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OIL AND GAS 2020MARKET OUTLOOKDeepwater Subsea: The Long Journey from Macondo to 2020p. 40The New Face of Industrial Marketing p. 4Following a Digital Barrel of Oil from Wellhead to Balance Sheetp. 32Canadian Oil and Gas: Action as the Antidote to Despairp. 18THE MAGAZINE FOR LEADERS IN AMERICAN ENERGYJanuary / February 2020OilmanMagazine.com
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Oilman Magazine / January-February 2020 / OilmanMagazine.com1IN THIS ISSUEFeatureOil and Gas 2020 Market OutlookBy Sarah Skinner - pages 28 & 29In Every IssueLetter from the Publisher – page 2OILMAN Contributors – page 2OILMAN Online // Retweets // Social Stream – page 3Downhole Data – page 3OILMAN ColumnsInterview, Brent Rhymes, CEO of WolfePak Software: Tonae’ Hamilton – page 24Predictive Analytics and Big Data Increase Flows in Downstream Supply Chain Management: Eric R. Eissler – page 50A Look Inside the Data Renery—the Expansion and Impact of Upstream Software and Emerging Technologiesin the Oil and Gas Industry: Tonae’ Hamilton – page 52Ready To Make It Happen!: Josh Robbins – page 53America’s Energy: 2020 and Beyond: Mark A. Stansberry – page 55Energy’s Top Quotes from 2019: Jason Spiess – page 60 Guest ColumnsThe New Face of Industrial Marketing: Gail Moch – page 4Spinning Straw into Gold: Using Expertise to Leverage Your Data and Gain Insight into Your Business: Patrick Long – page 6Project Controls Software Fuels Digitization for Oil and Gas Companies: McKinzie Pack – page 8Petrochemical Industry: How to Survive an Economic Crisis: Juan Zambrano – page 12Reuse of Well Production Water from Oil and Gas Wells: Andres Ocando – page 14Canadian Oil and Gas: Action as the Antidote to Despair: Paco Maldonado – page 18New CAM Software Boosts Production, Saves Time and Money for Houston Seismic Equipment Maker: Jerry Fireman – page 20Know Your X’s + O’s in the Oil and Gas Business’s New Math, Experience Matters as Much as the Molecule: Brent Potts – page 26Composite Solutions Improve Midstream Asset Integrity: Andrew Patrick and Tim Mally – page 30Following a Digital Barrel of Oil from Wellhead to Balance Sheet: Steve Haglund – page 32Standard Protocols Enhance Cost Savings and Safety Value of Wireless Gas Detection Systems: Chris Frail – page 34Double Your Money with Zirconia Ceramics in Oil and Gas: Ray Mouw – page 36Energy Transition Expected to Play a Major Role in the Oil and Gas Industry: Rakesh Singh – page 38Deepwater Subsea: The Long Journey from Macondo to 2020: Lillian Espinoza-Gala – page 40The Autonomous Oileld Will Always Include Humans (The Human Component of the Digital Oileld): Michael Chavez and Erik Waters – page 42Impact of a Digital Oileld: Ross Miller – page 44Saying Goodbye to Hot Oiling: Jason Thompson and Dr. Janaina Aguiar – page 46Enhancing Safety and Operability in the Evolving STS Transfer Market: Nicolas Landriere – page 54A Practical Approach to Using IOT Devices to Support Legacy SCADA Field Systems in the Transition to InternetBased Industrial Automation Systems: Steve Bullard – page 56
Oilman Magazine / January-February 2020 / OilmanMagazine.com2Gifford BriggsGifford Briggs joined LOGA in 2007 working closely with the Louisiana Legislature. After nearly a decade serving as LOGA’s Vice-President, Gifford was named President in 2018. Briggs rst joined LOGA (formerly LIOGA) in 1994 while attending college at LSU. He served as the Membership Coordinator and helped organize many rsts for LOGA, including the rst annual meeting, Gulf Coast Prospect & Shale Expo, and board meetings. He later moved to Atlanta to pursue a career in restaurant management. He returned to LOGA in 2007.Mark A. StansberryMark A. Stansberry, Chairman of The GTD Group, is an award-winning: author, columnist, lm and music producer, radio talk show host and 2009 Western Oklahoma Hall of Fame inductee. Stansberry has written ve energy-related books. He has been active in the oil and gas industry for over 41 years having served as CEO/President of Moore-Stansberry, Inc., and The Oklahoma Royalty Company. He is currently serving as Chairman of the Board of Regents of the Regional University System of Oklahoma, Chairman Emeritus of the Gaylord-(Boone) Pickens Museum/Oklahoma Hall of Fame Board of Directors, Lifetime Trustee of Oklahoma Christian University, and Board Emeritus of the Oklahoma Governor’s International Team. He has served on several private and public boards. He is currently Advisory Board Chairman of IngenuitE, Inc. and Advisor of Skyline Ink. Thomas G. Ciarlone, Jr.Tom is a litigation partner in the Houston ofce of Kane Russell Coleman Logan PC, where he serves as the head of the rm’s energy practice group. Tom is also the host of a weekly podcast on legal news and develop-ments in the oil-and-gas industry, available at www.energylawroundup.com, and a video series on effective legal writing, available at www.theartofthebrief.com.Jason SpiessJason Spiess is an award winning journalist, talk show host, publisher and executive producer. Spiess has worked in both the radio and print industry for over 20 years. All but three years of his professional experience, Spiess was involved in the overall operations of the business as a principal partner. Spiess is a North Dakota native, Fargo North Alumni and graduate of North Dakota State University. Spiess moved to the oil patch in 2012 living and operating a food truck in the parking lot of Macís Hardware. In addition to running a food truck, Spiess hosted a daily energy lifestyle radio show from the Rolling Stove food truck. The show was one-of-a-kind in the Bakken oil elds with diverse guest ranging from U.S. Senator Mike Enzi (WY) to the traveling roadside merchant selling ags to the local high school football coach talking about this week’s big game.Joshua RobbinsJosh Robbins is currently the Chief Executive Ofcer of Beachwood Marketing. He has consulted and provided solutions for several industries, however the majority of his consulting solutions have been in manufacturing, energy and oil and gas. Mr. Robbins has over 15 years of excellent project leadership in business development and is experienced in all aspects of oil and gas acquisitions and divestitures. He has extensive business relationships with a demonstrated ability to conduct executive level negotiations. He has developed sustainable solutions, successfully marketing oil and natural gas properties cost effectively and efciently.Steve BurnettSteve Burnett has been working in the oil industry since the age of 16. He started out working construction on a pipeline crew and after retirement, nishes his career as a Pipeline Safety Compliance Inspector. He has a degree in art and watched oil and art collide in his career to form the “Crude Oil Calendars.” He also taught in the same two elds and believes that while technology has advanced, the valuable people at the core of the industry and the attributes they encompass, remain the same. Investors and banks have indicated they are cutting back on investing and lending money to the booming shale market. Financial rm’s site the reason for the funding cutback is shale companies are producing less than forecasted and their reserves are less than anticipated. Shale producers receive funding based on the value of reserves, which are held for collateral. The pullback in cashow will result in severe disruption in operations for small and midsize shale producers and many will be forced to close. The tightening in lending matches the overall current oil and gas market. The drilling rig count is down nationwide, service and equipment companies that supply operators are resizing their operation, and demand has not moved as indicated in the stagnant price per barrel.We’ll take the bad with some good news. Let’s note that the hottest drilling region is still the Permian Basin in West Texas and New Mexico. The prolic shale play will continue to thrive despite the cyclical nature of the business. Even better, offshore spending is heating up. The Gulf of Mexico has several large projects planned or due online within the next two years. Leading the pack is BP’s Argos platform, part of the $9 billion Mad Dog Phase 2; the platform is being built in South Korea and will arrive in late 2020. Chevron announced a $5.7 billion Anchor project, the rst ultra-high-pressure development in the Gulf. Shell is in the lead as well with the Appomattox platform coming online this year. There are several smaller companies such as LLOG taking advantage of new technology to expand current elds through tiebacks. To top it off, the midstream sector is doing extremely well.This year will be full of quick turnarounds, mergers, acquisitions, bankruptcies, expanded pipelines and a steady stream of new technology. With all of the ups and downs coming our way, in all, America’s energy independence is important.Happy New Year! JANUARY — FEBRUARY 2020PUBLISHER Emmanuel SullivanMANAGING EDITOR Sarah SkinnerASSOCIATE EDITOR Tonae’ HamiltonFEATURES EDITOR Eric EisslerGRAPHIC DESIGNER Kim FischerCONTRIBUTING EDITORS Gifford Briggs Steve Burnett Thomas Ciarlone, Jr. Joshua Robbins Jason Spiess Mark StansberrySALES Diana GeorgeTo subscribe to Oilman Magazine, please visit our website, www.oilmanmagazine.com/subscribe. The contents of this publication are copyright 2020 by Oilman Magazine, LLC, with all rights restricted. Any reproduction or use of content without written consent of Oilman Magazine, LLC is strictly prohibited.All information in this publication is gathered from sources considered to be reliable, but the accuracy of the information cannot be guaranteed. Oilman Magazine reserves the right to edit all contributed articles. Editorial content does not necessarily reflect the opinions of the publisher. Any advice given in editorial content or advertisements should be considered information only.CHANGE OF ADDRESS Please send address change to Oilman Magazine P.O. Box 42511 Houston, TX 77242 (800) 562-2340Original cover photo by Prasit Rodphan – www.123RF.comLETTER FROM THE PUBLISHERCONTRIBUTORS — BiographiesEmmanuel Sullivan, Publisher, OILMAN Magazine
Oilman Magazine / January-February 2020 / OilmanMagazine.com3Week Ending January 3, 2020DIGITAL DOWNHOLE DATAGulf of Mexico: 22Last month: 22Last year: 22 New Mexico: 104Last month: 103Last year: 105 Texas: 403Last month: 400Last year: 534 Louisiana: 58Last month: 58Last year: 65 Oklahoma: 51Last month: 50Last year: 140 U.S. Total: 796Last month: 799Last year: 1,075OIL RIG COUNTS*Source: Baker HughesBrent Crude: $67.05Last month: $65.67Last year: $53.23 WTI: $61.17Last month: $58.42Last year: $47.76CRUDE OIL PRICES*Source: U.S. Energy Information Association (EIA)Per BarrelGulf of Mexico: 59,015,000Last month: 56,939,000Last year: 54,296,000 New Mexico: 30,435,000Last month: 29,365,000Last year: 24,024,000 Texas: 163,465,000Last month: 156,586,000Last year: 146,462,000Louisiana: 3,751,000Last month: 3,700,000Last year: 4,086,000Oklahoma: 18,351,000Last month: 18,133,000Last year: 17,861,000 U.S. Total: 392,305,000Last month: 374,517,000Last year: 360,572,000CRUDE OIL PRODUCTION*Source: U.S. Energy Information Association (EIA) – October 2019 Barrels Per MonthGulf of Mexico: 80,039Last month: 79,701Last year: 82,691 New Mexico: 162,265Last month: 155,341Last year: 133,526 Texas: 795,051Last month: 773,467Last year: 683,197Louisiana: 279,621Last month: 257,182Last year: 250,357 Oklahoma: 278,415Last month: 267,938Last year: 261,852 U.S. Total: 3,175,779Last month: 3,041,485Last year: 2,895,137NATURAL GASMARKETED PRODUCTION*Source: U.S. Energy Information Association (EIA) – October 2019Million Cubic Feet Per MonthConnect with OILMAN anytime at OILMANMAGAZINE.com and on social media RETWEETS@OilmanMagazine#OilmanNEWSStay updated between issues with weekly reports delivered online at OilmanMagazine.com SOCIAL STREAMfacebook.com/OilmanMagazine
Oilman Magazine / January-February 2020 / OilmanMagazine.com4OILMAN COLUMNThe New Face of Industrial Marketing By Gail MochIndustrial businesses in the energy sector have long doubted the merits of advertising and marketing. Back in the day, industrial businesses didn’t really need to do a lot of marketing to nd customers. If someone needed a specic com-ponent or product, they often had designated companies they would take their business to or they’d check a directory like the Thomas Register. Of course, with the advancement of technology and the internet, industrial buyers changed the way they searched for products and services. According to a report by Forrester, 68 percent of B2B customers prefer to research independently online (Wizdo, 2017). So, industrial businesses had to adapt and move into the digital space, however, many in the energy sector are still somewhat skeptical of using marketing and advertising to drive business. Much of this skepticism is derived from an inability to see the return on investment received from advertising campaigns. While impressions and clicks tend to be the language of media companies, most industrial businesses are more concerned with leads generated and dollars made. To combat this problem, most industrial companies tried to use targeted landing pages with forms in an attempt to capture reader data for follow up. Unfortunately, on average only around 3 percent of people who hit your website are going to ll out a form (Saleh, 2018). Which in turn, means you’re missing out on 97 percent of your web trafc and have limited options to nurture them. Another option B2B businesses had was to look for publications that provide advanced reporting and analytics. However, the denition of advanced reporting changes from publisher to publisher, so it’s important to determine exactly what is included.Some publications offer static lead generation report. These reports may simply state the companies that interacted with an advertisement or may include everything from the full name, title, company, and business email. Obviously, the full details are more appealing to advertisers as it provides deeper insight into exactly who showed interest.While static reports are valuable, they are still limited in terms of identifying what happened post-click. Did the subscriber click on the ad and then exit out of the website right away? Did they stay and explore content? Did they come back later? Basically, are they actually showing purchase intent?These are all questions whose answers would dramatically improve your ability to qualify the lead. That’s where conversion software comes in.Conversion software gives advertisers the ability to see lead attribution and follow the journey of leads as they travel through the sales pipeline. ActiveConversion, the leading provider of conversion software in North America offers a unique advantage to advertisers as it offers integration with specic industry publications, such as OILMAN Magazine. This integration allows advertisers to automatically identify subscribers visiting their website from the media publication. From there, they can see when the lead returns and are automatically notied of the best time to reach out.B2B sales cycles tend to be far longer than their B2C counterparts. In B2C scenarios, an advertisement in a publication can turn into an immediate purchase. Take an advertisement for some sunglasses as an example. An ad could be clicked and an order for the glasses could be made in minutes, if not seconds. But comparatively, if the advertisement is for expensive industrial heating equipment, chances are a sale won’t be made until weeks or months after the initial ad click.This delay between click to purchase makes it incredibly difcult to determine attribution and overall ROI of industrial marketing campaigns. Conversion software takes the guesswork out of determining which campaigns are actually working by providing detailed reports on lead activity from initial click to nal purchase. That way you can tweak your marketing spend to invest more in your top ROI activities and cut spend where the value is limited. Industrial companies are using these tools to transform the way they market and sell to their buyers. To remain competitive in today’s volatile markets, industrial businesses must leverage these technologies or risk extinction. Gail Moch has a background in B2B marketing & technology that she now uses in her role as Marketing Manager at the industrial sales & marketing company, ActiveConversion. She graduated from the University of Calgary with a Bachelor of Commerce in Marketing and shares her insights on various blogs and newsletters in North America. Gail has a passion for innovation and creativity that she applies to all aspects of her life. When she isn’t at the ofce, Gail can be found relaxing at home with her husband and two dogs. References Saleh, Khalid, “The Average Website Conversion Rate.” Invesp, November 2018, https://www.invespcro.com/blog/the-average-website-conversion-rate-by-industry/Wizdo, Lori, “The Way and Means Of B2B Buyer Journey Maps: We’re Going Deep at Forrester’s B2B Forum.” Forrester, August 21 2017, https://go.forrester.com/blogs/the-ways-and-means-of-b2b-buyer-journey-maps-were-going-deep-at-forresters-b2b-forum/Photo courtesy of Active Conversion
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Oilman Magazine / January-February 2020 / OilmanMagazine.com6OILMAN COLUMNOILMAN COLUMNSpinning Straw into Gold: Using Expertise to Leverage Your Data and Gain Insight into Your Business Leveraging data, analytics and relying on the expertise of your team can unlock new insights into your business and supply chain.By Patrick LongStop me if you’ve heard this story before. The Board sets a growth target for the upcoming year. The deal team is assembled from a cross-functional section of the business. They’re on the prowl for the best asset(s), looking for that diamond in the rough. After months and endless nights of proposals and bids, the offer is nally accepted, and a public announcement is made. Sound familiar? Like the Grimm Brother’s fairy tale of Rumpelstiltskin, it seems as if you’ve been given a pile of straw tasked with turning it into gold by morning, or else face dire consequences. The question now becomes: how do you utilize the data housed in that asset in order to manage it and manage it effectively in a way that captures a comprehensive view of your business and supply chain?When Reality Sets InIt’s at this point where the buyer learns about the new system and data used to “sell the assets.” The management team knew what was “sold” to them. That is the high (and sometimes unreasonable) benchmark. Management must now incorporate the new asset and get it to perform and live up to its potential. It’s now time to understand what was “really purchased.” Can the assets truly deliver on their promises? Where do you begin?Integration? What Integration?In the best-case scenario, the CIO has been a part of the deal team and was aware of what is soon to be “inherited” with all its pitfalls and risks. At worst (and most likely the norm), the CIO suddenly inherits a “Rube Goldberg carve-out” with minimal input. It wasn’t a mess on paper and in the negotiations. The seller spoke of separate instances and management reports. What made that work? What was the “secret sauce” behind the model and those visual dashboards? No amount of graphics, charts, gauges, heat maps or dashboards can help when a management team demands answers and the CIO struggles to integrate disparate systems, minimally viable products, imsy analytics together with existing architecture. Living Up to ExpectationsSo, how did Rumpelstiltskin do it? How did the straw get spun into gold magically overnight? The “Rube Goldberg architecture and systems” are pieced together with vague promises of a strategic overhaul in years to come. The data feeds start up and, suddenly, daily inventory starts owing. The asset team mumbles abstractly about “this nuance and that nuance” with the data. No one has the mindset to appreciate the nuances. The experience walks out the door when sales-side representatives leave the room and suddenly you have the proverbial keys to the car. What do the numbers mean? Daily end-of-day inventory, estimated custody transfers, certied inspection reports, BOLs (Bills of Lading), lab reports, vessel reports…how do you make sense of it all?Stabilize, Fight for Accuracy, ConsistencyJust like the King who demanded that the Princess spin straw into gold again and again before marrying her, management will demand consistency with the result. The rst ght is hand-to-hand combat—to lock down data sources and ensure that the base level of transactions is accurate. Develop and have condence in the numbers only after implementing health checks and monitoring processes as backstops to prevent breakdowns (or at least identify them quickly when they occur). Plan for success but expect challenges along the way as resources develop new habits around new processes. Set up health checks to catch issues before they manifest and become larger and more expensive (time and money) to correct.Photo courtesy of Kheng Ho Toh – www.123RF.com
Oilman Magazine / January-February 2020 / OilmanMagazine.com7OILMAN COLUMNOILMAN COLUMNPaying the Price: Having to Give Up Your First BornAt the conclusion of Rumpelstiltskin, the (now) Queen had to give up her rst-born if she didn’t answer his arcane riddle. Just as she was settling into her new life, she was revisited by the hasty decisions of the past. The same malaise can creep into any integration. As the acquisition stabilizes, it becomes clearer to the business about the performance of the recently acquired asset and how it’s tting into the larger portfolio. Needs change. No longer is management content with just baseline transactional inventory data. That’s now the given. At this point, the data should be molded to begin unlocking secrets.Resist the “quick, easy magical silver bullet” to solve all your data needs for purported insight into the future. Instead, as management starts to change questions from “what” into “why” and “how,” use data to support your resources and empower the business. Let data drive conversations and challenge preconceived notions of how the business works. The data should be stable. Rely on it and trust it. Let analytics drive new hypotheses. This can help draw new correlations that you (and the management team) didn’t know existed.Unlocking the Secrets and InsightIn our example of the asset integration, move beyond the tactical daily imbalance conversation. Let the data trend shed insight into behavior of customers. For example, take note of truck rack liftings. Marry in the pricing data and use the liftings to determine the price sensitivity for customers. Do lower prices drive more business? Do higher prices drive away more business? Chances are you don’t truly understand your buying levers for customers. The data will undoubtedly surprise you to understand which customers are more sensitive (and which ones aren’t) to prices.Look for consistency and trends with respect to imbalances. Do they signal process improvement needs because the correlation can be pinpointed to specic resources? Do they signal the need for work orders and justifying capital improvements to gauging and meters? Let the data drive new areas for continual improvement.Whatever the insight, rely on the expertise of your team to drive the business. Make the data work for you. Doing so will unlock the secrets for a successful integration. Patrick Long is a Director in Opportune’s Process & Technology practice. Patrick has over 20 years of experience in providing clients with energy trading and risk management, packaged software implementation, trading and risk processes and business process automation. Patrick leads the BI initiative within the rm. He focuses on applying BI tools (e.g., Spotre and Tableau) to client data in order to allow proper insight for management around both upstream and downstream business issues. Prior to joining Opportune, Patrick worked in the energy consulting trading and risk systems practice at Accenture where he managed multiple project teams through the entire process of software selection to successful implementation of trading and risk management systems for energy trading entities. Advertise with us!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would benefit the industry? If so, we would like to speak with you!We have a creative team that can design your ad! OilmanMagazine.com/advertise • Advertising@OilmanMagazine.com • (800) 562-2340 Ex. 1
Oilman Magazine / January-February 2020 / OilmanMagazine.com8OILMAN COLUMNProject Controls Software Fuels Digitization for Oil and Gas Companies By McKinzie PackThe oil and gas industry is no stranger to uncertainty, but with incongruity of supply and demand, organizations have found a game changer in getting better margins through efciency rather than overproduction. The companies in the industry that are coming out on top are those who are embracing digitization (the automation of existing manual and/or paper-based processes). While collecting, analyzing and effectively using massive amounts of data (digitization) is not new, not even to the oil and gas industry, it is still not vastly implemented on an end-to-end scale. Improving operations through analytics and project control systems is proving to be essential industry-wide now that high energy prices aren’t necessarily there to blanket the cost of inefciencies. One such solution that has seen a shift in the oil, gas and chemical industry from holding on to old processes and tools to embracing digitization and automation is ARES PRISM. ARES PRISM is enterprise project controls software that has been swept up by many industry-leading Gulf Coast companies in recent years.“Our project controls software, ARES PRISM, lets companies analyze data in ways they’ve never been able to in the past; saving them valuable time and money,” Geoffrey Stubson, Chief Financial Ofcer of ARES Project Management, LLC, said. “That initial fear of implementing a new solution across an organization is often quickly replaced by relief when they witness the increase in operational efciency, productivity, reliability and predictability after deployment.”McKinsey & Company estimates that effective use of digital technologies in the oil and gas industry could cut capital expenditure by up to 20 percent and improve global cash ow to around $300 billion by 2025. At implementation, oil and gas companies often have the challenge of dated legacy systems and equipment, and a huge number of suppliers. In fact, that is how ARES PRISM began– ARES’ project managers needed a better software solution than anything that was available on the market. When organizations implement ARES PRISM, they have a team of ARES PRISM project management experts helping them to roll-out the software. They are experienced in these common industry challenges and implementing and deploying ARES PRISM in ways that make their clients a more well-oiled machine. Project controls software helps to solve the oil and gas sector’s pain points surrounding inefciency: relying on error-prone spreadsheets, the increasing complexity of projects, time-consuming reporting at month’s end, change control and change management, and the lack of visibility into projects. When organizations successfully deploy an enterprise project controls software, they transform their previous manual processes to smarter, digitized processes. Digitization allows for more convenient, easier and superiorly utilized labor that gains a better planning process.With proper project controls established, project planning has predictive analytics and forecasting so that these organizations are able to anticipate and better respond to shifts in the market, company or project. With the constant ow of real-time data that can be processed continually, teams and stakeholders can make better informed decisions faster. In the last decade, many companies in this sector were exploring digital solutions to keep up and remain relevant, but it was not on a widespread, organizational scale. At the time, the effort and cost for a company to implement a digital transformation was not highly incentivized while energy prices were high. However, once oil prices began falling in 2014 when production started to outpace demand, corporations would have been wise (and some were) to stop shirking digitization and embrace it fundamentally. A 2015 survey conducted by Cisco Consulting Photo courtesy of ARES PRISM
Oilman Magazine / January-February 2020 / OilmanMagazine.com9OILMAN COLUMNServices of 550 oil and gas company professionals (upstream, midstream and downstream professionals) in 14 countries found that nearly 50 percent of respondents reported that data quality was the number one area of operations that needed improvement in order to make better use of IoE (Internet of Everything) technologies. IoE refers to the networked connection of people, process, data, and things. The survey identies intelligence from data as the key area needed to improve operational efciency, and data analytics as the number one IoE driving force for faster, better decision-making. With this realization being recognized by 48 percent of oil and gas respondents at the time, it is not surprising that they named “operational efciency of existing projects or reserves” as the top area of increased investment over the next two years. The survey also found that leaders need to improve operational efciencies and asset life to stay competitive without cutting costs with layoffs and project cancellations. The respondents understood that connecting “things” is a necessity, but that the true value lies in the intelligence of extracted and analyzed data from the “things.” This extracted intelligence allows companies in the oil and gas industry to drive business and operational transformation. Enterprise project management software like ARES PRISM is the centralized system that houses all the cost, schedule, and other integral systems’ data for analysis and reporting.When implemented throughout an organization, digitization provides the means to completely review and re-evaluate processes and operations, including inventory and labor needs. Project controls software solutions embrace the way technology is moving with the IoT via integration and makes companies more agile. Bringing real-time data into one robust system effectively helps to destroy data that was once siloed. Integrating dependable project controls data in one centralized system is delivering new efciencies and transforming oil and gas companies and their margins. By connecting IT systems, ERP systems, nancial systems, legacy systems and business processes, companies are able to orchestrate data ow that supports business goals.Discussing the survey in an interview with Rigzone in 2015, Nicolaas Smit, director for the global energy industry at Cisco Systems, said, Continued on next page...Photo courtesy of ARES PRISM
Oilman Magazine / January-February 2020 / OilmanMagazine.com10OILMAN COLUMN“The industry has made great progress on digital energy, but now it’s time to build on that foundation to make the industry hyperaware, predictive and agile using enterprise-level data management tools.” Since then oil, gas, and chemical rms have been jumping onboard with enterprise-level data management solutions like ARES PRISM, which has seen a major rise in clients of this sector in the Gulf Coast area. “We’re happy to be a part of the ongoing digital transformation in this major hub. Houston and the Gulf Coast area is huge, but the oil and gas sector seems to be pretty tight-knit professionally,” Geoffrey Stubson, Chief Financial Ofcer of ARES Project Management, LLC, said. “One O&G rm implements ARES PRISM then talks about the quick return on investment and the gains they are experiencing to a former colleague or friend at another company, and the word-of-mouth spreads.”Enterprises are now deploying solutions that t their needs with data and project management software systems such as ARES PRISM, rather than trying to make the faulty legacy systems and spreadsheets work. They are ridding their organizations of disparate systems and processes, along with the risks they posed. Despite being a COTS (Commercial-off-the-Shelf System), when implemented wholly throughout an organization, this software solution destroys data silos and becomes the ultimate in-house system since it is capable of integrating bi-directionally with other already in place systems.Unlike other market solutions, ARES PRISM integrates nancial, process, project, and organizational information into one dependable, robust solution. Once data is captured, it limits data leakage that can hinder operational and business decisions. It helps end information leakage types like data integrity not being maintained, data not being stored, data not being accessible, data not being analyzed, and data that is not communicated. With a powerful platform like ARES PRISM, oil and gas companies can scale-up their programs. The tools and capabilities required for digitizing change and risk management are built-in. If an oil and gas rm hasn’t begun to digitize, it is not too late to start the transformation. According to Ernst & Young, the time is now thanks to “the industrial internet, advanced analytics, cloud storage and increasingly reliable mobile communications [that] enable the potential for digital to transform the oil and gas industry.”McKinzie Pack is a content specialist for project controls software tool, ARES PRISM. With its growing presence in the Houston market, McKinzie has seen many organizations benet from the world-class integrated project management software. ARES PRISM manages the complete project lifecycle of capital projects to lower cost, mitigate risk and improve overall project performance. It is utilized across all major industries including the oil and gas, energy, engineering and construction. ARES PRISM has won numerous awards recently, includ-ing “Global Award for Project Controls in a Mega Project” at the Project Controls Expo UK and “Excellence in Cost Management” at the AACE International Conference.
