems, production ac-
counting systems, field data capture systems,
procurement software and so on).
But instead of outputting the data in
spreadsheets, all of these software packages
integrate with 3esi’s software, which puts to-
gether the business simulation model.
esi.manage has different tools which
work with the same model to enable people
from various departments to work with the
data including modules for inventory man-
agement, planning, budgeting, program
management, forecasting and reserves man-
agement.
So, for example, users can see their
budget for 1 month, 1 quarter, 1year plan, 2
years, and 5 years. They can see how much
capital expenditure they have made, and
what their regular operating expenditures
are.
They can see immediately what impact
different changes will have on their future
production profile as well as operating and
capital costs.
They can also see what impact differ-
ent options would have on their targets, for
example, if they acquired a certain compa-
42 digital energy journal - September/October 2008
Page 42
ny, how that would impact their reserves,
capex / opex, production, and if there would
be constraints from availability of other re-
sources (e.g. rigs, helicopters or staff).
Then they can manage and prioritise
their different projects, seeing them ranked
in terms of various key performance indica-
tors, such as f&d, capital efficiency, cash
flow, capital costs, operating costs, and risk.
The software can handle all of the revi-
sions and changes which need to be made to
the models, showing how they affect the
overall required capital expenditure and op-
erating cost profiles, as well as its reserves
and production rate.
The planning tools use probabilities –
you can estimate a probability of a certain
event occurring, and the software will calcu-
late the probability of different output events
occurring.
.The complexity is in making the inte-
grations between different software pack-
ages, and putting together workflow tools
which take people through the different steps
they need to make; and of course, persuad-
ing people to buy the software and to use it.
Benefits
The benefits of all of this is that the compa-
ny can plan better – this leads to improve-
ments in all areas of the business – job satis-
faction, safety, environmental performance
and of course profitability.
You can easily see how changes, or po-
tential changes, will impact on your most im-
portant key performance indicators: produc-
tion, reserves, capex and opex. You can also
get a much better understanding of your risk
position.
Users can find the data they need to
make crucial decisions much faster, and their
time (as a company resource) can be much
better managed.
And of course, the more information
that is captured in standard formats in the
software, the less headache it is when peo-
ple leave the company, because more of their
knowledge stays behind.
Success to date
3esi serves customers around the world, and
its software is used to manage numerous dif-
ferent assets. Customers include ENI (Italy),
Enerplus (Canada), Addax Petroleum (Nige-
ria), RWE (Germany), Wintershall (Ger-
many), Continental Resources (USA) and
Repsol (Spain) and another super-major.
As an example, Calgary oil and gas
company Delphi Energy Corp uses it to se-
lect which projects it wants to pursue, with
an aim of selecting around 50 projects from
a choice of 150.
ENI is using the software at a number
of different assets around the world; with
production of between 60,000 and 230,000
barrels per day and presently 3esi is in con-
versations with them to deploy it within
many more of their asset teams.
3esi has close to 40 employees at this
moment with offices in North America, Eu-
rope and Latin America. Mr. Sim expects the
company to be cash flow positive this year,
just three years after it was founded.
So far, Mr. Sim says that the company
has never lost a sale, on the basis that it has
been competing against another software
company, and the other company has won
the business.
In fact, the biggest competitor the com-
pany has is Excel – companies who are ad-
dicted to their spreadsheets and don’t realise
how much easier things could be.
Sales process
3esi’s sales process is to try to find the per-
son in the company who has the headache of
gathering together all the different spread-
sheets.
“Typically if you sell to the right per-
son, the person with the pain, it’s a one meet-
ing sale,” says Mr Sim. “They say I want
this. We have very few problems when we
talk to the right person.”
Sometimes, people understand the val-
ue proposition of the software so readily;
they don’t feel the need to calculate the re-
turn on investment.
“I went to one company and talked to a
CFO and VP of Operations, I said how will
you know the value you got out of it,” he
said. “They replied, they can see the value
clearly, they don’t need to quantify it.”
The software does not need to be im-
plemented for the whole company all in one
go; it can be implemented asset by asset.
3esi conducts workshops with staff, to
explain what the software does, and the ben-
efits of it, and how to use it, so they will start
using it more readily – this is the change
management process.
Who uses the software?
3esi envisages that the software will be used
continually for people who have to plan and
run the business, making decisions and allo-
cating resources, from asset managers up-
wards.
It could also be used by engineers, who
spend a lot of their time working out how to
allocate different resources to get the desired
results.
Accountants and geologists would still
spend most of their time in their discipline
software (accounting or subsurface) but they
could use the 3esi software if they wanted to
see the bigger picture.
DEJaugsept08:Layout 1 21/08/2008 15:11 Page 43

Financial Modelling
in the Oil & Gas Industry
Wednesday 12th & Thursday 13th November 2008,
Copthorne Tara Hotel, London

A unique opportunity to learn from industry experts including:

s Peter Saling, Risk Management Specialist, Mol Group
s Professor Derek Bunn, Decision Science, London Business School
s Mats Kjaer, Manager, Quantitative Analytics, Barclays Capital
s Simon Wardell, Research Manager, Energy Practice, Global Insight
s Metin Epozdemir, Manager, Moody’s Analytics
s John Richter, Director, Financial Mechanics
s Celine Jerusalem, Project Manager, Statistics and Artificial Intelligence Section, Gaz de France
s Michael Cragg, Founding Partners, Cambridge Finance Partners
s Etienne Gabel, Director, IFC International
s Dr Robert Manicke, Corp. Director of Quantitative Analyses, StatoilHydro

