May 2012

Executive Viewpoint

Intelligent energy today

Vol. 233 No. 5



Intelligent energy today


From a technology perspective, it’s clear our industry has more tools at our fingertips today than ever before. Across the E&P sector, we have a very large portfolio of measurement, analysis and control systems for every aspect of our business, offering new ways to deliver well construction efficiency, production optimization and improved overall recovery of hydrocarbons. This growing optionality in the digital landscape, while offering potential step changes in performance, does come with an interesting new set of challenges.

One such challenge is in the area of decision governance. Following the growth of remote operations centers, particularly for drilling, experts across several different companies can now be connected into the workflow from anywhere in the world. In theory, this should provide an excellent way of reducing risk, as the most experienced personnel can be involved in the decision-making process. However, clear processes need to be in place from both timing and sequencing standpoints to make sure everything is aligned with the activities involved in the operations. Technology clearly has a role to play in this space. Part of today’s debate is on human vs. digital decision-making or automation.

Another challenge is the impact of the crew change. The generation of engineers entering the oilfield today is clearly made up of digital natives, who have grown up with the internet in most aspects of their education, work and social activities. Many of the rest of us can claim to be digital immigrants, who are managing through the transformation of the oilfield with the daunting remit to forge links between a century’s worth of operations, best practices and the new digital age. While we may communicate and learn in slightly different ways, creating an accessible knowledge store is paramount in making this link “from bytes to atoms” to help the new age of engineers entering our industry.

We have definitely made great strides since I first became involved with this part of our industry in the mid-90s. Many of the critical challenges we faced back then have been overcome, some of the challenges have endured, and, as we have evolved, many new challenges are being posed.

Reliability was clearly a critical enabler for commercial progress and remained center stage for the best part of a decade. In that time period, a complete overhaul of the design and commercialization process was undertaken across the oilfield technology sector, drawing heavily on best practices and talent from industries, such as aerospace and automotive. Reliability engineering has become part of the fabric of our business workflows today. On the technology front, the focus on reliability drove a step change in electronic survivability for permanent monitoring, hydraulic intelligent completion equipment and fiber-optics for a range of measurement options.

Compatibility of equipment, outside of the mechanical challenges in well construction, was most obvious in the data world. As more technology options were created, proprietary communications protocols proliferated and operating companies were faced with increasingly difficult integration issues. Software development was almost a disposable activity until the maturation of the first open standards, allowing end-users to mix and match applications for their needs. As a result, remote drilling centers have grown exponentially in recent years, to the point where a large majority of all drilling activities, particularly offshore, are monitored from a remote location.

The understanding and delivery of economic value is a challenge that has endured. This was initially centered on business case justification. Today, it’s more about system thinking, company alignment, change management and risk mitigation. Interestingly, corporations are on a spectrum of very different stages of the learning curve without a definitive blueprint for success.

Meanwhile, the intelligent energy company of the future still defies definition, although some of what it will need to encompass is clear. Among these demands is a deep technological capability to tackle the toughest challenges, as well as significant progress on solving the efficiency dilemma of using fewer raw materials and leaving a smaller trace on the environment while delivering more energy.
Every two years, the latest technology, case studies and opportunities for intelligent energy are presented and debated by industry professionals in an effort to work smarter and faster. This occurs at the SPE Intelligent Energy conference, which I had the privilege to co-chair in The Netherlands this year. We showcased a number of technologies and concepts to shape what may be ahead in 2020.1

We explored how social media could change the ways we communicate in large numbers, and consequently, how this could shape opinion in real time. We looked at the impacts this would have on building strategy and workflows. It was a revelation how much, and how rapidly, we learned just by having a range of multimedia inputs to our site. 

We also had an auto industry pioneer describe how crowdsourcing could change the way we conceptualize, design, develop and manufacture cars. Some searching questions were posed as to how this might translate to the oilfield. This presented a potential game changing way for companies to access technical resources, intellectual property, and ultimately, innovation.

With the pace of change in our industry, the year 2020 will look very different. The intelligent energy company of the future has to build on the solid foundation laid today to help shape public and government opinion, encourage the best minds in the world to join the energy cause and engage in its transformation. wo-box_blue.gif


Derek Mathieson is President, Western Hemisphere Operations of Baker Hughes Incorporated. Mathieson previously served as Baker Hughes President of Products and Technology. He joined Baker Hughes in 2008 from WellDynamics, Inc., where he was Chief Executive Officer. He has worked for Shell UK Exploration & Production and the Wood Group in the United Kingdom. Mathieson holds a Ph.D. in micro electro-mechanical systems from Heriot-Watt University in Edinburgh, Scotland.

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