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Oilman Magazine / January-February 2020 / OilmanMagazine.com12OILMAN COLUMNThe petrochemical industry has a vital importance for the development of nations. This industry is a fundamental platform for the growth and development of important industrial chains such as textiles and clothing, automotive and transportation, electronics, construction, plastics, food, food fertilizers, pharmaceuticals and chemistry, among others. Given the value that this industry has as the rst link in important productive chains, it is essential that for it to be strengthened and thus be able to supply the national industry with the inputs that it requires.How Does the Petrochemical Industry Work?First, we must know what petrochemical means. This is nothing more than a branch of chemistry that studies the transformation of crude oil (petroleum) and natural gas into useful products or raw materials. These petrochemicals have become an essential part of the current chemical industry worldwide.The petrochemical industry is nothing more than a link in a multi-point chain. To focus the article a bit, one must begin by breaking down the main stages that constitute the oil industry.• The rst stage corresponds to the work of exploration, and study of the land that allows certifying an oileld as viable.• The second stage corresponds to the completion of the necessary work, to allow the controlled extraction of oil and gas abroad.• The third stage consists of engineering and the construction of the pipelines necessary to deliver the raw material to the renery, and the interconnection with other plants, and the distribution network.• The fourth stage is where already developed hydrocarbons are processed on the one hand in the reneries where the rening process is carried out, and on the other in the gas treatment plants.• The fth stage takes advantage of a part of the rening products, which are sent as raw material to the appropriate petrochemical plants, which produce the petrochemical products.• The sixth stage corresponds to the distribution, and commercialization of the different nal products.In this article we will move according to the fth stage, that is, petrochemical companies.Effects of the Economic Crisis on the IndustryAs we know, economic crises happen anywhere and at any time, it can be regional or global. When the crisis is regional, the solution to this problem may be simpler than when it is taken to global magnitudes.A regional economic crisis can be due to bad political actions, effects of a war, among others. By giving a great example we can see what is currently happening in Venezuela where, because of inefcient political actions that have been taken for more than 20 years, the country has been plunged into its worst economic crisis. Since for political reasons there is an economic and oil blockade from several countries, this makes that one of the many industries that make life in this country, the petrochemical industry are critically affected. Here are some of the most important effects that the main national petrochemical company takes from the Venezuelan economic crisis:• Leakage of human talent from the industry, due to their poor condition on a day-to-day basis. Either, for not knowing how to give food to their families because of the high cost of the products and the very low salaries they are receiving (being around $15 per month).• Lack of equipment acquisition to replace the already defective ones.• Deterioration of all facilities due to the lack Petrochemical Industry: How to Survive an Economic Crisis By Juan ZambranoThe most important effects to which the petrochemical industry is subjected when there is an economic crisis in a country. Zambrano 2019. Oil stages. Zambrano 2019.
Oilman Magazine / January-February 2020 / OilmanMagazine.com13OILMAN COLUMNof injection to the maintenance budget.• Projects closure due to lack of materials, personnel and investment.These are some of the most important effects that the petrochemical industry is subjected to when there is an economic crisis in a country.According to the research of Caraballo-Arias, Madrid, J. and Barrios, M., 2018. Working in Venezuela: How the Crisis has Affected the Labor Conditions. Annals of Global Health, 84 (3), pp. 512-522. DOI: http://doi.org/10.29024/aogh.2325. The following three points are described:The declining economy and highly dangerous environments have signicantly decreased the quality of life for Venezuelan workers and their families, to the point where no longer home or workplace are safe places.Over the last decade, the crisis has reached its peak, bringing the lowest salaries in the world, hyperination levels of 130 percent inter-monthly [3]; severe shortages in food, medicine, auto parts and other kinds of goods.Some examples about the crisis are: in January 2016, the Venezuelan Association of the Plastic Industry (Asociación Venezolana de la Industria del Plástico (AVIPLA)) noted that the industry was operating at an average 50 percent of its installed capacity, when the plants at “El Tablazo” Petrochemical complex of PEQUIVEN (main supplier of the resins), were shut down for almost two straight months [33], which generated employers paying salaries, no production, impact on consumers.How Can the Petrochemical Industry Solve these Problems and Get Ahead?To be able to overcome this crisis we must know that there is no “magic” solution to these problems. To solve them we must have patience and above all, hard work. A fast solution could be the repair of some tools or equipment that are defective. Another short-term solution could be the incorporation of trained personnel to deal with these situations, among others. The rst thing we must take into account when designing recovery strategies in an economic crisis, is how strong the impact of it on the industry and its scope was. For example, if the crisis continues to affect, a correction system should be developed for a real time solution and for the future.In Venezuela’s case, the rst thing would be to implement an economic recovery plan by implementing optimal management of state resources, decrease in political expenses, budget injection in the industries that are the fundamental pillar of the country (oil, petrochemical, minerals, and some others) with the help of foreign investment to have a faster response in the growth of the economy. This could begin to solve the most important problems that affect this industry such as those mentioned above:• Staff would be retained thus avoiding their resignation by improving salaries and living conditions of the employee and their family environment.• High efciency equipment could be purchased to replace already defective ones.• Proper maintenance of the facilities thanks to both domestic and foreign investment.• Completion of unemployed projects and design and implementation of new projects to improve capacity and thus have a positive feedback with the regional economy.• Provide other nished products to other industries in order to remedy the damage previously caused by economic mismanagement.Currently, the Venezuelan petrochemical national company Pequiven is surviving with the little that it receives via dividends of Metor and Supermetanol on the one hand, and on the other one from the sale of methanol and urea to the foreign market through its Colombian subsidiary Colombian-Venezuelan Monomers.It is necessary to understand that in this case only one of the solutions presented above is being taken into account, which is foreign investment in the industry that has prevented the continuous deterioration of the facilities and also have brought more equipment that can help the optimal functioning of these plants.Another way to help in the development of this industry is also to improve the stages mentioned above, such as the oil industry that is dedicated to the extraction and transport of hydrocarbons that serve as food for the petrochemical industry. The solutions are practically equal to petrochemicals, but with the exception that many transnational companies have already injected money for the improvement of the industry as well as the upgrading of the wages of their workers, which turns into a greater performance of their part in the projects where they are involved.For example, the transnationals, Chevron (has special permission from the United States government to operate despite the sanctions and block by the U.S.), Rosneft and Gazprombank (these last two are Russian companies that do not need any type of permission to continue operating in Venezuela, because of their alliance with the current Venezuelan government) continue to operate “normally” in the country. Finally, it is necessary to analyze and see in these crisis a form of self-criticism of how things should be done to ensure that companies function optimally and without possible risks of being deeply affected by a future economic crisis. Also, as an example to avoid taking actions such as those taken in the mentioned country that led to its worst economic crisis, thus causing a delay, deterioration and collapse of the industrial economy in that country.Juan Zambrano has around 3 years of experience in the oil industry, working in the following areas; reservoir engineering, support engineer for a petrophysical environmental corrections in a petrophysics program and geomechanic engineering. Working in several projects, such as, developing a 1D geomechanical model, a Phase 1 reservoir model and serving as a consultant in a petrophysical app development. Holding a Bachelor’s Degree in Petroleum Engineering and currently coursing a Masters in Petroleum Engineering. Survey: Most Venezuelans struggling financially. Survey conducted September 12 – December 7, 2018. Source: Pew Research.
Oilman Magazine / January-February 2020 / OilmanMagazine.com14Reuse of Well Production Water from Oil and Gas Wells By Andres OcandoWater is one of the most important resources on the planet. Composed by two molecules of hydrogen and one of oxygen, it represents a renewable resource as long as the procedures of treatment, ltration and conversion are respected, otherwise it would be considered as a non-renewable one.The water produced from oil wells has different uses, they can be separated into two areas: its usage in the same oil industry and in a more environmentally friendly usage, in this case we would talk about water as a renewable resource.Uses in Oil and Gas• Injection to recover more oil. o When removing toxic substances, it is functional as drilling uid or hydraulic fracturing uid. o As an injection uid in improved recoveries. o With the use of basic treatments or osmosis processes, for steam generation in continuous or intermittent steam stimulations.• Injection for future use. o Aquifers for storage and recovery. If there is any plan for it, the aquifers are reinjected for future use of the resource.• Injection for hydrological purposes. o Subsidence control, which is developed by the producer of large quantities of uids belonging to the subsoil. o Saltwater Intrusion.Environmentally friendly use• Agricultural use. o Irrigation. o Water for livestock and wildlife, as long as it is tolerable. o Swamp Management. o Algae cultivation as a raw material for biodiesel production. o Hydration of arid zones.• Water for domestic use. o Operation as gray water. o Drinking water (some cases).Where Does the Production Water Come From?The production water comes from the open wells for production, mostly. These wells are producers of oil and water volumes at the same time, either because the main production mechanism is hydraulic thrust or because the water injection technique is being used to maintain reservoir pressure.On the other hand, there are injection wells that are used to achieve maximum oil recovery inside deposits, new strategic wells are drilled, or wells are used where the production of water is very high, to inject additional water into the well, which forces oil to reach the surface.With the use of material balance or reservoir simulations analysis it is possible to dene the amount of water to be injected and in which wells of the reservoir, in order to occupy the space left by the oil produced and, subsequently, apply pressure for a better push of the oil.The water produced, as well as the injected, end up surfacing along with the oil, and as the oil in the well reaches its point of irreducible saturation, the proportion of water produced with the oil increases.In some occasions, these wells that contain volumes of water associated with oil production are no longer attractive. This happens because of the expenses generated by the water treatment, because the price of the barrel in the market is very low, but there are other circumstances where the economic benet is sufcient to keep the well open to production. Some other cases where the water that is produced is reinjected OILMAN COLUMNWater Injector Well System – Source: Integrated Flow Solutions
Oilman Magazine / January-February 2020 / OilmanMagazine.com15into the well. Then, it is common to work with the water cuts to have an important hydrocarbon production.How is the Production of Water Treated?The water produced was commonly deposited in large evaporation pools, something unacceptable to the environment and to the surrounding populations.A good example is what happened in the Lago Agrio oil elds, in Ecuador, where water produced in pools got accumulated, and its content ended up ltering into the rivers and the water table, which caused a serious contamination in nearby towns.The water produced is currently considered an industrial waste, since this liquid may contain metals, radioactive materials, such as radius 226 or radius 228, and organic compounds.Therefore it is understood that this uid is not suitable for the consumption of any living being, whatever its use will be, the water must be treated properly before any of the future provisions. The main contaminants that comes with the water are:• High level of TDS (Total Dissolved Solids).• Oil and grease.• Suspended solids.• Dispersed oil.• Dissolved and volatile organic compounds.• Heavy metals.• Radionuclides.• Dissolved gases and bacteria.• Chemicals (additives) used in production such as biocides, scale and corrosion inhibitors, and emulsion and reverse-emulsion breakers.To complete the treatment of the water, there are three steps:1. Pre-treatment, the bulk of the oil and gas, as well as coarse particles are removed. 2. Main treatment, which focuses on further removal of small hydrocarbon droplets and small particles from the water. This is achieved in two steps of treatment. o The primary step removes larger hydrocarbon droplets and large solid particles, as well as hydrocarbon slugs. o A secondary step goes after smaller droplets and particles, and it encompasses the bulk of the de-oiling equipment used in the upstream industry. This secondary step is usually sufcient to reduce the dispersed hydrocarbon content to below the typical offshore discharge level of 40 mg/L. 3. Then, there is a nal polishing treatment, which can be optional, where the oil concentration is lowered to levels typically below 10 mg/L.With the use of these steps, water does not become a substance suitable for the consumption of living beings, for this reason it is used only in industrial processes.On the other hand there are methods that are practiced in the waters of production to make them functional in ecological terms. Here we name some of them: OILMAN COLUMNSource: Society of Petroleum Engineers Lago Agrio condition – Source: Environmental Justice AtlasContinued on next page...
