Digital Innovation in Oil and Gas Industry

 By Andrew Burger

From the first digital well-logs to making use of Lidar, satellite and subsurface remote sensing and 3D visualization, oil and gas companies have been pioneers in developing and applying digital information and communications (ICT) technology…

(Cover photo: Goliat field 3D image by Eni Norge)

The incentives for doing so are even greater today as oil and gas sector players push into more remote, extreme areas, try to squeeze more out of existing wells, and face competition from cleaner alternative energy sources increases amidst growing political pressure to reduce greenhouse gas (GHG) emissions. Applying and developing a new generation of oil and gas industry digital ICT offers industry participants an opportunity to increase production, reduce costs and mitigate climate and environmental risks.

¨We are now poised for a second digital age that could further reduce costs, unleash unparalleled productivity, and boost performance significantly—if executives can harness the right technologies to support their business strategy,¨ McKinsey & Co. oil and gas industry analysts write in a recently released research report.

A Legacy of Technological Innovation

France’s Schlumberger has been at the center of technological innovation in the oil and gas industry since the dawn of the petroleum era in the early 20th century. In 1920, Conrad Schlumberger published the results of the experimental surface resistivity measurements he had gathered since 1911. Conrad and his brother Marcel opened Schlumberger’s first office in Paris that same year.

The Schlumberger brothers spent the next three years conducting geophysical surveys in Serbia, Canada, South Africa, Congo and the USA, as well as Romania, where they used electrical prospecting to produce the first map of an oil-bearing salt dome. Today, Schlumberger Ltd. Is the world’s largest oilfield services company, employing some 100,000 people representing more than 140 nationalities in more than 85 countries. In 2015, revenue totaled $35.47 billion.

Schlumberger 3D, offshore imaging

New Markets, New Digital Tech

In the early stages of a historic energy market liberalization, Mexico is a focal point for Schlumberger, as well as the world’s largest oil and gas multinationals. On Sept. 7, Schlumberger WesternGeco and ION Geophysical Corp. launched a new 3D multi-client broadband reimaging program that spans some 82,000 square kilometers in the Bay of Campeche, the most productive of Mexico’s offshore territory to date.

The data the program partners collect should prove extremely valuable as Mexico’s offshore exploration and development licensing auction process proceeds. As Schlumberger explains: ¨The complexity and variability of the geological areas being surveyed require a set of consistent, advanced workflows to maximize bandwidth, while producing data with strong low frequency content for sub-salt areas and high-resolution data for non-salt areas of the basin.¨

The offshore exploration partners will make use of a combination of broadband pre-processing and high-resolution steep dip reverse time migration (RTM) and Kirchhoff imaging algorithms. The results are expected to be ideal for prospect identification and exploration.

Esa sentinel

New Digital Tech: Across the Oil and Gas Industry Value Chain

Oil and gas industry companies are also applying innovative digital ICT in their upstream operations. On June 6, The Netherlands’ Orbital Eye launched a service that employs satellites to improve monitoring of oil and gas pipelines. An unnamed ¨major African pipeline operator¨ was the first to sign up for the service, which holds great promise in Europe and worldwide.

Gas pipelines extend across some 140,000 kilometers across the EU. Another 40,000 kilometers of pipelines carry oil and related petroleum liquids, while local distribution networks deliver these fuels to homes and workplaces.

Aerial inspection surveys reveal just 17 percent of oil and gas leaks across the EU, Orbital Eye points out. Thirty-seven percent are detected by the public. The company’s satellite-based pipeline monitoring service improves on those figures substantially, according to management.

Tapping into publicly available, high-quality satellite and radar images and data from the EU Copernicus program’s constellation of Sentinel satellites, Orbital Eye’s digital ICT platform provides more accurate, timely and broad- or narrow-field monitoring that detects actual and potential threats, including leaks and the slightest ground movement, the company highlights.

Carrying on a Pioneering Tradition

The two aforementioned examples barely begin to scratch the surface when it comes to digital ICT innovation in the global oil and gas industry. “Oil and gas companies were pioneers of the first digital age in the 1980s and 1990s. Long before phrases such as big data, advanced analytics, and the Internet of Things became popular, oil executives were making use of 3-D seismic, linear program modeling of refineries, and advanced process control for operations”. “The use of such technologies unleashed new hydrocarbon resources and delivered operational efficiencies across the value chain,” according to McKinsey & Co. global oil and gas industry practice members.

SEE MORE: Inside Eni Green Data Center by Marco Alfieri

They stand to gain as much or more in today’s energy environment should they prove able to apply the latest digital ICT profitably. According to the McKinsey consultants global oil and gas industry capital expenditures could be reduced as much as 20 percent, upstream operating costs 3-5 percent and downstream costs 50 percent by successfully applying the latest digital ICT.

That includes making better use of existing technology. Oil and gas industry players could realize production increases or cost savings of as much as $1 billion if they can invest in and capitalize on a new generation of digital ICT. “Executives that make their organizations more digital will be well positioned to pursue new growth opportunities,” they conclude.

(Below: ENI Goliat Field 3D image)

about the author
Andrew Burger
Andrew Burger has been reporting on energy, technology, political economy, climate and the environment for a variety of online media properties for over five years.