From the SPE Intelligent Energy Conference

Some highlights from Tuesday's technical sessions in Utrecht Netharlands last week:

- Shell and CapGemini talked about USD$5B in value from fields "born smart" or intelligent from the design phase, mostly from instrumented well bores, but also mentioned predictive maintenance as a goal
- Chevron gave a very generic presentation on transformational change around prioritizing their 200-some intelligent field projects
- Saudi Aramco defined their I-Field as mostly real-time drilling operations, with a goal to reduce the number of wireline operations (bet SLB and HAL loved to hear that!) to reduce costs
- BP had one of the more interesting and relevant talks, indicating their instrumentation now at over 2M tags on over 700 wells including 80% of their top 100 producers, and using real time monitoring to add 50K BOE / day in production. Preventative maintenance scheduling is in planning for their downhole flow meters in Azerbaijan. They are letting their producing asset customers drive the projects rather than pushing the technology, with goals of shifting support roles from offshore to onshore and reducing personnel on board
- Statoil's presentation on Integrated Operations specifically mentioned multi-field control centers for monitoring rotating equipment, but it was still in reactive mode
- PIPC closed out with a very high level presentation on best practices for automated oilfields

- Got a good look at PointCross's dashboard and workflow user interface, they are more concerned with the data management behind the scenes

Into the Fray (s) ...

Once again, it seems the oil industry has missed an opportunity to be proactive and provide the public with critical information that could help citizens impacted by oil drilling make intelligent and informed decisions. I speak of course of the Marcellus Shale play, where there is an ongoing debate over the environmental impacts of hydraulic fracturing (identifying it by its full technical name avoids all those style questions about "frac' -ing" or "fracking" - see http://blogs.chron.com/newswatchenergy/archives/2010/01/post_12.html).
We all know that our industry has access to plenty of technology tools for the timely distribution of information about leasing, drilling, and completions. So why are we not sharing this information as far as necessary or possible with the public? In Pennsylvania and West Virginia, we have the opportunity to develop a fresh relationship with communities not already numbingly familiar with the oil and gas business like in parts of the South and West. Yet it takes a bunch of social activists from MIT to decide that information about oil and gas leasing should be made available to communities through Google Earth?
See: http://civic.mit.edu/projects/c4fcm/extract
C'mon guys...

BRIC becomes BICSA for Climate Change?

Given the recent attention to the BRIC economies (Brazil, Russia, India and China) after their June Summit in Yekaterinburg, Russia, it was interesting to open the New York Times this morning and see not Dmitry Medvedev or his designee seated at the table with Barack Obama, the Chinese Premier, the Indian Prime Minister and the Brazilian President at the close of the Copenhagen Climate Summit, but the President of South Africa. Perhaps the choice was more of a preference for a growinge economy with a vested interest in biomass and energy and an easier negotiating partner than just the heft of population and GDP?

Monthly Reading in World Oil

A few fun tidbits from the August 2009 issue of "World Oil" from Gulf Publishing...

1) On page 7 in Perry Fischer's Editorial, a new way to define your position on the political spectrum by testing your belief in Global Warming vs. Professional Wrestling. I guess you might be a Dittohead if you think The Undertaker has more professional credibility than Al Gore.

2) On page 11 a news item about a Morgan Stanley trader who "built up a hefty unauthorized oil futures position after drinking at lunchtime, before hiding the deals overnight". Makes me wonder if he would have stayed under the radar if he had reversed the process and done his dealing at night and hiding during lunch. And okay, who here hasn't "built up a hefty ... GAS futures position" after eating at a Tex-Mex restaurant?

3) And finally a nod to those of us explaining to school age kids why they should pay attention in Math class - on page 17 in an excellent discussion on the potential of shale plays, Arthur Berman casually mixes up averages, modes, and correlations. It pays to think for a moment why there is a 3.5 year difference between the average and the mode of horizontal well producing lifetimes. This tells you a lot about the distribution of values without ever seeing a chart if you remember your basic math. Just like it tells you a lot about the real estate business that they insist on using median home values instead of averages, and refer to home prices "from the 200's".

Enjoy and stay skeptical...

Word Cloud

Some interesting technology that got publicity during President Obama's inauguration speech:
http://en.wikipedia.org/wiki/Tag_cloud

Here is a Word Cloud from this blog:




It was created and is posted at:
http://www.wordle.net/gallery/wrdl/1022920/Energy_Industry_Blog

Nitrogen in Gasoline?

Anyone else wondering why Shell is advertising an inert element as an "enhancement" to their automotive fuel? Last I heard Nitrogen and other inert elements actually lowered the BTU rating of hydrocarbons at the wellhead, why would we want to put them back in? Perhaps a hint here:
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5927869.ece
A coincidence that this marketing push comes at a time when Shell is suffering market loss due to their abandonment of alternate energy strategies? And what about the parallels of all the oil companies suddenely using geeky scientists to push their agendas? Remember during the Bush years when scientists weren't very cool? Well maybe our new administration has at least moved toward bringing respectability to to technical professionals who work in the energy industry... that would be a welcome, if unintended, change...

Waiting on Technology?

An article in the New York Times in April (http://www.nytimes.com/2009/04/11/us/politics/11climate.html?_r=1) should remind all of us who are positioning ourselves to apply technology to the new CO2 sequestration segment of the industry that we are on the right track. In the article, Jonathan Pershing, U.S. Deputy Special Envoy for Climate Change, who was at the time leading a U.S. delegation to an international climate change conference in Germany, defended the American "lack of robust leadership" by explaining that the Obama administration was "waiting to measure the American technological ... capacity" and expecting Congress to set specific targets. Many of us expect either a carbon tax credit or cap and trade schemen in the next 6 months to drive the financial business case for applying what have traditionally been hydrocarbon extraction technologies from the oil and gas industry to new CO2 sequestration projects. Pershing has been at this post only since mid-March but brings, interestingly, a geology and geophysics degree to the position from the University of Minnesota. And he seems to know the oil business. In 2004, he gave a presentation at an "ENERGY, ENVIRONMENT AND ECONOMICS" conference of the IEEE, in which he showed the possibility of up to 4% reduction in shareholder value of various oil companies due to restricted access in sensitive areas, either closer to human populations, remote, or in terrestrial or marine ecoregions. It highlighted many companies that are now actively involved in "green" initiatives such as CO2 sequestration.