Towards more efficient operations in the oil and gas industry: A case for digitization and

engineering innovations

Chapter Two

Literature Review

2.1 Digital Technology Trends in the Oil and Gas Industry

Digital transformation as a concept was firstly introduced in 2000 by Patel and McCarthy.

According tothe Patel & McCarthy (2000) digital transformation drawing more attention in

both business management literature as well as organizational business plans. The authors

specifically, focused on areas such as e-commerce and digital marketing or for example,

digitalliteracy and did not go as far to define the concept. The most thorough studies have

been conducted in co-operation by Massachusetts Institute of Technologyand CapGemini

Consulting in 2011. The research discusses the findings from a global study of how

157executives in 50 large traditional companies are managing and benefiting from digital

transformation. Westerman et al. (2011) interviewed 157 executives from 50 companies in

15 countries and across eightindustries over multiple years, and Fitzgerald et al. (2013)

surveyed 1559 executives from all over the worldon the topic. A definition of digital

transformation was introduced by Westerman et al. (2011), as “the use of technology to

radically improve performance or reach of enterprises. Fitzgerald et al., (2013) defineddigital

transformation as “the use of new digital technologies to enable major business

improvements suchas enhancing customer experience, streamlining operations, or creating

new business models. In the 1980s, oil and gas companies began to apply digital technology
to accurately estimate the reserves and potential production of the hydrocarbon resources

as well as to improve operational efficiency of the oil and gas fields in the world (Hongfang

2019). In a time of unprecedented technology advancements, the physical capacities and

cognitive abilities of the oil and gas industry are leaping in greater bounds each year. For

example, several drilling advancements at both the rig and downhole levels have helped

producers reach targets previously impossible to consider. But the key to unlocking full

digital transformation across the oil and gas sector will involve both soft and hard

automation technologies as well as require more nimble work practice. Active use of

technology to capture new frontiers and drive productivity is not new to the oil and gas

industry. In fact, we would argue that the oil and gas sector has been at the forefront of

several significant technological advancements in the past, from supercomputing techniques

for reservoir modelling to seismic and 3-D imaging for drilling and project departments

(Anders et, al 2018). Organizations have been digitizing for decades, and the digital

transformation of enterprises can be dated back to the 1960s with the release of new

mainframe computers. In the years that followed this innovation, the pace of technological

changes accelerated the pressure on the large enterprises to develop programs within these

environments to automate a certain number of activities, such as financial accounting and

inventory management. In the 1980s, e-mail began to spread in companies, and then

personal computers made their appearance, and with them IT applications in server mode

and desktops. In the 1990s, large enterprises marked a new milestone to encourage the

mass implementation of management software, and usage of business intelligence and the

Internet was widespread. These technological advances have led to a powerful digital

transformation of businesses to achieve greater productivity, optimized costs, a significant

change in the way of working of employees (Leignel 2016). Change of enterprises that may
lead to decisive competitive advantages. Going Digital is everywhere. Transforming our day

to day lives, digitalization is impacting every aspect of the way we live and work. The oil and

gas industry are no exception to this rule, undergoing a fundamental shift into the digital

age. The explosion in development of digital technologies during the past few years is

beginning to change the way we work, and these technologies are likely to shape the future

of the industry over the next decade. But what are the key ‘digital technologies’ and how

can they be applied within our industry (Rogers, 2016).

2.2 Artificial Intelligence and Automation

As a basis, digital engineering and Digital Twin type technology should be used to model the

overall system and implement the control schemes (Raman 2005). This ensures that we

have good overview of the process and collect data that can later be used for Process

Optimization, Condition Based Predictive maintenance and Artificial Intelligence decision

making. The aim of this is not only to reduce manning in normal operations, but also to

reduce the overall number of incidents requiring human intervention to a minimum.