Oilman Magazine / January-February 2020 / OilmanMagazine.com16Wetlands for Wastewater TreatmentMore than 50 years ago, this technique was developed by Dr. Seidel of the Max-Planck Institute in Germany. It consists of man-built areas where, in a controlled manner, mechanisms for the elimination of contaminants in wastewater are reproduced, which occur in natural wetlands through physical, biological and chemical processes.The articial nature of this type of wetlands is dened by: the connement of the wetland, which is mechanically constructed and waterproofed to avoid water losses to the subsoil, the use of substrates other than the original ground for rooting the plants and selection of the plants that will colonize the wetland.The articial wetlands technology can be considered as an ecosystem in which the main actors are:• The substrate: It serves as a support to the vegetation, allowing the xation of the microbial population, which will participate in the majority of the processes of elimination of pollutants.• Vegetation (macrophytes): It contributes to the oxygenation of the substrate, the elimination of nutrients and on which its underground part also develops the microbial community.• Water to be treated: Circulates through the substrate and vegetation.Reverse Osmosis (RO)To understand reverse osmosis, it is necessary to know osmosis rst. It is a procedure whereby water is passed through specially designed lters and membranes, at a constant speed and in this way the water is converted to its purest state.In reverse osmosis it is basically the same concept but in this case it is sought to exceed the original osmotic pressure. This way, the solvent (water) does not pass through the membranes, it collides with them hurrying and magnifying the result.In the oil industry, water carries dissolved metals and toxic substances in solution. When reverse osmosis is applied, it is sought to press this solvent against membranes specially designed to trap water contaminants, leaving treated water on one side of the barrier and, on the other, unwanted contaminants• RO ltration improves taste, odor and appearance of water by removing contaminants that cause taste and odor problems.• RO systems remove pollutants from water including nitrates, pesticides, sulfates, uoride, bacteria, pharmaceuticals, arsenic, metals among others.Microltration, Ultraltration and Nano FiltrationThis procedure is similar to reverse osmosis, unlike the solvent must be at a temperature not exceeding 95° F. It has more stages because it contains more than one type of ltration membrane and each of these does a particular job.Microltration membranes have a pore size of 0.1-10 µm, sufcient to retain all kinds of bacteria, turbidity, macromolecules, and colloids, among others.Through ultraltration, particles with a size of 0.001-0.1 µm are separated. In these membranes all viruses, macro proteins, antibiotics, and some others are already retained.Through Nano ltration, particles with a size of 0.1 nm-0.001 µm can be retained, which allows the majority of molecules to be separated from the water, although those of low molecular weight are partially retained in the membrane.This method turns out to be somewhat more attractive for the oil and gas sector, because it represents a lower cost than the other two, and allows the reuse of water for more than industrial activities.According to National Energy Technology Lab. NETL.DOE, cleaning a barrel of water through the use of reverse omosis costs $0.06 - $0.11, and what is done by Texaco in San Ardo eld, California. Where they use treatments such as ltration, reverse osmosis and wetlands getting the cost of $0.3 - $0.5.More and more governments are updating the environmental laws, and every day there are more companies that invest in this type of treatments. Water, as well as hydrocarbon, is a nite resource, so water treatment and reuse is not the future, it is the present and will continue to grow.Andres Ocando is a petro-leum engineer who gradu-ated from Santiago Mariño University in Venezuela. His geomechanical-oriented thesis received an honorable academic mention. He currently has 4 years of experience working as a geomechanical and reservoir engineer at PDVSA. OILMAN COLUMNWater maker (RO) – Source: Enwa Water TechnologyMicrofiltration, ultrafiltration and nanofiltration – Source: NXFiltration
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Oilman Magazine / January-February 2020 / OilmanMagazine.com18OILMAN COLUMNCanadian Oil and Gas: Action as the Antidote to Despair By Paco MaldonadoThe fact that oil and gas companies around the world are struggling to come up with the right strategy for the near and medium future is no surprise. Uncertainties associated with the energy transition (more strongly felt in Europe than in North America) are testing the reaction capabili-ties of many large companies. Growing concerns about climate change by different stakeholders (not least from the general public and investing entities) add to other boundary constraints such as volatile oil prices, lower-for-longer gas prices (particularly in North America), and emission restrictions associated with the fulllment of the Paris Agreement. Add decreasing worldwide economic activity due to recent trade disputes with downward effects on oil and gas prices, and new geopolitical risks associated with brasher at-titudes from several governments, and it will give any observer a pretty good idea of the amount of moving parts in the current energy world. In Canada, these uncertainties are further com-pounded by export restrictions associated with a lack of export facilities, a problem that has been dragging on for many years. This whole situation is far from “business as usual,” and devising a 10-year strategy in such an environment is quite risky; in fact, companies should leave ample room in their strategies to be able to change course as required, given the existing uncertainties.With the goal of becoming more protable in these turbulent times, Canadian oil and gas com-panies (and probably other countries too) should have present the following aspects:Strengthen the Technical Focus Upstream Canadian companies have signicantly contributed to the gas boom through the develop-ment of unconventional assets. Canadian technical expertise is certainly behind much of the recent unlocking of signicant oil and gas resources in both unconventional plays and oil sands. Howev-er, in times of low prices, more needs to be done, particularly in areas where capital is mostly spent and where production can be maximized. Drilling New alliances between operators and service companies need to be explored, with the goal of continuously reducing the drilling costs through innovation and lessons learnt, promotion of best practices, and eventually new formulas of shared benets between operators and service companies. The traditional approach of tying-up with the lowest-cost service provider is exhausted, and new contracts that promote innovation while keeping costs reduced are possible. On the more technical side, replacing single horizontals with multilateral wells where possible should be considered, as this is already the case in other areas of North America. This is a proven existing technology that reduces drilling costs upfront, but still is seldomly used. The capital benets of widespread use of multilateral wells technology can be signicant in the Canadian industry, where 1900 horizontal wells were drilled only in Alberta in 2018.Completions Still today, the number of completions performed with a cookie-cutter approach is substantial. Here, the room for improvement and cost efciencies is also important. 3D geomodels can be used to bet-ter design hydraulic fractures. The optimization of stages design, number of stages, number of clus-ters, distance between stages, etc., is possible today by using these models; selecting where to place fractures and where not to can add signicant savings and economic benets. Implementing ma-chine learning techniques for design optimization, and regular lookback exercises, can signicantly help to improve the efciency of fracturing. Here again, with 1100 HSMF (Hydraulic Multi-Stage Fracturing) wells in Alberta in 2018, the capital gains can be signicant.Production Operations Ensuring that each well delivers the maximum potential requires a detailed and regular analysis of well performance. The room for improvement is high particularly in gas and liquid producers with articial lift. Regular analysis can be done on each well to ensure performance optimization. Liquids production should be particularly looked at, in order to avoid having liquids forming in the reservoir and therefore left in the ground. The potential is larger in mature assets where production optimization has never been performed. It is surprising how effective methodical exercises of optimization analysis can be (both at the single well level and the whole system level) with direct effect in the enhancement of total asset production.Evolution from Oil and Gas into Energy Companies At a more strategic level, oil and gas companies need to evolve into energy companies due to several reasons. As it is well known, the Paris Agreement involves reaching net-zero emissions by the second half of this century and marks the path for the energy transition. This net-zero emission target is a balance between the source of emissions and their removal by emission sinks, so fossil fuels will still be present, simply because with current non-fossil technology it is impossible to fully reach energy independence. Decades of oil and gas are still ahead of us, and oil and mainly gas will still have a signicant role in the energy mix, although oil consumption will decrease as economies become lower carbon-intense with time. Particularly gas will play an especially key role in this transition, by replacing carbon intensive coal in many economies around the world. But there will be important switches from fossil fuels to other forms of energy, with electrication of land transport being the most obvious one. Oil used for road transport is
Oilman Magazine / January-February 2020 / OilmanMagazine.com19OILMAN COLUMNaround 45 percent of the total oil consumption in the world, and therefore oil consumption will noticeably decrease at some point during this century (oil for petrochemical use at 25 percent will just slightly increase in absolute magnitude). With such an impact, it’s clear that the most expensive oil sources will eventually be put out of the equation at some moment due to the laws of supply and demand (Shell sky scenarios shows 2070 as the decade for reaching net-zero emissions). What seems plausible is that pressure from capital investors will arrive earlier than this oil switch—in fact, it is here already. But the oil and gas industry need to be part of the solution, and so oil and gas companies should become signicantly involved in two main areas in the near future, directly targeting the net-zero emissions policy:Renewable Energy Generation On the energy source front, oil and gas compa-nies should also be engaged in renewable energy projects on a major scale, in addition to the traditional oil and gas projects. Because renew-ables are multi-faceted, and different locations will require different energy solutions, expertise in different types of renewables will be required. Electricity generation will have to increase signi-cantly when ZE (zero emissions) vehicles start to take over, and energy companies will need to be able to provide this extra generation capacity. The future economics of the renewables projects will have to consider factors such as the absence of a carbon tax on renewables, the lack of cost of externalities due to emissions, and easier access to capital by banks and investors. The attractive-ness for investors of an energy company with net-zero emissions in their energy generation portfolio (as a combination of oil and gas pro-duction and renewables) will become clearer with time. Finally, substantial research is still required in a number of renewables areas, and O&G companies should be a considerable part of these research efforts.CO2 SequestrationAlthough signicant research is still required on techniques to remove CO2 from the atmosphere, more push from the oil and gas industry is ex-pected. Future symmetrical policies to the carbon tax (i.e., assigning a benet for each ton of CO2 disposed of) should provide enough economic benets for making CCUS (Carbon Capture, Use and Storage) projects economically viable. The simplest form of CO2 sequestration, i.e., CO2 injection in oil and gas reservoirs, should be seriously considered by oil and gas operators in their operations, where possible. CO2 seques-tration will most likely be part of the future of the license to operate and will effectively offset the emissions associated with the oil and gas produced. Some Canadian companies have already started to make progress in the directions highlighted above, and most of them are still designing their future strategies. But one thing is clear: in the future, the protability of oil and gas companies will not be purely assessed by oil and gas produc-tion and reserves volumes: other factors related to the current path towards net-zero emissions will play an important part in the equation. How to get ready, and when, is to be decided by each company. Paco Maldonado is an Oil and Gas professional with 25 years of experience. He has worked in several countries around the world mostly as Subsurface Manager and Production Manager. His experience expands to both conventional and unconventional assets, oil and gas, onshore and offshore. He is a mining engineer by Madrid School of Mines, reservoir engineer by the French Petroleum Institute in Paris and Global Energy MBA by the University of Calgary, AB, Canada. SUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Editor@OilmanMagazine.com (800) 562-2340 Ex. 5
Oilman Magazine / January-February 2020 / OilmanMagazine.com20OILMAN COLUMNNew CAM Software Boosts Production, Saves Time and Money for Houston Seismic Equipment Maker By Jerry FiremanFor the oil industry, efciently nding and developing hydrocarbon resources is essential. In the ongoing search for new energy reserves, seismic data acquisition has emerged as one of the petroleum industry’s most reliable and commonly used technologies for nding subsurface oil and gas deposits. And the need for accurate and cost-effective seismic data acquisition technology continues to grow. GeoSpace Technologies, headquartered in Hous-ton, Texas, has been developing innovative prod-ucts for the petroleum industry since 1980, in-cluding geophones, printheads, and land-to-deep sea systems for seismic data acquisition. With GeoSpace’s seismic instruments and equipment, geoscientists use sound to search for oil and gas, collecting seismic data that can then create im-ages of the earth’s subsurface, revealing potential or existing oil- and gas-bearing formations. Geoscientists have come to rely on GeoSpace’s products to keep that valuable seismic data owing – and to do so in newer and better ways. Efciency and reliability are the twin keys to success, for both GeoSpace Technologies and the petroleum companies that rely on its products. Keeping tight delivery schedules is another critical factor in this industry. The costs associated with a late delivery can be substantial. For example, it might cost a company up to $300 thousand a day to charter a large ship for a geological survey. Forcing that ship to sit at the dock waiting for equipment to be delivered is not acceptable. Given these constraints, it can be risky to rely on external manufacturing suppliers—especially overseas suppliers—that have their own priorities and can’t always be relied on to meet delivery schedules. GeoSpace has overcome this challenge by manufacturing the majority of its products and their components in-house. The company has more than 200 manufacturing employees who make machined metal and plastic components, build molds, perform injection molding, build printed circuit boards, and perform other essential manufacturing operations.GeoSpace’s production equipment includes 33 CNC machine tools and a number of manual machines and auxiliary equipment. This has re-cently been augmented by newer, more advanced machinery, including a Citizen Miyano Machinery ABX-51TH3, which has an upper turret on the left side, another on the right side, and a lower turret capable of working on both sides. Initially, the manufacturing engineers at GeoSpace Technologies programmed the machine with the CAM (Computer-aided Manufacturing) software they had been using for years. However, they ran into difculties while trying to make full use of the machine’s capabilities. For example, achieving complete use of the machine’s three turrets was hindered by the fact that just moving an operation from one turret to another often required starting the program from scratch. Justin Henry, manufacturing manager for GeoSpace Technologies, was assigned the task of improving the efciency of its manufacturing options. Upgrading the company’s CAM software was his top priority and increasing efciency with multitasking machinings, like mill-turn and Swiss-type turning, was essential. Henry evaluated a number of CAM companies and systems and selected ESPRIT from DP Technology “because it provides the best support I have seen for advanced machines.” ESPRIT reseller, Victor Davila of Shape Design in Houston, was brought in to assist and showed GeoSpace what it could achieve with the CAM software, which offers factory-certied post processors delivering machine-optimized, edit-free G-code. “I told them they could write code and take it to the machine and run good parts the rst time,” says Davila. After training on the new software, Henry concentrated on improving the program to produce an “end bell,” a part for the company’s Programmer Alejandro Perez (left) and manufacturing manager Justin Henry (right), working on the Citizen Miyano ABX-51TH3. The GeoSpace Technologies logo in entrance.
Oilman Magazine / January-February 2020 / OilmanMagazine.com21OILMAN COLUMNOBX product. During seismic mapping, this part protects electronic components from the intense deep-water pressure on the ocean oor with the use of six O-ring seals. GeoSpace produces nearly 50,000 end bells every year, machining them from plastic as they are too complex to be injection molded.The GeoSpace Technologies’ programmer began by opening the Solidworks solid model of the part in the CAM software and used the software’s automatic feature recognition component to identify the machining operations necessary to produce it. “We decided to ip the part around front to back in the machine because it is easier to deploy two spindles on the front side of the part, which also has most machining operations,” says Henry. The programmer then assigned machining operations in order to maximize turret utilization. For example, originally, two radial drilled and tapped holes were produced one after another by a single turret. Using the new software system, they are now machined simultaneously on the front side of the machine by two synched turrets. Previously, an axial through-hole with several steps was drilled and bored using four different tools. The programmer changed this. Now, after the hole is drilled, a single carbide insert tool is held in the positions to bore all the steps while the part rotates. This new method shortens the cycle time considerably by reducing the number of tool changes.Cutting speeds and feeds were also adjusted to take full advantage of the tooling’s capabilities. After testing the new speeds and feeds on the machine, and tweaking where necessary, the nal parameters were transferred into the nal CNC program.The new program greatly reduced the cycle time—from 22 minutes to 6.5 minutes—for producing the part on the ABX machine, saving the company signicant time and money. The programmers then followed up on this success by using the CAM software to reprogram a variety of additional parts for the ABX machine, achieving still greater savings. The time savings also came from the ability to do time studies within the software. Knowing that a tool actually takes, say, two minutes to run instead of 10 allows for more accurate job planning and cost reporting. With the previous software, it wasn’t possible to get an accurate idea of run times until the part was test run on the machine. That has changed; now the new software provides GeoSpace with a report that shows how long the tool will be in the cut. The software’s ability to simulate machining operations also allows GeoSpace engineers to accurately visualize how a program will run when creating or modifying a new tool. Being able to check the machining—virtually—before actual production begins helps ensure optimal programming and avoid machine-tool crashes. With the new software, avoiding collisions and syncing between turrets can all be simulated in real time with a click of a button. This is in contrast to other systems, where the syncs don’t always match what you see in the machine and time and materials must be wasted proving out the program on the machine tool. According to Henry, the new software made it possible to move operations from turret to turret or set sync points with a few clicks of the mouse. Now, with more accurate syncs possible, even greater efciencies could be found. When you’re programming and process planning, control is everything. Among the The end bell being machined on the Citizen Miyano ABX51-TH3. Alejandro Perez, programmer, programming the end bell in ESPRIT. The final sensor. At the top is the plastic version for shallow water. At the bottom is the titanium version for deep ocean water. Continued on next page...
Oilman Magazine / January-February 2020 / OilmanMagazine.com22reasons that GeoSpace selected the new software for its machinery is the power and control that it provides. With the new system, programmers have control over the tool to do whatever they want to do. The software is completely customizable to meet the unique and changing needs of the manufacturers and machine tool builders who use it.Implementing the new full-spectrum CAM system for CNC programming, optimization, and simulation, one that supports the entire manufacturing process from CAD le to machined part, has helped increase production efciency at GeoSpace Technologies. Cycle times have been reduced, production rates have risen, and the company is able to rapidly adapt and improve its CNC programs for multitasking machines. “We have achieved substantial savings by combining processes into a leaner approach, dividing operations to more efciently utilize all machine spindles and turrets, reduce the number of tool changes required, and make many other improvements,” concludes Henry. With its CAM software and world-class technical support in place, GeoSpace Technologies is set to continue to develop value-driven, innovative and effective seismic data acquisition products and services for its clients. Jerry Fireman is a technology writer who specializes in writing about computer-aided design and computer-aided manufacturing (CAD/CAM), 3D printing, the Internet of Things (IoT), and a variety of other topics. To date, he has written more than 10,000 articles that have been published in over 3,000 trade journals, technical journals and mass media around the world. A video interview with Justin Henry discussing GeoSpace Technologies’ products, machining operations, and new CAM software can be viewed at: https://www.youtube.com/watch?v=VwCZkBf50RcOILMAN COLUMNCrude Oil Calendars is now a partner with Oilfield Helping Hands and Association of Desk and Derrick Clubs. Proceeds from the 2020 CRUDE Oil Calendar will be donated to the OHH or ADDC chapter of your choice.Your logo will be on the calendar along with their logo. This will show your clients and employees that you and your company support this organization.You can see the entire 2020 CRUDE Oil Calendar at crudeoilcalendars.comThank you for your support.Steve Burnett crudeoilcalendars.comFinished end bells with electronics. Crude Oil Calendars is now a partner with Oilfield Helping Hands and Association of Desk and Derrick Clubs. Proceeds from the 2020 CRUDE Oil Calendar will be donated to the OHH or ADDC chapter of your choice.Your logo will be on the calendar along with their logo. This will show your clients and employees that you and your company support this organization.You can see the entire 2020 CRUDE Oil Calendar at crudeoilcalendars.comThank you for your support.Steve Burnett crudeoilcalendars.com
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Oilman Magazine / January-February 2020 / OilmanMagazine.com24OILMAN COLUMNInterview, Brent Rhymes, CEO of WolfePak Software By Tonae’ HamiltonTonae’ Hamilton: Can you explain how the acquisition came about? Was acquiring DocVue a primary goal for WolfePak?Brent Rhymes: We’re ex-cited about bringing together DocVue and WolfePak. We pro-vide accounting and automation solutions for oil and gas that let our customers grow without complexity, achieve greater ef-ciencies and reduce risk -- and all within a highly secure environment. Document management is one of our most sought-after add-ons to our ERP platform. And DocVue is the gold-standard for document man-agement in oil and gas. The company was always on our radar. We have several joint customers and teams from both companies that were, and still are, working on a seamless, integrated solution. After meeting and getting to know the leadership team, it was clear we could accomplish more together and bring even more value to our customers. TH: With the acquisition, how does WolfePak plan to further impact the oil and gas industry?BR: WolfePak offers integrated, automated and mobile solutions that help our customers meet their challenges head-on on a daily basis. WolfePak operationalizes redundant processes and stream-lines the entire lifecycle of data from the back ofce to the eld. We do this in a highly secure and simplied manner, helping companies avoid costly errors using a centralized approach to data management. Immediately, DocVue improves our document management approach, and eventually, will replace our native technology, allowing us to provide seamless document management in and out of WolfePak. DocVue takes enterprise content management to the next level with its digital publishing, report-ing, workow management and secure document repository. These capabilities, combined with the power of the WolfePak ERP, open up endless op-portunities for new solutions that solve the unique challenges of managing large amounts of data and digitizing traditional paper-heavy processes.TH: What does the acquisition mean for DocVue and how do they plan to continue impacting the industry as a product division of WolfePak?BR: DocVue is the leading document manage-ment solution for oil and gas. With the strength of WolfePak behind DocVue, we expect deeper integration and solution expansion as part of our work, so we can continue offering comprehensive data and content management across the digital oileld. The DocVue imaging, document management and workow tools let companies capture, secure, distribute and manage documents and their associ-ated approval processes. Through its integrations and partnerships, it makes access to lease records, contracts, insurance certicates, AFEs, invoices, MSAs, Plant Statements and other critical docu-ments easy, safe and secure. Our respective tech-nologies are a natural t, which will only further substantiate their leadership within oil and gas into 2020 and beyond.TH: What can your customers/clients expect to gain, regarding the expansion of product offerings, due to the acquisition?BR: We think a lot about how we can continually improve our solutions and customer experience. Our customers have a strong voice in our software development, and we work hard to show them how well we listen. Combining WolfePak and DocVue’s technologies will enable us to better serve our customers and help them eliminate manual errors, digitize their operations and move toward a stronger integrated and automated approach to data management. WolfePak plans to aggressively invest in both the cloud and enterprise versions of DocVue. We will eventually replace our native Document Management tool with a DocVue package that offers a feature set suitable for an add-on module. Ultimately, combining our technologies will let us bring new solutions to market -- ones that let oil and gas companies do more with less and focus on growth. TH: Can you explain the reasoning behind the decision to have DocVue operate as a stand-alone division of WolfePak? What benets does this decision provide to oil and gas clients?BR: Again, it all goes back to the customer. Keep-ing DocVue as a standalone division gives our customers as much choice as possible to use the solutions they trust. Both DocVue and WolfePak will continue to work with other software providers and partners to pro-vide customers with seamless access to documen-tation through their preferred interfaces.We will continue innovating our ERP platform and deepening our integration with DocVue to launch new and enhanced cloud and enterprise solutions. TH: Has the acquisition presented any challenges or difculties? In addition, has this acquisition altered any leadership roles at DocVue?BR: Combining organizations always presents, what I like to call, opportunities, and I truly mean they are opportunities. It gives each organization the ability to challenge existing processes and nd areas for improvement. As for changes in leadership roles, Leon Busch and Ryan Lailey are now part of the executive team at WolfePak, with both picking up additional responsibilities over time. Beth Trammell, former DocVue CEO, remains involved as an advisor to the company, and will be part of our WolfePak Product Advisory Board.TH: Do you think it is important for oil and gas software and solutions companies to partner and/or merge? Why and what benet does it serve to the oil and gas industry?BR: Yes. There is a growing trend toward con-solidation and automation. Closed systems work for no one and are difcult to scale. Companies need their technology partners to collaborate and provide best-of-breed solutions that meet their needs with little worry of integration and manag-ing disparate data sets. TH: Are there any other companies WolfePak is looking to partner with in the future? What are WolfePak’s goals for the coming year?BR: We are always evaluating the marketplace for partners that improve and expand our solution of-fering to provide as much value as possible for our customers. WolfePak has some exciting partner-ships in the pipeline, so we’ll share them publicly when the time is right. 2020 will be a year focused on growth, solution ex-pansion and accelerated technology enhancements. Much of this body of work revolves around our mobile platform and how we automate and integrate eld operations with the back ofce. We look at these operations holistically to determine which part of the data life cycle we can optimize next. We plan to launch new solutions in a number of areas, such as our new mobile pumper applica-tion, as well as additional offerings for oil and gas service companies, E&P operators, rst purchasers and investors.
