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Production
Your IT department is not ready
Many people assume that upstream technical organizations already have technical processes covered. They rarely do, writes Dutch Holland 14
Increase production 25-200% by pulsing EOR
The effectiveness of enhanced oil recovery by flooding can be improved if the injection fluid (water or carbon dioxide) is pulsed, says Alberta
company Wavefront Technology Solutions Inc. 16
Maersk – plan to make CCS pay for itself
Maersk Oil and Gas believes that it can significantly reduce the costs of carbon capture and storage of carbon dioxide sequestered, by
burning gas directly from an oilfield in oxygen, generating electricity, using the resulting CO2 immediately for enhanced oil recovery, and
possibly selling the resulting water if it is in a region of water shortage (for example, desert) 17
Survey of spend analytics
OFS Portal surveyed 6 oil and gas operators who had recently done spend analytics programs to ask them how it went - By Elaine Rothman,
writing for OFS Portal 20
Post Stuxnet – expect government hacking
After the Stuxnet worm attack which ‘created problems’ for Iranian nuclear centrifuges, every government in the world will be honing up its
hacking skills – and testing them out on IT installations with a military value, like oil and gas companies, thinks LogRhythm’s Eric Knight 22
GE Oil & Gas - $210m on research
GE Oil & Gas reports that it is quadrupling its research
funding 23
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Exploration
Geochemicall im
Geochemic imaging
m ging
maging
Watch
W atch Dirk Hellwig,
Hellwwig, Regional
Regional Director
Director of Exploration
E
Exploration
GORE Surveys, how
Surveys, talk about ho w nano scale e geochemical
geochemical
imaging can make red
make a big contribution to reducing
ducing dry
dry
w ells, by
wells, by detecting
detecting and analysing
analysing tiny
tiny samples
sam mples of different
different
types of hydrocarbons
hydrocaarbons at the ear
earth's
th's sur
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fac
ce, which ha
have
ve
travelled
travelled up from m reservoirs.
from reservoirs.
Findingpetroleum.com/video/199.aspx
Findingpetroleum
gp m.com/video/199.asp px
Future
F uture of land 3D3 seismic
W atch Ian Jack,
Watch Jack, fformer
ormer head of subsur face R&D with BP
subsurface
and initiator of the
th
he first "life
"life of field" seismicc monitoring
ssystem,
ystem, talk about
aboout how
how land 3D seismic surveys urveys are
su are
about to get much
muc ch better,
better, pr oviding a muc
providing much h better
understanding ofo the subsurface.
subsurface.
Findingpetroleum.com/video/202.aspx
Findingpetroleum
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Peak oil
Peak
Watch
W atch David
David Bamford,
amford, ex
Ba ex head of exploration
explorattion at BP,
BPP,
discussing whet her or not w
whether e will see peakk oil in the n
we ext
next
decade..
decade
Findingpetroleum
gp m.com/video/243.asp
Findingpetroleum.com/video/243.aspx px
Fibre optics as
Fibre s listening de
devices
vices
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Gibbson, CEO
CEO of Fotech, talking
Fotech, talki ng about using
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devices, you get
geet a much
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understaanding of what is happening
happenin ng in your
your well.
well.
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Findingpetroleum
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Financials of EOR
EOR
Watch
W atch Oswald
Oswald Clint,
C analyst
senior analy st with Bernstein
Be
ernstein
Research,
Research, one ofo WWall
all St's top analyst
analyst companies,
commpanies, talking
about what is proven
proven to work
work (financially) and
a what
doesn't, with enhanced
enhhanced oil recovery.
recovery.
Findingpetroleum.com/video/250.aspx
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Robots for
Robots for workovers
worrkovers
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W atch Jørgen
Jørgen HHallundbæk,
allundbæk CE
allundbæk, CEOO of WWelltec,
ec, talking about
ellte about
using robotic devices
robotic de v
vices wells
inside wells to massively
masssively reduce
reduce the
cost of doing workovers.
work
o overs.