Autonomous systems may require lower-level automated functions to be effective: E.g., a

robot manipulator system can learn how to pick up an object that it has not encountered

before by making use of automated functions such as vision-based object detection and

sensor-based collision avoidance. The robot can apply methods for robot learning to learn

how to safely grasp and pick up the previously unknown object (Barto 1998). Artificial

Intelligence (AI) is arguably the scientific discipline most directly relevant to achieving higher

levels of autonomy in oil & gas operations. With more than 60years accumulated experience

behind the discipline, AI's proclaimed ambition is to create computer systems that rival

humans in carrying out tasks we normally associate with intelligence and autonomy: Reason
and deliberate, solve problems, plan, and act (including handling uncertainty), perceive, and

communicate, and learn from experience (Russell 2010). ExxonMobil, in partnership with

MIT (Massachusetts Institute of Technology), are working to develop self-learning

submersible robots for ocean exploration to boost their natural seep detection capabilities.

In 2017, TOTAL announced the winner of a competition it funded to design an autonomous

robot, the key functions of which were the ability to carry out inspection’s day or night, as

currently performed by humans, together with the ability to detect abnormal equipment

activity, such as a malfunction or leak, and intervene in the case of an emergency. Shell has

developed a virtual assistant for its online customers where, via an online ‘chat’ interface,

the virtual assistant can search hundreds of thousands of data sheets to recommend the

right product based on their customers’ input (Baker 2019). The inspection of offshore

assets is an interesting application for AI and automation. Details from a physical inspection

can now be entered in real-time into a digital system using a hand-held device which can

include information such as photos, measurements, and location. This information can be

automatically synchronised with an active database linked to maintenance scope and

schedules accessed through a 3D representation of the platform, freely accessible to all. The

system can then evaluate the results against pre-set limits and trending analysis such that

key actions can be automatically generated and sent to the personnel required to perform

the actions. This type of automation increases safety by reducing offshore time for

personnel and by automatically flagging potential safety concerns and recommending

action, whilst also reducing operational costs due to downtime and efficiency savings

(Anders et, al 2018).

2.3 Big Data and Data Analytics

Big data is a term that defines massive data sets streaming in real-time at enormous speeds,

due to advancements in data generation and collection technologies, such as social

networking, e-commerce, bank transactions, traffic patterns, and sensor networks. Big data

is mainly characterized by 5 Vs: Volume, Variety, Value, Velocity and Veracity. The volume

refers to the quantity of data, the variety refers to the different formats of data whether

structured or unstructured (text, video, audio, …), the value denotes the usefulness of data,

the velocity indicates the rate of real-time streaming data, and the veracity refers to the

quality of available data (Hassani H. and Silva E., 2018). Big Data analytics uses Machine

Learning (ML), Artificial Intelligence (AI), Statistics and Database Systems, to build a model

that analyses and reveals underlying trends, patterns, and associations, within massive raw

data sets. The machine learning algorithms used in Big Data analytics, are classified into two

main categories: supervised (i.e., predictive), and un-supervised learning (i.e., descriptive).

The supervised learning methods use some variables to predict unknown or future values of

other variables. Supervised machine learning needs a labelled data set of historical inputs

(i.e., features) and outputs (i.e., events), to train the model. Classification, regression, and

anomaly detection are classified as supervised learning methods. On the other hand, the un-

supervised learning methods find human-interpretable patterns that describe the data and

discover relationships between the inputs to predict the output. These unsupervised

algorithms are used when the labelled data set is not available; when you only have input

data, whether historical or in real time, with no corresponding output class. Un-supervised
machine learning creates models that train itself; learn how normal operations look like and

identify anomalies. Clustering, association, and sequential pattern discovery are examples of

the un-supervised learning methods (Tan P., Steinbach M., Karpatne A., and Kumar V.,