Why you should attend:

s Understand the key areas for financial modelling in the oil and gas industry
s Learn best practice techniques and how to avoid worst practice
s Strengthen your modelling skills
s Equip yourself with a toolkit to enable sound and confident decisions
s Identify industry specific risk and discuss how to model it effectively

PLUS A HALF DAY PRE CONFERENCE WORKSHOP:

Optimisation & Predictive Analytics in the Oil & Gas Industry

Applications in Upstream & Financial Asset Management
Tuesday 11th November 2008, Copthorne Tara Hotel - London

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DEJaugsept08:Layout 1 21/08/2008 15:11
Oil and gas production
Leading Software Company
3esi’s goal is to be the leading company to use
for managing upstream processes.
Mr. Sim believes that there is a gap in the
market for a dominant player. There are other
software companies being used for different
aspects of engineering and geology, but no
other company internationally leads the up-
stream management software market.
There are many niche companies, serv-
ing the needs of different discipline groups, in
different geographical sectors of the market
with companies of different sizes, Mr. Sim ob-
serves; for example, there are companies
which have carved out a market providing ac-
counting software to mid sized companies in
Houston. But the international top spot is still
available.
Chesapeake and Oracle PeopleSoft
US oil and gas company Chesapeake Energy recently started using Oracle's PeopleSoft software to help
manage people aspects of the business, including human resources, payroll, benefits administration and
enterprise learning.
The company started using the Oracle sys-
tem in late 2006, to replace five HR systems,
being used across different business units.
The software is used both by all com-
pany employees to manage their own HR re-
lated services (employee self service), as
well as by HR personnel. Employees can
change their addresses, set up direct de-
posits, view pay stubs and sign up for bene-
fits, which all means less work for the HR
staff.
Chesapeake is the 3rd largest natural
gas producer in the US, with annual revenue
of USD 7.8bn. The company added 1,300
employees in 2007, bringing the total work-
force to 6,300.
It takes pride in how well it treats its
employees, being named by Fortune Maga-
zine on its list of “100 Best Companies to
Work For” this year.
“First and foremost, Chesapeake is a
people company,” says Aubrey McClendon,
the company’s cofounder and chief execu-
tive officer. “Talent creates value and our
company has an abundance of talented peo-
ple.”
Chesapeake uses PeopleSoft to consol-
idate and streamline its payroll and benefits.
It can automate the core HR processes, re-
ducing paperwork and manual data entry.
It also uses it to track how well it is do-
ing, and assess its resources.
Analysts can easily mine the system for
business intelligence, such as turnover rates,
employee performance metrics and resource
assessments.
44 digital energy journal - September/October 2008
Page 44
“There are a lot of niche companies fo-
cused on a domain problem,” he says.
“There’s very little standardisation.”
“We’ve got clients on 4 continents and
we’re going to grow that,” he says.
Cultural issues
The reason why oil and gas is not as well co-
ordinated as it can be is relatively easy to guess
at. Oil and gas people, predominantly, are in-
dividuals, used to developing their own skills,
building their own reputation and working
quietly but confidently at their own desk on
their own project.
It has been relatively easy to sell these
people tools to do their own jobs better, such
as accounting software for accountants, geo-
physics software for geophysicists, and reser-
“PeopleSoft has been a catalyst for
breaking down functional silos and expos-
ing new ways that we can work more close-
ly across business units,” says Jeff Gardner,
director of IT with Chesapeake's Business
Systems Group.
In future, Chesapeake plans to use the
software to help its expand its enterprise
learning program, where employees to en-
roll in training courses and track their
progress online.
It also plans to use the software more
in future to enhance and str eamline its re-
cruiting process.
Mr Gardner says the move to People-
Soft “eliminated a lot of paper and handoffs,
and numerous Excel spreadsheets we had to
track, manage and report.”
“Information technology will play a big
role in Chesapeake’s evolving workplace,”
Mr Gardner says. Beyond streamlining and
automating business processes, Mr Gardner
believes technology can be a stimulus for re-
thinking the way people work together.
“PeopleSoft has been a catalyst for
breaking down functional silos and expos-
ing new ways that we can work more close-
ly across business units,” Mr Gardner says.
“It supports our wonderfully talented people
who we believe are the source of our com-
petitive advantage.”
Calculating pay
An important use for the software is work-
ing out how much to pay people, including
additional benefits.
voir engineering software for reservoir engi-
neers. But co-ordinating projects is something
else entirely.
Hyprotech was one of the first compa-
nies to introduce interactive computing in the
1980s – the idea that you could ask your com-
puter something and get the answer immedi-
ately, rather than send your computing jobs off
to batch computing centres, as people did back
then was unheard of.
Now, you don’t think twice to work out
what interactive computing is as many of us
have never worked with any other type of
computing.
In a similar way, in 10 years time, peo-
ple will be so used to using computer planning
tools to help run and manage their companies
that they won’t think twice about it, he says.
Chesapeake
needs many
complex
things from
its function-
ality, for ex-
ample the
ability to
automati-
cally in-
crease the
pay scales
of rig work-
ers accord-
ing to how
long they
have been Chesapeake Energy - using
there, ac- Oracle's PeopleSoft software
cording to to help manage people
an agreed aspects of the business
scale.
It has helped the company reduce pro-
cessing time for stock awards from three
days to 2 hours.
“Our goal is to stay on the cutting edge
in benefits and compensation,” says Lorrie
Jacobs, Chesapeake’s vice president of com-
pensation and benefits.
“We are constantly analyzing and
benchmarking data against other companies
in our industry in order to offer the best com-
pensation package to attract top recruits.”
As a result of using the software,
"we’re much more comfortable with the in-
tegrity of the data,” she says.
DEJaugsept08:Layout 1 21/08/2008 15:11
BP and Crystal Ball
BP is using Oracle’s Crystal Ball software on nearly 90 per cent of its new wells, to help keep its costs and
schedules on track.
Over 500 BP engineers in over 20 countries
are using the software, to forecast time and
costs for most of its big oil projects - approx
90 per cent of all new wells.
The software is used in the early and
middle phases of an oil field’s development,
