The Real-Time Optimization Technical Interest Group (RTO TIG) has endeavored to clarify the value of real-time optimization projects. RTO projects involve three critical components: People, Process, and Technology. Understanding these components will help to establish a framework for determining the value of RTO efforts. In this paper, the Technology component is closely examined and categorized. Levels within each Technology category are illustrated using spider diagrams, which help decision-makers understand the current status of operations and the impact of future RTO projects. Uncertain value perception in our industry has been one of the critical issues in adopting RTO systems. Therefore, case histories are reviewed to demonstrate the impact of RTO projects. To assist RTO project promotion, we list lessons learned through case histories, suggest a justification process, and present a simple economic example. Introduction Industry case histories demonstrate many types of benefits from RTO, such as volume increase, ROI increase, decision quality, HSE improvement, and opex reduction. However, they have lacked systematic project evaluation methods or processes for justification. Today, promoting RTO is in essence a competition for capital within producing companies. The project teams that recognize this fact and then clearly outline the purpose, benefits, costs (direct or indirect), and strategic business alignment of their proposals will be in an advantageous position to secure funding. Because RTO is still an emerging discipline, classifying projects of this nature is still dependent on an individual's point of view. This paper is intended to enable classification of RTO in an objective manner and to help provide a common vocabulary to address issues. Three Cornerstones in Adopting New Technology In adopting any new technology, TIG members realize that there are three major factors: People, Process, and Technology, as shown in Fig. 1. New RTO technology can achieve the benefits we seek, but it is not likely without corresponding changes in the way we work with others and in the processes or workflow in which we perform tasks. This challenge is common to the implementation of any new technology, whether RTO or not. Engineers tend to emphasize the technology aspect because we are most familiar with it, but the other aspects are equally important. For example, the lack of workflow modification, which requires training and possible organizational changes, is tends to result in unsustainable efforts and ultimately underperformance of the investment in RTO. People People issues manifest themselves in several ways1: corporate culture, organizational structure, and training. Corporate culture is the set of tacit understandings and beliefs that form the foundation of how an organization works. It is a mental model that people have about the nature of an organization and how it sees itself. Within an organization, culture is "how things are done around here." The culture of an organization can be appropriate and supportive to an organization's goals and strategies, or it can hinder its initiatives and projects. Usually any major change in an organization, such as deployment of new technology, radical strategic shifts, or new initiatives, is countercultural. That is, the change breaks existing cultural rules and assumptions, and the change is automatically resisted and thereby impeded.
Intelligent Energy (IE) is a broad initiative to improve asset performance and boost corporate value. IE includes the following major concepts, all of which require new work processes, workforce adoption, and, ultimately, changes in behavior:• Fully-integrated operations • Task and process automation • Digitally-enabled technology • Increased recovery • Improved HSE • Innovative and efficient methods to maximize productionThe concept of Intelligent Energy was formally introduced to the oil and gas industry in 2003 with the release of Cambridge Energy Research Associates' multi-client study on the digital oilfield. Although the technology exists for this initiative to succeed, the industry has not seen the expected level of uptake or success. This lack of implantation is attributed in part to organizational transformation, which must accompany the adoption of these new work processes if the IE initiative is to succeed. Transformation includes convincing employees to embrace new ways of working, commiting themselves to learning, and ideally to mastering the application of the new operating principles. Unfortunately, corporate objectives and individual motivators are often misaligned, causing delays and resistance to the changes necessary for widespread adoption.Lessons and insights extracted from seemingly unrelated disciplines can be applied to the oil and gas industry to great advantage. For example, several concepts from the field of psychology, dealing with organization and human behavior, may prove to be beneficial to the adoption of Intelligent-Energy initiatives and the transformation of production operations. These concepts include Maslow's Hierarchy of Needs, the "10,000-Hour Rule," and "The Magical Number Seven" (also known as Miller's Law).
Summary The Real-Time Optimization (RTO) Technical Interest Group (TIG) has endeavored to clarify the value of real-time optimization projects. RTO projects involve three critical components: People, Process, and Technology. Understanding these components will help establish a framework for determining the value of RTO projects. In this paper, the Technology component is closely examined and categorized. Levels within each Technology category are illustrated by use of spider diagrams, which help decision makers understand the current status of operations and the future RTO status. The perception of uncertain value has been one of the critical issues in adopting RTO systems in our industry. Therefore, case histories are reviewed to demonstrate the impact of RTO projects. To assist RTO project promotion further, we list lessons learned, suggest a justification process, and present a simple example of an economic-evaluation process. Introduction Industry case histories demonstrate many types of benefits from RTO such as production-volume increase; better return on investment (ROI); higher decision quality; health, safety, and environment (HSE) improvements; and operational expenditures (OPEX) reduction. However, they have lacked systematic project-evaluation processes for justification. Today, promoting RTO is, in essence, a competition for capital within a company. The project teams that recognize this fact and then clearly outline the purpose, benefits, costs (direct or indirect), and strategic business alignment of their proposals will be in an advantageous position to secure funding. Because RTO is still an emerging discipline, classifying projects of this nature is still dependent on an individual's point of view. This paper provides classification of RTO to help provide a common vocabulary to address a multitude of issues.