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Oilman Magazine / January-February 2020 / OilmanMagazine.com26OILMAN COLUMNKnow Your X’s + O’s in the Oil and Gas Business’s New Math, Experience Matters as Much as the Molecule By Brent Potts“Customer rst. Our people always.” TechnipFMC’s stated philosophy isn’t just a passing nod to the Experience Economy, it’s an indication of the company’s wholehearted embrace of a business strategy suited to the post-commoditized oil and gas industry, where protability is connected to a company’s ability to deliver an elevated experience to customers and employees.A subsea, onshore/offshore and surface project-management corporation with 37,000 employees and operations in 48 countries, TechnipFMC is among a wave of oil and gas companies that lately have begun to focus on experience as a powerful competitive differentiator in an other-wise highly commoditized business. As Quanah Gilmore, customer experience program manager for TechnipFMC, detailed during a recent oil and gas industry gathering, the company is invest-ing heavily in experience management, or XM, in which it gathers, synthesizes and analyzes business operations (O) data and experience (X) data to strengthen the outcomes it provides to customers and employees. In this context, the “O” speaks to data related to demand forecasts and inventory levels, nancials, new lease acquisi-tions, employee turnover, facility shut-downs and the like, while the “X” data has to do with retail customer and business partner/stakeholder satis-faction, fueling excellence, new talent acquisition, worker safety, etc.TechnipFMC’s experience-focused approach is embodied by a simple equation, X+O=XM, where experience from the rst point of interaction with the customer and the employee, right on through their entire journeys, connects directly to business outcomes. Experience management can manifest in a wide range of touchpoints along that journey, including the multi-channel digital portal experience, on-time delivery, the supplier experience, B2B order management, invoice accuracy and the retail experience on the operational side, and on the employee side, workforce engagement, workplace safety, employee recruiting, onboarding and retention, and exit feedback.TechnipFMC’s investment in a digital XM platform capable of collecting and gaining insight from both X and O data is rapidly transforming the company’s relationships with its customers and employees, Gilmore reports. In the span of a year, TechnipFMC has seen its net promoter scores (an index that measures the willingness of customers to recommend a company’s products or services to others) as well as its overall employee engagement metrics increase signicantly. Experience management plays right into an evolving beyond-the-barrel mindset that is driving oil and gas companies to diversify with new revenue streams and business models that revolve around packaging products with services to deliver an outcome rather than just a commodity. With the ability to touch key points along the entire customer and employee journeys, XM’s potential impact goes far beyond what traditional customer experience (CX) efforts in the oil and gas business ever could.Here’s a look at six areas where a focused experience management effort (supported by the appropriate end-to-end digital tools) can help to transform an oil and gas company:1. To strengthen relationships with partners/stakeholders. Solid business relationships among partners are critical to the success of upstream oil and gas ventures. XM gives oil and gas companies the ability to collect, analyze and act upon feedback from land owners and venture partners, providing them with the business insight they need to better understand how their counterparts in a particular deal view them before and after the transaction.2. To optimize well lifecycle and worker safety. Employees and contractors can be invaluable sources of insight on potential hazards and inefciencies at drilling and well sites. By collecting their in-the-moment feedback on conditions at these sites, then combining that data with operational data (number of accidents, employee/contractor attrition rates, time to complete/close out activities, etc.), a company can gain real-time insights on workplace and work process-related hazards and impediments to productivity. They then can take steps to improve safety performance, which in turn cuts time to drill and complete wells. 3. To attract and retain top energy industry talent. In a business where quality workers are hard to nd and even harder to keep, experience is the great differentiator. Indeed, according to analysis by Qualtrics, organizations that focus on employee experience report up to four times more prot per employee, three times more revenue per Photo courtesy of Marina Putilova – www.123RF.com
Oilman Magazine / January-February 2020 / OilmanMagazine.com27OILMAN COLUMNemployee and have a turnover rate 40 percent lower than the average company. Using digital tools connected to an XM platform, human resources departments can capture feedback from current and prospective employees (such as, “The hiring process took too long” or “I don’t get enough of the training I need to succeed in my job”) to better understand the factors that make them attractive or unattractive as an employer, then move to address any identied shortcomings. 4. To deliver an exceptional maintenance service experience and boost technician engagement. As heavily as an oil and gas operation relies on OEM equipment, and an efcient service and maintenance program to keep those assets operating efciently, XM capabilities give a company the means to collect feedback from its OEM partners and its own technicians to see a clearer, more complete picture of its service operations, with the ability to pinpoint reasons for underperformance, be it an issue with technician training, OEM parts shortages, etc. When technicians feel their concerns are being heard and addressed, they’re more likely to engage with their work and their employer.5. To improve supplier collaboration. For downstream-focused oil and gas companies, XM provides a new tool for strengthening business relationships with upstream suppliers/carriers. Let’s say that with operational data, a logistics manager identies bottlenecks at the company’s own depots and reneries that can be traced to an issue with a third-party trucking eet. Using XM, the logistics manager can solicit and analyze feedback from truck drivers (“Loading takes too long” or “I’m not privy to last-minute loading schedule changes,” for example), then take appropriate action to remedy the bottlenecks, such as working with the trucking company to improve planning and scheduling of loading and alerting drivers in real time about schedule changes.6. To strengthen a brand’s bond with retail customers. When consumers have a very good customer experience, they are 3.5 times more likely to make additional purchases than if they have a very poor CX, according to research by the Qualtrics XM Institute. With XM tools that enable them to capture regular and event-triggered customer feedback at the retail service station level, companies can gain timely, actionable insight on consumers’ shopping experience (“The doughnuts I usually buy in the morning have been stale lately” or “I really love the free car washes you provide after ve ll-ups”).In a world where companies are disproportionally rewarded when they deliver a great experience and punished when they don’t, XM enables oil and gas companies to deliver elevated outcomes at key customer, partner and employee touchpoints along the entire value chain. As a July 2019 report from the Qualtrics XM Institute concludes, those outcomes matter. For example, 71 percent of companies that are considered CX leaders report that their CX efforts had a positive impact on their nancial performance. Those same CX leaders also tend to outperform their peers nancially, and in the employee engagement category. Upstream, downstream and in between, experience is the X factor that the oil and gas business can no longer ignore.Brent Potts is Senior Director of Global Marketing, Oil and Gas, at SAP. He’s based in Arizona. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would benefit the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com
Oilman Magazine / January-February 2020 / OilmanMagazine.com28FEATUREOil and Gas 2020 Market OutlookBy Sarah Skinner We all want to possess the ability to predict the future. This is something we covered in a previous feature article on articial intelligence and it applies here, but in a slightly different way. The start of a new year brings new things, a little of the unexpected. The unknown brings with it some apprehension because when you’re talking about oil and gas outlooks, you’re talking about someone’s livelihood. From the CEO of a company, to the operators and everyone above, below and in between – no person, company or place is immune from the effects of a volatile oil and gas market. In these circumstances, we’d all like a fortune teller. Someone to ease our mind and to provide us with some insightful information to help arm ourselves as to what to expect in the new year. Duane Dickson, Vice Chairman of Deloitte Consulting LLP’s Energy Resources and Industrials industry group is doing just that. He is the author of Deloitte’s 2020 Oil, Gas, and Chemical Industry Outlook and his knowledge is instrumental to educating the public in the industry’s potential path forward. “As we once again, move from one year to the next, how do we assess the oil and gas and chemical sectors’ performance in 2019 and its prospects for 2020? As always, there are headwinds and tailwinds, risks and opportunities, uncertainties and foreseeable trends, but in this report we aim to take stock of the main factors to watch for in 2020 across the diverse oil, gas, and chemical industry. Over the past decade, we have seen the heights of bullish optimism and seemingly limitless investment during the years of the $100 barrel world, from 2011 to mid-2014, and the lows of the price crash and extended oil downturn, from mid- 2014-2017. Neither extreme seems in the cards for an imminent return as the industry has learned valuable lessons from both episodes, but uncertainties are clearly still a challenge to performance and investment,” Dickson says. In this feature, we will only be exploring Deloitte’s oil and gas sector, as it applies to OILMAN Magazine. The oil and gas sector of the 2020 outlook is broken down into ve parts: Market Fundamentals: Trade and Economic Headwinds are Causing Uncertainty for Fuel Markets“Deloitte forecasts that U.S. GDP growth will slow in 2020, with a 25 percent chance of recession and only 10 percent chance that growth in 2020 will match recent years,” Dickson said. There are a number of countries facing economic headwinds, so globally, the picture is not much different. There are regulatory changes, such as IMO2020 (International Maritime Organization) – a new regulation that will be implemented for a 0.50 percent global sulphur cap for marine fuels in an effort to reduce the amount of sulphur oxide. This is a drastic change from the previous 3.5 percent and could lead to near-term changes in product demand, changing the types of crude needed to meet the potential rapid increase in marine gasoil to meet the lower-sulfur fuel requirements. In addition, if production from the Permian moderates in 2020, and that is uncertain, it
Oilman Magazine / January-February 2020 / OilmanMagazine.com29FEATUREwould make OPEC’s job easier. The mid-2019 OPEC and non-OPEC country (e.g., Russia) agreement cuts targets by 1.2 million bpd, but global oil and fuels stocks rose in 2018 and 2019. Lower shale output along with OPEC’s quotas could bring the market in balance in 2020 and act as a cushion against weakening prices. Global Oil Supply: Increasing Security and Decreasing Demand of Global Oil SupplyIn September 2019, an attack on critical facilities in Saudi Arabia resulted in the largest single supply disruption since the Gulf War in 1991. Despite this, market disruption was largely avoided. The global market has seen the slower-moving decline of supply from two other major producers – Iran and Venezuela. Iran because of economic sanctions and Venezuela because of both economic sanctions and the ongoing degradation of investment and operating conditions in the Venezuelan oil sector. This begs the question of whether or not security of supply should be a bigger concern in 2020. There are a number of factors that could reduce supply risk in the current market environment:• Growing supply from Western Hemisphere producers – United States and Brazil are both delivering growth in supply barrels from onshore shale plays and deepwater plays. • Healthy commercial crude oil inventories in OECD (Organization of Economic Cooperation and Development where 36 member countries and partners span the globe and work together to promote economic growth, prosperity and sustainable development).• The production restraint agreement between the OPEC and non-OPEC Vienna agreement countries is still in place, preserving spare production capacity. “If we also assume that a lower-demand growth outlook is quite possible in 2020, as a result of potentially weakening global economies, then we could conclude that supply security is reasonably robust, even in the face of security risks in some key producing countries,” says Dickson.Liquid Natural Gas: LNG Volumes are Up, but Sanctioning New Projects will be HardThe U.S. LNG export growth exceeded ve billion cubic feet per day for the rst time in 2019 and it has not stopped growing yet, and once the current projects under construction are completed and fully ramped up, export capacity could hit 10 billion cubic feet per day by 2021. European and Asian prices are a decade lows, Henry Hub prices remain even lower, supporting the competitiveness of U.S. LNG exports into a soft global gas market. This has cut into prots for existing exporters, but it poses a bigger challenge for project developers looking to sanction in 2020. Historically, the U.S. LNG projects’ value proposition has been based on three things: • Access to a highly liquid and interconnected low-price natural gas market.• Contracts with exible destination and multiple pricing mechanisms.• Lower, less volatile delivered costs than many competing oil-indexed projects have built in recent years.The U.S. gas market remains a key strength for domestic developers with competitors willing to provide exibility in a buyer’s market. With tariffs and low oil prices, U.S. cargo pricing is not as attractive as it once was. A number of projects were sanctioned in 2019, both in the U.S. and internationally, but most were browneld or sold without long-term offtake contracts. This is, however, not an option for greeneld developers relying on project nancing. “Finding anchor buyers is 2020 is expected to be key. The global gas markets are soft today but could tighten in the next few years and new projects will be sanctioned to meet future demand,” says Dickson.Financial Markets: Oil and Gas Investors are Expecting Increased Efciencies Despite SlowdownGains in well productivity are slowing down in shale plays and because of fears of global economic shutdown, it is likely that 2020 will be another challenging year for the industry nancially. A practical nancial management strategy driven by operational and technological leadership could be key to retain or win back investors’ trust. Many companies have made excellent progress in this area, however nancial markets are still holding back to see if prudent nancial performance can be sustained. It’s anticipated that investors will be closely watching how shale operators improve their capital efciency, which through optimal completion designs, can be enhanced by about 20-25 percent in key shale basins. Investors will also likely pay attention to how the associated subsectors, primarily oileld services and infrastructure providers, can help operators bring new efciencies and save costs without compromising their margins and sustainability.“The display of operational leadership by oil and gas companies and the patience of investors in nding and investing in these companies can turn out to be a huge opportunity for both in 2020. Everyone wins when the focus is on operational excellence and nancial discipline,” says Dickson.Emerging Longer-term Disruptive Trends: The Energy Transition is Gaining Momentum in the Oil and Gas SectorThe energy transition poses new challenges for oil and gas companies and could prove disruptive to long-standing market structures, value chains, customer preferences, and the economic drivers for the oil and gas business. The challenge of these companies is that they will need to gure out how to produce more oil and gas (and increasingly power) year after year while also being carbon-conscious and addressing stakeholders’ sustainability concerns. There are at least four concrete steps that companies can take in the near term:• Low hanging fruit should be identied for reducing greenhouse gas emissions like eliminating methane links from existing infrastructure. • Deploy renewables to reduce emissions from eld operations. • CO2 enhanced oil recovery could be an avenue to boost production while sequestering carbon.• Invest in the infrastructure to sustain operations – especially in regard to water use and wastewater disposal.Dickson says, “The energy transition is a long-term trend, but we have seen a greater focus on this in 2019, which we expect to gain momentum in 2020. Decisions made now can help companies better position themselves for the decades ahead, to thrive by anticipating disruptive change rather than reacting to it too late.” ConclusionIn this outlook, we see some trends and suggestions that apply to concepts that we’ve covered in OILMAN over the last year. Articial intelligence and drone technologies are reoccurring solutions that continue to emerge when talking about preemptive strategies for efciency and problem solving within oil and gas companies. It’s an evolving industry and one that will always be faced with headwinds. Everyone is affected in some way by the ups and downs of the oil and gas sector. As long as we all, as a uniform industry, stay abreast of the subject matter needs and work to constantly evolve and embrace change that will help improve upon operations, we’ll continue to thrive. To read Duane Dickson’s Deloitte “2020 Oil, Gas, and Chemical Industry Outlook” in its entirety, please visit the link below: https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/oil-and-gas-industry-and-chemicals-industry-outlook.html
Oilman Magazine / January-February 2020 / OilmanMagazine.com30OILMAN COLUMNOILMAN COLUMNComposite Solutions Improve Midstream Asset Integrity By Andrew Patrick and Tim MallyKeeping pipelines operating safely and efciently is critical to the world economy, so diligent main-tenance and effective repairs are critical for the millions of miles of lines transporting oil and gas around the world.While traditional repairs often are the rst choice, they are not always the most effective or cost-effective options. Many standard repairs require hot work and other risks, and their labor-intensive approach introduces costly nonproductive time into the operations equation.When traditional repairs are impractical or cost-prohibitive, it is important to understand the options. Among those are multiple eld-proven composite solutions that can be installed quickly and last for decades. Proven effective over the last 25 years, these versatile systems have achieved success around the globe in applications rang-ing from preventive reinforcement to emergency repair. Strengthening Wrinkle BendsWrinkle bends are pervasive, particularly in North America, and many exist in lines that were built in and before the 1950s using primitive construc-tion methods. Continuous service and wear take their toll over time, but on wrinkle bends, which experience high strains resulting from bending and axial forces caused by shifting terrain and suf-fer in many cases from insufcient pipe support, there is particular concern about their continuing integrity.Inspectors for a liquids pipeline operator in Canada found a weakened wrinkle bend on a 10-inch (254-mm) crude oil transport pipeline. The operator could not afford to shut down the line to cut and replace the damaged pipe because of the high transport volume, so the owner began evaluating composite repairs.The solution was to use BlackDiamond, a bidirec-tional weave of carbon ber combined with a 100 percent solids epoxy that produces a composite system that is stronger than steel, forming a pipe around a pipe, with each successive wrap increasing the pressure rating of the repair. The bidirectional weave of the carbon ber provides strength in both the hoop and axial directions, a design that minimizes creep and ensures there is no reduction in strength over time.In this application, a high compressive modulus ller putty was installed to smooth stress concen-trations around the wrinkle bend and to transfer the load from the pipe to the carbon ber repair system. Primer was installed to increase the bond between the repair and the pipe. Then two trained technicians installed six layers of the composite ber over a 3.3-ft (1-meter) length to repair the wrinkle bend defect.The two technicians completed the installation within approximately two hours without introduc-ing any heavy equipment or hot work, repairing the line while it remained in operation. Pipeline RepairIn another pipeline repair, an owner of a 610-mm (24-inch) carbon steel X52 crude oil pipeline in the Netherlands needed to address a dent and a related crack in a seam weld. One of the safety objectives was to avoid welding, so a cut and replace solution was immediately ruled out. The repair designed for this pipeline consisted of two standard 24-inch (610-mm) Clock Spring sleeves, which are uniquely designed for high-pressure transmission pipelines.The pipeline operator took the line out of service – but did not evacuate it – while a team of two technicians removed the crack in the seam weld with a grinder. When the installers had ground the pipe sufciently to remove the crack and lled the dent using the ller kits, they repaired the line using the composite sleeves.In only four hours, they executed the installa-tion without introducing safety risks, delivering a repair validated for 50 years of service.Planned ReinforcementIn some instances, asset owners are using com-posites to prevent damage rather than repair it.The owner of natural gas compressor stations along a large transmission pipeline on the U.S. West Coast used composites in its proactive approach as a corrosion mitigation tool ahead of government audits.Typical solutions for addressing air-to-soil inter-face corrosion have relied on wax tapes or recoat systems, many of which have limited life spans or are subject to damage by climate or mechanical processes that can occur through normal wear and tear. The owner previously had used compos-ite products to mitigate corrosion at transitions between the open-air atmosphere and the soil and was interested in a composite solution.The project presented multiple challenges. There was a very tight timeline. The installers would have to deal with the climate in the remote locations where the work would be carried out, Technicians remove the crack in the seam weld with a grinder to prepare the surface of a carbon steel crude oil pipeline for a composite repair. Photos courtesy of CSNRI
Oilman Magazine / January-February 2020 / OilmanMagazine.com31OILMAN COLUMNOILMAN COLUMNand service could not be interrupted while the composite solutions were being installed. In addition, some of the pipe on the discharge side of the compressors called for high-temperature adhesive and ller due to temperatures in excess of 175° F (79.4° C).The range of requirements necessitated the use of multiple products, including Snap Wrap, Contour and Pipe Support.Once the repairs were designed, a team of 25 technicians removed soil overburden around the pipeline and began the process of abrasive blast-ing the rst of 1,118 locations that eventually would be covered by the Snap Wrap, Pipe Sup-port and Contour WA products. With the surface prepared, the team could apply the necessary adhesive and install the composite solutions.Over the two months of repair work, there was no disruption of service or operations at the compressor locations. This lengthy project was nished on time and within budget with no system downtime.The installation team executed the work without incident, delivering a range of solutions that have met with the approval of government audi-tors, illustrating that composite solutions are a proactive means of mitigating corrosion at the air-to-soil interface.Emergency RepairComposite technology also is often applied in emergency conditions, as in the case of a renery in Bahrain that experienced line damage from an explosion that created a 3.5 by 4.5-inch (343 mm by 114 mm) hole in a 28-inch (711-mm) carbon steel pipeline.The line was transporting crude oil under 145 psi (10 bar) pressure, and the wall of the pipe was bent inward in an irregular shape. This pipe was crucial to operations because it was the only pipeline delivering crude to the renery. DiamondWrap was applied to arrest the leak and restore the line. As soon as the compos-ite system was designed, a team of 12 trained technicians was dispatched to the renery. Crude ow through the line was stopped while the team plugged the hole and began preparing the surface of the pipe for the composite repair, which was carried out with about 50 percent of the crude oil remaining in the line.Technicians installed DiamondWrap over a 9.8-ft (3-meter) length of pipe. Working continuously, the team completed the repair in 16 hours, work-ing through the night to nish the installation as quickly as possible to restore the line integrity so renery operations could recommence.The repair was completed in less than 30 hours from the incident that caused the damage, and the pipe was back in service within 48 hours.Expanding HorizonsComposite technologies are changing the way pipeline owners are managing construction, maintenance and repair. As companies work to reduce risk and contain costs, more of them will be using composite solutions that deliver reliable performance without compromising project economics.Andrew Patrick’s career spans more than 30 years and encompasses all aspects of pipeline engineering, from construction to inspection to repair. He entered the indus-try working in offshore pipeline construction and has extensive experience with repairs in reneries and petrochemical plants and on midstream projects. Andrew began his 20-year career with ClockSpring|NRI as its sole sales executive for the western hemisphere and now manages the global sales team as execu-tive vice president, strategic opportunities. Tim Mally, ClockSpring|NRI Global Manager - Plants/Reneries, has worked in engineering and sales roles in the composite repair industry for 9 years. He has worked to advance composite repair testing, validation, education, and awareness within the oil and gas industry, and has authored 15 conference and journal papers and articles to date. Tim holds a Bachelor of Science degree in Mechanical Engineering and is a member of the ASME Mid-Continent Chapter, Tulsa Pipeliners Club, and the Composite Repair Users Group. A line damaged in an explosion is wrapped with 26 layers of DiamondWrap and restored to safe service. Installers secure Snap Wrap to strengthen a pipe and protect it at the air/soil interface.