helping with financial planning, project
scheduling and risk management.
The software aims to look at all the dif-
ferent variables which oil projects face, in-
cluding bad weather, equipment malfunc-
tions, geological surprises, and the number
of wells the company finds that it needs.
The software has a ‘sensitivity’ func-
tion to identify the major risk areas, to help
identify which factors could lead to cost and
time overruns, so staff can focus more at-
tention on them.
“Crystal Ball is involved in every ma-
jor investment decision that we make for
wells,” says Hugh Williamson, risk and cost
advisor, Drilling and Completions, BP.
“It identifies which risks add the most
uncertainty in outcome,” says Mr
Williamson. “These are the ones we should
pay the most attention to.”
“It increases our ability to deliver proj-
ects on time and on budget – a big plus when
partnering with governments of oil-produc-
ing countries or with other operators.”
The software stimulates productive di-
alogues among engineers and other experts,
by requiring estimators to gauge the likeli-
hood and range of outcomes.
“We want those conversations to hap-
pen,” says Mr Williamson. “The results of
those conversations can be input directly in-
to the front end of Crystal Ball.”
Spreadsheets
The software runs behind spreadsheets,
something which increases the appeal of the
software to engineers who are building the
forecasts, Mr Williamson says.
“Engineers love spreadsheets. Crystal
ball is intuitive and engineers can pick it up
quickly. I can teach people the fundamen-
tals in less than 20 minutes.”
However, “one of the challenges is to
not let the spreadsheet template get too com-
plicated, making it unusable by most engi-
neers,” he says.
It is also important not to automate the
forecasting process too much. “Outputs are
worthless if the inputs haven’t been proper-
Page 45
Oil and gas production
ly thought through,” says Mr Williamson.
Probability
The software uses Monte Carlo probabilis-
tic techniques to make predictions of how
long something will take, or how much it
will cost.
Users input data about what they think
is going to happen with certain input vari-
ables (eg, how likely they think the oil price
will drop to $50 a barrel).
The software runs the calculation many Use Crystal Ball to get an understanding of
times, each with different input variables the variabilities involved - this graph shows
the different net present values (NPV) a
along the probability distribution specified; project might end up with and the probability
then from the range of different outputs, you of each
can work out how likely certain outputs will
be. smaller reserves, the complexity of the busi-
“If we think there’s a 20% chance of a ness increases, and the necessity to keep a
drilling operation being hit by a hurricane – strong check on cost and time overruns in-
which might cost us between 10 and 50 days creases.
per well – we can put this information di- "There’s not much easy oil left, and to
rectly into the estimate," says Mr get at it, we need to develop some pretty
Williamson. complex, pretty risky projects, and our goal
is to execute them better than the competi-
Business process tion,” says Mr Williamson.
BP has a standard forecasting spreadsheet, Risks can emerge from places that are
which all engineers can use when managing hard to predict. “It’ll be hurricanes in one
a project. place, steel prices in another place, and a
BP engineers often perform several es- change of scope in a third place.”
timates in the course of an oil field develop- With oil and gas only getting tougher
ment project: an early forecast that neces- to find, Williamson sees continued robust
sarily contains higher degrees of uncertain- demand for sophisticated estimation solu-
ty; and several follow-ups that are more ac- tions like Crystal Ball.
curate as engineers eliminate many of the “Projects are going to continue getting
unknowns, such as daily rates for rigs and more complex and more expensive and
boats. more challenging,” he says, “and we have
It may be possible to use data from to be up for that challenge and find ways of
similar projects in the past, if there have understanding and communicating that risk
been any. and complexity up front.”
When the time-and-cost estimates have
been finalized, they are typically incorpo-
rated into a management report known as a
“decision support package” which is scruti-
nized by key decision-makers in the compa-
ny.
On the basis of the report, the compa-
ny may order more studies on the field, or
green light further drilling and development.
“Senior management want to know
how much projects are going to cost and
how soon they’re going to get their money
back,” he says.
This chart shows an estimation of how
Complex business environment reliable different materialswill be - and how
As oil and gas companies chase smaller and likely the reliability will be a certain amount
September/October 2008 - digital energy journal 45
DEJaugsept08:Layout 1 21/08/2008 15:11
Oil and gas production
Shipdex - a new standard for technical
data for vessels and platforms
Digital Energy Journal’s sister magazine, Digital Ship, held a conference in Hamburg, Germany, on a
standard has been developed for technical data for ships, drilling rigs and offshore platforms, which
should enable technical information to be supplied electronically, rather than on paper.
A new data exchange protocol has been devel-
oped for ship, drilling rig and offshore platform
equipment information, which aims to lead to
the end of paper manuals and drawings, and all
other tehnical information normally supplied
on paper, including maintenance procedures,
and lists of spare parts.
Shipdex arose out of the frustration which
two large dry bulk shipping companies, Grimal-
di Naples and Intership Navigation, were hav-
ing with paper manuals, and their decision to
do something about it.
"We get 1.5 tons of paper with a new ves-
sel, including technical manuals, drawings and
specifications," said Grimaldi’s purchasing di-
rector Giancarlo Coletta. "It is very hard to ac-
cept that, when EDI and communication is state
of art, the shipping industry should have this
huge amount of paper.”
Grimaldi Naples and Intership contracted
their software company, SpecTec, to develop a
standard for electronic technical information,
which is a simplified version of the S1000D
standard, used almost universally in the avia-
tion and defence industry.
By having all of the data for a new vessel
provided electronically, Mr Coletta estimates
that he might be able to save as much as 8 per
cent on the total costs of maintenance, because
it will be much easier to manage efficiently.
“Having the right data at the right time can
lead to savings in cost,” he said. “All the infor-
mation you need, you can pick up from your
database exactly. We can have access immedi-
ately to the information and supply faster an-
swers.”
“With so much paper onboard, "it’s very
hard to have rapid and quick access to informa-
