It is well known fact that the oil and gas industry forms a major part of the world’s economy. It is considered as a world powerhouse in terms of revenue and employment generation. Oil and gas companies contribute a significant amount towards national GDP.
The oil and gas industry is a complicated one given the complexities of operation, nature of the work and various factors that affect it. Let us understand the basics of this complex industry-
The oil and gas industry can be divided in to 3 important areas
- Upstream– Basically known as exploration and production. It involves exploration of gas and oil underwater/underground and also includes drilling of the wells to recover oil and gas.
- Midstream– This component involves transportation, storage and the processing of the oil and gas recovered during the upstream process.
- Downstream– Under this component the raw materials that are explored during the upstream phase are refined and filtered. In simper terms the crude oil and natural gas are refined and purified during this process.
In this article we will take a deeper look at the entire process of well delivery which is a part of the upstream component.
Well Delivery
The well delivery process consists of the following components-
Project definition– This phase involves a feasibility study and a delivery plan to define the project. At this stage objectives are formulated, opportunities are identified and risks are identified.
Pre-engineering– Once the objectives are defined and potential risks and opportunities are studied, the next step is to define options and plans to achieve the objectives. Details of the designing are formulated for approval at this stage. After design approval main selection is done which includes- Rig selection, service selection, materials finalization, and site layout.
Detailed engineering– Once the pre-engineering process is completed, detailed engineering comes into the picture. At this stage a detailed design for a well is made, cost estimates and material bills are looked into. Once this goes through additional specification are finalized which include-
- Well design
- Geology
- Drilling design
- Risk assessment
- Specifications of mud and so on.
Work preparation– Work preparation (operations engineering) includes step by step drilling program, materials, and cost estimates to be approved, etc.
Project execution– The last step is the execution of the project after all the approvals. At this stage the actual drilling work starts and activities are supervised in accordance with the detailed drilling program decided.
Benefits of analytics in the well delivery process (Upstream)-
Use of big data and analytics is no longer a surprise for many industries. However, in case of oil and gas industry which produces huge volumes of data the use of analytics is still at its development stage.
Given the number of wells delivered by oil and gas companies, data analytics can play a vital role. Following areas can benefit enormously from analytics-
- Geological interpretation– geological interpretation is the very basis of well delivery. With the help of analytics data can be collected and analyzed which can help producers to characterize shale basins in detail with more accuracy. And hence, give a competitive edge.
- New well delivery– Analytics have the capability to change the way producers manage the process of drilling and connecting a well for delivery. It can help in reducing the lag time to a great extent. The performance of a new well can be optimized by transmitting micro seismic, 3Dimaging over fiber-optic cables.
- Optimization– With the help of analytics the huge amounts of data related to geology, operation, and performance can be collected and studied in depth. This can help in optimizing drilling parameters, completion techniques and well spacing.
In order to keep pace with the growing technological advancements and reap benefits of the same, oil and gas companies need to engage more and more analytics in all of their streams (upstream, midstream, and downstream). The industry has huge scope of improvement and this can be achieved only through analytical approach.
Given the complexities of operation pertaining to the industry making the correct use of analytics can help in revitalizing the industry and giving them a competitive edge. To conclude, oil and gas companies should answer the following three important questions which will form the basis for developing a successful analytics strategy-
- Big data applications that will give most value to our organization?
- Organizational model to achieve the desired value for the company?
- The talent and resources required making the most of analytics strategy?