Findingpetroleum.com/video/244.aspx
Findingpetroleum
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Exploration
Doesn’t need seeps carbons collected from the sampling unit Ideally, you
Because the sampling units are so sensitive, have come from another source than a sub- would have a well
they are not restricted to only sampling oil surface reservoir. control – a produc-
which has travelled from subsurface reser- Mr Hellwig emphasises that conven- ing well in the re-
voirs through faults (Macroseepage). tional soil gas sampling can only normally gion – so you can
Miniscule quantities of hydrocarbons detect C1 to C5, and there can often be sim- compare the hydro-
can also find their way through a seal rock ilar geochemical responses for C1 to C5 carbon signature in
up to the surface. whether there is a reservoir below or not. the zone of interest
This process is known as Microseep- “So if you restrict yourself to the C1 to C5 with the signature
Helping you detect
age, with microbubbles of gas moving up you might not be accurate,” he says. around the produc- hydrocarbons from
through grain boundaries in the rock, driven Gore also has an idea what typical hy- ing well. sampling tiny
by pressure and buoyancy. “This occurs in drocarbon signatures above different types If there is no amounts in the
every type of lithology,” Mr Hellwig said. of reservoirs (gas / oil) look like based on its producing well, then surface soil gas -
experience so far, and that is helpful when you can analyse the Dirk Hellwig, GORE
Surveys for
Signal from noise trying to understand the information. data to look for sim- Exploration, W.L.
One challenge with the system is detecting Gore’s system does not measure ilarities in the geo- Gore & Associates
signal from noise – ie it is not enough just to methane (C1) at all, because methane is chemical patterns,
have a sample from above a possible reser- ubiquitous and a differentiation between aided by Hierachical
voir, you also need a sample which is thermogenic and biogenic methane is need- Cluster Analysis, to
nowhere near a reservoir and compare them. ed. This involves isotopic analysis, an addi- develop geochemi-
There is also a possibility that hydro- tional and complex process, he says. cal calibration points.
The term Digital Oilfield (DOF) practically The dictionary definition of discern- Acquisition
screams: “We have digital technology that ment is “the quality of being able to grasp A Technology
can make the company money, if we can just and comprehend what is obscure or not well Acquisition
get it deployed on the operations side.” defined”. Process will
Translated: the technical side is ready This is a major challenge for what has be needed to
and just waiting for operations to catch up. been called requirements definition. both drive
Unfortunately, such is not the case. Unfortunately, discernment may not yet vendor inno-
Upstream technical organizations today be a strong suit today in many upstream vation and to
are both ill-equipped, process-wise, and in- technology units. Who has the discernment acquire need-
appropriately staffed, oilpatch-wise, to help to articulate appropriate needs? ed technolo-
their companies exploit digital technology’s Perhaps it is only technologists experi- gies to sup-
potential. enced in both operations improvement and port technolo-
technology design and development. gy architec-
Business value architecture Therefore, staffing and managing the ture design.
It’s not enough to build a
When an upstream organization decides to interface between technology and operations This de- DOF to fit the company -
go for it to maximize digital technology use will be critical. The technology unit must put ceptively sim- sometimes the company
for business value, the organization’s archi- its strongest people into the discernment ple statement has to change to work
tecture (its “moving parts”) must be altered process. requires a better with a DOF, says Dr
and configured specifically for digital tech- At this point two things are clear: Dis- technology Dutch Holland, Holland
Management Coaching
nology, called the DOF Business Value Ar- cernment will always be necessary, and re- architecture
chitecture (DOFBVA) of the organization. cent graduates with a “Requirements Inter- design rooted
view Guide” will not be an adequate mecha- in current and future operational needs.
