Following the pandemic, companies are adjusting operating philosophies to focus more on production optimization and maximize existing investments. This growing need has fueled interest in the latest digital offerings, especially for remote operations, visualization, Edge automation and artificial intelligence.
Bimal Venkatesh, Weatherford
The oil and gas industry has faced numerous challenges in the recent past. Even though the price of oil is improving, there remain significant fluctuations, leading to a lot of uncertainty and causing our industry to continue struggling with macro issues. The global pandemic, which has persisted into 2021, has magnified the struggles. As a direct consequence, we are seeing unprecedented shortages in the labor market and delays in the global supply chain that are not expected to improve until the end of 2022. Both have resulted in sharp rises in costs that are further delaying the recovery of balance sheets, despite increasing oil prices.
CONSTRAINTS ON CAPITAL AND LABOR FORCE
Fig. 1. Operators are adjusting their operating philosophies to include a renewed focus on production optimization to maximize their existing assets.
In addition to the external challenges that companies increasingly face, capital expenditures have been slashed anywhere between 20% and 30%. Companies across the board are making tough decisions on where to invest or not to invest. In such an environment, stakeholders are also looking for ways to maximize their capital investments, already made in prior years. Another significant resource crunch that remains a mainstay of the industry is the severely reduced workforce. This means there aren’t enough experienced personnel available to fulfill current needs, and the employees that are on staff are challenged to address the ever-increasing workload. This means we must continue to be more efficient in our operations, despite improvements in the market conditions, Fig. 1.
To address the numerous challenges, companies are adjusting their operating philosophies. For example, there is a renewed focus on production optimization. The production phase requires relatively low capital investment, yet it has a significantly high return on that investment. According to McKinsey & Co, production management projects deliver a much larger economic return than new well drilling in all type-curve areas and requires a smaller capital expenditure. Therefore, companies are increasingly focusing their operational strategies toward maximizing investments by boosting production, increasing uptime, and enhancing the personnel efficiencies relating to operating the wells.
This means there are tens-of-thousands of gas-lifted wells in North America, alone, that stand to benefit from this type of investment application. Globally today, most wells are already on some form of artificial lift. However, managing these wells can be more of an art than science, which is compounded by changing production conditions and situations. This in turn, means that sub-optimum operating conditions, such as over-injection and under-injection scenarios in the case of gas-lifted wells, are common. This, then, translates to the fact that production is either left on the table, or an operators’ lift-gas capacity is misallocated or underused.
DIGITAL TECHNOLOGIES INCREASE PRODUCTION EFFICIENCY
Fig. 2. With the launch of Industry 4.0 technologies, solution providers are introducing additional sensors or controllers that would need to replace the existing hardware before benefits of the technology can be realized at the wellsite.
At Weatherford, we have experienced a renewed interest from clients interested in the latest digital offerings, especially because of their capabilities for remote operating, visualization, Edge automation, and artificial intelligence. With the Industry 4.0 technologies coming into the oil field, solution providers are introducing additional sensors or controllers that would need to replace the existing controllers before the benefits of the technology can be realized at the wellsite, Fig. 2.
For example, companies are developing and introducing additional sensors to measure pressure, temperature, vibrations and flowrates, either in the subsurface regimes or at the wellhead or near the wellhead. The solutions involve transmitting large data sets via IoT gateways and hubs to the Cloud, where data scientists build AI-based, machine-learning models. This requires a significant investment in capital, which as described earlier, is severely constrained now. Additionally, many of these technologies are still in their infancy, with limited or no prior history of success. These circumstances are significantly increasing the risk of the technologies failing to achieve the stated objectives.
A significant percentage of artificially lifted wells already have sensors and automation equipment at the wellsite that were installed over the last couple of decades or earlier. However, the problem is that the controllers only perform basic control functions, whereby they have just enough computational capabilities to perform the simple functions that operate the artificial lift equipment at pre-set operating setpoints—specified by the operator or the production engineer at the wellsite using a SCADA software solution.
Due to limitations of communication bandwidth and availability of qualified personnel, these operating set points are updated infrequently. As a result, oftentimes the controller is managing the well with outdated setpoints, even when reservoir conditions and other physical conditions change. Knowing that this is highly likely, when an operator or the engineer sets the set points, they set it to safe limits, to allow for enough tolerance to account for such changes.
The Weatherford digital solution uniquely addresses these challenges at the wellsite. It maximizes the use of existing digital equipment at the wellsite and integrates proven lift optimization and well-modeling technologies into the Edge. ForeSite Edge is a smart device that can be implemented within the enclosure of any controller already at the wellsite, or it can be installed as a stand-alone device on new wells with no controllers. The result is the same. It introduces not only proven models to the well, but also advanced artificial-intelligence capabilities to achieve higher production and lower operating expense.
COMMINGLING INCREMENTAL GAINS
Fig. 3. Wells on artificial lift, with unique operating conditions, can now be autonomously controlled achieving operational improvements that reduce OPEX by up to 78%.
Through use of physics-based modelling at the Edge, it is now possible to continuously and autonomously optimize an artificially lifted well that requires minimal human intervention, Fig. 3. The Edge device is an IoT-enabled smart device that can analyze the operating conditions of the well and continuously adjust it to match the changing inflow conditions. Edge also will notify an operator instantly when optimum operating conditions can no longer be maintained autonomously and subsequently require intervention from a human expert.
In short, a smart device-controlled, artificially lifted well can, and will, run itself in optimal conditions by altering set points within defined technical limits. This has been the promise in the industry, but the reality hasn’t always met the promise. ForeSite Edge devices, currently running on real artificially lifted wells with different operating conditions and optimization needs, are autonomously controlling the wells and…