FOR NOCS, IT’S TIME TO DIGITISE OR DIE
While national oil companies (NOCs) in the region have traditionally been slow in innovating, would the low oil prices convince them of the need to invest in new technologies? Dr Walid Fayad, Executive Vice President at Booz Allen Hamilton MENA, gives us the low-down on how the O&G sector is reacting to this crisis.
In general, oil fields in the region are still quite nascent with respect to digitization. At this time, it is imperative that companies that have invested in the relevant infrastructure also invest in the critically important analytics and visualization layers to tie the data together. For example, some companies have already installed the latest metering and well surveillance equipment. However, this equipment needs to be coupled with strong analytics on the back end to help predict well failure in order to avoid both direct costs in the form of costly downtime and indirect costs due to suboptimal work over rig utilisation. These investments can help NOCs turn their wealth of information into meaningful insights, reduced costs, and increased cash flow.
So, what is needed now is not necessarily an investment in new technology, but rather optimizing on the investments that have already been made. With budget cuts being felt in every sector, NOCs cannot afford white elephants. At the same time, if they stop making targeted investments, they risk falling behind technologically. So we will see smarter investments aimed at getting more from what is already there. At any stage of technological maturity, a relatively incremental investment in analytics can significantly improve the status quo. For example, the majority of wells being drilled today are collecting real-time drilling mechanics data (torque, weight on bit, rotation, etc.) When properly aggregated and analyzed, this data can be used to greatly improve drilling speeds and reduce loss time incidents (e.g., stuck pipe, downhole tool failure, and formation damage).
Once the data is integrated, effectively analyzed and presented in a meaningful way, there are benefits across the value chain, from exploration to transportation and export. Most relevant for regional NOCs, however, are the areas of: Drilling Optimization, Production Optimization (including reservoir modeling and management), and Executive Dashboards that can help decision makers better link the business with the realities in the field. Executive Dashboards, while conceptually not new, are advanced platforms that have the ability to give senior decision makers unparalleled insights. It is now possible to integrate the production data of every well in a portfolio, the capex projects, and the reservoir models to better understand the impacts of various decisions on the company's operations and business outlook. All this can be done on a single, easy-to-use dashboard, bringing the whole company to a CEO's iPad.
Many oil companies have invested in the needed technology. To maximize the benefits of digital oil fields, senior management must work to overcome the institutional barriers that keep the data locked away and prevent it from becoming useful information. It is important to remember that to do any of this, security is paramount. Specifically, it will be important to secure both the Operation and Information Technology environments. This means ensuring that best practices are being implemented at every stage of a project lifecycle, from design to operations and maintenance.
DR WALID FAYAD Executive Vice President Booz Allen Hamilton MENA