This consists of: nism for discerning needs. While some technologies may be de-
Strategic Business Architecture: the veloped in-house, many DOF technical ele-
company’s DOF vision and strategic goals, Technology architecture design ments will likely come from technical ven-
measures and incentives A Technology Architecture Design Process dors. The ideal would be for the technolo-
Work Process Architecture: the tech- will be needed to optimize the company’s gist to give clear functional specifications to
nical and business work processes needed to technical capability to support all types of vendors so that they might put their innova-
achieve DOF strategic goals work processes that the operations side re- tion processes to work to serve up technical
Technical Process Architecture: the quires to meet its goals. elements meeting the needs.
processes to manage digital resources re- This is easier said than done. However, many technical vendors to-
quired to enable work processes and busi- A famous hockey player once stated day state that DOF technology buyers are not
ness value optimization. that the secret to his success was “to skate to able to well-articulate functional require-
where the puck was going to be.” ments.
Technical Process Architecture Such is the challenge in the Design of Rather than a buyer holding a require-
Very specific technical workflows or technology architecture - to position func- ments conference for several qualified ven-
processes are required for the organization- tionality so that the operations side of the dors, vendors are holding conferences to
wide exploitation of digital technology. business can skate toward the most vital and show their wares, hoping to serve up one that
While some of the processes below productive business improvement opportu- the buyers can see fitting into the company’s
may look familiar, some may be seen as nities, using/counting on IT support to en- future. And, as buyers acquire what’s being
“new” for a company’s technology-end. able their direction. sold, they accumulate bits and pieces that
Five technical work processes, or orga- As in the first technical process dis- must be cobbled together as requirements
nizational elements, must be in place and cussed, positioning architecture is depend- eventually become clear.
aligned by senior managers to gain full busi- ent on great discernment, based on the tech-
ness value from DOF. These are Needs Dis- nologist’s understanding of both operational Systems Readiness Process
cernment, Technology Architecture Design, upsides and technology capabilities. A Systems Readiness Process will need to be
Acquisition, Systems Readiness, and Tech- The goal is not to just follow the direc- in place that can produce/ready apps and sys-
nical Implementation. tion of operation’s needs but to design-in tems meeting Business Improvement Oppor-
functionality and capability that might lead tunity requirements.
Needs discernment operations to see and solve their business As discussed in earlier articles, two dis-
A Business Needs Discernment Process that and technical problems in fundamentally tinct “readiness processes” are required for
accurately comprehends the range of opera- new ways. digital technology: getting the technology
tional transactions and decisions which Technology architecture is at its best ready for the business and getting the busi-
could be made by the business both now and when it can both follow and lead the opera- ness ready for the technology.
in the future will be needed. tions side toward business value Most technology shops have an appli-
Oil and gas e-commerce organisation OFS were deploying e-procurement and electron- (in this case
Portal conducted a survey of 6 oil and gas ic transactions with their supply base. integrated to
operators in different parts of the world that At the lower end the objective was for the ERP) or a
were known to have active spend analytics 25% of spend “managed in the system”, to SaaS provider
projects (to analyse how they spend their up to 98%, where the last 2% of spend was (meaning the
money). considered to be outside procurement. software is
The objective was to determine why Implementation project teams were hosted by a
they had embarked on the projects, what used in general, but not always. The teams third party
they were trying to accomplish, how they when present were often multidisciplinary – and used as a
had implemented the project (with a project purchasing, project management, IT, and ex- service, Soft-
team or consultants), what were their re- ternal consultants. ware as a Elaine Rothman
sults, what % of their spend was under man- External consultants were from the Service, now
agement, what KPIs they used, what could software provider or technology implemen- sometimes re-
they have done better, what were the project tation consultants. ferred to as
pain points and where are they going from With or without a team, the implemen- “in the Cloud”).
here. tation time was from 12 – 18 months but for The ERP alone is not seen to be suffi-
Unanimously the companies contacted varying “spend coverage”. ciently flexible to provide the needed report-
said they were looking for visibility. Some companies implemented a spend ing facilities as those of a tool designed
Companies were looking for a clearer analysis project to help prepare for imple- specifically for spend analytics.
