Digital Oil Fields

Oil exploration and extraction is going through a period of great technological innovation. Between 2005 and 2010, the number of patents filed in the classes relating to the oil exploration and extractive industries technically doubled from just under 700 to almost 1400. One of the growing areas of research has been the “digital oil field”. This is the latest buzzword in the sector and is something touted to be the future of the oil and gas industry.

A digital oil field is an environment where all the real-time data from the oil field is constantly fed and monitored by computers located at remote monitoring stations that is then used to optimize the production of oil. This is basically an umbrella term that is used to refer to all kinds of computerized networking and processes that help in creating a sophisticated monitoring and controlling system for oil wells.

To elaborate, consider this: the oil consumption is expected to breach the 100 million barrels per day barrier by 2015. To give you a perspective, this number was less than 80 million barrels per day two decades back. This rising consumption level causes a strain on the capital expenditure as well as on human labour. While capital expenditure may be justified on the basis of the increasing revenues that the oil drilling companies stand to make, human labour is a finite resource. According to some estimates, the labour shortage for oil drilling is expected to reach as much as 1 million by 2015.

A digital oil field is the way forward to ensure that the oil industry is able to extract higher volumes of hydrocarbons using fewer resources. This is done by feeding the thousands of minute data points from the sensors mounted on the wellheads, pipelines and the various equipments installed along the upstream to computers located at the monitoring station. These computers study and interpret useful information about the conditions and output. In the IT industry, such analysis of thousands of data points is called big data analytics and this is typically processed over a cluster of computers located at a remote location through what is called cloud computing.

The benefits of such a computer-controlled oil drilling process is immense. For one, it makes the operational process extremely efficient by drastically improving the productivity of the human workforce. Since the data is fed to the computers on a real-time or a near-real-time basis, a digital oil field may be equipped with automated pump controls to control the volume of oil extraction. In addition, the data may be used to track equipment efficiency and surface conditions to minimize rig downtimes. Also, by integrating the field details with information from third party seismic analysis, the digital system may be able to help chart out the future production estimates. Overall, the digitization of the oil rigs are estimated to improve the net present value of oil by up to 25%.

The huge opportunity present in the digital oil field industry has seen multiple IT companies enter the fray over the past few years. AllStream, a leading provider of enterprise networking services in Canada is already working with a number of firms in the Canadian oil & gas sector to implement a digitally networked oil drilling system. EMC, one of the leading big data analytics companies now has a dedicated center in Brazil for oil & gas data analytics. Besides, Microsoft, IBM and Cisco too are other companies that have made significant strides into the oil & gas sector. 

The benefits of a digital oil field far outweigh any concern over capital cost. Besides improved productivity and optimized labour force, such digitization also helps in enhancing the collaboration between the off-site monitoring team and the on-site workforce. Add to this, the scope for improved automation of oil extraction, a digital oil field then becomes a critical element in the energy needs of the world over the next few decades.

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