tion when it’s needed," he said. “Sometimes
technical manuals are a photocopy of an old
manual they got somewhere, and not really con-
sistent with the equipment they are delivering.”
"One vessel has 80 to 100 different equip-
ment manufacturers, with 700 to 900 compo-
nents, up to 1000 parts per component, and
33,000 different general stores", he said.
With data provided in Shipdex format,
seafarers will be able to get much faster answers
to critical questions. “People ask – we have 25
tonnes of cargo. Can we load this on the ves-
sel? Instead of searching through your manu-
als, you can answer immediately. It will be great
46 digital energy journal - September/October 2008
Page 46
advantage in my opinion.”
As well as its planned maintenance sys-
tems, Grimaldi anticipates using Shipdex data
in its quality management systems, technical li-
brary and computer based training systems, he
said.
There are plenty more benefits.
By receiving all the electronic data in
Shipdex format, you can also reduce the enor-
mous amount of cost associated with manually
building an electronic maintenance system for
a new vessel – currently as much as $20,000
per ship, if you want a database that works.
You can manage your spare parts much
better – so you are more likely to have the spare
parts onboard which you need, and not have
spare parts onboard you don’t need – and small
percentage improvements in spare parts man-
agement lead to big financial savings.
You can also keep your technical data up
to date easier – if a supplier sends out an up-
date to a manual, it can be automatically incor-
porated in the shipboard electronic manual – no
posting out pieces of paper and wondering if
they made it to the right ship.
And if a shipping company has better da-
ta, it is much easier to manage the whole com-
pany – compare how different vessels are per-
forming, manage costs, and make sure that the
fleet is in good condition.
In future, Shipdex do many wonderful
things – for example, to pass on information to
shipyards about what equipment is onboard the
ship, and store this data in a standard format, as
will be required under IMO’s forthcoming ship
recycling legislation.
It could be used to communicate data with
regulators, surveyors and suppliers, about ex-
actly what is on the ship, and any problems
which are happening with the equipment.
All of these things, of course, lead to big
potential to improve safety – if it is easier to
manage maintenance on the vessel, and ship
staff can find the right answers to their ques-
tions much faster they can with paper.
Will people use it?
So will Shipdex be embraced by the maritime
and oil and gas industry?
Till Braun, head of department - sales
projects, Germanischer Lloyd, and chair of the
conference on ShipDex organised by Digital
Ship magazine
in Hamburg in
April, noted
that there were
representatives
of major ship-
ping / oil and
gas companies,
including BP
Shipping and
Maersk, present
at the confer- “Expecting to save 8 per
ence, “with cent of total maintenance
their eyes wide costs from having better
open,” he said. data” - Grimaldi’s
MacGRE- purchasing director
Giancarlo Coletta
GOR, one of
the world's largest suppliers of hatch covers,
cranes, equipment for RoRo ships and ports,
has already decided to wholeheartedly commit
to providing technical information in Shipdex
format. It will also use Shipdex to manage the
data about its manuals internally, so it can easi-
ly make updates and make sure new equipment
is provided with the right manual, even if it is
in paper format.
Alfa Laval, a major supplier of separators
for ships, is also embracing Shipdex, starting
by making its manuals for separators available
in Shipdex format, and then its manuals for
freshwater systems. MAN Diesel is also part of
the working group.
Grimaldi Naples and Intership Navigation
are currently making orders for 90 new vessels
between them, and will use their purchasing
leverage as far as possible, to try to cajole their
suppliers and shipyards to provide the manuals
electronically.
One delegate from BP Shipping said that
he would consider trying to get OCIMF (the Oil
Companies International Marine Forum) in-
volved in Shipdex, using the purchasing clout
of oil companies to encourage tanker compa-
nies to encourage shipyards and equipment sup-
pliers to provide equipment manuals in
Shipdex, because it can potentially lead to im-
proved safety.
S1000D – following aviation
It helps that Shipdex is based on a standard
called S1000D™, which is used internationally
in aviation and defence (including naval ves-
DEJaugsept08:Layout 1 21/08/2008 15:11
sels). All docu-
mentation in the
aviation and de-
fence industry
must (it is sug-
gested but it is not
mandatory. It de-
pends on con-
tracts) be written
in the same stan-
dardised way, so You just need two lines in
it can be easily your contract with the
imported into dif- shipyards to force them to
provide the technical
ferent software information in Shipdex
systems. format, said Marco
S1000D is Vatteroni, SpecTec ILS
sponsored by the manager and Shipdex
Air Transport As- technical manager
sociation of America (ATA), the Aerospace and
Defence Association of Europe (ASD), and the
Aerospace Industries Association of America
(AIA). The document describing the standard
is more than 2600 pages long.
By using a standard developed for avia-
tion, it means the maritime industry can take
advantage of all of the software and services al-
ready developed for S1000D. It also means that
many maritime equipment suppliers are already
providing manuals in S1000D format, if they
also supply to the defence industry. Shipdex
will also ultimately be an official part of the
S1000D organisation.
It won’t be the first time the maritime in-
dustry has followed aviation; vessel traffic sys-
tems, voyage data recorders, automatic identifi-
cation systems, and using English as a standard
language, were all first done in the aviation in-
dustry and subsequently adopted by shipping.
Safety benefits
When you realise what enormous safety bene-
fits there could be from having manuals sup-
plied electronically, you might expect the Inter-
national Maritime Organisation and oil and gas
regulators to make it mandatory.
The primary safety benefit will be from
ships and rigs being better maintained – be-
cause they have better maintenance manage-
ment systems, with data directly input from the
manufacturer’s procedures. A better maintained
ship is probably a safer ship.
A secondary safety benefit is that if there
is ever any problem, seafarers can find out what
to do about it much faster from an electronic
manual, than having to look for the right page
in 1.5 tons of paper.
“By having the information very well
structured and searchable, you can quickly find
the correct information for the specific equip-
ment,” says Eva-Lisa Martinsson, manager,
Technical Documentations Services, Compe-
tence Centre Cranes, MacGREGOR, “You can
have the correct safety instructions for particu-
Page 47
Oil and gas production
lar equipment. If something happens, it’s easy