vision of spend while allowing greater visi- mentation of an e-procurement project, seg- All the companies interviewed were
bility to more category managers, business menting suppliers into types of spend, and SAP users, though some had other systems
units and often to provide business intelli- looking for the best purchasing strategy for in place also.
gence to improve purchasing. each type of spend. Some chose an integrated spend analy-
Two of the companies interviewed used Some companies implement a spend sis solution from SAP and others a third par-
spend analysis to implement business trans- analysis project to help expand an existing ty SaaS provider.
formation, either creating a new central pur- e-procurement project, focussing on the best Interestingly the results of an integrat-
chasing organization or expanding the scope ways to control spend and increase adoption ed versus a non-integrated solution from a
of an existing purchasing organisation. of its e-procurement project. SaaS provider, in term of the benefits of
Some of the companies were managing spend analytics were equivalent.
a project with 5 operating divisions where Sell the project In the case of the companies that were
others were collecting data from over 700 Not surprisingly, when the spend analytics interviewed, those who had a real project
operating units. project was “sponsored” by the executive management focus and a “top down” view
In all cases the companies interviewed committee, buy-in was less of an issue, where top management was behind the proj-
had embarked on spend analytics as they though at times some business units were re- ect reached above 80% spend under manage-
luctant to have their numbers added to a cor- ment whether they were using a third party
porate project. SaaS provider or had an integrated solution.
When the project was not sponsored by The implementation side and the use of the
top management there was a need to “sell” tool, however, were different.
the project internally – either to new busi- Some of the companies interviewed
ness units or to new category managers. had multiple ERP systems, as many as 50,
The task was to convince them to add others had just 1.
their data to the pool, and also to be trained
on the system to generate reports that they Key performance indicators
could use. The KPIs for spend analytics that were put
In the case of one of the companies in- in place, were largely the percentage of
terviewed who had neither top management spend “captured” by the system, and a
support nor a real project team, currently af- growth rate of that spend.
ter 3 years only 30% of spend was under In some companies it was the number
management. of business units reporting into the tool and
their respective % of spending being report-
Software solutions ed.
Many different types of (software) solutions For companies with a “category” ap-
were implemented. All were with the addi- proach it was the number of purchasing seg-
tion of a specific tool, whether from the same ments covered by the reports.
Spend analytics - do you know what your supplier as the enterprise resource planning In all cases implementation was tracked
company is spending and what you get for it? (ERP) software, or another software vendor and KPIs reported.
After the Stuxnet computer worm, which to install key loggers and get hold of peo- to the SCADA
managed to hack into Iranian nuclear plant, ple’s credit card numbers. equipment,
operators of industrial equipment around the “SCADA systems are lowest value to a and get into the
world need to be more wary of hacking, hacker. But the military value is extremely main data cen-
thinks Eric Knight, senior knowledge engi- high,” Mr Knight says. ter to get into
neer at LogRhythm, a log management and the log man-
security information event management Evidence for government backing agement sys-
company. The amount of effort and organisation in- tem, to modify
It is not so much that Stuxnet revealed volved in building Stuxnet suggests a gov- specifically the
the weaknesses in industrial IT systems. The ernment backer. Security experts have esti- pieces they
point is more that Stuxnet was widely be- mated that it would have taken 5-10 people were looking
lieved to be created by a government organ- working for 6 months to build. for,” Mr
isation – and other governments around the The worm simultaneously successfully Knight says.
world will want to make sure they have targeted the Windows operating system (run- “This
hacking capability which can keep up. ning on PCs behind the automation system); adds so many Oil industry "likely to be
first on the list" - Eric
And when they look for industrial cen- an industrial software program which runs more levels of Knight, senior knowledge
tres with high military value to test out their on Windows, and a programmable logic con- protection.” engineer at LogRhythm
hacking skills on, the oil and gas industry troller in the equipment. Lo-
will come high on their list, Mr Knight It also included code for faking indus- gRhythm can receive a continuous stream of
thinks. trial process control sensor signals so an in- logs from the automation systems and scan
“I would assume that every country that fected system does not shut down due to ab- it for operational anomalies, and provide im-
has observed what has happened at Stuxnet normal behaviour. mediate notice of impending attacks or at-
will be trying to create their own cyber se- Whoever did it would have needed to tack attempts.
