Oil companies lean on data collection to save money

Technology and the oil industry are by no means strangers. Using sophisticated equipment for both finding and drilling for oil has been the norm for many years. Recently, oil firms have further relied on technology by starting to use data collection software to store and compare information for all aspects of drilling.

Tiny sensors incorporated into drilling and production equipment collect data while operating. The sensors monitor variables like: pumping pressure, heat, and rotational speed of drill bits. This information is then analyzed, compared, and stored using special software.

Matt Fox – executive VP for strategy, exploration, and technology for ConocoPhillips – explained, “By comparing data from hundreds of sensors, its program automatically adjusts the weight placed on a drill bit and its speed, accelerating the extraction of oil. It is just one application, but if applied to more than 3,000 wells ConocoPhillips hopes to drill in the Texas basin, those small sensors could lead to billions and billions of dollars in savings.”

Houston-based ConocoPhillips now uses the sensors and data analytic software in the Eagle Ford shale basin down in South Texas. The oil producer uses the Spotfire data visualization package, created by Tibco Software. The technology has cut the normal drill time for new wells in half.

Producers can now purchase equipment already fitted with sensors and all of the required software from industry service firms like Schlumberger and GE Oil and Gas Unit.

Binu Matthew, who is charge of digital products at GE Oil and Gas, explains, “Back when oil traded at more than $100 a barrel – before the price crash in 2014 – data analysis was an ‘afterthought’ for most oil firms, but now – with prices at about $43 a barrel after recovering from a low of about $26 in early 2016 – the efficiency aspect is far, far more important.”

The use of big-data analytics, or data mining, has spread throughout the industry. Last year Ernst & Young examined 75 big oil and gas companies. Out of the 75 companies surveyed, 51 of them invested more than $100 million in data analytics over the past two years. Almost 75% of the same companies plan to spend 6 to 10% of their capital budgets on digital technology.

The software can also be used to analyze designs for fracking wells. Occidental Petroleum Corp. uses a program to analyze data on well completions and geology to find out if injecting steam or water would produce more oil.

Another company, Texas Standard Oil, uses data mining to choose which properties to explore. The company uses the same Spotfire program used by ConocoPhillips. Standard Oil uses the software to rank asking prices for land, using variables such as: completion, production, and geological variables.

“The technique has reduced the time needed for evaluating land parcels from weeks to hours – and resulted in better decisions. We found value in properties when many other teams did not,” added Abhishek Gaurav, a petroleum engineer for Texas Standard Oil.

With the future price of oil in question, more companies are turning to technology to cut costs.

Article written by HEI contributor Raymond Arrasmith.

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