Nervous System of the Digital Oilfield

Under conditions, when easily recovered oil reserves are depleted, and hydrocarbon prices are declining, oil and gas companies proceed to increase using innovative information technology to optimize their business. Leonid Tikhomirov, the head of ITPS group of companies, commented on, why the companies in this industry cannot do without digital oilfield technologies in the very near future to the "Standard" press correspondent.  

How crucial is the task of increasing the yield of oil deposits? How did the industry solve it earlier?

To begin with, easy-to-recover oil reserves are depleted. New oil fields are discovered, but they are located farther and farther from the potential consumer: in the Far North, in the deserts, on the deep sea-bed. Companies have to drill very deep wells and apply expensive extraction technologies which are often harmful to the environment, and therefore extremely unpopular. In this regard, there’s much tension around the issue of increasing returns from the existing deposits. And that’s not forgetting the competition from other types of energy sources. According to analysts, renewable energy resources already account for about 10% of the world market, and this share is constantly growing. Finally, companies are feeling compelled to compete with their industry counterparts. In such a case, the company with the lowest production cost will come out on top.

Increasing the level of oil production is possible only with complete and up-to-date information on well condition and the oilfield as a whole. For a long time, the means of collecting the necessary information simply did not exist; there was not enough computation power to process it.  So, it was that while application of complex and expensive technologies made no economic sense, easy-to-recover oil reserves were exploited in excess.

How is this task being solved now? What impact can oil and gas companies expect it to have?

When digital technologies merged with traditional ones, the concept of the smart oilfield emerged, and it became another push for innovative development. Various sensors fitted on equipment appeared quite a long time ago. But to install them on numerous remote processing facilities used to be unprofitable. Besides that, there was no communication infrastructure to collect information from them. Now the cost of sensors and equipment for building a communication infrastructure has considerably decreased. And the energy-efficient standard for data transmission LoRaWAN allows you to create next-generation industrial communication networks without significant investment. The range of such a network reaches 20 kilometres in open terrain, signal penetration power is strong, communication channels are stable, and the data transmission security levels are reliable. The cost of base stations and sensors, which can operate for up to 10 years without the need for recharging, is low.

One of the key components of the smart oilfield is a platform that connects all IT systems of the company's facilities together and collects and analyses big data based on built-in intelligent algorithms and mathematical models in real time mode. We use AVIST (Asset Virtualization System, smart asset management technology) – our in-house technology which solves a whole range of tasks related to operations on the field. Our product is included in the Unified Register of Russian Software. The AVIST platform contains a set of connectors that allow it to be integrated with solutions from the main developers of business-oriented software.

The platform consists of modules that can be used both as a single set, and individually: AVIST.Operation (forecast, monitoring and operational management of events in real time, Field Management); AVIST.Prediction & Choke Modelling (creation of a field digital twin, modelling and optimizing its development through operating modes and activities); AVIST.Planning (integrated production planning, built-in optimizer); AVIST.HSE – Safe work environment (management of occupational and industrial safety) and finally a bank of geological, geophysical, and field data.

The AVIST platform on the one hand provides the technologies for collection and processing of big data in real time, and on the other hand – the tools for modelling oilfield development.

That AVIST is tailored to accommodate for industry-specific issues is owed to ITPS’s many years of experience in the field of design and implementation of IT systems for oil and gas companies, as well as coordination with oil company specialists during the product’s development phase.

To get the most from an intelligent oilfield, introduction of these technologies should be accompanied by digital transformation within production, such as creation of Integrated Operations Centres (IOC) as well as relevant changes in company business processes. This new form of production management at the operational level requires that specialists from various areas (geologists, technologists, mechanics, power engineers, etc.) are coordinated into one interdisciplinary team. IOC is equipped with solutions to support communications and workflow management, as well as with a knowledge base that harnesses and promotes the sharing of experiences. IOC enhances the accuracy and speed of decision making, thus morphing into a decision-making centre.

