Race for smartest field greets a new Champion
  from: Asian Oil & Gas
  by: Darius Snieckus
  Friday, October 27, 2006

First oil earlier this year from Shell's Champion West phase three development off Brunei could well be looked back on as a watershed in the history of the digital oilfield. But, given that 'smart' capabilities are soon to become far more commonplace on the operator's major new greenfield projects, it might equally end up a footnote. Darius Snieckus discusses 'asset optimisation' culture with Shell International's executive VP, technical, Matthias Bichsel.

That most every major international operator has now trademarked its ownbrand digital field - in addition to Shell's Smart Field, the coinages are the i-field, efield, next generation oilfield, and field of the future - makes plain the importance being attached to this ever-evolving approach to field developments. Likewise, in the public domain, Schlumberger was earlier this year awarded the $9 million contract to manage and further develop the UK's Well DataStore, one of the world's largest repositories of digital oil and gas well information.

In an era where something close to 70% of the world's oil production is being pumped from fields that are more than 30 years old, brownfields and greenfields alike have everything to gain from the digital treatment. Shell, for one, has reportedly seen around a 10% improvement in production, 5-10% (average 5% gas and 10% oil) increase in recovery, as much as a 20% saving in operating costs, and, in some cases, up to 75% reduction in workflow cycle times in core processes, courtesy of integrated smart technology. The operator currently has 25 Smart Field projects under way around the world.

Champion West, first discovered in 1975 but shelved until the early-1990s because of the marginal economics of its reservoir productivity, has since become a Smart Field showcase for Shell. Following two development phases executed as part of an 'early oil' project at the field, phase three took Champion West - which is made up of more than 1000 reservoirs varying in depth from 2000-4000m with pressures of 200-600bar and temperatures of 80-120°C - into the digital realm.

Being promoted by Shell as the 'front runner' in the digital oil field of the future (Doff) race, the $1.5 billion Smart Field was brought onstream using a combination of 'a number of cutting edge technologies', including a highly complex, horizontal 'snake' well that was drilled through the sands with a tortuous trajectory. Champion West's platform is 'one of the world's most technically advanced offshore facilities' and uses downhole pressure and temperature sensors pre-installed in a 5km long fibreoptic cable, along with remote controls, tied back to Shell's Brunei offices by high bandwidth connections that allow engineers onshore to continuously monitor the performance of the wells and facilities to hone production and reserves recovery.

The field, which reached start-up two months ahead of schedule in January, has shown early signs of producing record output for Brunei Shell Petroleum with oil flowing at an initial rate of 16,700b/d.

Bichsel acknowledges the 'sizeable' improvements in performance to be had from the application of 'smartness' to a field like Champion West, but reckons the greater prize is the data derived from hard-wiring a development with intelligent technology. 'I maintain that at the end of the day the value of the digital oilfield is the data - how you use the data, what you do with the data, the connections you make via the data,' he stresses. 'This really becomes the big differentiator.'

The technology housed in the Champion West Smart Field, particularly the valve-, sensor-, and gauge-laden 'snake' well, is incontrovertibly a central part of the story, he says, but it is not the whole story. As Bichsel points out, Shell, which established the Smart Field concept in 2002 'to acquire and implement technologies within key E&P processes such as field development planning, reservoir management and production optimisation', has at the same time been actively pushing ahead with the commercial development of smart technologies through joint venture companies such as Shell-Halliburton owned WellDynamics, responsible for the first intelligent completion on the operator's US Gulf Mars field in 2004.

No silver bullet
The golden vision of Doff first emerged in the oil industry refracted through the lens of several cross-sectional studies - not least the seminal 2003 Cambridge Energy Research Associates multi-client report on the increased global recovery potential represented by the digital field. The focus then shifted to the proprietary advances being made by individual oil companies pushing ahead with their in-house versions of the digital oilfield absent of any cross-pollination.

