High in a Houston office tower, the info-tech-savvy team at Chevron's Machinery Support Center (MSC) monitors thousands of pieces of equipment on six continents in real time, including hundreds of units in Kazakhstan and two massive compressors in Colombia that deliver enough natural gas to supply approximately 65 percent of that nation's demand.
Stuffed with screens and software, the new nerve center is already making a difference. Each day, for example, operators at Chevron's big Sanha Field off the coast of southern Africa inject millions of cubic feet of natural gas, an essential task at a complex facility that produces millions of barrels of ultra-light oil per year. When a compressor recently showed subtle signs of overloading, the first person to notice was 6,000 miles (9,656 km) away in the MSC.
The busy crew at Sanha would have found the problem, but now this and other Chevron Upstream operations have solid backup to detect any similar situations in other locations with the teams and technologies at the global MSC, which evolved from an earlier surveillance center conceived to monitor compressors in the Gulf of Mexico and California.
"The crew acted on the MSC's tip and avoided a couple of million dollars in downtime and lost production," said Fred Schleich, machinery and electrical power system manager at Chevron Energy Technology Co.
Until recently, the MSC was just a proposal. Today it's one of several elaborate technology solutions in an orchestrated Chevron initiative called Upstream Workflow Transformation, or UWT. The new program follows a decade of investment in infrastructure and instrumentation—mostly in Chevron's North America operations—under a broad business priority known as the digital oil field. Now the company wants to extend the proven solutions and safety gains from its U.S. oil and gas fields to its operations on six continents.
Big Prizes Await the Winners
Helped by other companies—Microsoft, SAIC, Schlumberger and more—Chevron set out to reinvent and automate operations using existing, emerging and yet-to-be-developed technologies and workflow enhancements, said Mike Hauser, program manager of Chevron's UWT effort. Major competitors did the same. Industry results to date suggest big prizes await the winners of this race: up to 25 percent in operating cost savings, up to 8 percent higher production rates, 2 to 4 percent lower project costs, and as much as 6 percent improved resource recovery within the first full year of deployment, according to IHS-CERA, which tracks projects at a dozen companies, including Chevron.
“We used technology to change what we do, rather than optimize what we have always done.”
—Jim Williams, Chevron manager
"Chevron has been a leading light, one of the early industry drivers, and they've worked methodically and thoughtfully to become one of the top three companies working on the digital oil field," said Judson Jacobs, longtime leader of the IHS-CERA Digital Oil Field of the Future forum.
Pioneered in North America, Chevron's original i-field™ digital oil field effort delivered hundreds of millions in cost savings and improved output since 2002. Challenged by company leaders, employees and teams in California, Texas, the Gulf of Mexico and other locations turned fields and facilities into i-field laboratories, incubators and proving grounds to transform and reinvent workflows.
"We used technology to change what we do, rather than optimize what we have always done," said Jim Williams, one of several key managers who led and inspired Chevron's first forays into the digital oil field.
Becoming Lean
The Carthage Field in Texas, Kern River Field in California and Captain Field in the United Kingdom, among others, became i-field digital oil fields. At the same time, Chevron sponsored the Center for Interactive Smart Oil Field Technologies at the University of Southern California, initiating research, hiring graduates, hosting interns and helping employees earn degrees and certificates. As digital oil field technology evolves, Chevron is committed to evolving with it, said Paul Siegele, president of Chevron Energy Technology Co.
Meanwhile, the entire digital oil field effort has been enhanced by a simultaneous focus on streamlining key business processes through techniques such as Lean Six Sigma. Indeed, said Brian Cabote, who coordinates Chevron's UWT effort in the Gulf of Mexico, digital oil fields can perform their best only when companies integrate streamlined processes with people, technology and information.
"We're confident that our improvements and results to date make a strong business case for taking the i-field program global," said Gary Luquette, president of Chevron North America Exploration and Production Co.
The trend isn't just about profit. Achieving what's come to be known as "intelligent energy" operations is also about increasing world energy supplies. According to the International Energy Agency, by 2035 oil demand will rise by nearly 20 percent, gas demand by nearly 60 percent, and electricity demand—much of it fueled by gas—also by almost 60 percent.
Savings from digital oil fields create more capital for energy investment. Higher field reliability helps ensure safer operations, more accurate production forecasts and steadier energy supplies for businesses and consumers. Automation raises field productivity and optimizes experts' knowledge. Given the potential benefits to Chevron's customers, partners and stockholders, no wonder it's called intelligent energy.
Ultimately, some 300 full-time employees throughout the company will support Chevron's new, five-year plan, anticipates UWT general manager Dave Dawson. Six to eight global solutions are projected to improve performance at the biggest, most productive fields in more than 40 locations, giving Chevron an edge over competitors, he believes.
Real-Time Drilling Optimization Center
Consider the new Real-Time Drilling Optimization Center (RDOC) near the MSC in Chevron's Houston towers. Here, seasoned drilling experts immersed in 360 degrees of live data provide support to drillers throughout the world, monitoring data trends to assist in decision making as wells are drilled. Employees work 12-hour shifts in 14-day rotations, matching crew schedules out on the rigs. As it evolves and the team learns how best to add value, the RDOC will aim to increase safety, efficiency and well quality where it counts most, monitoring, supporting and advising top-priority wells simultaneously across Chevron's global Upstream operations.
