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Resourse: FuelFix

A pump collects data about the oil it is hauling to the surface andre-configures its operations to handle the crude more efficiently. A roughnecktripped up by a repair job logs into a mobile device from the rig and downloadsa training video. Drones fly out to remote locations to inspect oil fieldequipment and scour the best places for new well pads.

This is the digital oilfield, as envisioned by Houston-based oilproducer Occidental Petroleum.

As oil companies hunt for new ideas to save money amid a global crudeslump that’s dried up revenue and forced a retreat from once-booming shaleplays, they are increasingly turning to the tech industry for nontraditionalideas that could help them operate faster and better than their competitors.

“I think there’s a tremendous amount of technologythat’s currently in our pockets and in use in the consumer world … that areimproving not only the way we live, but could also impact the operationalinefficiencies that we have a challenge with in the oil field,” YanniCharalambous, vice president and chief information officer at OccidentalPetroleum. He shared the company’s vision about the future of the oil industryTuesday with an audience gathered in Houston for an annual innovation expohosted by software company Landmark, a division of oil field services giantHalliburton.

Falling oil prices may be battering exploration and productioncompanies and forcing industry-wide cutbacks and layoffs, but the downturnhasn’t curtailed the appetite for sophisticated technologies that promise totransform the old school oil patch where reports still get jotted down on paperand workers waste huge amounts of time traveling between corporate offices andremote drill sites.

Oil companies have long struggled to capture and process the vastamounts of information collected from the oil field in part because some of thereporting continues to be done on paper, but also because the industry has beenoverwhelmed the by the sheer amount of data to crunch, Charalambous said.

Lower oil prices intensify the industry’s scramble to figure out how tounlock the secrets buried in reams of data gathered during exploration,production and drilling to be able to operate faster and better, Landmark’svice president Nagaraj Srinivasan said in an interview with Fuel Fix.

“If prices stay lower for longer, the only mechanismto keep a sustainable low-cost view is to invest in technology and innovate,”Srinivasan said. “Because at the end of the day, that’s what changes your fixedcost structure.”

Underscoring his point, Srinivasan said the Landmark conference hasdoubled its attendance numbers from last year

While the technology can be expensive, the long-term payoffs outweighthe upfront costs, underscoring the need for oil companies to invest ininnovation even while they look to cut costs elsewhere, Srinivasan said.

Although Occidental’s profits tumbled 85 percent in the second quarteron declining oil prices, the exploration and production company is stillpressing forward with a project aimed at taking advantage of the growingproliferation of intelligent equipment, advanced data crunching and mobiledevices that allow workers to file reports from the field.

Many exploration and production companies have relied on traditionalcost-cutting methods to weather the slump – squeezing more from existingtechnology, pressing suppliers for ever-deeper discounts – but Occidental ishoping to find a new approach in its digital oilfield initiative, dubbedProject Re-Imagined Oil Field (RIO).

The so-called smart technologies used in devices that controltemperatures in households and monitor a person’s fitness levels haven’t yetgained mainstream acceptance in the oil patch, but the possibilities are hugeif exploration and production companies can figure out how to harness theirpower, Charalambous said.

No longer do companies have to send workers to remote regions to findthe best drilling spots or conduct routine inspections of rigs. They can senddrones instead to do the same risky jobs that pose potential dangers toemployees, Charalambous said.

Instead of sending workers out into the patch to gather data on paperor laptop and return to office to input the information into a company’s mainservers, Charalambous envisions a world where workers snap “selfies” on siteand send the info back to headquarters, where it’s analyzed and processed. Orthey could equip individual drilling supervisors with a GoPro video camerasattached to their hardhats, allowing them to record their drilling morningreports and expediting the reporting process.

“Why can’t we use some of that technology in theoilfield?” he said.

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