to find the right page in our manuals.”
“If you have a question, how do I fix the
pump, it takes 1 minute instead of 10 mins to
find the answer,” said Kay-Michael Goertz,
head of logistic procedures and IT at HDW -
ThyssenKrupp Marine Systems.
Managing spares
If equipment information is supplied in Shipdex
format, shipowners can also load the data about
their spare parts automatically into their pur-
chasing systems – and with better data in their
purchasing system, they can make sure they
have the right spare parts onboard and always
order the right spare parts.
Even if only a small percentage of your
Is network
spare parts are wrong, it is very expensive and
potentially dangerous.
performance
There are many stories in the industry
about vessels carrying completely the wrong
and reliability
parts for years, and nobody knew they were
there – tying up large amounts of capital use-
slowing your
lessly.
There are also many stories in the indus-
productivity?
try of shipowners forced to airlift critical parts,
or charts, to a vessel by helicopter, because they
If your critical business operations
will get detained if they don’t have them.
By having a better database of your spare are bogged down or compatibility
parts, it is possible to do many new things. For issues have your information and
example, you might determine that a supplier is control systems at a crawl, we can
trying to get you to buy a spare part, which is help you pick up the pace.
only needed for one procedure, and that proce-
dure can only be done by a dry dock – so there’s
no point in buying it. YR20 has been helping companies
quickly troubleshoot and diagnose
Benchmarking and dashboards network and applications issues
"We have one since 2001. Our revolutionary
customer with 23
products and services are designed
vessels, each data-
to get to the root cause of your
base is built by dif-
ferent people," network and application perform-
said SpecTec’s Mr ance and reliability issues quickly
Soncini. "So they and expertly.
are completely dif-
ferent databases.
To learn more about our services,
It’s impossible to
compare one ship Everyone wants visit our website at www.yr20.com
with another." management or call +1 (832) 225-1293 (U.S.),
Bob Kessler ‘dashboards’ but they + 44 (0) 1224 355290 (U.K.).
of ABS Nautical are only any use if the
underlying data is of
Systems recalled a good quality, pointed
Dilbert cartoon, out Bob Kessler, head of
which showed a Europe, Middle East and
manager asking Africa with ABS Nautical
for executive sum- Systems 1718 Fry Road
mary information, or 'dashboards', but not car- Suite 440
ing whether the underlying data is any good or Houston, Texas 77084
not, a scenario many in the maritime industry
will be familiar with. Unit 16, James Gregory Centre
“Everybody wants ‘dashboards’,” he said. Aberdeen Science & Technology Park
“But if you have bad data, you won’t get any Balgownie Drive
useful dashboards.” Aberdeen AB22 8GU
DEJaugsept08:Layout 1 21/08/2008 15:11
Oil and gas production
Communicating oil and gas asset value
UK software company Palantir Solutions has developed a standard way for oil and gas companies and
their lenders to put a value on their assets, even if they disagree on what the oil price will do.
UK oil and gas company Palantir Solutions
is developing software which provides a
standard way of communicating the value of
an oil and gas asset between oil companies
and their investment banks, even if the par-
ties disagree on their predictions of different
costs and indexes, such as future inflation.
The software can be used to make a
quick estimation of the value of an asset, or
the range of the value of the asset, using the
limited information available (eg estimated
size of the reserves, the estimated cost of the
infrastructure, production rate decline).
The output of the software is provided
in Microsoft Excel, so it is easy to use.
But if two parties discussing sales of
the asset both have the Palantir software,
then the parties can get an estimation of the
value of the asset based on their own predic-
tions of future costs and prices, and then use
the software as a basis for their discussions.
“Promoting Palantir's solutions for working
outoil and gas company value in the financial
sector” - Amy Williams-Allden, Palantir’s sales
and marketing executive for the financial
sector
In May this year, Palantir appointed
Amy Williams-Allden, as sales and market-
ing executive for the financial sector (and
previously a consultant with IBM), to build
the business with investment banks and bro-
kers.
Palantir’s vision is that it could offer a
48 digital energy journal - September/October 2008
Page 48
‘gold standard’ way of enabling people to
see how much different assets are worth.
“We want to provide a bridge between
borrower and lender,” says CEO Jason Am-
brose. “We want to be the currency that they
trade economic data in. It should help create
more transparency.”
The is proposing to the DTI and the
London Alternative Investment Market
(AIM) with a view to formally incorporating
the software in oil and gas company evalua-
tions, before floats.
The software could also be used by
governments conducting a leasing round.
They could use the Palantir method to pres-
ent their calculation of what the field is
worth. Other people can then test the calcu-
lation, putting in their own data (for exam-
ple, if they think the estimate of infrastruc-
ture costs has been too low).
Fast evaluation
The software also enables the assets to be
valued very quickly, to give a snapshot of the
company in its current condition.
“There is a strong competitive advan-
tage available to people who can get a fast
analysis of the value of a company,” says Mr
Ambrose.
For example, when evaluating assets
which have been put on the market, it is pos-
sible to get an estimate within a few hours
of what the range that the value of the asset
might lie between, using your own estimates
of future key indices.
This should enable users to make a de-
cision quickly about whether or not they
want to bid for the asset, and at which price.
A range
The calculation method does not try to pro-
vide a precise answer, but give a range which
the right answer might be in.
“Say you have one company which
could be worth anything between 0 and
$15bn,” he says. “And you have another
company worth between $3bn and $7bn. You
might prefer the second one because there is
substantially less risk.”
“People have different appetites for
risk. But if you can measure the risk you can
do calculated risk taking.”
“If you have two portfolios with equal
risk, but one is more valuable, you would go
for that one.”
“People have different appetites for risk. But if
you can measure the risk you can do
calculated risk taking.” - Palantir CEO Jason
Ambrose.
The company
Companies working with Palantir include
BG Group, Chevron Upstream Europe (Ab-
erdeen), Talisman, Dana Petroleum, VITOL,
Premier Oil, ITHACA, Jeffries Investment
Bank and Anardarko Texas.
It was set up in London in 2002, origi-