“Even though each oil field is different, all waterfloods have key operational elements and reservoir management activities that could be standardized globally.”
—Ray Clark, Chevron waterflood specialist
Ultimately, RDOC could help improve field development efficiency for projects requiring large numbers of similar wells, particularly for heavy oil and shale gas developments. Meanwhile, another solution called Waterflood Surveillance, Analysis and Optimization will focus on improving performance in Chevron's global portfolio of 140 fields that use waterflooding. The fields produced more than 570,000 net barrels of oil per day in 2011.
"Even though each oil field is different, all waterfloods have key operational elements and reservoir management activities that could be standardized globally," said waterflood specialist Ray Clark.
The company's digital oil field vision also includes complex asset management systems incorporating torrents of data and bundles of technologies. Real-Time Production Optimization/Reservoir Management, for example, uses real-time well and subsurface models based in geology and engineering to guide wells, facilities and operating system decisions.
Beyond these initial global solutions, four more are in the works, including the Thermal Decision Support Center to optimize heavy oil production in Indonesia, the United States and the Middle East, where Chevron is a leader in steam-stimulation technologies.
But let's back up a bit. What, exactly, is a digital oil field?
Automation, Integration, Intelligence
"The vision is real-time monitoring, analysis and control for optimum field management," said Hauser. "We've seen a revolution in sensors to measure what's happening down in the wells and in production equipment and have seen major advances in process instrumentation. And we've connected hardware and data to field performance models, continually analyzing information and making optimum decisions to maximize output."
“Connectivity is not only improving our business, it's enabling us to improve it faster.”
—John McDonald, Chevron VP and CTO
So it's about automation, but also integration—linking once-separate functions such as maintenance and drilling, and managing them within value chains. This requires streaming all relevant data into asset-decision environments, which fuse humans, data and technologies in a collaborative setting. Said Chevron i-field specialist Darrell Carriger, "Centralized surveillance allows management by exception, which enables a more efficient use of the workforce than manually checking every well and facility."
In addition to novel types of surveillance, new and innovative types of analysis programs search the clues to forecast when equipment will need service, repair or parts. More and better data, converted by software in real time into useful information, also enables another digital oil field essential: better, faster decisions to optimize field performance. A malfunction that might reduce output by 200 barrels in a week is caught and fixed in a day instead.
Making it all possible, said Chevron Vice President and Chief Technology Officer John McDonald, is connectivity—linking data, facilities, people and ideas through information technology and advanced communications.
"Connectivity is not only improving our business, it's enabling us to improve it faster," said McDonald. "Applying ingenuity at speed, we're putting our best minds to the toughest challenges anywhere in the world, ensuring that we'll continue to perform better and open new frontiers to help meet the world's energy needs."
Case in point: Before the MSC and the RDOC were conceived, Chevron's Gulf of Mexico operations created an Offshore Logistics Decision Support Center to streamline the constant coordination of vessels, supplies, equipment and people moving between shore bases and hundreds of structures. Within a year of opening, the center was logging cost savings from smarter vessel usage and fleet management, and safety gains as well, said Hauser. UWT is now building an enterprise version of the Gulf of Mexico's logistics solution for deployment across all major Chevron Upstream operations.
Transformation Through Connectivity
Chevron has also recognized the importance of designing and building its major new projects as digital oil fields. The company today has 40 energy developments in which it is investing at least $1 billion each. Within 10 years, 50 percent of company production is expected to come from today's big projects.
Recently, intelligent wells and systems were installed to automate and optimize the injection of gas and water into the Agbami Field in Nigeria. And the company's Tahiti deepwater project in the Gulf of Mexico has incorporated digital oil field fundamentals and systems.
“We've set a course to fully harvest the potential of the digital oil field.”
—Mike Hauser, Chevron's UWT program manager
"Tahiti achieved maximum oil production rates in a short period of time, proving that incorporating i-field solutions into projects can deliver huge incremental value through increased production and reserves," said Warner Williams, vice president of Chevron's Gulf of Mexico operations.
Currently in the pipeline to further help future projects is Real-Time Facilities Optimization (RTFO). This effort focuses specifically on advanced process controls to enhance efficiency in oil and gas fields while ensuring safety and protecting the environment throughout a facility's lifetime. RTFO leader Mike Barham believes that building upon this capability will give Chevron "sustainable technical and economic competitive advantage."
"We've set a course to fully harvest the potential of the digital oil field," said Hauser. "The global vision is to transform how we operate, with real-time instrumentation delivering real-time information, allowing real-time implementation of decisions, with processes coordinated to provide innovative solutions to meet the needs of our oil and gas operations."
Not surprisingly, Chevron's people are also being transformed, learning new systems and embracing collaborative behaviors. The company is recruiting the next generation of employees. But as energy companies surge toward the digital oil field future—and invest to deliver new energy supplies—they know that training and recruiting can't fill the whole need for human resources. They must find ways to leverage brainpower and experience more broadly and better integrate functions across the value chain.
Consider, for example, that Chevron's major capital projects are expected to double their global compression capacity by 2015. To make sure that enough expertise is available to cover the larger fleet, the MSC functions as a real-time knowledge-delivery portal, beaming top troubleshooters into hot spots without the time and expense of travel and. In effect, they're cloning the company's most seasoned technologists through connectivity.