curity offence and defence plans to prevent know which specific centrifuges were being For example, the Stuxnet worm needs
them becoming a victim of this.” used in Iran. “It required a tremendous to reprogram certain microchips in prepara-
The oil industry is likely to be first on amount of intelligence, time and a large di- tion for an attack, and the LogRhythm prod-
the list because of its high military value. versity of resources, “Mr Knight says. uct could spot this by looking through the
“I’m sure that in the gas and oil industry they logs.
are one of the most crucial infrastructures, Other industrial attacks “It can create a forensics view of what
in a time of war or otherwise,” he says. There have been other attacks on industrial transpired,” he says. “You can put together a
“So the chances are – every industry equipment before, including one in Australia time line of events that took place.”
will have a lot of prodding by people who which managed to open up sewage gates. The company can also help companies
are government backed.” “That one was a fellow was trying to get his install standards which will help them pre-
“There are potentially hundreds of gov- job back by creating problems,” he says. vent hacker sabotage, including making sure
ernment sponsored organisations which There was another incident where peo- they are storing the right information about
couldtry to hack into your IT systems to de- ple thought China had infiltrated US equip- who is doing what on the system.
termine the effectiveness of their programs ment for the power grid in order to start col- The system will work with any comput-
and gathering data for the future in case lecting information. “They saw the monitor- er system which can generate a log. “We’ve
something transpires.” ing taking place but no evidence of sabo- done everything from Windows type log –
tage,” he says. down to X-ray machines, door access. The
Stuxnet management of the records is really where
Stuxnet was discovered in July 2010, and LogRhythm tools we’re focussing on.”
was later credited by Iran’s president, Mah- To create the best possible defence against “Any type of computerised system with
moud Ahmadinejad as managing to “create hacking, LogRhythm offers a system to con- a digital record that can be translated back
problems for a limited number of our cen- tinuously analyse equipment audit logs to get as a log can be sent back to LogRhythm"he
trifuges,” according to press reports. the earliest possible warning of something says.
This was the first time a worm has tar- going on. Sometimes you have to analyse logs
geted industrial systems, gaining control of This means that, if a hacker wants to be from different systems to get a better under-
the SCADA (supervisory control and data undetected, they need to both hack into the standing of what is going on. “When you add
acquisition systems) to locate and infect the equipment and hack into its logging system the business pieces to the common infra-
centrifuges. at the same time, a much bigger hacking structure pieces – you can create a very ro-
Before then, computer worms had challenge. bust understanding – not only security but
mainly only been developed to gain atten- “It is very difficult if not impossible for also risk and problems that are taking place
tion or to make money for hackers, such as him to have both the opportunity to break in- inside your organisation,” he says.
GE Oil & Gas, the oil and gas division of Macondo well in 2010. custom-made
corporate giant GE, reports that it is now After the disaster, “We were immedi- microchips
spending $210m a year on research, four ately contacted by BP and undertook a 24-7 which GE’s
times as much as it was in 2007. effort to develop shutoff and containment subsea depart-
Over the past 4 years, GE Oil & Gas equipment,” says GE Product Manager Bob ment had been
has been gradually building its footprint in Judge. The chairman of the company put to- using.