nally as an asset evaluation consultancy.
Jason Ambrose, the founder, has a
background as a wireline engineer with
Schlumberger. He later moved to Merak, a
Canadian financial modelling company,
which was itself bought by Schlumberger in
1999.
After the acquisition, Mr Ambrose left,
because he relished the challenge of running
his own company.
Palantir has 44 employees, two thirds
of which are in London. It also has offices
in Aberdeen, Houston, Singapore and Cal-
gary.
It has 20 full time consultants. It has its
own software development centre in Banga-
lore, India, with 8 full time staff; altogether
the company has 12 programmers.
Mr Ambrose is very proud of the geo-
graphical diversity of his staff; only a small
percentage are from the UK.
“Having a diversity of staff means we
can be much better at solving people’s prob-
lems,” he says.
DEJaugsept08:Layout 1 21/08/2008 15:11
Warning - possible satcom shortage
Increased demand for satellite capacity, particularly for cellular backhaul, means that oil and gas
companies can no longer take its availability for granted in West Africa, South America and the Middle
East, warns James Trevelyan, head of enterprise sales at Arqiva's Satellite Media Solutions division.
“In many parts of the world, particularly
West Africa, the Middle East and South
America, there is a shortage of available
satellite capacity, which means oil and gas
companies can no longer take it for granted
that they will have the satcom bandwidth
they need”, says James Trevelyan, head of
enterprise sales at Arqiva's Satellite Media
Solutions division.
Arqiva is one of the world’s largest
purchasers of satellite bandwidth, negotiat-
ing between the satellite owners, and the
users of satellite capacity to provide connec-
tivity services. It leases around $240m a
year of space segment and works directly
with companies in the oil and gas industry
as well as indirectly through oilfield servic-
es companies and telecoms companies.
Part of the increase in demand for the
satellite bandwidth is due to massive expan-
sion in cellular phone use in recent years;
“if there are no fibre optic cables to carry
the calls internationally, they are routed
through satellites”, he says.
“In some parts of the world, countries
have only just brought in mobile phone net-
works,” he says. “They bypassed telecom
infrastructure and went straight to cellular.
It has led to huge sucking up of capacity for
backhauling voice around.” Across Africa
the number of mobile phone users has
grown to 65m in the last 6 years. Growth
shows no sign of abating.
There have also been at least two ma-
jor satellite failures in the last 18 months,
which have led to a panic buying of avail-
able capacity.
“One satellite that was going to cover
Africa and Asia, one of the largest satellites
of its kind, failed at launch 12 months ago –
that’s caused a bit of a panic buy across all
the vertical markets,” he says.
Meanwhile, the oil and gas industry is
engaged in a great deal of new projects in
the same parts of the world, and its satellite
communication requirements are going up.
“Oil and gas companies have been his-
torically very stable users – and they are be-
ing penalised because of a shortage of ca-
pacity,” he says.
“What that means for oil and gas com-
panies is, if they want to bring on a new rig
and they want their 256k duplex connection,
there isn’t always capacity at hand.”
One solution is of course is for the
Page 49
satellite operators to launch more satellites,
but it is not easy to launch more of them
straight away.
“It takes 3 years to plan and build a
satellite,” he says. “It’s not a decision that
can be made lightly. While we can see
launches ahead of us, there may not be suf-
ficient capacity ahead of us to support cur-
rent output.”
“Operators are looking at repositioning
some underused satellites to different orbital
slots in an attempt to bolster supply in areas
where demand is greatest.”
Careful planning
Mr Trevelyan advises oil and gas companies
to plan carefully to make sure they have the
bandwidth they need; they also need to
make sure they are using the bandwidth
which they have already acquired as effec-
tively as possible.
Arqiva typically purchases satellite
bandwidths in ‘transponders’ – which basi-
cally means that they purchase a chunk of
the entire satellite. This is carved up into
smaller chunks and sold to service providers
and companies. A satellite typically lasts 15
years which means that users pay for the
bandwidth whether or not they are using it.
An alternative is to share a pool of
bandwidth between users. Bandwidth can
be shared privately by one company across
its network. Alternatively bandwidth can be
shared publically between a number of com-
panies. If both companies want it at once
then they get half the speed, but otherwise
they get the same speed, but pay half the
price. With today’s technology the pool of
bandwidth can be shared securely which is
important given the value of the data.
“Take a long term view and talk to
your service provider about what you expect
your activities to require,” he suggests.
“Have a look at the applications that support
your activities on the oilfield – start to pri-
oritise the types of data which really are crit-
ical.”
“A lot of the time – often we hear peo-
ple say – we have so many different data
streams – and we’re not entirely sure if the
parts of the business that request them still
use them.”
“Talk to your service provider – about
how you might have some traffic on dedi-
cated streams and some on shared streams,”
September /October 2008 - digital energy journal
Communications
With increasing demand for satellite
resources, oil and gas companies might not
be so sure of getting the satcom power they
need, says Arqiva
he suggests.
“We’re trying to find out which appli-
cations are mission critical and which ones
aren’t. When the data is not mission critical,
we can offer privately shared or publically
shared bandwidth which can reduce band-
width and costs without compromising
speed.”
There are sophisticated technologies
available which can help companies share
and reduce bandwidth, such as iDirect and
Comtech.
The skill is in designing the network
and profiling its traffic patterns carefully
taking into account bandwidth hungry ap-
plications and users. “If you size those net-
works correctly it works very well,” he says.
On the other side, there are several ap-
plications where communications are mis-
sion critical or real time, such as monitoring
drilling and subsea equipment from shore.
“For that, we recommend a nailed up pipe,”
he says.
An alternative solution is to find ways
to reconfigure the satellites themselves so
they can offer more capacity in the areas
with the shortage.
“Recently we reconfigured some
transponders over Africa used for video to
enable them to carry 2 way traffic,” he says.
“We were able to feed 260 to 280 mbps of
capacity into the market.
“But that’s been sucked up almost in-
stantly by wholesale users concerned about
49
DEJaugsept08:Layout 1 21/08/2008 15:11 Page 50

