Integrated operations
Encyclopedia
In the Petroleum industry
, Integrated operations (IO) refers to new work processes and ways of doing oil and gas exploration and production, which has been facilitated by new information and communication technology. Multi-discipline collaboration in plant operation is one example. IO has in a sense also taken the form of a movement for renewal of the oil and gas industry.
In short IO is collaboration with production in focus.
It's also possible for a team at an office in a different time zone to be consulting the night-shift of the platform, so that no land-based workers need work at night.
Splitting the team between land and sea demands new work processes, which together with ICT is the two main focus points for IO. Tools like videoconferencing and 3D-visualization also creates an opportunity for new, more cross-discipline cooperations. For instance, a shared 3D-visualization may be tailored to each member of the group, so that the geologist gets a visualization of the geological structures while the drilling engineer focuses on visualizing the well. Here, real-time measurements from the well are important but the downhole bandwidth has previously been very restricted. Improvements in bandwidth, better measurement devices, better aggregation and visualization of this information and improved models that simulate the rock formations and wellbore currently all feed on each other. An important task where all these improvements play together is real-time production optimization.
In the process industry in general, the term is used to describe the increased cooperation, independent of location, between operators, maintenance personnel, electricians, production management as well as business management and suppliers to provide a more streamlined plant operation.
By deploying IO, the petroleum industry draws on lessons from the process industry. This can be seen in a larger focus on the whole production chain and management ideas imported from the production and process industry. A prominent idea in this regard is real-time optimization
of the whole value chain, from long term management of the oil reservoir
, through capacity allocations in pipe networks and calculations of the net present value of the produced oil.
A focus on the whole production chain is also seen in debates about how to organize people in an IO organisation, with frequent calls for breaking down the Information silo
s in the oil companies. A large oil company is typically organized in functional silo
s corresponding to disciplines such as drilling, production and reservoir management. This is regarded as inefficient by the IO movement, pointing out that the activities in any well or field by any of the silos will involve or affect all of the others.
While some companies focus on their inhouse management structure, others also emphasize the integration and coordination of outside suppliers and collaborators in offshore-operations. For instance, it is pointed out that the oil and gas industry is lagging behind other industries in terms of Operational intelligence
.
Ideas and theories that IO management and work processes build on will be familiar from operations research
, knowledge management
and continual improvement as well as information systems
and business transformation
. This is perhaps most evident in the repeated referral to "people, process and technology" in IO discussions. As bullet-points this mirror many of the aforementioned fields.
It has been estimated that deployment of IO could produce 300 billion NOK of added value to the Norwegian continental shelf alone. On a longer time-scale, working onshore control and monitoring of the oil production may become a necessity as new fields at deeper waters are based purely on unmanned sub-sea facilities.
Moving jobs onshore has also been touted as a way to keep and make better use of an aging workforce, which is regarded as a challenge by western oil and gas companies. As the average age of the industry workforce is increasing with many nearing retirement, IO is being leveraged for knowledge sharing and training of younger workforce. More comfortable onshore jobs together with "high-tech" tools has also been fronted as a way to recruit young workers into an industry that is seen as "unsexy", "lowtech" and difficult to combine with a normal family life.
As for the efficiency aspect, some criticize the onshore-offshore collaboration for creating a more bureaucratic working environment.
has traditionally branded the term Smart Fields, which was an extension of Smart Wells that only referred to remote-controlled well-valves. BP
uses Field of the future, Chevron has i-field and Schlumberger
terms it Digital Energy. The latter term, understood as referring to oil and gas, is adopted in the title of the digital energy journal. This term could have several meanings, as GE Digital Energy
for instance, do not appear to use it in the IO sense.
Other terms include e-Field, i-Field, Digital Oilfield, Intelligent Oilfield, Field of the future and Intelligent Energy. Integrated operations has been the preferred term by Statoil
, the Norwegian Oil Industry Association
(OLF), a professional body and employer's association for oil and supplier companies and vendors such as ABB. Intelligent Energy is the dominant term in publications revolving around the biannual SPE Intelligent Energy conference, which has been one of the major conferences for the IO movement, along with the annual IO Science and Practice conference which obviously supports the IO term.
Petroleum industry
The petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
, Integrated operations (IO) refers to new work processes and ways of doing oil and gas exploration and production, which has been facilitated by new information and communication technology. Multi-discipline collaboration in plant operation is one example. IO has in a sense also taken the form of a movement for renewal of the oil and gas industry.
In short IO is collaboration with production in focus.