The reality now, to Bichsel's mind, is something part-way between the two: Shell is investing in the commercialisation of key 'enabling' technologies that may well see pan-industrial take-up but the integration of these technologies will remain the oil company's own affair.

'The Cera paper [which suggested the total worldwide resource base could be expanded by 125 billion boe, and 7% shaved off sector operating costs] proposed a silver bullet, an IT solution that - if it existed - could be banged into our fields and tens of billions of barrels of oil equivalent would be miraculously unlocked. But it was quickly followed by the sobering realisation that this would require overcoming serious communications issues, hardware endurance issues and so on.'

'Once the euphoria died down,' he adds, 'we all hunkered down to continue working on digital oilfield strategies and solving some of these issues.'

This, Bichsel suggests, is 'a classic example of how this technology is evolving up the curve' and points to the fact that oil companies need now most of all to identify, 'one, where the value lies and, two, where one can rely on commercially available, standardised pieces of kit that can be integrated in some value-adding way'.

'Shell is quite willing to come up with technologies and commercialise them through a company that allows for an uptake in the industry and creates a robust product that the industry - and naturally we ourselves - will benefit from,' he notes.

As well as moving to integrate 'smartness' as a basis for design in its greenfield projects, Shell has a catalogue of developments that are to be retrofitted with intelligent technologies, starting with areas including IT and communications before moving on 'in a logical and sequential order' as part of the optimisation of its global asset portfolio. This strategy is underpinned, says Bichsel, 'by the fundamental belief in measuring a development on a continuous or at least more frequent basis because it allows you to get better insight into the reservoir, to better model how to produce a field, to design better, more intelligent interventions'.

With the industry-wide trend toward enhanced and increased oil recovery projects, too, digital oilfield technologies and strategies now offer oil companies 'another layer of granularity' in boosting ultimate recovery levels. 'Smart Field technology steps forward to provide some other tools to get yet more out of the reservoir,' as Bichsel puts it. 'And it becomes very exciting when you consider that you can link up all of your EOR and IOR schemes to your smart technology.'

Most importantly, he adds, by integrating intelligent production- and recovery-enhancing technologies and techniques, the operator becomes 'a much more active participant in the life of the field' than in the past.

Digital identity crisis
It would appear that the digital oilfield continues to suffer from something of an identity crisis. On one hand, it is the emblem of futurist industry technology in leading-edge areas such as enhanced automation, intelligent completions, modelling and visualisation, real-time drilling, and remote sensing and timelapse seismic on greenfield developments; on the other a retrofittable means of more fully exploiting the worldwide population of long-producing - and often declining - brownfields.

Perhaps in part because of this portmanteau role, as ChevronTexaco recently discovered to its chagrin, just what the digital oilfield - or i-field in this case - is supposed to be to oil companies remains a source of puzzlement because the 'value of information' provided by the concept continues to be nebulous.

Bichsel argues the vision of the digital oilfield has been 'quite well communicated', but that the idea has not translated well into day-to-day applications - so far. 'As always, it is one thing to come up with a bright idea and quite another to turn it into reality,' he offers. 'That is where the frustration lies because there is no such thing as a digital oilfield kit that can be installed with the result that a field will deliver an average of 10% higher recovery and production. Larger operators are coming to realise that it is going to be a piece of work and we need to better organise ourselves to handle it in an optimal fashion.'

So while the extra 125 billion boe promised by the 2003 Cera Doff study may have been overplayed by an oil industry then emerging out from under the shadow of historically low crude prices - and still spending too little on replacing reserves with the drillbit, Bichsel nonetheless believes it captured the spirit of the gamechanging possibilities represented by the digital oilfield.

'I do believe the day is coming when you will see companies such as ours having developed a generation of smart fields that have a great deal in common,' he concludes, 'not just on the level of hardware, but also on the level of approach and philosophy, on the level of organisation of workflow, and so on, and this will mean large additional volumes of oil and gas recovered, that much is certain.' AOG

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