Communications
the future – and oil companies who have
their road map set out and know they have
to commit now.”
Another option is to consider In-
marsat’s range of portable satellite solu-
tions. These are popular in the maritime
sector for narrowband applications but
struggle to achieve broadband speeds due to
the terminal size and are often better back
up solutions due to their prohibitive running
costs.
“Inmarsat is part of the communica-
tions mix in the E+P market,” he says. “But
its more of a backup and insurance policy
for the main satellite communications link –
it is also useful for engineers who are going
to go and set up these satellite links so they
have some way of communicating.”
“It’s generally not as cost effective for
a dedicated connection that’s on full time.”
“One of Arqiva’s great strengths is that
it has scale – it can access over 100 satel-
lites from its global teleport infrastructure
across all the satellite operators fleets. If a
satellite is repositioned – we immediately
have the earth stations to access the satel-
lites – for smaller operators in the industry
– they may not have the finance to make the
capital investment required to access multi-
ple satellites.”
Price increase
If there is increasing competition for satel-
lite capacity, one expected impact would be
an increase in prices, something which oil
and gas companies might be better prepared
for than other industries given their under-
standing of commodity markets.
However Mr Trevelyan warns against
getting into a bidding war. “We’ve got to be
responsible when it comes to maintaining
long term relationships with our customers,”
he says. “Our base costs have increased dra-
matically but we have tried to reflect this
with moderate stable price increases. If we
suddenly hiked the price up, it’s clearly not
good for long term business.”
“There are other players in the market
who have some bandwidth and took a short
term view and doubled, or in some cases
tripled, the price.”