Oilman Magazine / January-February 2020 / OilmanMagazine.com32OILMAN COLUMNOILMAN COLUMNFollowing a Digital Barrel of Oil from Wellhead to Balance Sheet By Steve HaglundAs an oil and gas operator, your protability and cash ow depend on a clear and timely view of revenue. To achieve this in today’s digital oileld, producers must be able to rapidly and precisely track each digital barrel of oil through a complex information gathering system that extends to commodity markets and ends at the general ledger. Operators who adopt the right production operations solution and strategy can accelerate the ow of eld data, increase workforce col-laboration, and drive business performance.Management of producing assets and nancial planning hinge on efciently connecting the eld to the back ofce, however, attaining an accurate and up-to-date view of crude, gas, and NGL revenue is fraught with barriers and risks. Opera-tors often rely on an unconnected or antiquated mineeld of software for collecting, aggregating, allocating, and reporting production volumes and revenue. All too often, such systems create data silos that result in information delays, incon-sistent data, and access constraints. This leaves production engineers and accounting teams with limited visibility into the eld data they need to manage production operations, allocate volumes, cut revenue checks to interest holders, and com-ply with government reporting.Consider the path that a typical digital barrel of oil takes, which starts at the wellhead. This data streams in from the eld through a mix of manual data entry and automated data acquisi-tion. Operators receive production volume in-formation in multiple forms, from gauge sheets, spreadsheets, and SCADA systems. Volumetric data is often manually imported into a produc-tion accounting system for daily reporting as well as monthly allocation and reconciliation. Volumes and sales are then allocated back to individual wells and leases where division orders are applied to calculate payments to interest owners. There are a lot of moving parts, point solutions, and manual workarounds to get to the nal income statement, injecting delays and error.However, perhaps the biggest risk for opera-tors is nancial uncertainty. This explains why many operators augment their production and accounting software with manual calculations and spreadsheet-based solutions to validate results. The costs for an operator can be staggering, including the high cost for multiple software systems, G&A, and opportunity costs.Building a production operations solution that provides the back ofce with an up-to-date and accurate view of crude, gas, and NGL produc-tion starts with centralizing well information management, or “warehousing data,” in order to improve the way operators store, quality control, and distribute eld data. In today’s fast-paced and constantly evolving energy market, however, the solution needs to be non-disruptive, scalable, and cost-effective.The cloud is a low-cost yet extremely reliable option to store data and applications that are eas-ily accessible from any connected device. It is a simple concept with powerful benets for oil and gas companies looking to solve eld data man-agement challenges. Combining pumper-based eld data capture and SCADA streams, the cloud becomes a hub for gathering production data and efciently distributing information to people and applications. Pumpers and lease operators are on the front line of eld data capture. They are responsible for capturing daily wellhead and other eld measure-ments supplemented with machine-read, SCADA based data. These eld staff coordinate and track events surrounding the movement of produced crude, gas, and water.Pumpers are also integral to optimizing produc-tion, reducing well downtime, and responding to operational exceptions. This makes eld staff key to both acquiring eld data and leveraging insights for the back ofce, underscoring the need to efciently share and collaborate around a common set of data. Cloud-based production operations solutions can support pumper work-ows with mobile eld data capture technology that once validated, upload directly to a cloud-based data warehouse, which synchronizes data and analysis between the eld and back ofce. If pumpers are the front line of eld data capture, the engineering and operations team are the front line of analysis. This team tracks production and monitors well uptime along with a variety of operational KPIs against their targets. They also provide critical input into production optimization and determine whether wellbore remediation investments are required.Cloud-based production operations solutions can stream eld data directly to integrated software tools that generate the reporting and analysis production engineers rely on, including produc-tion dashboards that provide a real-time view of asset status, volumes, and operational exceptions. By providing a daily view of production, staff can rapidly identify and resolve eld data quality issues. And by minimizing variance between daily observed volumes and actual sales reported on revenue statements, operators can seek to mini-mize discrepancies upon performing monthly reconciliations. What’s more production operations solutions that bring data and applications together in the cloud create new opportunities to rapidly respond to shifting conditions in the eld, including complex allocation networks that constantly evolve. Such a solution is also capable of visually dening and updating eld assets and allocation networks on a daily basis, signicantly reducing errors and yield-ing more accurate allocations.Production accounting is driven by daily and monthly reporting cycles. Accounting teams must be able to track production and eld sales as well as perform daily allocations leveraging observed numbers. Monthly allocations are performed and observed production reconciled with sales volumes. And because many operators may also hold non-op interests, volumes and revenue from these wells must also be incorporated into the production accounting process.Adding complexity, production accounting teams Mobile Pumper Field Data Capture App Synchronizes Production Volumes with the Cloud
Oilman Magazine / January-February 2020 / OilmanMagazine.com33OILMAN COLUMNOILMAN COLUMNmust also allocate buyback and production expenses, such as water disposal charges. And federal and state entities require operators to report sales, production, and monthly inventory based on operating requirements.With a modern production operations solution built on the cloud, production accounting teams can simplify reconciliation, allocation, and re-porting while closing the month faster than ever. The benets extend into revenue accounting as well. By integrating production and revenue accounting in the same cloud-based solution that shares a common and consistent dataset, division orders and payments to interest owners can be rapidly processed. And by tracking the movement of crude, gas, and NGL volumes and sales through a single platform, operators gain unprecedented capabilities to audit and trace revenue at every stage.A unied production operations solution built on the cloud offers scalability and affordability while accelerating data acquisition, processing, allocation, and nancial reporting. That digital barrel of oil that used to take weeks to travel from wellhead to the accounting department can now make the trip in minutes by eliminating data silos and manual processes. As a result, opera-tors can nally connect the eld with the back ofce to gain the up-to-date view of production and revenue they need to manage cash ow, accelerate revenue disbursement, and simplify compliance.Operators looking to benet from the cloud and an integrated software platform are increasingly turning to W Energy Software. The company pioneered the oil and gas industry’s only unied production operations solution built on the cloud that features modern eld data capture tools, production reporting, visualization of assets and allocation networks, and an advanced allocations engine. As a fully integrated upstream ERP platform, production accounting seam-lessly ows into revenue and nancial account-ing where production volumes are linked with actual commodity pricing to provide operators with a precise view of their nancials. Wellbore work and other well related eld costs can also be tracked, accelerating the processing of both revenue and expense data streams. At the same time, W Energy Software simplies the monthly regulatory reporting process by bringing all necessary data together and providing out-of-the-box reports.Yet the most valuable benets of a unied platform and W Energy Software are stabil-ity, predictability and reliability. By eliminating the need to maintain the dozens of software applications and tools that operators have his-torically relied on and providing a common and consistent dataset, W Energy Software elevates condence in your analysis, calculations, and nancial results. When combined with increased performance, that trust can empower an opera-tor’s workforce, reduce risk, and accelerate busi-ness performance.Steve Haglund has over twenty years of experience in strategy, business development, operations and consulting practice development in the information technology and oil and gas industries. He serves as Vice President of Field Operations at W Energy Software where he spearheads the software developer’s eld solutions for upstream and midstream. Haglund was previously President of NeoFirma (acquired by W Energy Software in 2019), where he grew the software company into a category leader in mobile and cloud-based oil and gas eld operations solutions. Prior to that, Haglund co-founded and served as President of Insolexen – a business integration services company and Michigan Fast50 Award winner – which was acquired by Percient, a public, IT services consultancy. Before that, served in various capacities with webMethods, Andersen Consulting, Baker-Hughes, and FMC. Haglund graduated from the University of Illinois with a B.S. in Chemical Engineering and holds an MBA with Honors from the Cox School of Business at Southern Methodist University. Interactive Visual Representation of Field Assets and Allocation Networks Calculation Trace Enables Complete Auditing of Oil and Gas Revenue at Every Stage
Oilman Magazine / January-February 2020 / OilmanMagazine.com34OILMAN COLUMNStandard Protocols Enhance Cost Savings and Safety Value of Wireless Gas Detection Systems By Chris FrailDetection of methane, hydrogen sulde, carbon monoxide, hydrocarbons and other gas leaks, is becoming increasingly critical to gas plant safety and emissions monitoring in the heavily-regulated oil and gas industry. Reducing costs, improving safety and complying with regulations require the ability to monitor hard-to-reach areas and many oil and gas producers are augmenting gas detection capability with wireless instruments because eliminating wiring enables lower-cost deployment of more detection points. But those who choose also to do so with standard wireless protocols — such as WirelessHART or ISA 100 — gain the further advantages of plug and play integration, more cost-effective maintenance, and overall operational resilience.The Benets of Plug and PlayPlug and play integration makes it easier to integrate gas detectors seamlessly with components and systems from multiple vendors. Proprietary systems lock users into the offerings of one vendor, but by choosing standards-based systems, you have much more exibility in tailoring coverage to your plant needs. This impacts cost, safety and operations by enabling multiple levels of integration. At the most basic level, it makes it easier to congure your plant for monitoring of different gases. For example, if you are monitoring for methane or hydrogen sulde and add a process that requires monitoring for carbon monoxide, standards-based wireless systems make it easier to add multiple sensors that talk to the network and remain vendor agnostic. Open communication platforms allowing for plug and play integration also make it much easier to integrate gas detection functions with other components of gas detection systems, such as annunciators, alarms, and PDAs (Personal Data Assistances). And beyond that, is easier to integrate gas detection with other safety-critical systems such as ame-detectors or shutdown systems. Integration with plantwide information and manufacturing operations management systems such as MES and SCADA systems is also much easier. Support for integration standards enables the collection and analysis of operating and trending data to optimize operations. This also enables integration into the cloud and cross-enterprise. WirelessHART technology, for example, is compatible with all major eld and plant network technologies, making it possible to deliver trending and analysis capability across the plant, as well as to digital solutions that integrate cloud technology.Operational ResilienceIn addition to facilitating multiple layers of integration and the benets that come with that, the ability to mix and match vendor brands improves plant performance by making it easier to implement best-of-breed technology. If you have a standards-based detection system and one of your detectors goes down, you will have more options to replace the component with something that offers more capability than what your current vendor offers.Not all vendors may have all detection capabili-ties. So when you have a plug and play system, you may be able to select devices that require less maintenance – perhaps those with longer battery lives – and pair them with compatible devices from another manufacturer that covers differ-ent gases. For example, if your primary vendor’s products detect hydrocarbon gases and ammonia but not benzene, but have the wireless features you need and longer battery life, you can stay with your primary system and get the benzene detection from a different vendor. Or if no wire-less vendor covers the additional gases you need, you could pay slightly more for a wired version to complete the coverage.ExpandabilityExpandability is a benet all unto itself. When you have maxed out the wiring capacity of your plant and need to expand, wireless is your only option. Using standards makes it easier to nd the right combination and implement it with minimal disruption of your current infrastructure.Reducing Maintenance CostsStandards-based protocols have signicant benets when it comes to maintenance. Because they share engineering environments in which many more people are trained, you can reap the benets of open technologies, without having to pay a premium for specialized employees or consultants.Moreover, manufacturers of eld devices are increasingly incorporating standard device management data such as FDI (Field Device Integration), a global standard through which device manufacturers agree to use a common Photo courtesy of PICHIT BOONHUAD – www.123RF.com
Oilman Magazine / January-February 2020 / OilmanMagazine.com35OILMAN COLUMNarchitecture for providing users with device diagnostic and conguration information. Choosing a Wireless ProtocolThe two most widely applied wireless standards are WirelessHART and ISA 100. Both are based on the IEEE 802.15.4-2006 standard and operate on 2.4GHz frequency band. Both are using the same mechanism for data transportation to/from Gateway. And both offer the advantages over proprietary networks we have been discussing so far, but there are many application-specic technical distinctions. WirelessHART has a self-repairing capability that contributes to network resiliency using a mesh architecture. All WirelessHART devices can function as repeaters in a mesh network. If one node goes down, packets are re-routed to another. ISA100 devices, however, offer this as standard only at the gateway and access point level, not at the device level. This makes for a weaker network that requires more installed components. Either option, however, is superior in this regard to proprietary networks, where the operator must accept only wireless devices from the proprietary device vendor or run separate networks in order to accommodate them.Another key difference is that WirelessHART can support different transmission intervals by using multiple superframes with different numbers of slots. Each slot has a xed duration of 10 ms, which is enough time to transmit a packet and receive an acknowledgment message (the maximum packet size is 133 bytes, including headers). ISA100.11a, on the other hand, must be congured between 10 and 14 ms, which means that users will need to ensure that all ISA100.11 devices in a given network support time slot lengths compatible with all other devices in the network.There are numerous other differences that will depend on what your company may already be running, what kind of reliability your application needs, security requirements, ease of program-ming vs. customizability and much more. Joining the Digital RevolutionWhile wireless gas detection itself offers many advantages in terms of greater density, exibility and overall simplicity of operation, adherence to standards-based communications protocols adds further advantages. While some proprietary legacy systems remain, the move is toward standards for all of the reasons we have been discussing. So, if you are now in the process of upgrading your legacy, proprietary gas detection system, give careful consideration to upgrading to standards-based wireless technology. If you are already using a standards-based wireless gas detection, evaluate the instruments available for that protocol, to see if they ll any gaps that you may have in your protection, like long-life batteries, exible mounting, etc. If you are not using wireless at all, work with your IT team to conduct a thorough analysis of the wireless standard options that are available based on your needs. Regardless of which approach you take, you can expect to gain signicant exibility, safety and cost advantages as you increasingly participate in the digital transformation that is upon us now.Chris Frail is the product manager for gas detection at United Electrics Controls in Watertown, MA. His focus is on deploying wireless, battery-operated solutions to aid customers with faster, reliable deployment of xed gas detectors. He graduated as a mechanical engineer in 1997 from Boston University and earned his MBA from Babson College in 2009. Frail has been involved in the management and development of instrumentation for multiple industries for over 20 years. He got his start at Panametrics and GE Baker Hughes, where he worked with customers in the oil and gas and petrochemical industries specifying and developing ultrasonic owmeters for are, high temperature and cryogenic uids and pushing boundaries of ultrasonic meters. His key focus has always been on solving difcult technology problems and making the solution easy to use for the future, as evidenced by his work on portable ultrasonic meters and wetted ultrasonic meters for high temperature applications like coke bottoms in reneries. Each WirelessHART device can function as a repeater in a mesh network. With ISA100 devices, however, repeatability is standard at the gateway and access point level but not at the device level.
Oilman Magazine / January-February 2020 / OilmanMagazine.com36OILMAN COLUMNDouble Your Money with Zirconia Ceramics in Oil and Gas By Ray MouwIt goes without saying that crude oil is a valuable, or perhaps more accurately an invaluable product to all of us globally. The unrened petroleum is pumped from reserves deep underground and by the barrel load, all day, every day.Our dependence on this product (which is processed into a variety of fuel sources and com-modities like jet fuel, petrol and diesel) has been quantied by a market intelligence report from Beroe.In terms of demand and supply, the global fuel oil supply stands at 92.7 mbpd (Million barrels per day), while the global fuel oil demand stands at 98.18 mbpd. Demand is expected to increase, with a Compound Annual Growth Rate (CAGR) of 1.8 percent, until 2020. For all the efforts being put into renewable and alternative energy sources, the reliance on crude oil will not go away any time soon.It is clear that investment, innovation and operational best practice must continue into the extraction of crude oil. Otherwise, supply slows down and the price per barrel of crude oil then increases due to the imbalance.A key component that helps to keep supply up, are pumps. Unlike the slick and smooth products that it is turned into, crude oil is a petroleum composed of hydrocarbon deposits that ranges in viscosity, and contains oil, water and sand (often as the wells dry out increasingly) in its natural form.Therefore, the pumps undertaking the extrac-tion need to be durable and able to withstand the harsh, abrasive sandy oil. The rst challenge is ensuring these costly pieces of equipment have a long lifespan, as only then can true value be achieved.Striking it Rich with Heavy Duty PumpsAs you’d expect, pumps on oil rigs are an expen-sive outlay. Not only are there energy costs to run the pump, but the capital and maintenance costs are high.Typically, a ‘clean oil’ pump – that is, a pump which is pumping purer crude oil – will last ten years between overhauls. However, with a sandy, dirtier crude oil, the pump life deteriorates to as little as one year.The reason for these high maintenance costs is largely down to the erosion caused on the impel-ler shafts and wear rings (from the sand in the crude oil). It is the rapid wear through the tight wear ring clearance points that determines when the pumps are overhauled.The materials used to construct these parts are various grades of metal often coated with wear resistant sprays. When pumping, pressures range from 2,100kpa during suction up to 15,000kpa during discharge. These pressures, combined with the rough surfaces of the sand, will quickly erode wear rings and bearings. In turn, the pump becomes less effective and inefcient.While it may be easy to accept that this is just the norm of how heavy-duty pumps are constructed, there is an alternative to using hardened stainless-steel components. Parts made from magnesia sta-bilized zirconia (also known as MgPSZ) ceramic are fast becoming the preferred alternative.Of the various grades of zirconia ceramic avail-able on the market, it is the magnesia partially stabilized grade that is best suited to heavy duty pumps. Unlike other grades of zirconia ceramic, such as yttria stabilized zirconia, magnesia stabi-lized zirconia is the toughest, most reliable grade and doesn’t suffer from hydrothermal degrada-tion - an important criterion in moist, elevated temperature environments. Morgan Advanced Materials’ Nilcra® Zirconia is one such grade of magnesia stabilized zirconia and is a robust and simple to use replacement material for applications where high wear rates occur. By using this type of zirconia ceramic, the time between overhauls for a sandy crude oil pump can increase from the typical one-year lifespan up to four to six years instead.Indeed, an example of this bettered performance has been seen by Morgan when comparing a refurbished eight-stage centrifugal pump, tted with Nilcra® Zirconia wear rings and shaft bush-ings, across a four-year period.OEM wear rings tted to the pump’s impeller shaft were made from 420 stainless-steel 270-300 BHH and 420 stainless-steel 350-400 BHH. These wear rings lasted 12-15 months in a sandy well service, before requiring a total overhaul.Meanwhile, wear rings made from Nilcra® Zirco-nia were also tted to a different section of the impeller shaft. Findings showed a huge decrease in the wear on the magnesia stabilized zirconia rings in comparison to the spray-coated stainless-steel rings. The life of the pump was extended by approximately four times as a result, with vastly reduced downtime and maintenance costs result-ing in an increase to production.A Slicker Operation Just off the south coast of Australia is where magnesia partially stabilized zirconia ceramics have proven to be a huge success story, following Morgan’s consultation.In this region up to 480,000 barrels, or 76,800m³ Photo courtesy of iStock
Oilman Magazine / January-February 2020 / OilmanMagazine.com37OILMAN COLUMNof crude oil is pumped per day, with nearly 40 pumps in use across the site since the 1990s.However, the operation and maintenance of the pumps is costly. Sand content within the crude oil in the wells has been steadily increasing as oil reserves have been dwindling down over time. It was found that each pump would only be able to provide roughly one year of service before needing critical maintenance from wear and erosion.Crucially, wear was happening in four key areas of the pumps. Namely, these were the throttle bush, case separating ring, throat bush and impellor wear ring, which were made from hard-ened stainless steel or coated stainless steel.Following the site operator’s consultation with Morgan Advanced Materials, these parts were replaced with Nilcra® Zirconia, with only slight modications to the internal corner radii to reduce corner stresses and facilitate diamond grinding wheels. Over 40 pumps have been retrotted, and lifespan for each pump has increased from the typical one-year lifespan to an estimated four to six years instead.Energy to BurnNilcra Zirconia parts are not just benecial for reducing maintenance costs and extending the life of the pump. The other side of running a pump is managing the operating costs. When stainless-steel and cast-iron components wear, the sealing gaps increase. This reduces the pump’s efciency – so they need to work longer to pump the same amount of product – or can’t meet the desired pump pressure. In other words, the pump needs more energy to pump the same amount of oil through. Ultimately, becoming less and less efcient.The energy to run a pump is typically between 40 and 70 percent of the lifecycle costs – so maintaining sealing gaps and pump efcien-cies is important. When pump efciencies drop below the desired threshold, pumps are taken ofine and overhauled – another costly and time-consuming exercise as many tens of thousands of dollars are wasted (per pump per overhaul). Perhaps more importantly though is the cost of downtime and loss of production once the pump needs to be decommissioned and overhauled. In some cases, a pump can produce AUD $740 per minute, making it easy to see why operators don’t want downtime to be a regular occurrence.Zirconia Versus Ferobestos – Swelling at SeaAnother common material that partially-stabi-lized zirconia stacks up well against is ferobes-tos. Ferobestos is a bre reinforced composite material and is often chosen to create the sleeves or bearings on heavy duty pumps, as they provide an excellent seal with minimal leakage. However, ferobestos, is subject to moisture ab-sorption, causing the parts to swell and increase running friction. This then affects the pump performance and causes rapid wear on both the mating parts.Magnesia partially-stabilized zirconia does not suffer from this issue, as it is a solid monolithic material. This also means it is not subject to hard abrasive wear particles embedding into it and scoring the mating shaft, which can be a very expensive repair exercise.One such instance that has been noted by an operator is a pump with 2-inch shaft for waste/holding dam pumps, in Longford, Australia. An open vane pump in the bottom with ferobestos sleeves were only lasting between one to two months due to swelling and fast wear rates.Following consultation with Morgan, the sleeve material was changed to Nilcra® Zirconia. The lifespan on these parts is now greater than four years, which has vastly reduced downtime and maintenance costs.Pumped Up Parts, Pumped Up PerformanceAn additional benet of working with Nilcra® Zirconia is that the ceramic, originally dubbed ‘Ceramic Steel,’ can in most cases use the same drawing and tolerances of current metal parts. Thus, there is no need for major redesigns and approvals, it is essentially like-for-like. How-ever, the parts can be modied quite easily if required. Another case Morgan encountered was with a centrifugal pump, pumping ammonium carbon-ate slurry. The temperature range of the slurry was between 45° C and 85° C, and the shaft speed was running at 1,500 RPM, with water to lubricate the pump.The pump originally had metal shaft sleeves, but the life of the sleeve was only ve weeks - a ceramic coating on the pump had a lifespan of eight to ten weeks. Operators of the pump were still nding downtime substantial, maintenance time high and costly, and production was low.After replacing the shaft sleeves with Nilcra® Zirconia ones the sleeves lasted 12 months, a signicant ten-fold life increase.Built to LastAs crude oil continues to be a key fuel source for the world, it pays to keep the pumps in good working order and increase operating efciency. Only by lowering the lifecycle cost of pumps and maintaining production can operators truly realize better value. Nilcra® Zirconia parts go a long way into achieving that.Ray Mouw, Business Development Manager at Morgan Advanced Materials’ Technical Ceramics business, explains why magnesia stabilized zirconia ceramic components will be vital for pumps that work in harsh environments, such as oil and gas, and crude oil extraction. Multistage Centrifugal Pump retrofitted with Ceramic wear part. Photo courtesy of United Pumps AustraliaCase wear rings for Centrifugal multistage pump.
Oilman Magazine / January-February 2020 / OilmanMagazine.com38OILMAN COLUMNEnergy Transition Expected to Play a Major Role in the Oil and Gas Industry By Rakesh SinghOil and gas storage primarily refers to the state employed for the safe storage of both rened and unrened products including gas oil, gasoline, diesel, kerosene, aviation fuel, naphtha, liqueed natural gas, and liqueed petroleum gas. Recent innovations and technological advancement has longer storage back-up and expected to fuel the market in the future years. Emerging technology such as oating oil and gas storage tanks is expected to increase in the coming years.The entire energy system across the globe is going through a transition. The composition is likely to change in just a few decades as it would detach from the population, economic growth, and carbon. The volatile nature of the oil and gas industry has always kept it unpredictable. Uncertainty about the future of fossil fuel, erratic commodity price uctuations and upending supply-demand rational has always put this industry into a dilemma with no clear answer for future strategies in line with this industry. The world on a rapid road path of renewables has come with a big question in front of oil and industry. The energy transition is expected to play a major role in the coming years as even the automotive sector is on boom with a new replacement market for electric vehicles. Possibly, these oil and gas companies would pave their way to electric and non-renewables.Introduction and substantial acceptance of EVs (electric vehicles) globally would hit the oil and gas industry on a large scale. Technologies such as lithium-ion battery and ultracapacitors nd application across electric vehicles which is further expected to lower the demand for oil. However, the gas would hold more than 50 percent market share and the market share of oil is projected to decline in the coming decade probably by 2030. Renewables, batteries, and gas would remain the primary source for energy globally.Hydrocarbons are expected to play a key role in providing energy to the level and would grab the share of the oil industry in the next three to four decades. By 2050, the world is expected to see gas as the major energy source, along with renewables, running the world in the coming years. Curtailing methane emissions across its value chain is likely to be an opportunistic area where companies need to really focus. The decline in the demand for coal and oil and rising demand for gas is supposed to further boost the market of oil globally across different application areas.Global Oil and Gas Storage Market Report, published by Accurize Market Research, forecast that the global market is expected to experience a compound annual growth rate (CAGR) of 3.5 percent from 2019 to 2026. To meet the growing demand for oil and gas across various industries, the storage of oil and gas is essential. To have a backup of this product, many countries are trying to build an additional facility for the storage of oil and gas. Increasing demand for strategic reserve for oil and gas is one of the dominating factors in the growth of this market. Further, the growing importance of pipeline distribution network across the world boosts this market. Many countries are investing in the oil and gas storage market which is a positive sign for stiff competition in this market. This market is involved with the transportation of oil and natural gas from their production wells to the reneries and further to the storage tanks. Thus, improvement in the storage tank design is one of the dominant factors to grow this market. However, frequent oil leakages along with the environmental regulation may hamper the market.The dependency on the pipelines to deliver consistently is mounting and the need for better storage is also burgeoning owing to the surge in demand for oil and gas. Leak detection systems are progressively being used in aging pipes, owing to various factors such as strict government regulations, higher risk of leakage, and being more prone to corrosion. The rapid growth of the oil and gas sector, escalating demand for energy, and increased investment in offshore energy resources are the major factors driving the oil and gas pipeline leak detection equipment market. Further, the need for proper leak detection techniques to avoid potential disasters and accidents would provide several growth opportunities in forecasted years. In Photo courtesy of Leo Wolfert – www.123RF.com“The sudden fuel crisis & instability in the oil-producing region, investment by different countries in the oil and gas storage and improvement in tank design drive the oil and gas storage market globally; however, uncertainty about the future of fossil fuel, unpredictable commodity price uctuations, introduction and substantial acceptance of electric vehicles (EVs) globally and upending supply-demand rational has always put this industry into a dilemma with no clear answers for the future strategies.”