2018). Big Data analytics can bring predictability to operations, where disruptive events are

forecasted and smoothly recovered. On the other hand, supply, refining and sales

operations of several refineries across vast regions can be integrated and optimized to

achieve regional and global optimizations. In terms of energy management, utility

optimization is implemented to increase the energy efficiency of energy intensive processes

and assets (Lu, and Azimi, 2019). One of the possible applications is determining the

optimum cut point temperatures for any variant feed composition in a crude distillation unit

(Durrani, Ahmad, Kano, and Hasebe, 2018). Thermal efficiencies of heaters and boilers can

also be increased with the help of Big Data analytics (Wang, and Li, 2017). The data sets

required for building a predictive maintenance model are time-series sensors’ data which

determines the current condition of an equipment, occasionally updated data such as

maintenance and failure logs, frequently updated data such as usage history and equipment

load, and static data such as equipment metadata (Lu P., et al., 2017).
 Figure 1. Big Data Analytics process flow diagram, Modified after Haidy Eissa 2020

Computational intelligence (CI) or Machine Learning are two sides of a coin notorious for

Artificial Intelligence (AI). AI comprises of the employment of complex algorithms and

networking tools to unravel multidimensional problems mimicking human brainpower. AI

uses science and engineering to allow machines and computers to perform demanding

computational tasks that require arduous human thinking abilities. The designed models

learn through continuous repetitive operations without depending on "rules-based

programming" thus constantly refining the models’ computing abilities with the intake of

data feed. Despite its basis on classical statistical methods from the early 1700s, its

robustness originates from contemporary computational facilities and massive data bases

attained from present technology (Pyle and San Jose 2015). ML has been gaining more

acceptance and popularity for tackling case-based challenges and complex problems in

numerous applications. The produced models seize the ambiguity in real life cause-and-

effect situations, thus, integrating obtainable information with probability inferred

computations. (Xia et al. 2013). Especially, in the sectors of health care, economics, finance,
banking, engineering, tech, advertising, military, and marine (Mellit 2008). However, the

petroleum industry has fallen behind these disciplines in the adoption of this discourse.

According to Bravo et al. 2014, only 13% of participants were familiar with and actively

involved with the technology in a current SPE survey. Despite this lagged adoption, there

has been a noteworthy upsurge in ML research within the industry in the last few years.

Gharbi and Mansoori, 2005, attributed this rapid increase in the quantity of AI applications

can be attributed to the increase of human expert knowledge and plentiful publications of

effective case studies.

2.4 Internet of Things and Electronic Monitoring

In 2016, OMV was facing a challenging situation. In addition to the cost reduction pressure

caused by the oil price decline, production was declining in the mature Matzen field in

Austria (1,000 wells spread over 2,400 sq. km). 47% of "good" wells were online (alarms and

data collection), and 53% of "stripper wells" had no data connection, leaving well

monitoring to regular on-site visits. An innovative solution was required to connect those

unconnected wells at low cost to enable production optimization. OMV enlisted a

consortium of vendors to jointly evaluate whether an IoT-based automation solution for

advanced beam pump surveillance could appreciably lower costs, compared to a traditional

SCADA or Distributed Control System (DCS) solution. Additionally, the pilot aimed to

demonstrate that edge analytics, performed on a well IoT gateway, could be used for well

optimization and controls. Finally, innovative ways to perform beam pump surveillance

using load soft sensing were implemented. This endeavour was the first IoT pilot for beam
pump surveillance covering traditional IoT topics such as the use of edge and fog analytics,

low bandwidth LoRaWAN™ communication and cloud applications in the context of well

surveillance and optimization (Desroches 2017). In another example of applying an IIoT

approach to artificial lift, a technique called "pump stroke optimization" (PSO) was

introduced and refined in successive SPE papers by Encline Lift Technologies. The original

research demonstrated that using a slower speed for the downstroke than for the upstroke

could improve pump operations in horizontal wells. Further enhancements were based on

machine learning techniques. Specifically, the analysis of several hours of pumping speeds

and low pump fillage incidents

allows the system to optimize pumping speeds. According to a presentation made by the

