Smarter Oil and Gas Asset Management

The world has more than 65,000 known Oil and Gas fields spanning tens of millions of square miles. The now famous Bakken Shale covers greater than 200,000 square miles spanning Late Devonian to the Early Mississippian reservoir underlying Montana, North Dakota, and Saskatchewan. Exploration in the Gulf of Mexico may reach all 617,000 square miles of available exploration area. All of us who have been in pickup trucks, crew boats, or helicopters early mornings and late nights have felt small out there. By comparison to the Bakken, the total area of New York City is 469 square miles.   To access the world’s energy, the Plant, Property, and Equipment (PPE) for the seven largest Oil and Gas operators exceeded $795 billion USD in 2010. To provide services, the PPE for just the three largest Service Companies was $186 billion USD in the same year. The equipment, infrastructure, supply chain, and people to make this happen quite literally cover the globe.

I believe that the real location of each of these pieces of equipment will be known precisely and instantly accessible on the internet. This innovation will result in a meaningfully different world. The technologies that make this possible (cloud computing, global GPS, widespread open standards and the low cost miniaturization of hardware components) are maturing today and will be expected tomorrow.   I have enjoyed the challenge and opportunity to spend 15 years as a team leader and engineer on the operational front lines of this industry. That time has been spent both downstream with Hunt Refining Company and then upstream with Schlumberger on land, offshore and in the Arctic. Looking back, without question, having real knowledge of the location of equipment and materials “out there” in the field would have been meaningful to me every day. I am also certain it would have improved my quality of life and made the job less hectic and more enjoyable.   If you have been in the field, examples come to mind right away. There are many times that you wished you knew where something was or when it was going to get there. For four cold and dark winters, I performed downhole well work for an Operator on the North Slope of Alaska. To perform the work safely at these temperatures, it was necessary to have an outdoor heater on location every day. There are plenty of heaters in the field. But the field is 558 square miles with a lot of people looking for heaters in the middle of the night, often moving them without calling in. Even with the best pen and paper dispatch organization, the Operator could not keep track of this equipment. As a result, there were many days where my crew was unable to do work. In strict accordance with our contractual agreement, over those four years, I billed this Operator hundreds of thousands of dollars for my non-productive time.

There are thousands of examples like this. This waste is so common that it is considered the status quo wrapped around everyday life in the oilfield. However, this will not stand over the long term. Solving problems like these is within the reach of technology and engineering.   GPS location data and cloud-based software will change this by providing increasingly important control. In the last five years, these technologies have emerged from pilot projects to proven technology with proven benefits. GPS equipment tracking has cut cost throughout the supply chain in the transportation industry. Companies such as Salesforce, Google, and the DoD have demonstrated that cloud-hosted software can meet the security standards for enterprise. It is inevitable that these tools will be applied to Oil and Gas operations.