Contents of the term
The most striking part of IO has been the use of always-on videoconference rooms between offshore platforms and land-based offices. This includes broadband connections for sharing of data and video-surveillance of the platform. This has made it possible to move some personnel onshore and use the existing human resources more efficiently. Instead of having e.g. an expert in geology on duty at every platform, the expert may be stationed on land and be available for consultation for several offshore platforms.It's also possible for a team at an office in a different time zone to be consulting the night-shift of the platform, so that no land-based workers need work at night.
Splitting the team between land and sea demands new work processes, which together with ICT is the two main focus points for IO. Tools like videoconferencing and 3D-visualization also creates an opportunity for new, more cross-discipline cooperations. For instance, a shared 3D-visualization may be tailored to each member of the group, so that the geologist gets a visualization of the geological structures while the drilling engineer focuses on visualizing the well. Here, real-time measurements from the well are important but the downhole bandwidth has previously been very restricted. Improvements in bandwidth, better measurement devices, better aggregation and visualization of this information and improved models that simulate the rock formations and wellbore currently all feed on each other. An important task where all these improvements play together is real-time production optimization.
In the process industry in general, the term is used to describe the increased cooperation, independent of location, between operators, maintenance personnel, electricians, production management as well as business management and suppliers to provide a more streamlined plant operation.
By deploying IO, the petroleum industry draws on lessons from the process industry. This can be seen in a larger focus on the whole production chain and management ideas imported from the production and process industry. A prominent idea in this regard is real-time optimization
Process optimization
Process optimization is the discipline of adjusting a process so as to optimize some specified set of parameters without violating some constraint. The most common goals are minimizing cost, maximizing throughput, and/or efficiency...
of the whole value chain, from long term management of the oil reservoir
Oil reservoir
A petroleum reservoir, or oil and gas reservoir, is a subsurface pool of hydrocarbons contained in porous or fractured rock formations. The naturally occurring hydrocarbons, such as crude oil or natural gas, are trapped by overlying rock formations with lower permeability...
, through capacity allocations in pipe networks and calculations of the net present value of the produced oil.
A focus on the whole production chain is also seen in debates about how to organize people in an IO organisation, with frequent calls for breaking down the Information silo
Information silo
An information silo is a management system incapable of reciprocal operation with other, related management systems. A bank's management system, for example, is considered a silo if it cannot exchange information with other related systems within its own organization, or with the management systems...
s in the oil companies. A large oil company is typically organized in functional silo
Functional silo
A functional silo exists when the business processes of a functional unit within the division of labor of an organization focus inwardly on their functional objectives...
s corresponding to disciplines such as drilling, production and reservoir management. This is regarded as inefficient by the IO movement, pointing out that the activities in any well or field by any of the silos will involve or affect all of the others.
While some companies focus on their inhouse management structure, others also emphasize the integration and coordination of outside suppliers and collaborators in offshore-operations. For instance, it is pointed out that the oil and gas industry is lagging behind other industries in terms of Operational intelligence
Operational Intelligence
Operational intelligence is a form of real-time dynamic, business analytics that delivers visibility and insight into business operations. Operational intelligence solutions run query analysis against live feeds and event data to deliver real-time, actionable information...
.
Ideas and theories that IO management and work processes build on will be familiar from operations research
Operations research
Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...
, knowledge management
Knowledge management
Knowledge management comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences...
and continual improvement as well as information systems
Information systems
Information Systems is an academic/professional discipline bridging the business field and the well-defined computer science field that is evolving toward a new scientific area of study...
and business transformation
Business transformation
Business transformation is the fundamental change to the way a business operates, whether that be moving into a new market or operating in a new way It is an approach that attempts to align an organisation's activities relating to people, process and technology more closely with its business...
. This is perhaps most evident in the repeated referral to "people, process and technology" in IO discussions. As bullet-points this mirror many of the aforementioned fields.
Incentives
Common to most companies is that IO leads to cost savings as fewer people are stationed offshore and an increased efficiency. Lower costs, more efficient reservoir management and fewer mistakes during well drilling will in turn raise profits and make more oil fields economically viable. IO comes at a time when the oil industry is faced with more "brown fields", also referred to as "tail production", where the cost of extracting the oil will be higher than its market value, unless major improvements in technology and work processes are made.It has been estimated that deployment of IO could produce 300 billion NOK of added value to the Norwegian continental shelf alone. On a longer time-scale, working onshore control and monitoring of the oil production may become a necessity as new fields at deeper waters are based purely on unmanned sub-sea facilities.