Introducing the given technologies results allows for a saving in material resources to be made and increases production efficiency. Unspent funds can always be put toward upgrading the processing systems, exploring new deposits and addressing other pressing issues. In addition, the company's competitiveness improves owing to lower production costs, which, as already said, is extremely important in the current situation on the oil market.

How widely are digital oilfield technologies used? What inhibits their implementation?

Globally, these technologies have been used already for 15-20 years and in Russia for about 10 years. However, so far only 3% of wells are connected to the Industrial Internet of Things (IIoT). In general, there are no more than five oilfields in the country, where everything that we are talking about is implemented as a complete package. As for neighbouring countries, the situation is no better than in Russia.

The expansion of any technology is hampered mainly by resistance to change, and something which is somehow inherent in all people, even younger generations. Inertia when it comes to mindset also takes its toll. Finally, in recent years, many have become unaccustomed to long-term planning, and are unable to adapt to this mode of doing things.

What is the role of Industrial Internet of Things technologies in the creation of digital oilfields? What solutions does the ITPS group of companies offer for this segment? Do they require an upgrade or deployment of new infrastructure?

The role of IIoT subsystem in creating smart oilfields can be compared to the function performed by the human nervous system. Creation of an appropriate infrastructure can be compared with the development of a road network within a city. Moreover, it is a basic technology, which it is impossible to be without. One cannot just equip facilities with sensors and transmission systems and stop at that. They must constantly transmit data, on the basis of which informed management decisions are made, in addition to which they must relay administrative commands. Otherwise, all these devices are useless. Creation of the infrastructure required for this is not too expensive. LoRaWAN technology, which we offer together with our partner ER-Telecom, provides coverage that is much cheaper than using traditional approaches, with a very high level of security.

Let me remind you that the term "Internet of Things" is slightly misleading. It would be more accurate to refer to it in the context of corporate intranets, which are based on the technological framework of the Internet, but may well be isolated from the public Network. Moreover, this eliminates a lot of issues with security. This also fully applies to IIoT.

How typified are the ITPS solutions? Is it easy to replicate them to different production sites?

Everything here works as it would in say, medicine. Yes, there are methods and protocols. Yet for each patient, specific treatment methods must be tailored to the individual: tolerance to medication differs between patients and the health status of individual patients is different. Each field, like any other person, has its own specifics. A lot depends on the culture that has developed in the company and on the technologies used there. Solutions for intellectualization of fields must be replicated enterprise-wide. The AVIST platform enables integration of all IT systems on the facilities and creation of a common information space, and the software product takes into account not only the industry specifics, but also features of various technological facilities of a particular enterprise. To implement IIoT-technology on one well, and leave everything as it is for the remaining six thousand is totally pointless.

Can you give the examples of the smart oilfield implementation by ITPS?

West Qurna-2 – one of the largest oilfields in the world located in Iraq. Production there is more than 20 million tons per year. The field is operated by the Russian company LUKOIL. From my point of view, this is an example of what a digital oilfield should look like: business processes are fine-tuned, there’s nothing superfluous, a very high level of operations integration. At the same time, this doesn’t make them impermeable to a variety of extremes.

Using the intelligent oilfield technologies allows you to get a very accurate forecast with a horizon of up to a year or longer. The solutions implemented by ITPS together with partners optimize extraction per reservoir and in terms of oil recovery technologies. In addition, intelligent management of maintenance and repair of equipment is provided. The total annual economic effect from implementation exceeds $150mn. This is a unique experience for Russian companies, nor are there many analogues at a global level either.

What ROI timeframe can one expect from introducing digital oilfield technologies?

The return on such projects can be anywhere in the region of several months to one or two years. Return on investment is achieved by reducing capital and operating costs by 10-25%, increasing production and extraction of reserves by 3-10% (in new fields – up to 15%), improving economic efficiency of production, environmental and industrial safety, reducing equipment downtime and costs of its maintenance and repairs. All in all, according to the most conservative estimates, the use of IIoT-technologies in Russia only on the most efficient fields will provide a total economic benefit of more than 150 billion rubles a year.