As 2015 reached mid-year, the price of U.S.-traded crude had toppled to a six-year low, crushed by the weight of an oil glut. With sobering concerns that oil prices may remain depressed for an extended period, the oil and gas industry is beginning to embrace automation as a game-changer in the marketplace. Companies that take proactive steps to welcome automation options now will be in a stronger, more viable position when the recovery occurs. And it will.
Two major trends that are a motivational force in oilfield automation are the harsh reality of the volatility of the commodity price and a growing emphasis on health, safety and the environment (HSE). Automated processes are proving effective as solutions to optimize production, reduce failure, lower operating costs, improve efficiency, manage information and, most important, enhance safety.
Even before the sharp decline in oil prices began early in 2015, the oil and gas industry was exploring ways to optimize its current assets to maximize production efficiency and cash flow. Faced with challenging competitive pressures, companies are looking at strategic value-added solutions.
A key advantage of automation technology is the fact that safety is enhanced. HSE remains a top priority for oil and gas companies, which recognize the importance of managing risks and adhering to regulatory compliance.
The Can-Do Factor
Faced with economic challenges, the industry must also keep a sharp eye on environmental risk preparedness. Regionally, operators face different regulatory issues and HSE requirements, such as those for emissions, and automation is already helping meet the need to decrease the carbon footprint.
A determined “can-do” spirit has characterized the oil and gas business since 1859 when the Drake well, often referred to as the first commercial oil well, was drilled in Titusville, Pennsylvania. Edwin Drake had the idea that drilling in the manner of salt wells would result in more petroleum than conventional digging. His idea to hire a blacksmith and saltwell driller, William A. Smith, worked.
The team obtained cast iron pipe, driving it approximately 32 feet into the bedrock past the water with a white-oak battering ram. Using steam power, Drake and Smith were able to drill at a rate of three feet per day. They struck oil at the shallow depth of 69 feet. The well produced 12 to 20 barrels a day, but it was never profitable because the price of oil nosedived after the resulting boom. The well stopped producing in 1861.
This bit of history proves that the “can-do” spirit and the search for technological innovation and more efficient solutions have been inherent in the oil and gas industry since its humble beginning.
Innovative Wellsite Automation Solutions
Wellsite automation solutions deliver real-time data and optimal production. Reliable, accurate data is critical to ensure that wells are online and produce efficiently. With ever-present safety and environmental concerns, remote monitoring and the control of site facilities are equally important.
Safe, innovative wellsite automation solutions are proving their value in today’s market environment. For example, one company offers a line of artificial lift equipment, accessories and services engineered to enhance the profitability of gas lift, plunger lift, rod lift, progressing cavity pump applications and surface production.
“With the recent downturn in price, people appreciate the value that technology brings,” said Dallas Barrett, an operations manager for an artificial lift services provider. “Companies that automate and optimize production through the life of the well will fare better, regardless of the commodity price. One of the reasons our optimization products are effective is because they are designed from algorithms that come from actual wellhead experts. In today’s environment, we are being asked to do more than start and stop production.”
Wellsite management tools that allow for reliable remote management are maximizing performance across the industry. One wellsite manager uses artificial intelligence to manage rod pump wells. The system uses 3-D pump simulation, coupled with video and audio, to provide insight into performance on-site. This data is also accessible from the Web via Wi-Fi or Bluetooth. The ease of installation and accessibility make remote management a practical option for companies looking to ensure their employees’ safety and maintain production capabilities.
A fully integrated automation solution ensures a wellsite is completely automated and optimized. Collecting real-time data from each well, the system helps companies recognize trends, manage by exception and quickly correct problems to ensure maximum uptime and production. On pad wellsites, production of multiple wells can be synchronized, with gas production for each accurately allocated. One application enables companies to automate their gas-lifted wells today and plunger-lifted wells tomorrow, running them together in a single application.
Chemical Optimization Solution
Those who manage a chemical program know the cost to supply chemicals and refill tanks and service pumps can quickly add up to tens of thousands of dollars each month. Dosing is inaccurate, and pump inefficiencies are common. Working within these limitations, operators typically overdose chemicals just to be on the safe side, and their chemical costs can quickly spiral out of control.
“Chemical injection is a significant operating expense for most oil and gas producers and one of the largest uncontrolled expenses, and it doesn’t need to be,” said Tom Dean, vice president of automation for an artificial lift provider.
One solution helping users reduce chemical injection costs is an innovative and reliable automated chemical optimization system that provides control and accuracy of chemical injection rates, resulting in significantly lower chemical expenses without decreasing effectiveness. Easily implemented with existing equipment and supervisory control and data acquisition (SCADA) systems, the solution provides monitoring either at the wellsite or remotely to reduce field service and maintenance downtime. A proven auditing system is used to help evaluate an operator’s chemical program to determine the best chemical optimization solution. This system offers assurance that only the necessary amount of chemical is being injected.
Operators who require a pump-for-volume methodology with precise injection of the desired chemical amounts and frequencies can opt for another chemical injection system. This automated chemical optimization product delivers chemicals based on known volume and desired pumping frequency. It is ideal for a retrofit application for operators who need to manage their chemical programs by exception and want to gain immediate control of their chemical program costs.
What Does the Future Hold?
Automation will play a major role in the industry, but there will continue to be a need for product awareness. The digital trend will continue, as will the “green” movement to fulfill environmental responsibility. The emphasis on HSE will continue, as will the desire to decrease the industry’s carbon footprint, which is already underway.
Safety concerns demand continued improvements, particularly in video and audio capabilities. Video cameras can now identify leaks that can potentially be catastrophic in terms of the safety of human life and lead to potentially devastating costs. Cameras with a zoom capability already offer huge advantages at a wellsite, and the technology will only get better.
As automation continues to be added to the oil and gas field, the number of visits to wellsites will continue to decrease. Fewer pumpers will be driving around looking at equipment.
“We appreciate the current reality that customers are trying to optimize their current assets because they don’t have the same level of capital that would allow them to drill new ones,” Barrett said. “Customers will continue to focus on operational efficiency and want to get more out of their existing equipment. Instead of increasing profitability by drilling new wells, companies will continue to be selective about where to spend their dollars.”