Moving jobs onshore has also been touted as a way to keep and make better use of an aging workforce, which is regarded as a challenge by western oil and gas companies. As the average age of the industry workforce is increasing with many nearing retirement, IO is being leveraged for knowledge sharing and training of younger workforce. More comfortable onshore jobs together with "high-tech" tools has also been fronted as a way to recruit young workers into an industry that is seen as "unsexy", "lowtech" and difficult to combine with a normal family life.
Critique
The security aspect of reducing the offshore workforce has been raised. Will on-site experience be lost and can familiarity with the platform and its processes be attained from an onshore office? The new working environment in any case demands changes to HSE routines. Some of the challenges also include clear role and responsibility definitions and clarifications between the onshore & offshore personnel. Who in a given situation has the authority to take decisions, the onsite or the offshore staff. The increased integration of the offshore facilities with the onshore office environment and outside collaborators also expose work-critical ICT-infrastructure to the internet and the hazards of everyday ICT.As for the efficiency aspect, some criticize the onshore-offshore collaboration for creating a more bureaucratic working environment.
Naming conventions
Both the exact terms and the content used to describe IO vary between companies. The oil company ShellRoyal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
has traditionally branded the term Smart Fields, which was an extension of Smart Wells that only referred to remote-controlled well-valves. BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
uses Field of the future, Chevron has i-field and Schlumberger
Schlumberger
Schlumberger Limited is the world's largest oilfield services company. Schlumberger employs over 110,000 people of more than 140 nationalities working in approximately 80 countries...
terms it Digital Energy. The latter term, understood as referring to oil and gas, is adopted in the title of the digital energy journal. This term could have several meanings, as GE Digital Energy
GE Enterprise Solutions
-History:On 1 August 2007 GE announced the formation of GE Enterprise Solutions, consisting of the various GE Industrial businesses other than GE Consumer & Industrial, as well as GE Power Quality. The company says the new unit will help its "global customers increase their productivity through...
for instance, do not appear to use it in the IO sense.
Other terms include e-Field, i-Field, Digital Oilfield, Intelligent Oilfield, Field of the future and Intelligent Energy. Integrated operations has been the preferred term by Statoil
Statoil
Statoil ASA is a Norwegian petroleum company established in 1972. It merged with Norsk Hydro in 2007 and was known as StatoilHydro until 2009, when the name was changed back to Statoil ASA. The brand Statoil was retained as a chain of fuel stations owned by StatoilHydro...
, the Norwegian Oil Industry Association
Norwegian Oil Industry Association
The Norwegian Oil Industry Association is an employers' organisation in Norway, organized under the national Confederation of Norwegian Enterprise.The current director-general is Gro Brækken. Chairman of the board is Steinar Våge....
(OLF), a professional body and employer's association for oil and supplier companies and vendors such as ABB. Intelligent Energy is the dominant term in publications revolving around the biannual SPE Intelligent Energy conference, which has been one of the major conferences for the IO movement, along with the annual IO Science and Practice conference which obviously supports the IO term.
See also
- Integrated Operations in the High NorthIntegrated Operations in the High NorthIntegrated Operations in the High North is a unique collaboration project that during a four year period starting May 2008 is working on designing, implementing and testing a Digital Platform for what in the Upstream Oil and Gas Industry is called the next or second generation of Integrated...
, a collaboration project working on the next or second generation of Integrated OperationsIntegrated operationsIn the Petroleum industry, Integrated operations refers to new work processes and ways of doing oil and gas exploration and production, which has been facilitated by new information and communication technology. Multi-discipline collaboration in plant operation is one example...
. - ISO 15926ISO 15926The ISO 15926 is titled: "Industrial automation systems and integration—Integration of life-cycle data for process plants including oil and gas production facilities" is a standard for data integration, sharing, exchange, and hand-over between computer systems.This title is regarded too...
, an enabler for the next or second generation of Integrated OperationsIntegrated operationsIn the Petroleum industry, Integrated operations refers to new work processes and ways of doing oil and gas exploration and production, which has been facilitated by new information and communication technology. Multi-discipline collaboration in plant operation is one example...
by integrating data across disciplines and business domains.
External links
- Integrated Operations on the StatoilHydroStatoilHydroStatoil ASA, trading as Statoil and formerly known as StatoilHydro, is a Norwegian energy company, formed by the 2007 merger of Statoil with the oil and gas division of Norsk Hydro. The Government of Norway is the largest shareholder in Statoil with 67% of the shares...
corporate website. - Integrated Operations Center for Integrated Operations in the Petroleum Industry