The Integrated Digital Oilfield OperationsEnabling Profitability During the Low Oil Prices
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Transcript of The Integrated Digital Oilfield OperationsEnabling Profitability During the Low Oil Prices
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Stephan Klein, Vice President, SAP, Germany
Arif Abdullah, Director, SAP, Germany
The Integrated Digital Oilfield Operations
Enabling Profitability During the Low Oil Prices
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Agenda
The Trends in the Industry
The Oil & Gas Upstream Operations
Introduction to Integrated Digital Oilfield Operations (IDOO)
A Day in Production Operations
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Clean Energy
Price vs. Cost
Radical changes in supply and expected changes in demand
Sustainability
Sarbanes Oxley
Sanction Party compliance
Environmental compliance
Increased Governmental Regulation
Resource and asset optimization
National Oil Companies expanding
Mergers & Acquisitions
Global business operation models
Global Market Dynamics
Demand continues to grow in emerging economies
Supply resources shift for oil and gas
Oil price volatility
Shifting Demand & Supply Patterns
Operational excellence
Digital oilfields
Asset performance
Maximize Reserve Recovery
A price of $128 per barrel of oil will be needed to support development of new resources such as
light tight oil and ultra-deep water. WEO, 2013.
More wells, Wider Areas
More complex accounting dealing with multiple leases
More complex logistics to drill/produce
More options/constraints to delivery
Unconventional
And Where are we with Price Now
Unconventional
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Shifting market >>> Technology convergence >>> Empowerment of people
Increasing asset complexity enriches technology business
15 Billion connected devices
Continuous capital investment getting to the next barrel
More data in last 5 years than entire history of humankind
1 Billion people engaged in social networks
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2015 SAP SE or an SAP affiliate company. All rights reserved.
A CIO of a US $20
billion company will
typically have around
1000 large enterprise
applications to manage
1000
By 2020
Of data that needs to
be analyzed (40 billion
terabytes of data)40 zetabytes
of CIOs cannot respond
timely to digital
opportunities 451%
Today
Companies live in times of unprecedented pace of change
End of 2020
1 ScienceDaily. ScienceDaily, 22 May 2013
2 Technology Adoption Report: Business Networks, Ardent Partners, 2014
3 Internet of Things (IoT) 2013 to 2020 Market Analysis: Billions of Things, Trillions of Dollars, 2013
4 Gartner, 2015
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Cut in Capital Expenditure. Tighter scrutiny of the investments in high risk projects
Optimize Capital
Spend
Optimize Production Cost / Barrel. Maximize reserve recovery from existing fields
Optimize Production
Management
Increased focus on sustainable operations & Risk Management. Reduce Cost across the organization e.g. Supply Chain etc.
Sustainable Operations
Talent Management Contingent Workforce Management
Optimize Workforce
and Talent
Mergers & Acquisitions. Economies of scale not viable for small players
Enable Mergers &
Acquisition
Upstream Business imperatives in the new reality
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The ever increasing business complexity is leading to higher cost, less
innovation and less growth
Higher cost
Less
Innovation
and hence
less growth
10.2% or US$237 billion
of profits is lost by top 200
global companies due to
hidden costs of complexity
Global Simplicity Index, 2013
Complex decision makingLarge global organizations have created so much complexity that businesses often struggle to bring good
ideas to the marketplace profitably
McKinsey, 2014
Complex business processesLarge organizations can spend between 40% and 80% of their time on non-value-added activities
BCG, Complexity Report
Complex technology40% executives worry that their organizations will not keep pace with technology change and lose their
competitive edge.
McKinsey study, 2013
Business complexity
Innovations top performer see higher revenue
growth
leading to a 3-fold difference in 5 years
Bain, 2015
is leading to
and needs to be tackled to ensure business success
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More than 60% of CEOs expect 15-50% of their earnings growth in the next 5 years to
come from technology-enabled business innovations.
