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IoT in the Oil Field: A Smart Equipment Revolution

By Matt Green, Engineering and Technology Development Manager

The speed of innovation has been quickening over the past decade. It seems the Internet of Things (IoT) – all the web-enabled devices that collect, send and act on data acquired from their surrounding environments using embedded sensors, processors and communication hardware – have infiltrated nearly every industry and much of our everyday lives. Similarly, the oil and gas industry is embracing digitization at a faster rate, and as a result it’s seeing dramatic improvements in efficiency and safety that will further transform the industry.

Prior to digitization, oil and gas drilling and completions operators had predominately low-tech methods for monitoring and managing their processes. Visual inspections and manual estimations created large margins for error and also put the safety of personnel and the environment at risk.

Now operators have analytics and sensors at their disposal that not only offer the ability to automate costly, error-prone tasks but also offer operators the ability to capture vast amounts of rich data to inform operations and vastly improve their bottom line. Big data and data analytics have revolutionized other industries, most notably e-commerce, and now oil and gas is experiencing a revolution of its own.

With the current cost pressures weighing on the oil and gas industry, outsiders may be confused why operators are making investments in digitization technology. Truthfully, it’s those very cost pressures that are driving operators to employ digitization to the greatest extent possible. Costs are exerting such a strain on producers that they are motivated now more than ever to realize every efficiency possible from their processes to create a competitive advantage.

Real-time optimization of production, flow, continuous processes and maintenance intervals helps reduce unplanned downtime, which also decreases losses. Reducing non-productive time can generate significant cost savings.

Spill prevention could be categorized as an elevated type of non-productive time that carries detrimental financial – not to mention environmental – ramifications. From a purely financial perspective, the significant remediation and cleanup costs associated with such events can be debilitating for an operator, which is another reason operators need real-time monitoring.

Beyond financial impact, environmental and personal safety is another reason operators are increasingly turning to real-time monitoring to realize significant improvements in this area. The inherently hazardous nature of this work poses ecological risks as well as physical risks to personnel that can now be mitigated with technology.

Analyzing performance data has become essential, because operators can now optimize their processes to drive improved production, increased revenues and enhanced safety. Digitization has become a valuable tool to help personnel perform better and safer.

In the current state of the intelligent oil field, systems monitoring and equipment performance monitoring communicate alarms or alerts about current upset conditions or operational trends that point toward an upset condition. This allows operators a greater degree of response time to prevent those upset conditions from actually occurring. For the substantial volumes experienced with offshore production operations, even small improvements in production efficiency will have significant financial impact, because that greater throughput creates more revenue. For unconventional mature assets or low-volume operations, digitization allows operations to reduce costs while simultaneously improving equipment reliability, which generates much higher revenues that can extend the economic life of an asset.

The key to digitization is to take an open systems approach and integrate sensors so that one is able to process the relationships to those sensors in conjunction with the manufacturers’ equipment information.

Compiling and integrating information can’t be performed in a vacuum – it is optimal to know what each piece of data means relative to each piece of equipment that has been purchased or rented.

Using Weir’s frac flowback system as an example, flowback operators can set alarms based on a response time, such as receiving 30 minutes of notice before a tank is going to overflow. By using intelligent sensors, operators can process a rate of change over time. As that change occurs, fill rate data and certain points can be used to create a graph showing the rate of change of a specific point from the top and the alert by time, which is a new capability. This enables alarms and alerts to be created that are specifically geared towards operators’ individual needs to improve their response time. Predictive alarms, alerts and notifications that are based on actual system dynamics are functionally designed to drive positive operator behaviors for preventing loss and maximizing performance.

Current sensor-driven optimization has been focused on each manufacturer’s proprietary equipment without taking upstream or downstream operations into consideration. Sensors currently operate in a silo without integrating other data that is relevant but happening in other parts of the process with other pieces of equipment. Weir believes an open systems approach is emerging, which will allow monitoring controls to achieve the maximum impact possible by considering the relationship and communications with all pieces of equipment in a customer’s entire system, rather than only monitoring the readings of one brand of machinery. This type of open innovation will demand a new level of collaboration between multiple equipment vendors in the systems to be optimized.

The importance of a systems approach becomes evident when considering how to optimize a mud gas separator. If an operator understands a mud gas separator’s fill rate and knows that the discharge valve is 100 percent open, then the only way to control the fill rate in that instance is to slow down the circulation rate in the drilling operation. With a systems approach, an operator could not only receive an alert about a condition in the mud gas separator but also an alert to address an issue with the mud pump that will remedy the issue. In a systems approach, the mud pump and mud gas separator communicate with each other regardless of the make or model of each individual piece of equipment.

The future of oil field digitization will evolve to embrace a systems approach so that the monitoring of upstream and downstream operations is integrated. As an integrated IoT systems approach materializes, large data files are going to be produced. That is when digitization will employ big data analysis to leverage the insights in those files. Operators will be able to model and determine relationships that are currently unknown and could be optimized to yield a significant impact on the entire system.

Intelligent monitoring and alerts have successfully replaced outdated manual rules of thumb to allow operators to expand in very strategic ways backed by data. This digital transformation could create approximately $1.6 trillion of value for the industry, customers and society as a whole, according to consulting firm Accenture.

If you have not employed digitization in your operations, now is the time. Waiting can have significant negative economic, environmental and human impacts. The growing financial and social pressures placed on operators will only intensify in the coming months and years. The oil and gas producers that successfully implement and integrate digitization today will be the ones that win tomorrow.

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