Oilman Magazine / January-February 2020 / OilmanMagazine.com39OILMAN COLUMNaddition, the construction of new pipelines, and the expansion of existing pipelines is also projected to fuel the market during the forecast years.The xed roof oil tank storage is in high demand due to its several advantages like lower installation costs, maximum safety, and the lower level of contamination while in operation. Floating roof tanks are also in high demand due to its structural signicance and minimum loss due to evaporation and corrosion.North America contributes to the highest market share during the estimated period. Due to the higher demand for gas in European countries, there is a major opportunity for the gas storage market in this region. To fulll the demand of domestic consumers as well as industries, the Asia-Pacic countries have the major potential in the estimated years for the storage market. The Middle East countries cover the highest storage due to the increased capacity of renery oil. Saudi Arabia, UAE, Kuwait, and Iran are the largest contributors in the storage market. A country like India increases its oil and gas storage capacity by investing in the strategic petroleum reserve. A new exploration site in Africa gives new opportunities in this region for the oil and gas storage. The competition among the major players for the unexplored area in this region is increasing the further growth of this market.Major companies through collaboration, acquisition, and expansion grab the emerging economies in the developing regions such as Brazil, India, China, Central America, and Africa. The key players in the market are Royal Vopak N.V., Worley Parsons Limited, Amec Foster Wheeler plc, Chiyoda Corporation, Magellan Midstream Partners, Centrica plc Niska Gas Storage Partners LLC, Oiltanking GmbH, Buckeye Partners, L.P., and others.Rakesh Singh holds an MBA degree in Mar-keting and has nearly 9 years of experience in researching the oil and gas industry. He has authored many reports relating to oil and gas industry, and he mentors a team of analysts from this domain.Mr. Singh has worked across several leading research organizations, creating reports on subjects including mining equipment, offshore mooring, Oil & Gas Pipeline Leak Detection Equipment Market, and Oileld Process Chemicals among others. He has experience working with leading industry associations in the oil and gas industry domains, as well as in heavy machineries. SUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Editor@OilmanMagazine.com (800) 562-2340 Ex. 5
Oilman Magazine / January-February 2020 / OilmanMagazine.com40OILMAN COLUMNDeepwater Subsea: The Long Journey from Macondo to 2020 From Paper Records to Digital Checklists and Digital Twins and an Electronic Ecosystem to Prevent the Next MacondoBy Lillian Espinoza-GalaApril 20, 2010: Mike Fry recalls that fateful night - “I was the Subsea superintendent for Trans-ocean. I helped support several of our GoM deepwater eet from a Subsea operations stand-point and technical eld support. The Deepwa-ter Horizon was one of them. So, on the night of the incident, I got a telephone call basically asking where the control system drawings were, and obviously, I knew that something was wrong because that would not be a call that I would get at basically about 10:30 at night.”But then when Fry asked what was wrong, they just said, “Hey, don’t worry about it at the moment. Go back to bed.” He scrambled out of bed and called and e-mailed the rig. No response. Then he sent an e-mail to the rig manager in Houston saying, “Hey, I got this really cryptic telephone call, what’s going on? Is there anything I can help you guys with?” They responded quickly, “Hey, Mike, you need to get to the ofce as quickly as possible, can’t discuss anything more about it.”As Fry raced for the Transocean ofce he wondered “what could be that severe that they won’t give me any information” and imagined different scenarios. But nothing could have prepared him for the USCG satellite images taken from space. The Deepwater Horizon MODU was burning with ames shooting 200 feet through the derrick. He had worked with six of the eleven men who died that night. He was also close to some of the 63 men and women who are still going through surgeries today. For the next 86 days he would live in the BP Crisis Center taking 12-hour shifts as the best and brightest engineers and scientist on the planet worked to cap the well on July 15, 2010. Macondo was the offshore oil and gas Industry’s Apollo One. The goal in 2020 is to prevent a Challenger or Columbia type disaster.Fry says every week he is still asked if Macondo could have been prevented. He says, “unfortunately, the question he still gets is always from an operational standpoint if the things that went wrong, not counting the BOP, if we did the exact same thing over again, could Macondo happen a second time?”“Unfortunately, the answer is yes because it had nothing to do with the blow-out preventer. Investigations proved there were so many things that went wrong that if we did it all over again, the exact same steps with the new regulations in place, it would happen again,” Fry says.Even in 2019 he gets questioned about the cost and the ROI. When potential customers asked him why they should invest in a digital checklist and ecosystem to provide evidence that procedures are followed 100 percent of the time his memories of those lost on the night of April 20, 2010 lead him to speak from the heart: “It’s like, guys, Macondo was really only nine years ago. Are we going back in the other direction again? I understand what’s right, but cost is now coming back into the forefront, right? So, how do you eliminate a Macondo from happening? Operationally, you really have to have organizations where the human factor of peer pressure and outside inuences get removed, and it just comes down to procedural discipline and doing what needs to be done, WHEN it needs to be done simply because this is the way that we do business, these are our policies and procedures, Deepwater Subsea Management Training 2015 with Microsoft Suite: Paper ChaseDigital Checklists for every procedure leave no room for pencil whipping a report or changing a report. Like an EKG - it creates a digital fingerprint of every minute of the BOP and riser equipment. Evidence for the regulator, operators and drilling contractors of procedural compliance. Photos courtesy of Mike Fry
Oilman Magazine / January-February 2020 / OilmanMagazine.com41OILMAN COLUMNand we’re going to follow them to the letter of the law, and we’re not going to deviate because of management pressure to try to speed things up. We’re going to do the things the way they need to be done, and just execute it safely, and move onto the next job,” Fry says.In 2014 while working in the corporate ofce for Vantage Drilling still remembering Macondo, Fry had a moment that led him to make a life changing decision. He decided he could continue trying to change his company or walk away and start his own company with the mission of changing the global drilling industry. He picked the latter option. By 2015, Deepwater Subsea opened in Houston offering IADC accredited Deepwater Subsea Management Training which involved white binders with all the API and BSEE regulations and the Microsoft Suite for creating a more streamlined approach for operation project management and daily tracking of BOP and riser systems. Those courses spun into quality assurance and leadership courses and providing audit services for his clients around the globe.When BSEE unveiled the new well control rules in 2016 Fry became convinced that paperwork might be a cause of procedural drift and in people not performing the required tasks. He dreamed of putting the procedure checklists on an iPad or laptop. He reached out to software companies, “They all said give me six gures and six months.” He dreaded having to communicate to a software vendor what it had taken him more than two decades to understand. Throughout 2016, Deepwater Subsea began signing up clients to do their annual compliance audits and as he traveled around the globe, Fry realized the global deepwater drilling industry needed an innovative approach to capture all the data collected minute by minute that would leave an electronic ledger of every action taken, photos of the equipment, something beyond an electronic tally book on when a problem was spotted and the response onshore and from OEM. Total transparency could prevent near misses and also provide a method for reporting every detail. In March 2018, Fry attended a conference and met the folks from J5 International. He says it was the quickest deal he ever consummated in his life. Everything he had been hoping for and dreaming about fell into place. With the addition of new software, he could lay out all the information in much the same way he had learned to do with Microsoft Ofce and using Google Docs. J5 allowed adding the digital twins for the BOPs of his clients and the creation of the 24/7 real time monitoring system center for all the BOPS he had contracts to service. In 2019, Fry added Hexagon’s SDX platform. The Hexagon and J5’s operational management system can pull information from the OSIsoft PI system and it can also write back from the IndustraForms, back into the PI system. The Hexagon’s SDX operational software allows the use of smart P&IDs, basically integrating with J5’s IndustraForms, and also pull PI system data. As the Deepwater Subsea Digital Ecosystem combining multiple software and AI solutions, customers and drilling contractors expressed excitement over nally having minute by minute legal proof of procedural compliance.But when Fry started rolling out the program to his team and the workforce he was faced with hostility. Even though many had grown up with Xboxes and playing video games, they instantly wondered why they needed Big Brother tracking everything they did each day. They expressed shock at not being trusted. The post Macondo paperwork took so much time away from the actual work and had been overwhelming but they feared the digital system would just make their job even more challenging. Change is painful and difcult. When his team and offshore workers asked him why he did not trust them, he realized implementing the totally digital ecosystem would take more than trust. He would have to provide a compelling and rational reason for the dramatic change in industry operations.To allay fear of the digital system, Fry created roll-out classes on the new BSEE requirement for verifying procedural compliance. One of the points Fry shared in class, “When the BSEE inspector arrives at your rig you will have to verify and show how you documented the process, and show the documentation we use for verication. This digital checklist allows a BSEE inspector who is digging deeper to nd everything in less than ve minutes. The digital checklist is protecting each of you and all of the companies involved to identify the small before they become an insurmountable crisis.” Fry says the ecosystem is great for overall subsea operation, but perhaps the biggest change from ten years ago is the ability to troubleshoot: “When the alert goes to the Janus24 monitoring center in Houston, the team on duty calls the rig to inform them of the event.” Fry says with the click of a mouse the team can pull up the digital BOP while the ROV is ying down and can get a 3D image of what the camera on the ROV will be showing. It might take the ROV ve hours to reach the seabed. With a few more clicks the Deepwater Subsea team has all the information needed to share with the client and with the work crews and ROV operator. “The client, drilling contractor and all stakeholders can see what is happening in real time almost as though we were visually inspecting the BOP from the seabed,” Fry says. Lillian Espinoza-Gala, owner LEG Explora-tion Education, served on the steering com-mittee for National Academy of Science Off-shore Worker Empowerment workshop held in Houston in January 2018 and a section of her Macondo Research is published in Chapter 2 of the proceedings. She currently serves as a Membership Chair on SPE International Hu-man Factors Technical Section Board. Deepwater Subsea 24/7 BOP Real Time Monitoring Center in 2019 Mike Fry with 3D digital image of BOP
Oilman Magazine / January-February 2020 / OilmanMagazine.com42OILMAN COLUMNThe Autonomous Oilfield Will Always Include Humans (The Human Component of the Digital Oilfield) By Michael Chavez and Erik WatersIn an environment where investor money is tight and where producers must therefore operate on a cash ow basis instead of relying on an almost endless inow of investment capital, many are turning to automation to reduce overhead and improve production in order to stay in business. The question becomes less about whether to automate and more about how far can it be taken? Can machines replace people altogether in some functions? If so, how would that work?Some in the industry have been concerned that the autonomous oil eld would indeed be com-pletely unmanned, like autonomous lawnmowers and vacuum cleaners. But with thousands of sensors on pumps, compressors, tanks and pipe-lines, combined with remote actuators on valves, switches and other devices, the level of complex-ity in the patch is such that automation systems will always be conned to helping humans make fast, accurate and preemptive decisions.Computers excel in managing these massive amounts of data and cherry-picking outliers or a collection of outliers that require a response. Outliers can include things like rising tank levels indicating a need for either a truck to collect the product, the turn of a valve to redirect product ow or the slowing/stopping of a pump, all of which is aimed at preventing a spill. In managing these outliers, computers can use AI and ML to make a number of autonomous adjustments based on what the humans have pro-grammed it to do, without personnel onsite.Early forms of automation were limited in func-tion. For example, once a tank level reached a preset parameter the computer’s only option was to shut off the associated pump. AI and ML broaden the system’s capabilities. Now, in addition to tracking multiple tank levels, automation can monitor pump injection rates to match inow with takeaway capacity instead of limiting the decision-making data to tank levels exclusively.When a situation arises that is beyond AI’s solu-tion capabilities, it can alert company personnel who can then either make remote adjustments or send someone to the site to make repairs. Certain people are always on call no matter how many or few sites the company operates.For producers considering an in-house monitoring system, there may be a level of efciency gained in so doing. But developing the advanced algorithms to control tanks and systems is expensive—and unnecessary, since it’s already been done. So outsourcing that alone can bring faster and better results.But there are even more efciencies in moving to the next level, which involves a third-party automation rm aggregating multiple elds and adding 24/7 human monitoring at a centralized command center. In this scenario when an alarm goes off, the contracted third party receives the alert, activates onsite cameras, evaluates the issue and, in most cases, can x the issue remotely. Only if an onsite visit is required do they notify exactly the person-nel who need to know and act on the information.This eliminates the payroll costs involved in a producer assigning their own personnel to monitor every possible alarm on a handful of wells. Instead, they pay a fraction of that cost to a third party whose personnel may be monitoring hundreds of wells at a time.In the eld, one SitePro client dropped its per-site personnel average from 2.0 operators per site to .72, with an estimated savings of 21 percent in payroll costs.The most efcient use of automation lies in its scalability. The days of dozens of people racing down lease roads with pencil and paper in hand gauging tanks and inspecting perfectly-working pumps across 1,000 miles per day have been replaced by one person overseeing multiple elds from a wall of monitors. With scalability, it is just as easy to absorb a few new wells recently completed as it is to take on an entire eld purchased in an acquisition.Remote monitoring’s economies of scale also apply to water handling. With simple automation, a producer might pay $10,000 per well, then $50 per month per well for monitoring. Now one facility can automate 8-12 wells for both water treatment and controls. In this scenario oil and gas production becomes a light industrial operation. This has the effect of turning water management operations into a light industrial plant instead of a series of separate, less efcient operations.Uniformity of hardware and software is a key ingredient in scalability. Proper quality control allows the automation provider to ne-tune the system to incorporate hardware and software With remote monitoring and control equipment onsite, a large number of decisions and adjustments can be made remotely, saving time and increasing safety by greatly reducing miles driven to remote sites.
Oilman Magazine / January-February 2020 / OilmanMagazine.com43OILMAN COLUMNupgrades a well as adding new datapoints. Datapoints can be added through new sensors on existing facilities or through new facilities.Humans are needed not only in the daily operation, they are vital in the development of the systems themselves. Only the human mind can dream, can creatively connect dots and identify problems and their solutions. There is no level of programming now or in the near future that can impart those qualities to circuit boards.As to concerns about automation eliminating jobs, it may be more correct to say that the stafng pool has done the eliminating in some areas. Despite recent layoffs, jobs in many basins still go begging due to a lack of workers, whether the shortage is due to lack of interest or insufcient training. Automation removes the idea of throwing workers at a problem but it does not remove workers altogether—it just improves the efciency of those that are on the job. It may very well be the best of both worlds, at current technology levels.No longer is this the wave of the future—it is here now in most industries, and energy is no exception.In a June 27, 2019 story in IndustryWeek, writer Travis Hessman discussed how robots in many industries are relieving humans of monotonous and mundane work. “But in the process (of saving humans from the mundane), we need to ask ourselves a very serious question: If humans aren’t pallet trucks or pick-and-place machines, then what is our role in manufacturing?This, I believe is the fundamental question of our times, and one every manufacturer and every executive needs to be asking.The human asset goes far beyond labor. Every worker on the oor is lled with ideas, insights, perspectives and abstract creative genius that no machine and no software can duplicate. The challenge now is to redene our strategies to tap into that, to harness the true human potential.But, if any of this is going to work, that process must occur in concert with automation. If not, we risk gaining productivity at the cost of innovation—a miscalculation no business can afford to make.”After all, it was human-driven innovation that brought industry, including oil and gas, to the level that a ‘robot revolution’ is even up for discussion. But the real revolution is in automation freeing humans to be human—to solve the complex problems and to continue to evaluate the systems themselves and to weigh other decisions such as buying or selling assets, drilling decisions and other ways to improve life, corporate and personal.Tight markets for both labor and capital are forcing the industry out of its “we’ve always done it the old way” thinking and into researching any and all tools for survival. The right combination of humans and automation can be that sweet spot.Michael Chavez is vice president of sales and marketing for SitePro, a position he has held since 2017. Previous experience includes stints with companies working with oileld technology and water management. Chavez speaks and blogs on oil and gas topics. A Navy veteran, he is a member of the International Society of Automation, and Society of Petroleum Engineers and the Young Professionals in Energy.Erik Waters is the Vice President of Technology for SitePro, Inc. He manages the development and implementation of the company’s automation software that improves the uid management operations for SitePro customers. In addition to his time at SitePro, Prior to entering the oil and gas industry, Erik served 10-years in the U.S. Army as a helicopter pilot. He received his Master’s Degree in International Affairs from Texas A&M University and his Bachelor’s Degree in Environmental Engineering from the U.S. Military Academy at West Point. The human element of the autonomous oilfield allows a small number of technicians at a central location to monitor hundreds of wells across thousands of acres. This improves operations, reduces downtime and makes each person more efficient.
Oilman Magazine / January-February 2020 / OilmanMagazine.com44OILMAN COLUMNImpact of a Digital Oilfield By Ross MillerThere are over 9,000 independent oil and natu-ral gas producers in the United States, operating in 33 states. Each of these companies works with countless vendors and service providers, all who stand to benet from a digital oileld. According to Oilprice.com, US oil and gas will contribute $1.9 trillion to U.S. GDP by 2035.TrendsA major industry shift was recognized with the major price collapse in 2014. Dramatic layoffs were coupled with a decrease in exploration and production. The industry was forced to examine its current strategy and minimize its future risks. With this, a proactive approach was taken with the introduction of automation and new technology. With the recent resurgence and condence in the market, production in upstream and midstream in particular are increasing at a signicant rate. Additionally, the stabilization of crude oil prices has opened the door for additional investment in technology, providing a perfect storm for digital solutions in oil and gas. It cannot be overstated that the direction of leadership across the board for all E&Ps is to invest in new cost saving technologies rather than throw manpower at business challenges. Supply chain, operations and accounting teams are all being directed to bring emerging tech to the table. By 2020, 100 percent of oil and gas companies will have invested more in cloud-deployed applications than in supporting or acquiring on-premises apps. In fact, according to Gartner, by 2022 more than half of signicant new business systems will incorporate continuous intelligence that uses real-time context data to improve decisions. ChallengesOne technology that is top of mind for all operators and service providers is ticket automation in the oileld. Currently most transactions are completed using a carbon copy handwritten approach, wasting time and costing companies billions of dollars industry-wide. The lack of transparency makes it impossible for companies to effectively manage their day to day operations and perform intelligent audits of their eld activity.According to Oil & Gas Journal, only 45 percent of operators had any type of electronic eld ticketing system in place and only 25 percent of supplier companies were using digital tickets. Most companies also must combine mul-tiple systems for eld management, rather than having a centralized platform for all services. Without access to this data, companies lack the real-time actionable intelligence to make prudent business decisions. Companies not embracing big data and analytics will soon nd themselves falling behind those who realize these competitive advantages. SolutionsOne company that is holding the reins for this digital transformation is Engage Mobilize. Engage is a cloud-based digital eld management platform that is revolutionizing the way oil and gas companies interact with their service providers. Its comprehensive solution interfaces with both operators and vendors, allowing transparency on all sides. Engage is the industry preferred solution for digitizing oileld activity spanning across over one hundred service types.As a company, Engage Mobilize is a blend of industry experts along with established professionals in forward thinking technology. Its solution digitally mirrors intricate workows in the eld, making it easy to adopt, while keeping a big picture, data driven approach that is paramount from an executive perspective. By integrating with other software, Engage can preload pertinent information, predictively schedule repeatable services and streamline ticket information into accounting systems. Leveraging robust modeling tools, its solution creates unprecedented data analytics in real-time. The data collected through the digital ticketing process is pertinent for new technologies such as blockchain and dynamic smart contracts to operate seamlessly. After realizing successful results, Engage clients have been moving rapidly to expand their solution to other active basins. Case studies reect a dramatic reduction in costs and increased productivity, all the while saving precious time for both operators and their service providers. One company in particular was searching for ways to reduce its LOE costs. In the rst six months of bringing on the Engage platform, they realized an 8.5 percent decrease in its water transport invoices, saving them millions of dollars per year. MarketCurrently there are very few true competitors in the market. Some companies offer a piece of Engage’s complete solution, such as digital tickets. However, they do not offer the advanced technology like their automated dispatch and ticketing capabilities, nor do they provide software and IoT integrations. Engage is also the only solution that interfaces with both the operator and their service providers, providing real-time data to both sides. The future is bright for Engage Mobilize, having recently secured the team’s Series A Investment from Cottonwood Venture Partners. Engage is also the latest company to join Cottonwood’s portfolio of industry leading energy technology solutions. The funding will allow Engage to add to its Denver-based team to enhance its current platform and accelerate new product development, including advanced-analytics features for customers.Digital transformation is coming to the oil and gas industry. It is not a question of when, but rather how fast. Photo courtesy of artitcom – www.123RF.com
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Oilman Magazine / January-February 2020 / OilmanMagazine.com46Saying Goodbye to Hot Oiling By Jason Thompson and Dr. Janaina Aguiar“If you want the good stuff (performance), then you have to use the bad stuff.” This has been a long-standing slogan in the oileld production chemicals business, referring to the use of synthetic chemistries. The meaning of it? Chemicals that performed the best were also some of the most toxic and environmentally harmful products to use—resulting in a difcult choice of selecting performance and cost over safety and sustainability. For decades, chemical usage in the oileld has been ubiquitous by operators to control and manage risk associated with a variety of ow assurance challenges, including wax deposition—one of the most common and challenging. While synthetic chemicals are relatively low in cost and offer variable results, their ongoing use can result in long-term formation damage, as seen in hot oiling applications for parafn remediation. Today’s parafn remediation problems need more than conventional treatments. With ever-changing well characteristics, specic regional challenges and increasing formation damage from using hot oil or brine applications, customization and a new approach are crucial to stay protable and extend the life of older wells. But is there an alternative? Enter biosurfactants. Outperforming Chemicals with Green SolutionsChemical suppliers have attempted to introduce green solutions for parafn remediation into the oileld, but with variable results and high costs. Standard production methods limited volume capacities and caused challenges in achieving biodegradability with reduced bioaccumulation, while retaining temperature stability, persistence in application, and stability for transportation and storage. The most promising green solution for parafn remediation is a unique class of surfactants knows as biosurfactants. Biosurfactants are highly biodegradable, low in toxicity, offer a smaller carbon footprint and have endless application possibilities. Most importantly, biosurfactants have an unmatched ability to enhance traditional remediation methodology and offer added production benets through OILMAN COLUMNFigure 1. Oil sales and oil production during hot oiling; before the biosurfactant treatmentsFigure 2. Dispersed wax after DWRT
Oilman Magazine / January-February 2020 / OilmanMagazine.com47their enhanced oil recovery capabilities. Historically, biosurfactants have been too expensive for oileld applications, until recent advancements in fermentation technology enabled the cost-effective production of high-quality, pure solutions with consistent, proven results—in volumes large enough for oileld use. These new customized biosurfactant solutions are outperforming synthetic chemicals and allowing the multiple benets of green chemicals to be realized in the oileld for the rst time. The result? A growing movement across the industry in replacing hot oiling and standard synthetic dispersing agents with biosurfactants. The Hot Oiling Replacement MovementDue to low cost, rapid results and simple application, hot oiling has been the most widely-used method for removing parafn deposition. This conventional method utilizes thermal heat transfer from heated oil or brine to heat the parafn above the wax appearance temperature and dissolve it. The parafn is then typically kept dispersed using a dispersant. Although this appears to be a practical way to manage parafn deposition, the reality is many producers suffer from hot oiling formation damage. This is when precipitation of high molecular weight waxes, asphaltenes, and inorganics occur. The sources of this can come from impurities in the oil or brine sources used for the thermal heat transfer, or procedural errors that push parafn deposits from the rod and tubulars out into the formation. The complications and safety hazards associated with hot oiling have led some producers to explore alternative remediation methods, such as biosurfactants.Case Study: Making the Change in the PermianA producer in the Permian basin decided to travel down the unconventional path of using biosurfactants to remediate parafn from the rod, pump, tubulars, and nearby wellbore. The difference in this producer’s scenario was that instead of applying live microbes downhole and relying on those microbes to metabolize organics insitu and excrete biosurfactants, this producer decided to pump a puried biosurfactant mixture, produced by Locus Bio-Energy Solutions, that contained no live microbes. Known as AssurEOR FLOW™, this biosurfactant solution was derived from a fermentation process in a local production plant in Midland, where the molecules are produced under tight tolerances. This was a game changer for the producer because this reduced variability and ensured that the high-quality biosurfactants could be reproduced in a consistent manner.To ensure that the producer had an apple-to-apples comparison, a lease that contained nine producing vertical wells was used as the live experiment. These vertical producing wells were in Upton county and produced oil from the Wolf-camp and Leonard tight shale formations. This lease had been hot oiled for years with different degrees of success and failure—the ladder had become more frequent, which provided a solid foundation to evaluate the efcacy of the AssurEOR FLOW ™ treatment. Treatment success was evaluated in three factors: a dispersion and dissolution kinetics test to determine if the biosurfactants could disperse parafn into solution, ngerprinting the CCD (Carbon Chain Distribution) of oil from the wells before the biosurfactant treatment and after to see if an appreciable increase in carbon chains was detected, and a comparison of production trends from when the lease was hot oiled to after the biosurfactant treatment, adding a new dimension to the parafn remediation program. Factor One: Dissolution and Dispersion Kinetics The oil production of the wells drilled in a tight reservoir were continuously decreasing over the previous months (Figure 1), and wax deposition was also observed (Figure 2 - Left Side). The precipitation and deposition of waxes are related to permeability reduction and formation damage around wellbore, changes in rheological behavior, increasing of viscosity, excessive pumping cost, oil production reduction, interior diameter reduction of pipelines and in severe cases the blockage of wells and equipment. In order to evaluate if a biosurfactant-based product would be able to disperse the wax deposit, a Dynamic Wax Remediation Test (DWRT) was performed. The DWRT results OILMAN COLUMNFigure 4. Increase of paraffin in crude oil after biosurfactant treatmentFigure 3. Carbon chain distribution of wax depositContinued on next page...