McKinsey study, 2013
Everything in the Cloud
Networks
Convergence of social, business
networks
Platform
Advances in in-memory computing and
decline in hardware costs
Applications
Role Based, Location and Context-
Aware, Intelligent, Predictive, mobile
Transformational technologies will drive business
innovation like never before
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but most companies spend today 2/3 of their IT budget just maintaining the status quo, leaving only 1/3 for new innovations
28%Drive business
innovation
72%Keep the
lights on
Drive
business
innovation
Keep the
lights on
As-Is Business
expectation
ComplexityDecision making
Business-process
Technology
InnovationCustomer experience
Employee engagement
Resource optimization
Networked economy
40% executives worry that their organizations will not keep pace
with technology change and lose their
competitive edge.
McKinsey study, 2013
Source: Forrester IT Survey, 2013
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2015 SAP SE or an SAP affiliate company. All rights reserved.
SAP oil&gas value map
Capital and Spend
Effectiveness
Capital Planning
Portfolio and Project Management
Strategic Sourcing and Supplier
Management
Procure to Pay and Business
Network
Operational
Integrity
Risk Analysis and Governance
Workforce Competency
Asset Integrity
Hydrocarbon
Supply Chain
Hydrocarbon Supply
and Distribution
Hydrocarbon Processing
Visibility
Commercial Sales
and Marketing
Secondary Distribution
and Fuels Retailing
Convenience Retailing
Integrated Digital
Oilfield Operations
Hydrocarbon Revenue Management
Field Logistics
FinanceFinancial Planning
and Analysis
Accounting and Financial Close
Treasury and Financial
Risk Management
Collaborative Finance
Operations
Enterprise Risk
and Compliance
Management
Human
Resources
Core Human Resources and
PayrollTalent Management
Time and Attendance
Management
Workforce Planning
and Analytics
Environment, Health, and Safety
Enterprise
Information
Management
Hydrocarbon Production
Management
Platform and
Technology
Data Architecture and
Integration
Information
GovernanceContent Management Information Archival
Enterprise TechnologyAnalytics
Technology
Mobile
TechnologyIn-Memory Technology
Simplify business processes
https://rapid.sap.com/se/executive
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Optimize the Oil
Supply Sources
As stable sources of oil and gas are becoming a scarce commodity, companies are driven to explore new
sources and new ways to extract oil and gas. Intelligent oilfield technologies can help oil companies get
the most out of their existing fields and establish successful new fields in remote and harsh areas
Increase
Production, Reduce
Costs, Increase
Safety
Managing an oilfield requires a balance of maximizing well life and optimizing production equipment.
Monitoring and analyzing data can help achieve this balance, but the data validation, analysis and
diagnosis is laborious without a system. Intelligent oilfield solutions can increase production and cut costs
while reducing the risks for its employees
Improve Data
Management
While many new oilfields contain state-of-the-art monitoring equipment, older oilfields can provide only
limited data. In fact, some critical information is still collected on paper. Even when data is electronically
gathered, most companies store it in isolated systems that have are not easily able to talk to one another . With the intelligent oilfield, integrated systems and advanced technologies analyze raw data from oilfields
and turn it into meaningful information
Manage Aging &
Dwindling
Workforce
Industry sources estimate that demand for hydrocarbons will continue to increase to approx. 100 MMbpd
and labor shortage of 1Mn by 2015 (avg oil worker is older than 50 yrs). Digital Oilfield technologies
enable productivity to close the supply gap by accelerating employee productivity, in which a handful of
skilled people can accomplish what required a few hundred in the past
Digital oilfield is the umbrella term for technology-centric solutions that allow companies to leverage limited resources. It allows companies to capture more data, with greater frequency, from all parts of the upstream value chain and analyze it in real or near-real time, thus optimizing reservoir, well, and facility performance
Problem statement and objectives
Integrated digital oilfield operations (IDOO)
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The capability to monitor and manage all operational activities in real-time or near real-time, regardless of location
Operators seek to leverage real-time asset data in conjunction with sophisticated analytical tools and techniques to continuously optimize field performance.
