New technologies will fuel surging US oil production 0

Commentary by David Farr, Chairman and CEO of Emerson

A funny thing happened to the oil and gas industry as it lay flat on the mat after the collapse of oil prices about four years ago.

It figured out how to get up and start investing for the future again.

While scores of exploration and production companies went bankruptand more than 200,000 American energy industry workers lost their jobs, some resourceful producers figured out how to slash costs and boost efficiency. Upstream, midstream and downstream, they adopted new technologies that enabled them to cope with much lower-priced oil.

Now, with oil back to $60 a barrel and more, their production is surging, and the world has in some ways been turned upside down. As The New York Times recently reported, the United States is rapidly becoming a significant world oil and gas producer. Led by shale oil companies that adopted innovative technologies, America will likely surpass Saudi Arabia and rival Russia as the world’s leading oil producer this year.

Good news just beginning to flow

But for oil and gas companies, it’s fair to say, the good news has really just begun to flow. That’s because the opportunities for applying technologies that bring down costs and boost productivity are still enormous, and innovation is expanding rapidly. The turnaround we have begun to see in some companies’ fortunes is only the tip of the iceberg.

In part that’s because until just recently, the industry has been decidedly slow to adopt new digital technologies. That’s understandable, given the hefty profit margins companies reaped when oil surpassed $100 a barrel – peaking a decade ago this summer at more than $145.

Prices like that made new approaches and innovation a low priority; the overwhelmingly primary challenge was production – maximizing output now. Then, when prices crashed – to $26 just two years ago – most companies were more focused on cutting their capital spending than innovation. The same pattern seemed to hold true across all manufacturing industries in general.

But as prices began to creep up again, at least some oil and gas companies began to fold more automation and technology into their plans. A year ago, I wrote that for the first time in years, I was beginning to see hope in the industry, as companies were finally beginning to make long-overdue investments to enhance safety, efficiency and productivity. Now these companies are playing a major role in the U.S. production surge.

For that very reason, more and more companies are going to want to jump on the bandwagon with them, accelerating the trend’s momentum. Also playing a role in companies’ plans: digital technology itself is better than ever before, and more reliable and safer.

Chewing on ‘Big Data’

Consider sensors, for example. Today they can measure not only variables such as temperature, pressure and fluid levels, but also more sophisticated ones, like corrosion, vibration and hazardous leaks. And they can wirelessly communicate all these measurements reliably, saving vast sums on engineering, no-longer-necessary wiring and labor. They can communicate over the Industrial Internet of Things (IoT), which is no longer a dream – it’s a reality. But this innovation is just beginning.

Then consider the ability to access the reams of information – the Big Data – that all these tireless sensors are producing. Cloud computing makes it possible to set up central operations wherever we want, even as the sensors operate in “four D” environments – places that are Dull, Distant, Dirty and Dangerous. New software and analytics are enabling companies to chew the Big Data into digestible bites and give them actionable insights. As a result, companies can predict, save and optimize in ways that would have been considered impossible only a few years ago.

An example: End-to-end Exploration and Production (E&P) solutions are now available to help oil and gas operators increase efficiency, reduce costs and improve return on investment. These solutions range from seismic processing and interpretation to production modeling.

Companies can now interpret data and generate high-fidelity representations of existing brownfield assets in ways that enable them to maximize production and avoid nonproductive drilling and wasteful exploration spending.

Advances like this will help companies ensure ongoing safety, improve reliability, maximize availability and reduce operating costs, as well as avoid negative environmental impacts. They’re the kinds of innovations that have already changed the world in just the last couple of years. It’s clear now that in the years ahead, we can confidently look forward to much more in a safer, more productive, more environmentally friendly environment.

Reference source: CNBC Published March 5, 2018

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These AR Goggles Are Making Faster Fixes in Oil Fields 0

By Milana Vinn

  •  Managing complicated repairs remotely saves oil companies time and money

Replacing parts of an outdated Baker Hughes turbine at a petrochemical plant in Johor Bahru, Malaysia, is about as fun as it sounds. The chore was supposed to halt operations at the facility for at least 10 days and cost $50,000 to fly a specialized U.S. work crew about 9,000 miles. Instead, once the equipment upgrade began last year, it took only five days and zero air travel—just an on-site technician wearing a dorky helmet camera and a few American engineers supervising remotely. They watched and coached the local crew through the helmet from a Baker Hughes site in Pomona, Calif.

Augmented-reality headsets, which overlay digital images on a real-world field of vision, are driving advances in industrial technology a few steps beyond FaceTime. While the likes of Apple, Amazon.com, Google, and Microsoft race to develop mainstream AR consumer gadgets in the next couple of years, they’ve been outpaced by oil companies looking for ways to cut costs. Some are simply buying the goggles and building custom software; others are investing directly in AR startups; still others are making the hardware as well. Baker Hughes, a General Electric Co. subsidiary, calls its rig a Smart Helmet. “Traditionally I would have to pay for two people’s travel, two people’s accommodations, and so forth to visit the customer’s site to do the mentoring,” says John McMillan, a regional repairs chief at the company whose team uses the helmet regularly. “It’s saved me a lot.”

Baker Hughes co-created its AR headset with Italian developer VRMedia S.r.l. and wrote its own software. BP Plc says it’s using AR glasses to bring remote expertise to sites across the U.S. Startup RealWear Inc.says it’s signed two dozen other energy companies, including Royal Dutch Shell Plc and Exxon Mobil Corp., to test its $2,000 headset. On March 6, AR software maker Upskill announced a fresh $17 million in venture funding from Boeing Co.Cisco Systems Inc., and other investors.

Remote gear can help experienced workers stay on the job even if they can no longer handle the travel or other physical demands of rig maintenance. “With these technologies, it’s more about the people than the hardware,” says Shell Executive Vice President Alisa Choong. Janette Marx, chief operating officer for industry recruiter Airswift, says remote work is also a good sales pitch to skilled technicians who might be lured by cushier gigs in Silicon Valley.

The bigger prize for oil companies is reduced downtime for equipment. Each day offline for a typical 200,000-barrel-a-day refinery can mean almost $12 million in lost revenue. Offshore oil and gas facilities often halt operations while waiting to fly specialists in by helicopter and, according to industry analyst Kimberlite International Oilfield Research, shut down 27 days a year on average. Little wonder, then, that analyst ABI Research estimates energy and utility companies’ annual spending on AR glasses and related technology will reach $18 billion in 2022, among the most of any industry.

Remote AR work doesn’t always go smoothly. Oil rigs often lack reliable wireless networks, and many headsets don’t yet meet the strict standards for areas near hazardous materials or high-risk jobs. Under certain conditions, for example, the headsets might emit dangerous sparks. That’s one reason many of the oil companies’ pilot programs remain just that for now.

Baker Hughes hasn’t had to worry about those issues yet, says John Westerheide, director of emerging technologies. In Malaysia, engineers were able to view equipment, send images to the headset screen, and talk directly to the on-site workers with few hiccups. “The way that we currently go to work,” Westerheide says, “that’s going to become much more virtual, interactive, and collaborative.” —With David Wethe

BOTTOM LINE – Energy and utility companies’ annual spending on AR and related technologies, which reduce travel and equipment downtime, is expected to hit $18 billion within five years.

Source Bloomberg

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