company at SPE's ATCE 2017, "with extended field trials on over 80 wells in 3 basins, PSO

has been proven to reduce the number of strokes up to 40% while maintaining oil

production" (Elmer 2017). In the above example, the operation of the pump is essentially

observed from the outside. In a paper presented at the 2018 Offshore Technology

Conference, Per Christian Johnsrud of Aker Solutions described a more "intimate"

application of IIoT to artificial lift. Subsea production boosting can be achieved by a new

generation of multiphase pumps. Optimizing their performance requires condition-based

maintenance and tuning of the pump system. In the case study presented at the conference,

proximity probes are embedded in the pump body to measure the pump rotor speed and

the temperature of the bearings. This information is sent to a field management system,

based on an open-source big data platform. Real-time data analytics is performed, and the

results are displayed through a web browser, meaning that the users do not need to license

or install any special software on their devices. From this, decisions can be made to change

pump settings or to perform maintenance (Johnsrud 2018). Shell has deployed an IoT
solution to monitor its pipelines in the Niger Delta, in collaboration with device

manufacturer Končar, communications provider Ingenu, and Nigerian technology services

firm Upland Consulting. (Tomás 2017) The main goal is to prevent theft of oil, sabotage, and

rapidly pinpoint accidental bleaks while minimizing human intervention in this chronically

unsafe area (Shell).

Figure 2 Taxonomy of an IOT Solution according to Momenta Partners, modified after Flichy

2018

2.6 3D Virtual Modelling and Drone Technology

The emergence of new technologies such as Internet of Things (IoT), drones, and Artificial

Intelligence (AI), has already started to reshape the oil & gas industry, and has opened the
door to new approaches in geophysical acquisitions and subsurface imaging. One such

approach is METIS, a disruptive and integrated research project that was launched by Total

in 2014 and developed with several different specialized partners. METIS® aims to unlock

hard-to-image and hard-to-access acreage with an innovative 3D high density geophysical

acquisition (Bertini et al., 2017; Lys et al., 2018; Pagliccia et al., 2018). METIS® relies on the

use of drones to deploy the seismic sensors, called DARTs. The dropper drones fly to

predefined locations and drop the DARTs that land and couple themselves to the ground

with the force of gravity. The DARTs are dropped in a dense irregular grid defined by the

presence of vegetation or other ground obstacles. A carpet recording acquisition scheme is

therefore used to ensure the high quality of the seismic data. The carpet recording scheme

consists of a very dense grid of seismic sensors, which allows to limit the number of seismic

sources required to illuminate the subsurface, as well as to finely sample the upcoming

wavefield.

During the first METIS® pilot that took place in Papua New Guinea (PNG) in late 2017, a

single dropper drone was used to drop about 60 DARTs (Pagliccia et al., 2018). The dropper

drone was flown beyond line of sight (BLOS) above the vegetation, at about 50m above the

ground, to predefined locations, where a pilot repositioned the drone, ensured the lack of

any human or animal presence, and triggered the DART drop. In another application, drones

can capture amazing images of rock outcrops, which, when combined with other

technologies such as mobile mapping (helicopter) and laser scanning (LiDAR) data, can be

georeferenced and processed to generate virtual outcrop models which can act as a very

useful classroom learning aid. In addition, if data can be obtained from the outcrop via

physical inspection these virtual models can be taken a step further where an accurate, high

resolution 3D digital model of the outcrop can be generated which can be visualised and
interrogated by the user. Some possibilities of data and visualisation from such models

includes the extraction of 3D lines which can demonstrate clinoforms, channel bodies and

sedimentary structure, fracture and fault geometry and facies boundaries. Additional

information such as porosity, permeability and net to gross can be combined with

information on the thickness and width of sedimentary features to create a powerful,

interactive, learning resource that can be used to supplement more traditional classroom

and field-based training courses (Baker 2019).

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