HomeInternet of Things (IoT)Use Cases: The importance of IoT in upstream oil and gas

Use Cases: The importance of IoT in upstream oil and gas

What is upstream oil and gas?

The upstream oil and gas sector, focused on exploration and production (E&P), includes searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells and subsequently drilling and operating the wells that recover and bring crude oil and/or raw natural gas to the surface.

Upstream oil and gas operations identify deposits, drill wells and recover raw materials from underground. This sector also includes related services, such as rig operations, feasibility studies, machinery rental and extraction chemical supply, according to Investopedia. Many of the largest upstream operators are the major diversified oil and gas firms, such as Exxon-Mobil.

Statistics on IoT in upstream oil and gas

Over the next three to five years, 80% of upstream oil and gas companies plan to spend the same, more or significantly more (30%, 36%, and 14%, respectively) on digital technologies as they do now, according to a survey by Accenture and Microsoft titled ”2016 Upstream Oil and Gas Digital Trends Survey”. This continued investment in digital is due to respondents’ confidence that digital technologies can continue to help them drive leaner, smarter organizations, according to Accenture.

source: Accenture
source: Accenture

More than half of respondents said digital is already adding high to significant value to their businesses. Cost reduction was identified as the biggest challenge that digital technologies can address, respondents said. In addition, respondents reported that making faster and better decisions was the greatest benefit digital technologies can deliver and that one of the biggest barriers to realizing value is the lack of a clear strategy or business case, not the technology itself.

There have been significant increases in IoT investment within upstream oil and gas with 44% investing in the internet of things this year versus just 25% in 2015. The cloud gained 38%, up 8% from last year.  Over the next three to five years, these investments are expected to shift more to big data and analytics (38%), IoT (36%) and mobile (31%), according to Accenture.

source: Accenture
source: Accenture

Respondents said digital’s biggest impact to date on the upstream oil and gas workforce has been increased employee productivity and engagement followed by better training and reskilling opportunities. They see the greatest impact from IoT in enabling connected field workers, with 60% of respondents planning to have field workers and assets digitally connected with smart devices.

The use of the cloud, respondents said, has shifted from being used primarily for infrastructure to an enabler of mobile tools. This trend is expected to increase in the next three to five years, as companies keep using the cloud to get faster and more value from other digital technologies.

“By taking advantage of the intelligent cloud, greater use of analytics and IoT go hand in hand with what we are seeing in our business today – the advent of the industrial Internet enabling the power of digital across the oil and gas landscape,” said Craig Hodges, general manager of the Gulf Coast District at Microsoft, according to Accenture. “You can see this trend gaining traction from connected wells and intelligent pipelines to highly- efficient digital refineries.”

IoT solutions for improving Oil and Gas Production

Solutions from Intel

As wells mature, liquids often accumulate, hindering the flow of hydrocarbon. Addressing this problem for gas, plunger-lift technology enables wells to remove liquids and resume producing at higher rates, according to Intel. However, plunger lift efficiency is dependent on well pressure and temperature, data that, for wells dating back to the 1950s, is provided only once per hour or day.

source: Intel
source: Intel

With IoT technology, it is easier to connect to sensors throughout the well and to sample readings more frequently. Using edge analytics on sensor data, producers can optimize the plunger lift cycle and increase production by up to 30%, according to a report by Intel. Moreover, producers have the data needed to rank their wells by production efficiency, information that is critical for effective asset portfolio management.

IoT offers the ability to help companies compete on cost by improving productivity by:

  • Enable predictive maintenance vs. preventative maintenance
  • Improve process flow achieved by monitoring changes in operating conditions
  • Increase productivity and reduce accident frequency with real time monitoring of assets

Exploring the surface and subsurface for oil

Using robots and sensors to analyze surface and subterranean environments could save millions of dollars. Seismic nodes collect large amounts of data that can be used to determine sites for oil deposits. Sensors also can collect data on surface materials, temperatures and how equipment preforms in different environments. These readings all help oil producers find new hydrocarbon deposits, determine new spots for drilling and even find ways to optimize already-operational rigs.

source: Intel
source: Intel

The search for new hydrocarbon deposits demands a huge amount of materials logistics with deep-water oil well costs at more than $100 million. Surveying potential sites involves monitoring the low-frequency seismic waves in a process that calls for probes put into the earth at the spot being surveyed, which register if the waves are distorted as they pass through oil or gas. This normally means taking a few thousand readings during the typical survey of a potential drilling site. In the past few years that number has jumped to more than 1 million – increasing the accuracy during exploration.

Enabling Massive Data Collection

The data generated from a single well can be sizeable; a large field of wells can produce massive amounts of valuable information. Industrial internet technology can tackle the large-scale collection across an entire site. The proven results include better asset utilization across all wells, reduced effluents and accelerated production. Broad oversight also accommodates hydrocarbon recovery, and offers insights that can lead to better decision making about well locations.

Augmented reality can help by providing views of real-time data, equipment and production. Furthermore, apps can include training manuals and guides can help new employees navigate the site and equipment.

How it can be achieved

source: Intel
source: Intel

Moving to open standards and internet-based solutions— whether on private or public networks, data centers, or clouds—is key to achieving faster time-to-market, lower lifetime costs and greater availability of engineering expertise, according to Intel.

Upstream oil and gas is often divided into three business segments: exploration, drilling and production. Each of these segments has unique problems while some problems cross all three segments.

Exploration often involves seismic acquisition, data processing and interpretation. Drilling includes real-time process monitoring, predictive maintenance and completion. Production includes remote pump and tank monitoring, reservoir simulation and recovery optimization. Common to all three segments are problems related to asset management, transportation and safety.

Intel has provided a standardized reference architecture for helping the upstream oil and gas industry move from expensive customized and proprietary components toward commercial off-the-shelf (COTS) solutions. This will reduce costs, unlock engineering expertise and enables innovation focused on the unique challenges of oil and gas, rather than generic computing infrastructure. Here is Intel’s proposed architecture:

Conceptual Architecture                                      

The upstream oil and gas architecture consists of a collection of distributed components, the relationships and connections of those components, and a set of deployment topologies.

With this architecture, the computing infrastructure is distributed across multiple geographies, beyond the walls of the data center, and across a variety of locations—from well sites, to work camps, to wearables to pickup trucks.

Sensors, Actuators, and Process Control Networks

The internet of things would not be the internet of things without things. In upstream oil and gas, these things are likely to be sensors reading process-related data, legacy process control networks and actuators that change the process in some manner, a valve, for example.

Well Site Gateways

Gateways at the well site provide security; connection to wired, mobile and satellite networks; connectivity to field engineers’ and the company’s laptops and tablets; as well as compute resources for on-premise applications.

Mobile Computers

While not always present, many jobs at the well site require a field engineer to perform real time analysis and process optimization. In producing wells, oil field services workers will likely need to upload historical data and perform maintenance on the pump, workover the well, stimulate the well or perform other jobs requiring job-specific compute.

Back Office Gateways   

Gateways in the back office provide security, integration of third-party data such as weather or market prices, edge abstraction and brokering between different consumers.

There are three general types of information propagated from the well site to the compute infrastructure, according to Intel:

  • Data pipeline and management decision propagation
  • Control and event propagation
  • Security and device management path

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