Upstream development in a digital world

Over the last four years, oil and gas companies’ unprecedented focus on CAPEX and OPEX has enabled them to reduce their portfolio breakeven costs by 20 percent and the average time to first oil by 25 percent. This is a good start – but it is only just that. An additional 15 percent savings and 20 percent cycle times compression is theirs for the taking if they use digital technologies more strategically and holistically to underpin their development programs.ⁱ Specifically, oil and gas companies can use digital solutions to connect, consolidate, accelerate and automate activities and decisions across the asset development lifecycle.

Connect & consolidate

Upstream activities can be carried out more efficiently when functional teams involved in finding and producing crude oil and natural gas work together from a standard playbook. Two digital solutions can help oil and gas companies streamline and integrate their upstream operations:

• A Digital Twin is a digital representation of a physical asset. In the construction phase, the asset’s Digital Twin makes it possible for the yard supervisor to not only coordinate work orders more safely and efficiently, but also maximize technicians’ productivity with an overlay of augmented reality features, such as hidden mechanical and electrical components.
• A Single Engineering Platform reduces engineering costs by enhancing collaboration and reducing feedback cycle times. Engineering and software companies are joining forces to build integrated, 3D-centric and cloud-based platforms to enable ecosystem partners to work smarter and faster.

Accelerate

Fifty-seven percent of upstream oil and gas companies strongly agree that they need to innovate more quickly just to keep a competitive edge.ⁱⁱ Faster decision-making leads to faster action. Similarly, faster processes allow the company and its systems to react quickly to changes, and scale production up or down, as needed. Two digital solutions enable this agility:

• A Digital Thread extends the Digital Twin concept to encompass all data flows across the infrastructure’s lifecycle. In the design phase, the Digital Thread allows engineers to re-use project design packages, simulate new approaches, and accelerate or even automate certain design processes. In the commissioning phase, Digital Threads can be used to test processes and controls, safety logic and operating procedures.ⁱⁱⁱ
• Data Analytics and Artificial Intelligence (AI) underpin new models that deliver faster, more accurate results and identify opportunities for profitability or risk avoidance.^iv For example, efforts to optimize Rate of Penetration (ROP) and in-zone drilling have traditionally involved adjusting the downward force exerted on a drill bit and rotary speed. With predictive analytics and AI, they can now take other factors (e.g., formation properties, borehole deviation and size/type of bit, etc.) into consideration. By doing so, they significantly reduce drilling on bottom activities and enhance the value of historical data locked in legacy systems.^v

Automate

Automating processes enables oil and gas companies to reduce the variability, cost and resource intensity of their operations, while improving safety. Two types of automation can help companies further streamline their upstream operations:

• Remote Application Programming Interface (API) platforms integrate drilling automation systems. They allow different IT and operational technology (OT) systems to work together, regardless of language or platform.^vi These remote platforms enable autonomous or remote drilling, which significantly reduces flat phases and the need for offshore staff. They also create full transparency of operations, allowing a shift from day-rate to performance-based contracts.
• In the design and engineering phase, Robotic Process Automation (RPA) can help engineering, procurement and construction teams manage the massive quantity of manual and error-prone data, tasks and approvals that flow from one project area or system to another.^vii By automating specific steps, and by leveraging Digital Twin technologies and predictive analytics, companies can substantially reduce total man-hours and free professionals to focus on more strategic tasks.^viii

While some operators have begun to apply some of these digital advances and are seeing tangible results, the application is mostly isolated and limited to pilots. Realized value will accelerate and multiply when oil and gas companies embrace these and other solutions across the exploration and production arena.

To unlock this digital potential, companies need a visionary yet pragmatic approach. First, they need to re-imagine their upstream capabilities and develop a clear vision for how applied intelligence, asset automation, digital workforces, smart ecosystems and customized standardization will change their operations. With this re-imagined upstream vision, they can create a digital initiative engine that captures new value and ensures their competitiveness for years to come.

¹ Accenture Strategy Global Data, 2018

² Accenture 2017 Tech Vision Research.

³ Accenture, “The Digital Thread Imperative,” 2017.

⁴ Accenture Strategy, “A New Way Forward for Oilfield Services,” 2017.

⁵ B. Mantha and R. Samuel, “ROP Optimization Using Artificial Intelligence Techniques with Statistical Regression Coupling,” Society of Petroleum Engineers Annual Technical Conference, 2016.

⁶ Jennifer Pallanich, “Doubling Down on Digital,” Upstream Technology, June 26, 2017.

⁷ David Steuer (Accenture), “Seven questions to ask before making the jump to robotic process automation,” July 27, 2017.

⁸ GE, “The World’s First Digital Rig: Digitizing Operational Excellence”.