Oilman Magazine / January-February 2020 / OilmanMagazine.com48were obtained by observing the dispersibility of 2 grams of wax deposit in a tube with 30 mL of AssurEOR FLOW™ at 95° F and rotating at low speed (5 RPM). The results showed that after only 2 hours, the wax deposit was completely dispersed with high owability (Figure 2 - Right Side). Factor Two: Carbon Chain ProlesA study based on CCD showed that the wax deposit contained macro and microcrystalline waxes with long parafn and carbon chains up to 76 carbons (Figure 3). Considering that deposits with long carbon chain normally present high Wax Disappearance Temperature (> 113° F), AssurEOR FLOW™ proved to be efcient even under hard conditions on DWRT, performed at 95° F. The CCD study also showed an increase of parafn amount in crude oil after treatment (Figure 4), the largest increases in parafn concentration were observed for parafn with 29 and 31 carbons (8 percent and 10 percent, respectively), but the concentration of shorter and longer carbon chains were also increased. This data combined with the observations of the operator that claims not observe wax deposition after treatment conrmed the assumptions based on DWRT, that AssurEOR FLOW™ is able to disperse the wax deposit in the reservoir and in the pipeline, leading to an increase in the amount of parafn in the oil. Factor Three: Production TrendsA production decline rate of 9.5 percent was calculated as the baseline projected decline for the lease that was treated with hot oiling. To the surprise and fascination of the producer, production rates began to steadily increase over the 6-month period following the AssurEOR FLOW™ parafn remediation treatments. The biosurfactant treatments were deployed on a monthly basis and provided a 17 percent increase in production over that time period. Figure 5 depicts the monthly production trends during hot oiling and the biosurfactant treatment program.ConclusionThe depletion of conventional oil reserves and the large oil production increase from unconventional and tight reservoirs since the mid-2000s have made wax deposition an ongoing challenge. Its impact on lowering the ability of wells to reach predicted maximum recovery, slow cleanup and production decreases, along with growing safety and environmental concerns within the industry, creates a crucial need for highly-effective, green solutions. Results prove that biosurfactant-based solutions are not only a greener, biodegradable, low toxicity option, but also a highly efcient product able to eliminate wax deposition problems and increase oil production. This approach opens up a world of possibilities in deploying biosurfactants in unconventional ways to achieve unmatched benets. Goodbye hot oiling; hello biosurfactants. Jason Thompson, Business Development Director, Locus Bio-Energy SolutionsJason is responsible for developing and managing Locus Bio-Energy’s award-winning AssurEOR treatment program business in the US. For the past 16 years he has been working in all aspects of oil eld production chemicals, previously as the District Manager of USA West (California and Alaska) for Clariant Oil Services. Jason holds an MBA and is qualied as a Six Sigma Black Belt. Dr. Janaina I. S. Aguiar, Application Scientist, Locus Bio-Energy SolutionsDr. Aguiar is a chemical engineer with Master’s degree and PhD in Science and Technology of Polymers. She has more than 10 years of experience in oil R&D. Dr. Aguiar has experience studying the mechanisms of actions for oileld solutions and nding innovative solutions for ow assurance problems related to asphaltenes and wax deposition, emulsions stability and compatibility of surfactants and polymers. OILMAN COLUMNFigure 5. Oil production increase after biosurfactant treatment with AssurEOR FLOW ™ (17% over 6-month treatment timeframe)
Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would benefit the industry? If so, we would like to speak with you!We have a creative team that can design your ad! OilmanMagazine.com/advertise • Advertising@OilmanMagazine.com • (800) 562-2340 Ex. 1 ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would benefit the industry? If so, we would like to speak with you!We have a creative team that can design your ad! OilmanMagazine.com/advertise • Advertising@OilmanMagazine.com • (800) 562-2340 Ex. 1 ADVERTISE WITH US!
Oilman Magazine / January-February 2020 / OilmanMagazine.com50OILMAN COLUMNSince the 2014 oil and gas downturn, the industry reinvented itself in order to rebound. What has emerged from the chaos of 2014 is not your father’s oil and gas industry. After decades of unwillingness to adapt and adopt technology, the oil and gas industry was nally forced to do so. Working with smaller prot margins than ever before, technology has allowed the industry to modernize and digitalize. By doing so, it can remain competitive. Leading the way in the oil and gas industry’s transformation is data and data management. Once oil and gas companies got their hands on sensors and started sticking them all over the oilelds, the digital oileld was born. However, to have big data, does not mean that one has the magic key to the proverbial kingdom. With big data comes big aggregations and manipulations and the challenge of where to store it all. OILMAN Magazine had the opportunity to step outside of North America and gain some insight into retails data management and downstream supply logistics from Tim Hoffmeister, CEO of Implico. The international company headquartered in Germany has subsidiaries in North America, Asia and Europe, as well as customers all over the world. Tim took some time to introduce Implico and explain how data and automation are becoming ever more prevalent in downstream retail distribution. Unique Data Solutions While there are many companies offering data and supply management services, the important question is what makes Implico unique in this area? Tim responded: “When it comes to data communications, our service portfolio iGOS – Implico Global Operating Services – is as unique as it is efcient. It handles the entire data communication between downstream companies, translating and, if needed, xing the data they exchange. iGOS collects input from various sources and distributes the respective information in streamlined, optimized form. If an entry is missing, iGOS scans the connected data bases to identify and complement the searched-for piece. That way, the data arrives at its destination complete, sorted and readable.”Automation is KeyAnother core competency of Implico is process automation. “Our specialist solutions cover every aspect of the downstream supply chain,” explains Tim. “For tank farms, we have the feature-rich terminal management system OpenTAS available. It handles all operations inside and outside the plant: automating tasks, managing inventory, processing data, communicating with eld equipment, connecting with ERP systems, reaching out to trading partners and much more. OpenTAS supports all means of transport and is fully scalable to meet the different needs of forward-looking tank storage operators. For petrol station management and hydrocarbons distribution, there are the SAP standard solutions SAP RFNO (Retail Fuel Network Operations) and SAP SDM (Secondary Distribution Management). Both are developed by Implico.” Work in the North American MarketSince OILMAN’S audience is primarily located in North America, we must ask the following question: While you are headquartered in Europe, what kind of work do you do in North America? “Implico operates globally. Since North America is a key market for us, we opened a subsidiary in Philadelphia in 2005.” Tim drills down into the details of what Implico does in North America, “Our focus lies on the storage and petrol station businesses and we offer a broad range of services in the elds of terminal management and fuel retailing. Our customers in North America include oil majors and big retailers alike. On the one hand, we provide them with consulting and guidance, especially on their digital transformation journeys. On the other hand, we deliver automation software, web services and cloud solutions for oil and gas.”Downstream Technology and Real-time Data Keep the Pumps from Running DryPredictive analytics are a unique tool used to decipher big data and make changes according to supply. Imagine, it’s a big holiday weekend and there’s a well-traveled highway near a stadium with a major concert going on. The gas stations near the stadium are going to be getting slammed with more customers than normal and to avert the pumps from running dry, the software calls for an increase in supply to match those demand levels. Tim dives into the details: “A key feature of SAP RFNO is Continuous Station Replenishment. It handles the complete forecasting and planning for petrol station Predictive Analytics and Big Data Increase Flows in Downstream Supply Chain Management By Eric R. EisslerPhoto courtesy of Implico Group
Oilman Magazine / January-February 2020 / OilmanMagazine.com51OILMAN COLUMNnetworks, creating advanced consumption patterns and replenishment plans for all connected locations. For maximum accuracy and reliability, it taps into different sources: point-of-sale data, tank level readings and pump values. If needed, it even considers special incidents and occasions. For example, if a big concert or sports event happens near a petrol station, Continuous Station Replenishment will anticipate an increase in trafc during that time.” Implico works with SAP to manage gas station fuel distribution with two kinds of software developed by Implico: SAP RFNO and SAP SDM. Both solutions move all processes to the background, where they steer and run them automatically. Tim explains that, “In a petrol station network, SAP RFNO and SAP SDM receive extensive data from every location. Based on this information, they register and process all transactions – fuel llings, shop purchases, extra services and so on. At the end of each workday, they provide the proper recipients in accounting and administration with a detailed report. And they also initiate potential follow-up processes automatically.” With new downstream technologies and services like the ones mentioned above, the way the industry keeps its supplies owing is evolving for the better. Companies like Implico make it possible to have better supply chain management in the downstream and retail sectors of the oil and gas value chain. Photo courtesy of Implico GroupAdvertise with us!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would benefit the industry? If so, we would like to speak with you!We have a creative team that can design your ad! OilmanMagazine.com/advertise • Advertising@OilmanMagazine.com • (800) 562-2340 Ex. 1
Oilman Magazine / January-February 2020 / OilmanMagazine.com52OILMAN COLUMNA Look Inside the Data Refinery—the Expansion and Impact of Upstream Software and Emerging Technologies in the Oil and Gas Industry By Tonae’ HamiltonIn recent years, the oil and gas industry has experienced a major transformation in operations and oil production, with many companies now relying on data analytics and software to improve processes and pipeline efciency. With an increased demand for big data, technologies, and upstream software solutions, many oil and gas operators are relying on software and data companies to provide the tools needed to satisfy various initiatives from gathering pipeline data, to minimizing operational risks and increasing safety.With a heavy reliance on data and software solu-tions, companies who possess such expertise are in high demand. To stay ahead of the competi-tion or to enhance and expand their software solutions, some oil and gas companies have established partnerships with software companies and vice versa, thus gaining the ability to provide an array of services to oil and gas customers. Engineering and procurement company, Worley, and software company, Arundo are two compa-nies who have taken the opportunity to partner and strengthen their offerings. Together, the two companies have established the “Data Renery,” a hub designed for applied data science and ma-chine learning solutions in the energy, chemicals and resources industry. Worley and Arundo’s “Data Renery,” serves as a signicant technological advancement for the oil and gas industry, and further builds on the expan-sion of software and technology use in the in-dustry. Stuart Morstead, COO of Arundo shared how the Data Renery “brings EPC relevant digital capabilities to our [Worley and Arundo’s] mutual global customers, including proprietary AI/ML software solutions, data science as a service, business-centric AI/ML education, and digital use case workshop facilitation.” Through his perspective, Morstead shared the capabili-ties of the Data Renery, how partnerships and collaborations can benet oil and gas customers, and how a digital transformation is promoting a positive change in the industry. As the oil and gas industry increasingly depends more on upstream software solutions and data analytics to improve oil production, it is im-portant that oil and gas operators and software companies stay up to date on their service offerings to continue beneting their clientele. Aware of this demand, some companies have taken the initiative to build upon their services by collaborating or partnering with other companies. Morstead expressed the im-portance of companies partnering saying, “I do believe it is important for oil and gas companies to start working closer with software companies, especially in the ‘new normal’ environment where efciency, reliability and visibility are key drivers on the bottom line.” Morstead’s software and analytics company, Arundo took the opportunity to partner with Worley, an engineering and energy consulting services company.The two companies decided to partner after seeing how their differentiated services could help transform an industry and solve customer problems. “Worley and Arundo executives were introduced through a common relationship and quickly realized that their mutual capabilities could be a powerful combination to solve customer problems in an industrial context. Worley has deep subject matter expertise and strong customer relationships at the asset-level across the oil and gas value chain, and Arundo brings deep data science and machine learning expertise in the industrial context and proof of value in 90 days or less.” explain Morstead. Since partnering, the two companies have been able to provide various services to their com-bined network of oil and gas customers, one in particular being the “Data Renery,” located in “an iconic building in downtown Houston,” as Morstead described. “The Data Renery has been serving as a global hub for numerous digital workshops, ideation sessions, data science educational programs, and digital team meetings. In addition to the capabilities we are bringing to the external market, it has been an integral part to boosting the “digital readiness” within Worley while being the center of development for data-centric products,” Morstead described. Unlike a single technological tool that can be used by one or a few oil and gas customers, the Data Renery serves a plethora of customers, especially those located in Houston. Morstead shared how “hundreds of industrial users now have access to the Data Renery’s SaaS product DataSeer, which combines computer vision and machine learning to bring unprecedented speed and accuracy to project cost estimation work.” Through the use of the Data Renery, many oil and gas operators will be able to better determine the cost of projects and make smarter decisions based on accurate data.Photo courtesy of Leo Wolfert – www.123RF.com
Oilman Magazine / January-February 2020 / OilmanMagazine.com53OILMAN COLUMNReady To Make It Happen! By Josh RobbinsKicking off a New Year, a new decade and in Oil and Gas – an exciting time of making deals happen! Of course, I work in the off-market acquisitions space, and there are a lot of plans that will take shape in 2020 over the entire industry. At Beachwood, we are seeing a signicant amount of assets shift from “not for sale” to “for sale” for a number of reasons.The main reason, as expected in this market, is to capitalize on assets that are not core to the company’s position in the eld. Eliminating overhead, in every aspect of the word, is going to be a common theme throughout the year. With sellers eliminating overhead of operational assets, there will be more cashow to increase the production of current assets, or to purchase additional assets that t better into the current portfolio.The current oil and gas operators are looking at this market with opportunistic eyes. Emotional attachment to wells, lands, leases, capital investment, etc. has gone by the wayside. Everyone is excited to move forward. To get out of the current stall, and to shift into the next gear. This industry has always been focused on one primary target, and that is to make money. With service costs nally dropping, the midstream deferential costs slowly eroding away, the focus is nally back on the core belief of the actual operators in the business, to make money. The companies feeding on oil and gas are realizing the hard facts, that you can’t overcharge on a commodity driven entity. The stock market won’t continue to pull the strings, especially when the entire industry falls out of favor with the investment community. There is oil and gas in the United States that can be produced, and money can be made. As obvious as that statement is, it has taken literally seven years for the industry to realize it.Now that private equity has lived through a downturn, they are savvier with investment dollars. They are asking tougher questions of their teams; and demanding result-driven success. With this new direction, we will see merger after merger in 2020. We will see companies that will collapse on one another, and asset divestitures that will primarily help fund internal cashow commitments. The great news is that everyone in the industry is excited about this development. The stalled collective business model needed to be shaken. It needed to be reduced to a simple formula of the creation of positive cashow and the elimination of unnecessary debt. There needed to be a restructure, and now that everyone can see the light, excitement is starting to rise.We can expect a huge turnout at this year’s NAPE in February, and although the deals on the ten by ten tables may not reect the actual assets available, the off-market deals will be ying around. I’m expecting a fantastic 2020, and an even better decade. Everyone is ready to make it happen!Here’s to a very Happy New Year! Oil and gas operators are increasingly relying on software solutions and data hubs, like the Data Renery, to improve the efciency of oil production and processes and to minimize risks and operational costs, among other issues. As Morstead explained, “Data science and analytics are being leveraged to improve operating uptime, asset life and HSE challenges. The ability to combine historical data sets and live data ows at scale is enabling operators to make better decisions that improve outcomes.” Morstead also expressed how “some of the solutions coming to market now are enabling organizations to move humans out of dangerous contexts (e.g., equipment inspection in inherently dangerous places) or to improve monitoring and avoidance of pollution emissions.” With an increased popularity for the use of big data and analytics in the oil and gas industry, collaborating with software companies, like Arundo, is almost a necessity to improve business operations and to continue contributing to the industry as a whole. Through Worley and Arundo’s partnership, the two companies created DataSeer through the Data Renery. Morstead explained how “DataSeer is a cloud-based machine learning application that extracts information (symbols and text) from engineering schematic diagrams like P&IDs by leveraging deep learning models along with computer vision techniques.” “Its most signicant impact is the dramatic reduction in user workload and increased condence and accuracy of extracted information from P&ID images. This is especially important for browneld expansion engineering projects or during bid phases where P&IDs are not always available in CAD source formats but, instead, as raw scanned images,” Morstead expounded on the application’s benets. Through their partnership, Worley and Arundo have been able to make signicant contributions, not only to their clientele, but to the industry overall. The two companies are also launching the DataSeer Managed Service, which is a “scalable, turnkey managed service leveraging the DataSeer application suite in combination with a rigorous engineering workow to rapidly convert legacy engineering drawings into smart digital drawings of the highest quality,” Morstead shared. They expect to fully launch this offering in February 2020.With the oil and gas industry undergoing a digital transformation, it is imperative that oil and gas operators remain—or become—up to date and improve their business operations to stay relevant and meet industry demands. With a push for big data and analytics to help monitor operational efciency and examine project costs, for example, partnering with software companies to obtain access to such tools can help companies improve business outcomes and achieve growth. Worley and Arundo are two companies continuing to grow their business and designing digital solutions for their customers. “We are working on a number of data-driven solutions that are either process-centric or equipment-centric. These solutions can be applied to different parts of the oil and gas value chain from upstream production optimization to renery workow improvement. More to come in 2020,” stated Morstead. Josh Robbins
Oilman Magazine / January-February 2020 / OilmanMagazine.com54OILMAN COLUMNEnhancing Safety and Operability in the Evolving STS Transfer Market By Nicolas LandriereShip-to-ship (STS) transfer is becoming increasingly common throughout the shipping industry. It has been an important part of the oil industry for some time, providing the logistical backbone for large swathes of the global oil trade, but STS transfers in oil have become even more important of late. This rising prominence of STS transfers across the maritime industry is evidenced by the Malaysian ship-to-ship specialists KA Petra’s recent $180 mill agreement to build the world’s largest STS transfer docking station in Malaysia, expecting to tap into the growing STS transfer industry in the region and build a global trading hub. There are many factors behind the growth in STS transfers, but few are as important as exibility. Allowing vessels that carry liquid cargo to transfer offshore in essence means that VLCCs that have multiple unload points throughout their journey can be more economical, and their cargo can be delivered to ports or via routes that cannot accommodate a ship of that size. STS transfer is an essential and widely used part of efcient and cost-effective transport of oil all over the world.STS transfers come with their unique challenges, though. Some are obvious; STS transfer requires proper coordination, equipment and approvals, which can become prohibitively complex when coupled with bad weather and the physical stresses of operating equipment between two moving ships. Others are perhaps easier to overlook, such as the signicant increase in risk that occurs when crews don’t have the relevant expertise, or have inappropriate or poor-quality equipment. The risk of re or environmental pollution associated with a poorly planned STS transfer, or one using substandard or inappropriate equipment, can be very high.In 2018, an incident involving a faulty hose raised serious questions about the safety and operability of STS transfer across the industry. In that incident, a faulty hose ruptured and sprayed oil on deck and overboard. It was only the quick reactions of the crew that contained the spill, resulting in only a minimal amount of oil entering the ocean rather than an environmental disaster that would have posed a signicant risk to life. The UK P&I Club subsequently investigated the accident, and issued a recommendation stating that all cargo hoses must be t for purpose and provided with valid records of test and inspection. It had transpired that the hose had not been tested for over two years – twice as long as is recommended by industry bodies – and had visible signs of pressure damage that neither the STS service provider nor the crews had properly checked for. That incident highlighted the clear need for operators, owners, crew and other parties to ensure that the process is conducted safely and efciently. It also illustrates the need for suppliers to ensure that they are helping to raise standards across the industry by contributing their expertise as well as their products. In any oil transfer, be it on land or sea, equipment must be efcient and t for purpose. It must be easy to operate efciently for the crew that use it, it must be easy to operate safely, and it must exhibit resilience in the face of often extreme environmental challenges. As hoses are perhaps the most important link in the STS transfer chain, this raises the issue of standards; there is no universally agreed upon single type of hose for use in STS transfers. Instead there are several standards used to qualify hoses that can be used in the process. These vary in quality, efciency, and cost. Typically, the EN 1765 standard is used to qualify STS hoses. However, Trelleborg recently launched a new STS transfer solution to enhance safety and operability in the rapidly evolving sector – the KLELINE STS hose, which is qualied to the GMPHOM 2009 guidelines for marine application. This offers increased resilience and service life beyond what is typical. These guidelines guarantee a higher standard of manufacturing as each hose goes through a complete factory acceptance testing program, which includes hydrostatic, vacuum, adhesion and bending tests to ensure a superior level of certainty and condence when it comes to STS transfers. This is in line with best practice and regulations, and provides more accurate performance predictors including service life and resistance.Capital expenditure for this higher specication ensures an increase in operations, a decrease in maintenance, and ultimately fewer expensive re-placements over the life of a project. This longer service life helps reduce operational expenses while reducing the environmental impact of manufacturing and tting replacement hoses. KLELINE STS hoses consist of two carcasses made of steel cables. The inner carcass in this dual carcass design provides resistance to the internal pressure, up to ve times the rated working pressure. The outer carcass provides resistance to the stresses and loads inherent in STS transfers and protects from external environmental challenges – while preventing leaks. This technology, based on technology Photo courtesy of Anatoly Menzhiliy – www.123RF.com