Summary Surveillance in one form or another has been used in oil and gas production almost since the industry began. The initial goal was relatively simple and straightforward: monitoring output against production targets for individual wells and troubleshooting those same wells when problems occurred. The actual scope of what could be accomplished was limited by available resources and lack of tools and technology, so only a very few high-value wells could be monitored closely. With modern complex oil- and gas-production operations, the goal of surveillance has evolved from ensuring a single well's performance to managing a producing asset against its potential—a much loftier endeavor that must consider each of the system components, the interaction of those components, and the impact of factors external to the system. Traditional approaches to surveillance are no longer adequate to meet the current and continuously emerging and increasingly complex requirements of oil and gas operations. Modern and next-generation surveillance systems must deliver more. More recently, in both mature fields and greenfields, the industry has seen increased implementation of more-sophisticated solutions with richer capabilities (e.g., monitoring centers that feed data into real-time displays; the enabling of operations staff to see the status of all key measurements; and model-based, integrated workflows to automate and facilitate operational excellence). The addition of advanced analytics, expert systems, and process automation (all of which routinely leverage real-time information) has taken surveillance from gathering production data on grease books to sophisticated solutions that combine business or operational intelligence with automated technical calculations. Indeed, these are the types of surveillance solutions expected by forwardthinking managers. However, despite these successes, widespread uptake of these types of solutions is slow, as is often the case in our industry. This paper provides a survey of business practices proven in other complex industries, including management by exception (MBE), business intelligence (BI), situational awareness (SA), model-based decision support (MBDS), advanced process control (APC), and consequential analysis (CA). With learning from use in other industries, these business practices, enabled by state-of-the art information technology, can be combined and implemented to build next-generation surveillance solutions that will allow oil and gas producers to manage production assets against their potential in a safe, environmentally responsible way and in support of corporate goals.
As defined by Andrew Grove, strategic inflection points (SIPs) represent what happens to a business when a major change occurs in its competitive environment (Grove 1999) or when major market changes significantly impact business fundamentals. Oil and gas case studies have documented new ways of working and a more than tenfold improvement to individual productivity, demonstrating that new, more effective ways of operating oil and gas assets are both possible and practical. This evidence suggests that oil and gas production has experienced an SIP. Throughout the last few years globally, nearly 400 workflows representing more than 50 digital oilfield automation projects have been implemented successfully. Many have focused on improving efficiency and all have gone far beyond SCADA implementation. These projects encompass nearly every asset type, demonstrating that intelligent or digital energy (I/DE) solutions are not restricted to a single operating environment. Many papers have been published on this topic at SPE conferences. Examples cited by Barbarino 2011, Dutra 2010, Moisés 2008, Sankaran 2011, Al-Jasmi 2013, Vignati 2013 and Van den Berg 2010 provide descriptions of representative projects. All of these projects experienced significant engineering capacity gains. This implies that when companies respond to the SIP, engineers and operators no longer must devote the majority of their time to routine, low-value tasks. Instead, they can concentrate on activities that produce meaningful performance improvements and business value. In other words, the resulting expansion of effective engineering capacity, the maximum amount of high value work that an engineer is capable of completing in a given period, can change the way oil and gas companies operate (Holland and Crompton 2014). Although specific work processes are prioritized differently amongst various companies and assets, the underlying I/DE principles of operational excellence, efficiency and automation on which solutions are based remain constant. The application of these principles is what makes business transformation possible (Lochmann 2012). Presently, significantly higher levels of production performance are achievable within the oil and gas industry. Companies that choose to fully implement I/DE principles are likely to follow the steep upward performance trend predicted in the SIP model, where employees focus on such business imperatives as increasing production, reducing cost, and managing risk, rather than routine, mandatory, low-value assignments. The consequences of a strategic inflection point within production are similar to those encountered in exploration 25 to 30 years ago when the introduction of information technology made the routine application of 3D seismic interpretation a reality and brought profound business changes to the upstream geoscience sector.
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