the industry, making 3 major acquisitions gether a team of the top 30 people to assist. GE’s
(VetcoGray, Hydril Pressure Controls and “Overall, we had 230 people working at var- wind business
Sondex) and hiring 930 new employees (in- ious times on his effort, designing and test- had developed
cluding 600 hired in 2010). ing different pieces of kit.” a chip that
The company wants to be able to pro- “We didn’t stop to talk about terms and could with-
vide a wide range integrated services and conditions, we said, we’re going to step up stand high
equipment needed to support drilling and and provide whatever help we can to assist levels of vi-
production. in ending the crisis. We were fortunate to be bration and
It now has 6,500 employees in the a part of it, and in the end, BP was very gen- extremes of "We offer the entire drilling
package - Manuel
drilling and production business. Its Oil and erous in its thanks,” said Mr Judge. temperature
Terranova, senior VP
Gas Annual Meeting in Florence in Febru- GE went on to provide the blow-out (very hot from regional operations and
ary 2011 attracted 1000 customers from 70 preventers on the final capping stack that the electron- global sales for GE
countries. sealed the Macondo well, and both vessels ics, but in drilling and production
The company is building new service that drilled the relief wells had GE blow-out very cold am-
centres in Angola ($40m investment), Brazil, preventers installed on board. bient temperatures).
Nigeria, Australia (new campus and training “The wind guys worked with a chip
centre) and Singapore. It has 1600 services Acquisitions background fabricator to make sure it is adequate for the
staff, all with consistent training. In February 2007 GE acquired VetcoGray, a ruggedized environment,” Mr Terranova
It hired 600 people during 2010 and re- specialist in subsea drilling and production says. “That would have taken us 3 years on
deployed 700 people in the regions to be systems, including “capital” (ie large scale) our own.”
closer to customers. drilling equipment, floating production sys- Now many of the microchips in
“We want to have key shops in the ma- tems, surface and subsea drilling systems, VetcoGray drilling systems use these mi-
jor locations, around the product line and subsea production systems and flow assur- crochips. “Vetco tradition has always been
specific solutions,” says Manuel Terranova, ance. to embrace the best ideas regardless of where
senior vice president regional operations and In October 2007 the company acquired they are from,” Mr Terranova says.
global sales, drilling and production with Sondex, a manufacturer of wireline tools, di- GE also strongly encourages the use of
GE. rectional drilling and formation evaluation standard operating systems and communica-
The company can now say, “we offer systems. tions protocols rather than developing pro-
the entire drilling package,” says Mr Terra- In April 2008 it acquired Hydril Pres- prietary ones. The software runs on the
nova. sure Control, which manufacturers blow-out UNIX open source operating system and
GE also harnesses expertise from other preventers, drilling control systems and sub- communications are in TCP-IP standard.
divisions of the company (outside oil and sea systems. By using standard formats, it should be
gas). This includes software (it is actually Another acquisition, still in the works easier to replace, fix or upgrade equipment
the 14th biggest software company in the at the time of writing the article, is of Well- in the coming decades.
world); rotating equipment; remote monitor- stream Holdings, a UK company which
ing (including from aeroplanes); electronics makes flexible risers and static flowlines for Semstar 5
in harsh environments (such as at the top of deepwater. This will enable GE to connect GE has invested millions of pounds in de-
a wind turbine), equipment reliability (from seabed equipment to topside equipment veloping a new control system for subsea
work in the nuclear industry). The company without using solid risers. equipment called SemStar 5. To date, 84 of
has experts in materials sciences, aerody- the units have been supplied to Statoil.
namics, combustion, flow and motor dynam- Sharing technology Each circuit board in Semstar 5 has an
ics. GE strongly encourages the sharing of entire computer on it – so if one circuit board
The company operates an “Oil and Gas knowledge between different parts of the fails, the other circuit boards are not depend-
University” in Florence, which has trained company, and discourages people from ent on it.
252 students since 2005, particularly in lead- keeping their technology to themselves. Having a control system on the seabed
ership, energy, oil and gas processes and ro- “I tell product managers, you go steal is essential for fast response. If the data had
tating equipment. the ideas from the other GE businesses,” Mr to go to a surface installation for processing,
Terranova says. it would take too long. “Things are happen-
Macondo One example is the microchips devel- ing more quickly on the seabed,” Mr Terra-
The company is very proud of the contribu- oped for wind turbines, which are now be- nova says.
tion it made to trying to stop the flow of the ing used in subsea equipment, replacing the The control system uses Bayesian mod-
Beyond
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The Geological Society,
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