IDOO* defined a common view
A sample set of technologies that are receiving
universal industry acceptance include the following:
Remote Real-Time Facility
Real-Time Drilling
Real-Time Production Surveillance
Intelligent Wells
4-D Visualization and Modeling
Remote Communications Technology
Integrated Asset Models
Workflow and Knowledge Management Systems
Production Volume Management Systems
*Also called Digital Oilfield, Smartfields, i-Field, Field of the Future, e-Field, Integrated Operations
Shell UPDS, Smart Field many projects worldwide
BP - Field of the Future many projects worldwide
Chevron - iField many projects worldwide
KOC - Kuwait Integrated Digital Field Jurassic (KwIDF) Launched 2009
Marathon Oil - ViewPoint
ADNOC - Various projects DOO, Smart Fields
Petrobras - GeDIg project Carapeba (2006) and Campos 2010
PTTEP - Gulf of Thailand project 2010
Saudi Aramco - Many projects
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Exploration &
Reservoir Mgmt.Drilling & Development Production Dispose & Abandon
Generally, the digital Oilfield encompasses both the tools and the processes surrounding data and information management across the entire lifecycle of upstream activities
Key scope of IDOO in upstream operation
Long term portfolio planning 3D/4D seismic Geological Model Core data for Geostatistical Model Well logs PVT data Well testing and pressure buildup Reservoir Modeling Enhanced oil recovery programs
Site management (Right of Way) Wired drill pipe LWD/MWD Rotating equipment EHS compliance Hazardous material disposal Field development Inventory management Procurement Project management
Well Design Economic analyses Facility planning and mgmt. Production allocation & surveillance Production planning and mgmt. Well and field services Energy mgmt. Operational excellence Integrity & reliability Logistics and contract mgmt. Hydrocarbon logistics and storage Venture financial mgmt.
Environmental certifications Asset disposal planning Plug and Abandon activities Remedial work & site restoration Project execution and monitoring Logistics (People, Stores &
Spares)
ITOT
Big Data
Core
01 Year 02 years 20 years 06 Months
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Solutions from SAP for integrated digital oilfield operations
Promote an integrated framework for production
allocation, planning, and maintenance, and support
modeling of linear assets
Hydrocarbon production management
Validate data, perform production allocations, create forecasts,
and capture deferment events
Hydrocarbon revenue management
Streamline financial, revenue, and venture processes to explore,
develop, and product hydrocarbons
Field logistics
Reduce the time and effort needed for ordering, scheduling, and
delivering field activities and services
80%Of decision makers think access to the right
information at the right time is critical to their
business+76%
Operating margin with historical and forward-
looking views into financial and operational
performance
Typical results*
*Source: SAP Performance Benchmarking.
What do SAP solutions help customers do?
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Well pad operations
Operational plant maintenance on mobile devices
Empower field workers to perform Well Pad Operations processes and access necessary context information using mobile devices
Enable core functionality from SAP Plant Maintenance on (offline) mobile devices
Besides performing planned maintenance activities, field workers also perform routine checks using checklists
Immediate incident reports including integrated picture taking capabilities
Offline-availability of (technical) documents and BOM information
Business Needs & Use-Case
Improve maintenance efficiency and productivity of field workers by providing and capturing plant data, when and where required lower administrative efforts
Increased data accuracy and near real-time information in backend systems (no hunt for information)
Avoid legal actions and reduce risk of environment, health and safety incidents
Increase operational efficiency by utilizing new technological possibilities
Business Value
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Well opportunity management
Well services activity management
Improve WSAM proposal processing time
Leverage SAP platform capabilities for integration of business processes
Decommissioning of disparate legacy system
Business Needs & Use-Case
Effective planning and execution of well services to maintain oil and gas production levels
Optimize usage of critical resources e.g. Hoist
Support effective decision making process by providing consolidated information
Scalable and Adaptable Solution based on SAP Application Portfolio
Improve scheduling process by automating business processes to reduce manual data entry, delays and errors
Business Value
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Real-time prediction of drilling failures
2013 Confidential and Proprietary, Cognilytics, Inc.
Stuck drill problem costs the oil industry hundreds millions $
every year
Even when all precautions are taken, stuck pipe may occur
Problems come quickly if corrective action is not taken as soon
as the sticking situation is noticed
Process is not analytical with prediction based on the drilling
crews experience and skill
Reduce Oil exploration and drilling costs
Respond rapidly to changing drilling conditions
Implement an analytical control system that alerts crew to stuck drill
events.