Oilman Magazine / January-February 2020 / OilmanMagazine.com55OILMAN COLUMNMark A. Stansberryoriginally developed for truck tires, enables the hose to withstand accidental kinks or crushing forces that can occur due to the intensity of the forces involved and the nature of carrying out a complex process across two ships while at sea. The hose also demonstrates the value of Trelleborg’s unique nippleless design. In a standard nipple hose design, there is a metal connector in between different sections of the hose – which creates additional wear and pressure, and therefore risk of failure. In contrast, Trelleborg’s design has no stiff metal connectors between sections of the hose, and is thus more exible while the continuous inner layer and integrated Gasket create a perfect sealing solution. The design means that there is no need for gaskets at each connection, which increases the simplicity of installation alongside the benets in longevity and safety that come with a hose that can withstand stresses and strains for longer. It is crucial that we continually evaluate the long-term effectiveness of oil transfer solutions as the industry evolves, at every part of the value chain and alongside operability. As suppliers, we have a duty to ensure that we are playing our part in raising standards across the industry by providing our technical and operational expertise alongside our products. Hoses are one of the areas in which we have sig-nicant expertise, and one of the areas in which a higher specication product can cut operational expenditure, reduce the need for maintenance, increase operability, and lesson the number of costly replacements over the lifecycle of a project – not to mention reduce the risk of accident – despite an initially increased capital expenditure. Trelleborg offers this expertise as part of a comprehensive support service based on 45 years of experience supplying oil and marine hoses, which spans the lifecycle of a project. As a global company with local presence across the world, we are able to work closely with our customers to form the best solutions for their applications and be there when they need us.Nicolas Landriere is product manager for Trelleborg’s oil hose applications, providing technical support to new and existing customers and expert advice throughout the various stages of each project. As a technical specialist for hoses and offshore ofoading applications, Nicolas also contributes to the development of new products.Nicolas joined Trelleborg 12 years ago, to de-liver technical support for projects. Since then, he has taken on various roles within the same scope, working as both a project manager and sales manager, offering solutions and techni-cal support on complex projects around the world. He is currently product manager for all of Trelleborg’s oil applications. America’s Energy: 2020 and Beyond By Mark A. StansberryAs stated in my book, America Needs America’s Energy: Creating Together the People’s Energy Plan, “Future generations are depending on us to keep the American dream alive. For too long we in America have been wasting time blaming the energy industry or the government for failure to adopt a national energy strategy, when we should be responsible for creating the plan. As consumers of energy, we must drive the process, evaluating how we can best leverage our natural resources here at home to ensure long-term energy independence and security. American citizens must take individual responsibility for the state of this great nation, striving to protect the land we call home.”The 24th Annual/Anniversary of IEPC (Energy Policy Conference) - Roundtable/Summit was held August 11, 2016, at the Renaissance Hotel in Tulsa, Oklahoma. The roundtable was hosted by IEPC, The Energy Advocates and the Master of Energy Program, University of Tulsa.Roundtable participants included Representatives of state and federal government, chamber of commerce, public relations rm, concerned citizens, various areas of the energy sector, professors, think-tanks, energy management students from across the U.S., and the media.Several issues were discussed regarding energy issues and views. Since that time, we have seen continued dialogue regarding the ever-changing landscape of energy and other economic areas of interest. The energy sector will need to form alliances with other economic sectors in 2020 and beyond. One company, IngenuitE, is looking at ways to assist energy companies entering and maintaining digital transformation. They are able to provide consulting to energy companies. Another company that is looking at changing the way things are handled in the real estate business today is KEVO Properties. KEVO, led by CEO Steve Burris, is also looking at ways to more efciently incorporate innovation and application in the energy/real estate sectors. In 2020 he plans to announce KEVO’s plans.Stacey Huddleston – Midwest Sales Director, Prestige Capital, has extensive national commercial nance experience throughout several industries including energy services and construction. Stacey is looking at ways to assist energy companies. He states, “Prestige Capital (www.prestigecapital.com) provides companies with the working capital they need to manage operations and payroll without interruption, take advantage of new sales opportunities, or simply pay obligations in a more timely manner. Businesses who don’t qualify for traditional bank nancing, or need quick funding, turn to Prestige Capital to support their cash ow needs by immediately turning unpaid invoices into cash. Products include: Factoring, Credit Protection Services, Factors Assurance Program, and Back Ofce Solutions.”Former U.S. President Eisenhower was the founder in 1956 of PTPI (People to People International). His great grandson, Merrill Eisenhower Atwater, is the current CEO of PTPI. He stated at a recent event at the University of Central Oklahoma, “We can all make a difference and together work toward solutions.” Energy is the future of America, and America Needs America’s Energy.For more information about these companies and National Energy Talk, go to Mark@thegtdgroup.com. Also, join our effort by visiting Facebook: National Energy Talk.
Oilman Magazine / January-February 2020 / OilmanMagazine.com56OILMAN COLUMNA Practical Approach to Using IOT Devices to Support Legacy SCADA Field Systems in the Transition to Internet Based Industrial Automation Systems By Steve BullardIn the world of industrial automation, the talk is centered around IIOT. With buzzwords like “Industry 4.0,” “IOT,” “digital twin,” “cloud computing,” “articial intelligence,” “machine learning,” and “deep learning,” it is difcult for automation engineers and business managers to determine how to implement these new technologies. The purpose of this article is to dene a practical approach to using IOT devices to connect and support legacy SCADA systems in the transition to IIOT. The focus will be on remote, eld automation systems, where there are additional challenges of communications, power, security, and isolation. These systems are deployed throughout the world in the electrical utilities, telecommunications, upstream and midstream oil and gas, and water utilities industries.BackgroundSCADA (Supervisory Control and Data Acquisition) systems have been around more than 50 years. They have evolved to be very effective for the job that they were designed: monitoring, controlling, and acquiring data from industrial equipment. The brains of a SCADA system is the RTU (Remote Terminal Unit) and the PLC (Programmable Logic Controller). These microcomputers are typically hardwired to sensors, actuators, and switches that use simple logic to control an industrial process. SCADA systems are limited in computing power and are not capable of articial intelligence, therefore they are considered “dumb” systems. A HMI (Human machine interface) provides information to the people responsible for managing the system. These systems communicate using their own languages, mostly proprietary, such as Modbus, DNP3, Probus, and Conitel. Data from the components of the system are typically logged and stored on the system. These systems are typically a closed loop system, controlled at a local level, and many times customized for the industrial processes that it controls.On the other hand, IT systems have evolved on a separate path beginning with mainframe computers over 50 years ago to today’s client/server/router based systems. The interconnectivity of these systems is what we refer to as the “internet.” The internet uses a standard communication language called TCP/IP (Transmission Control Protocol/Internet Protocol). All relevant business software, websites, email, databases, etc. run on these platforms. Because of the widespread use, information technology systems have evolved at an exponential rate and now include “cloud computing” systems where multiple computing devices work together to increase computing speed and power. Breakthroughs in AI allow systems to learn by computing enormous amounts of data, identifying trends, and creating conclusions. IOT evolved when devices outside of computers were able to connect and interact on the internet. Smart phones are probably the most common IOT device. Over the last 10 years, other devices such as surveillance cameras, doorbells, swimming pool controls, building thermostats, alarm systems all have become internet devices. IIOT refers to IOT devices designed to gather data and control industrial processes.SCADA and IT systems are a common part of our everyday lives and control our world. SCADA systems control our manufacturing and infrastructure, such as utilities, trafc lights, factories, pipelines, dams, etc. IT systems run the internet, nancial systems, business systems, communications, personal computing, etc.The Problem for BusinessesIndustry 4.0 refers to the “4th industrial revolution” where human, industrial, manufacturing, and infrastructure systems are integrated and monitored by internet devices. By using the internet to connect these systems,
Oilman Magazine / January-February 2020 / OilmanMagazine.com57OILMAN COLUMNbusinesses can collect data, analyze data, monitor, and control processes from anywhere. Using cloud computing and AI, data scientists can analyze trends of processes and help businesses make more informed decisions with regards to efciency, safety, maintenance, and other key factors affecting their bottom line. Also, interconnectivity of complex systems allow multiple different areas of a business to work together to achieve efciency. For example, supply chain, manufacturing, transportation, billing, accounting systems all communicating on the same platforms increases efciencies in processes.If Industry 4.0 is the goal, how do businesses transition from SCADA platforms to internet-based systems? Because SCADA systems control so many critical infrastructure systems, outright replacement is not feasible nor economical. SCADA systems speak a different language from IT systems therefore they can’t communicate with each other. Due to the fact that SCADA systems have always been closed systems, there are no security protections such as rewalls, encryption, etc. to protect against cyber-attacks. For these two reasons, integrating SCADA systems directly to the internet is also not feasible.The SolutionAs said earlier, this article will focus on remote systems where communication and power are sometimes issues with eld automation systems, such as electrical transmission, pipelines, oil and gas wellsites, ood control, irrigation canal systems, water utilities, and mining operations. Each situation is unique and must be assessed individually. In many cases, companies merge or are acquired and there may be SCADA systems of different types in the eld, causing an integration mess. There is not a single best solution for all problems, but this is an overall strategy to move forward with integration.Step 1: Build an IIOT based network of devices that collect critical data from SCADA systems. These IIOT systems do not interfere or control the SCADA systems, but monitors SCADA operations and reports data directly to the cloud. A handful of manufacturers have devices that connect to SCADA RTUs and collect logged data from the SCADA system and transmits this data to the cloud. Basically, this device works like a translator that can communicate between the different protocols. Connexa is one of those manufacturers with its certied IIOT Cell Module. This module combined with REST API (Application Program Interface) is an agnostic system that can interface with all major SCADA protocols and transmit data, using low bandwidth, to cloud systems. Data ow is strictly one way and modern computer security is present. Even critical alarms can be transmitted via these devices. Where SCADA systems have deciencies, additional IOT devices can be installed to collect data (i.e., electrical power monitoring, ow rates in a pipeline, or weather data). These newer IIOT devices can network in a LAN (Local Area Network) or direct wire with a cellular modem and data can be transmitted over a VPN (Virtual Private Network). Recent changes in cellular networks brings quality enhanced 4G LTE service to most areas with 5G and 3.5 GHz CBRS (Citizens Band Radio Network) on the near horizon. 5G will give faster data speeds and CBRS will allow companies to setup their own private LTE network without going through a cell provider. If cell service is not available, more expensive microwave and satellite communication networks are available.These hybrid IIOT/SCADA systems will be able to be deployed quickly and inexpensively, giving enterprise wide access to eld data. Business processes can use this data in cloud No w Av A i l A b l e : Th e Cr u d e l i f e Cl o T h i N gw w w . s h i r T s i C l e .C o m / T h e C r u d e l i f eContinued on next page...
Oilman Magazine / January-February 2020 / OilmanMagazine.com58OILMAN COLUMNcomputing to analyze system performance, forecast costs, and make better business decisions.Step 2: Begin building IIOT based automation networks. The goal of IIOT automation is to create a digital representation of processes in the eld, essentially a “digital twin” of the real world. With these digital twins, powerful cloud computers with AI can create simulated models to test running conditions and predict outcomes. As new products come to market, automation components based on standard IT operating systems, network protocols, and software compatibility will be available. These systems can replace aging legacy SCADA systems in an organized, scheduled, and budgeted manner. Using onsite edge industrial computers based on client/server architecture, local wireless networks, wireless cellular modems/routers, and IIOT sensors and devices can create automation systems similar to corporate and home networks. Using edge computers locally allows real time data acquisition and control of mission critical systems. At today’s cellular network communication speed, latency is an issue when real time data acquisition, computation, and control is required. Having computing and decision making at the local level, communication and power outages become less of an issue for critical operations. Local wireless networks are easily scalable, and provide exibility of moving equipment around without having to rewire devices.Cloud computing and AI will do the heavy lifting for complex systems computing. Software updates and security patches can be done remotely, as is done on IT systems. Currently, SCADA systems do not have this capability causing someone to update systems onsite. Also, RTUs and PLCs only do simple logic operations in SCADA systems, limiting their capabilities. With edge computers and powerful cloud computing, systems will be able to adapt and change to conditions in the eld systems. These “smart” systems will be able to predict changes in demands on equipment and make adjustments to optimize operations, reduce wear, increase life of equipment, and reduce operating costs.Step 3: Future IIOT devices could have built in cellular modems that will allow direct communication with the cloud. As 5G communication evolves, it is possible that all control and decision making is done in the cloud. There is debate within IT circles whether centralized, powerful, cloud computing or distributed localized edge computing is the best route to go. This is the same debate that has gone on since we went from mainframe (centralized) to client/server (distributed) to cloud data centers (centralized). The most likely scenario is that there will be a combination of both depending on real world needs.ConclusionSCADA and IT systems evolved separately, with different hardware, software, and communication protocols, and purposes. Integration of these two very different platforms is essential to make the next step in productivity, and protability. Over time, IIOT devices will replace legacy SCADA devices and systems, creating a truly smart and networked world. Powerful cloud computing and articial intelligence will be able to optimize machine/system/human performance and productivity. For companies operating automation systems in remote locations, the benets are numerous:• Less human trips to check eld equipment and record data.• Real time alerts when systems need attention.• Enterprise wide data sharing• Internet access from anywhere.• Predictive maintenance.• Systems and equipment optimization.• Trend analysis.• Longer equipment life.• Better predictions of return on investments, downtime, and other key performance indicators.• Greater protability.Final ThoughtsIn each of the previous three industrial revolutions, a breakthrough technology fundamentally changed society. In the rst industrial revolution, the invention of the steam engine in the 1700s created manu-facturing processes, factories, and caused people to move from the farms to cities. The second industrial revolution happened in the late 1800s with mass production and the invention of the assembly line, light bulb, telephone, and internal combustion engine. These inventions led to mobility, greater freedom, and a tremendous increase in the quality of life. The third industrial revolu-tion occurred in the 1960s and 1970s with the invention of the semiconductor and computer. Otherwise known as the “Digital Revolution”, human feats like going to the moon, global sharing of knowledge, and exponential leaps in productivity would not have been possible.If Industry 4.0 is as transformational as the other three revolutions, society and life changing improvements are bound to occur. It is interesting to note that each of the previous revolutions occurred about every 100 years, but with the latest technologies, the time span to this revolution was cut to 50 to 60 years, almost half. Also, each leap in technology created winners to those that adopted the technology, and losers of those that stuck with the “old” ways. We are denitely in transformative times.Steve Bullard directs marketing efforts for Connexa, an award-winning industry leader in remote power and automation systems, IIOT/SCADA integration, industrial control panel fabrication, and remote electrical distribution systems. Visit https://www.connexa.com for more information.
Oilman Magazine / January-February 2020 / OilmanMagazine.com60OILMAN COLUMNOILMAN COLUMNEnergy’s Top Quotes from 2019 By Jason SpiessHere is a look back at some quotes from The Crude Life in 2019 that deserve another look and listen.“It is confusing and gets more confusing when we talk about 9,100 barrels of oil released and that’s equivalent to 383,000 gallons, sometimes the reporters mix gallons and barrels together and those are two different units. The hard thing is to keep consistent with the units going through. So, the 9,100 barrels is equivalent to the 383,000, it’s all the same there and that hasn’t changed.”David Glatt, Director of the North Dakota, Department of Environmental Quality (DEQ)“As our industry experiences its paradigm shift, we have to keep up with the times, we have to make sure we stay relevant. If you want to look at America, you go to the Permian or the Bakken, and that’s what America should be. United as one. And that is exactly what we are and that is what I love about the oil and gas industry.”Ty Juarez, PetroDex.com “What’s really going on, if you want to take a step back. I don’t want to go super political on you with the political term, but it really is indoc-trination that’s going on within the educational system. We haven’t done a good enough job be-ing able to push back the narrative and push back the educational system…. They are being told over and over again that any type of fossil fuel is evil, and clean energy, wind and solar are the only way to go and there is no one there to challenge or push back on it. So that generation are now in decision making roles.”Joseph “JB” Bendik, The Navitas Organization “I taught economic forecasting for MBAs at LSU for over 30 years, and I would tell students oil prices are the second most difcult thing to forecast in the future. And you can see why, it’s highly variable, it bounces all over the place and it moves for reasons that are very unpredictable. For example, the latter part of 2014, that the Saudis would have pumped a whole lot of oil into the market, who would have guessed that and then drive the price down to under $30 or more. Who could have predicted that? ….. Oil prices are the second most difcult thing to forecast. The most difcult thing to forecast is the climate. It’s changing all the time and it is changing for reasons that are very unpredictable.”Dr. Loren C. Scott, Energy Expert and Economist“This (climate change) has gone far beyond science now. To no small extent it is a religion to many people as opposed to being science.”Dr. Loren C. Scott, Energy Expert and Economist “It’s pretty interesting right now with Governor Pollis and his war on oil and gas. In the past a lot more people were quiet or hid the fact they worked in oil and gas, but today, more and more are stepping up and courageously standing up for the industry. A lot of people do not even know that Colorado has oil and gas activity. When I go to conferences or on vacation with my family people are surprised when I tell them not only is there oil and gas in Colorado, Weld County is one of the top counties in the nation.” Heath Holloway, Titan Solutions “That bill was passed very quick. I along with thousands of landmen, eld workers, roughnecks, we all went and testied to the Senate to really explain there has not been an economic study to show what happens when say 60 percent of a county loses oil and gas revenues. Everyone is very nervous. I know of a company that left the Western Slope two weeks ago. They just packed up and moved their operations to Oklahoma.”Destenie McMillen, third generation senior landman “The risk of additional controls on oil and gas development will certainly lessen the value of the minerals as well as any oil and gas leases that are granted. Additional costs, delays in develop-ment, and possibly lease expirations all have to be factored into the oil and gas transaction. This is not good for mineral owners, companies, or the state.” Joe Dancy, Associate director, Maguire oil and gas institute, Southern Methodist university.“Pipelines create lasting jobs, which creates lasting tax revenue. There are over 8,000 miles of proposed projects in these members states, imagine the amount of jobs and economic stimulus this would create. Economic prosperity follows pipelines. Natural supply has always been the focus from a conversational standpoint. Ev-eryone wants to talk about the growth and that is great, and I don’t want to shift away from that, however, there are others elements to consider. When we look at critical infrastructure there are three components to that discussion - supply, infrastructure and demand.”Wesley Cate, Eco-Energy“Why do you think the United States is the number one country in the world? Why do you think we have the most advanced civilization in the world? Why do we have the best at almost everything in the world here, by in large it’s because of fossil fuels.”John Droz, Alliance for Wise Energy Decisions“Absolutely lawsuits have cost us time, and fear over the lawsuits have cost us a lot of money. That is a true and undeniable fact.”William Prentice, Meridian Energy Group “It’s astonishing that the trajectory of the whole world is changing in such a quick time frame. It’s changing at warp speed and this environmental narrative is like a ‘mania’ to me or like a religion which you said. It’s just gripped the world. It’s become a self-feeding movement now and has accelerated like nothing I have ever seen.”Terry Etam, author of “End of the Fossil Fuel Insanity, writer for the BOE Report and blogger for Public Energy Number One “It’s a big issue right now in industry. It’s like a Red Riding Hood syndrome. People making it out the industry to be the Big Bad Wolf.”Michael Clance, EcoPoint Jason Spiess is an award-winning journalist, host of The Crude Life and energy contributor to a variety of media outlets from 660 KEYZ-AM Williston to CNBC to the BBC World. Spiess has over 30 years of media experience in broadcasting, journalism, reporting and principal ownership in media companies. To listen, read or explore The Crude Life, visit www.thecrudelife.com
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