Satcom – as customer needs change,

technologies and services must evolve
In order to provide effective satellite communications services to oil and gas companies, you need to have
an in-depth understanding of their increasingly complex and comprehensive needs, says Broadpoint’s
new President and CEO, Errol Olivier.

There was a time when all an offshore com-
munications company had to do to meet its
customers’ needs was install a satellite dish
to connect remote employees to the corpo-
rate office. However, in today’s increasing-
ly competitive and complex oil and gas en-
vironment, companies are asking for much
more from their communications
providers.
“As major oil and gas companies con-
tinue to expand their operations to very re-
mote areas around the world, they want
complete end-to-end solutions,” says Errol
Olivier, president and CEO of Houston
telecommunications and network solutions
company Broadpoint.
“Our customers are now looking to us
to provide more value added solutions than
the basic installation, commissioning,
maintenance and operations. They now re-
ly on us to provide support further down
the value chain like protecting these net-
works with firewall protection and content
screening.”
These new customer demands mean
that providers must gain a deeper under-
standing of what customers are actually do-
ing with their communications infrastruc-
ture, and they can no longer focus on sim-
ply selling the latest gadgets. Customized
network solutions reign supreme in today’s
offshore communications age.
“As communications providers, we
need to truly understand how the customer
will use their applications, which will en-
able us to provide the technology platform
that best suits their individual needs,” Mr
Olivier says.
“There’s no use selling customers
dedicated bandwidth when they don’t need
it.”
Reliable Crew Communications Leads
to Enhanced Productivity
One area where Mr Olivier believes Broad-
point can support oil and gas companies is
in increasing the productivity and efficien-
cy of offshore operations.
“Our focus is identifying how we can
"Satcom providers must gain a deeper
help our customers be more effective in do- understanding of what customers are
ing their work,” he says. actually doing with the communications
That means providing them with a infrastructure" - Errol Olivier, president and
customized communication system that CEO, Broadpoint
streamlines their operations. Broadpoint,
formed last year from a private equity buy- satellite and cellular offerings.
out of PetroCom, SOLA Communications WiFi is becoming increasingly desir-
and Coastel Communications, has united able offshore, Mr Olivier says, because it
and improved upon the offerings of its provides the mobile and flexible data con-
predecessor companies to offer a variety of nectivity that is required by the many con-
platform and technology options including sultants and engineers who service the off-

50 digital energy journal - September /October 2008

DEJaugsept08:Layout 1 21/08/2008 15:11 Page 51

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Communications
shore industry. Also, as the industry faces
a shortage of professionals that is often re-
ferred to as the “knowledge gap” the abili-
ty to easily transfer data or view remote
conditions via video in real time over any
kind of network is becoming increasingly
important. With these capabilities, opera-
tors can maximize the use of their experts
by allowing them to consult on projects
worldwide while never leaving the home
office.
Beyond these benefits to a company’s
productivity, Olivier notes that implement-
ing the right communications network can
also have a significant impact on employee
morale.
“What’s really important to our cus-
tomers right now is maintaining positive
morale of their staff,” Mr Olivier says. “The
oil and gas industry must be competitive
with the rest of the world in providing good
quality of life offshore if they want to at-
tract and retain talented employees.
“It is extremely important that these
employees have a way of checking in with
family and friends and the ability to handle
personal business through on-line access
during their off-time offshore. Imagine be-
ing offshore for six weeks or longer and not
being able to access your mortgage, utility
or banking accounts.”
Many companies are choosing dual
communication systems—one for corpo-
rate access and the other for employee
communication. For example, Broadpoint
has seen a rise in popularity in oil compa-
nies asking for a network specifically ded-
icated to employee use that will not inter-
fere with the corporate network.
“Separate communication systems
give companies the best of both worlds—
the ability to have a fast-running corporate
communication line, as well as a way to
provide employees access to personal com-
munication methods and a bit of redundan-
cy, is a great value to those working in
harsh environments,” says Mr Olivier.
Limited space segment
In many parts of the world, namely regions
like the Middle East and Africa, space seg-
ment is running thin. With the recent fail-
ures of satellite spacecraft over the past
few years, service providers are finding it
more difficult to buy and hold space seg-
ment, due to market uncertainty.
“The shortage of bandwidth in many
remote locations leads us to ask the ques-
tion, ‘How can you best provide the right
solution with a very limited amount of
bandwidth?” says Mr Olivier.
Some satellite service providers are
setting up shared bandwidth systems—
where companies share the same band-
width in order to cut costs. While this may
be a good option for some, the decrease in
effective throughput could lead to de-
creased productivity.
“On the surface, shared bandwidth
systems appear to offer customers the same
level of service as private bandwidth, but
they often result in much lower throughput
than customers expect,” he says. “When
the amount of data you need to transmit is
high and the time you have to transmit is
low, a shared system may not allocate the
bandwidth you need to support the appli-
cation, especially when it requires real-
time functionality.”
When working with Broadpoint, cus-
tomers are ensured a committed informa-
tion rate (CIR)—meaning that they know
exactly the amount of minimum bandwidth
available to them at all times. Even though
there is no industry standard on providing
a committed versus a burstable information
rate, Broadpoint holds itself to the highest
regard of availability and throughput.
“When Broadpoint says you’re going
to receive 512 kbps CIR, it means you will
get 512 kbps all the time—not just in a
‘best case’ scenario,” says Olivier. “We
don’t provide solutions that only get the
job done sometimes—we provide a net-
work that allows our customers to do their
work efficiently at all times, that’s the val-
ue we bring to their operations.”
But sometimes shared bandwidth is
exactly what a company needs. For com-
panies that don’t require massive amounts
of data transfer, real time information, crit-
ical and timely monitoring and control or
live video feeds, shared bandwidth is a
great option for communications at a re-
duced cost.
“The key is to assess each client’s in-
dividual needs,” he says. “While some may
say that utilizing a very dynamic band-
width sharing system to lower the cus-
tomer’s cost is an upgrade, I consider it a
significant downgrade when productivity
is compromised for price.”
And there’s no end in sight—Olivier
predicts that the demand for bandwidth will
only increase as companies’ needs expand
and diversify.
“In the office, we are spoiled and nev-
er satisfied with the speed of the internet
that supports all of the new applications re-
leased every year. When employees travel
to these remote sites, they expect no less
than what they get in the office, and the ap-
plications deployed to improve the effi-
ciency of their operations are rapidly in-
creasing the need for even more band-
width.”
DEJaugsept08:Layout 1 21/08/2008 15:12 Page 53
DEJaugsept08:Layout 1 21/08/2008 15:12 Page 54

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