Enable real time prediction to failure with low latency
Improve automation/execution speed & efficiency of drilling operations
and reduce drilling cost
Avoid lost revenue due to down time of drill
Use SAP Predictive Analysis on HANA to :
Detect and predict upcoming events and potential
failure in real-time to enable corrective action
Use data from multiple sources including the drill
string, earth model, historic data etc
Aggregated to build models, pattern recognition, and
simulation
Business Needs & Use-Case Objectives
Solution Approach
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A day in production operations
The IDOO StoryA field produces primarily Oil , with some water production. The oil field makes extensive use of ESP (electric
submersible pump) due to the low pressure Oil being produced. There are more than 1000 producing wells on this
field.
In a certain year Oil production seems normal.
In the next year, the Production Manager notices that monthly Oil production is falling below plan. Investigation
also reveals that failure rates for ESP have increased. Deeper investigation reveals a root cause as Bearing Pack
(Oils-Sealed) failures & manual adjustments to pump operational parameters for Optimum operating conditions
(Water cut, BHP, Vibration, Temperature) for optimal operational
A new maintenance program is designed to replace the worst performing bearing pack more frequently
Real Time Operation Monitoring and Reporting, Operations Management based on Predictive Analysis
Effect of well outage on Production Plan is simulated, assessed and a new Production Plan is created
Maintenance Plan is executed This also intimates Procurement and MOC activities
Maintenance Executed and completed
An incident is reported and managed whilst maintenance was being performed
All costs associated to the program are captured and allocated to JV partners
Company Execs are able to see / measure the positive Impacts of the program in due course
What
Change
Consequences
Impact
Application &
Platform
Network
Application
Application, Network
& Platform
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Run Simple with SAP
Intricate Business Models
Pace of Change
Complexity in Business & IT
Speed of Innovation
Pioneering Business Models
Faster Time-to-Value
Reduced TCI & TCO
Enabled Growth
AcceleratedInnovation
SimplifiedBusiness & IT
SustainableEngagement
Simple to do Business with SAP
One Recommendation (Solution Center)
Simplified, global Portfolio, Contracting & Pricing
SAP MaxAttention
as the foundation
New Business Models
Innovation Roadmap
Co-innovation onSAP HANA Cloud
Streamlined Processes & Decision Making
Real-time business via SAP HANA
Choice of deployment (OnPremise, Hybrid, Cloud)
Landscape Optimization
Focus on Outcome & Value Realization
E2E Engagement
Long-term Relationship
One Accountable Lead
Run Simplewith Service and Support
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SAP platforms and solutions reflect unmatched industry expertise
>50% Of the worlds oil movements are
managed with
SAP solutions*
800+ oil and gas customers worldwide
Industry-driven, robust advisory
councils help ensure alignment
Deep industry-specific capabilities with
clear industry road map
40 years of delivering value to oil and
gas
Overall, 6,000+
customers run SAP
software worldwide
*Source: SAP Performance Benchmarking
Largest oil and gas companies
in Forbes 2000 rankings
85%
ExxonMobil
Royal Dutch Shell
PetroChina
Chevron
Gazprom
British Petroleum
Petrobras
Total
Sinopec
ENI
SONANGOL
Statoil
Rosneft
Lukoil
ConocoPhillips
CNOOC
Ecopetrol
Schlumberger
Reliance Industries
Phillips66
YPF
NNPC
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Thank You
ENERGY LIVES HERE!
Stephan KleinGlobal Vice President
Energy and Natural Resources Ind.
T +49 351 4811 4800
Arif AbdullahGlobal Director
Energy and Natural Resources Ind.
T +49 622 7768 304
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2015 SAP SE or an SAP affiliate company. All rights reserved.
The IDOO Story