Oil & Gas
The Technology Revolution in Oil and Gas
The last decade has seen enormous advances in technology related to finding, estimating, and producing oil and gas. A decade ago, many of these technologies would have seemed like scenes from a Sci-Fi novel. But today, they are realities. They range from supercomputers to nanotechnology. Seismic imaging technologies let drillers find oil and gas trapped miles underground and undersea. Oil rigs “walk” from one drill site to the next.
Here are a few of the technologies that will reshape the way that oil companies do business in 2014 and beyond.
The Digital Oilfield
Imagine an oilfield where all the components integrate and communicate constantly on a platform from which companies can manage, measure, and track all of the data coming from all over the oilfield.
Instruments constantly read data from wellheads, pipelines, and mechanical systems.
Information is evaluated by computers, which send analytics to real-time operations centers that fine-tune oil flows to optimize production and reduce downtimes, cutting operating costs by up to 25 percent while improving productivity by five percent.
The investment to make this happen is occurring now. According to Oil and Gas Investor, total upstream energy IT support spending is about $0.25 per barrel of oil. Experts at Booz Allen Hamilton believe digital oilfield technologies could increase the net present value of oil and gas assets by 25 percent.
The New Normal
The days of so-called “easy” or conventional oil are dwindling; so the oil and gas industry has focused on developing technological solutions, thereby increasing the world’s producible reserves and creating the “new normal” of exploration and production. Oil companies of all sizes have used technology to find quantities of oil and natural gas so substantial that worries about running out have dissipated. Here are some of the technologies that are making that possible:
Development of the Subsea Oilfields — Subsea oil and gas technology is advancing to meet the requirements of increasingly demanding production environments: deeper water, greater distances from shore, and higher reservoir temperatures and pressures. Oil companies are cognizant of the risks and rewards. Over 100,000 people attended the Offshore Technology Conference in 2013, a multi-day conference focused on drilling rigs, remote underwater vehicles, and crew safety. At the conference this year, Dr. Phaneedra Kondapi, an adjunct professor of subsea engineering at the University of Houston, presented findings that moving fluid processing to the floor of the sea was the most sought-after technology being developed and improved today. Moving processing to the ocean floor reduces infrastructure costs and production costs, greatly improving return on investment.
The Shale Play — Exploitation of shale basins using hydraulic fracturing (“fracking”) and horizontal drilling techniques has pushed U.S. crude output to its highest level since 1989. The resurgence in production helped the U.S. meet 87 percent of its energy needs in the first five months of 2013, on pace to be the highest annual rate since 1986, according to the Energy Information Administration. These techniques have changed the risk profile of drilling for oil and gas. For example, in the Bakken there is a 99 percent success rate of finding producible oil. With this success rate, rigs are used like a sewing machine putting together a patchwork quilt, just moving from section to section drilling a well and then moving to the next patch. Large shale basins in other countries have yet to be developed. As they begin to be developed, we can expect the supply and demand curve for oil and gas to be impacted.
Enhanced Oil Recovery — Conventional production recovers approximately 35 percent of the original oil in place. The rest remains trapped in the rock. Boosting oil recovery could unlock around 300 billion barrels of oil, according to the International Energy Agency. New techniques of unlocking that trapped oil are being developed, such as steam or chemicals tailored to the properties of the rock and gas. These techniques are being used on older fields, where the exploration and drilling risks are minimal and the infrastructure to get oil and gas to market is already in place. This reduces the risk and the infrastructure cost, making it an attractive investment.
4D Seismic Technology
The expense of exploration in deeper waters and the value of residual oil in existing fields are among the drivers of seismic technology development. Seismic technology is used by petroleum geologists and geophysicists to map and interpret potential hydrocarbon reserves. The size and scale of seismic surveys has increased alongside the increases in computing power during the last 25 years. 3D technology looks at oil and gas reserves as if it is a cube with height, width, and depth. 4D technology adds time as a component, which shows how a reservoir will change over time. The industry’s increasing acceptance and application of 4D seismic techniques in both exploration and production indicates that time-lapse 3D exploration and reservoir monitoring are coming of age as a tool to minimize drilling risk and to maximize the return on investment