Digital gains Middle Eastern ground

As easy oil depletes all over the world, Middle Eastern producers are turning to digital oilfield technology to not only enhance recovery but make finds economical to produce. Heather Saucier investigates the region’s technological gains.

Visualization of a digital oilfield developed by Petrolink. Photos from Petrolink.

As luck would have it, many countries in the Middle East have enjoyed simple oil far longer than other areas of the world – making the need for high-tech digital oilfields (DOFs) more of a luxury than a necessity. But, many fields that have abundantly produced for decades have reached their peaks. This has prompted Middle Eastern countries to adopt DOF technology not only to enhance onshore oil recovery, but to economically produce from new offshore areas.

In fact, Middle Eastern countries are diving into DOF technology – so much so that the Middle East is expected to be the fastest growing market in DOF technology for at least the next six years, according to RnR Market Research, which provides reports from leading global publishers and in-depth market research studies.

The coming years could see one of the most prolific times of hydrocarbon production offshore for the Middle East, according to reports from the Middle East Economic Digest (MEED). “Deep sea production offers more challenges and is more difficult to execute,” MEED reports. “But there will be no shortage of companies wanting to be involved.”

When many Middle Eastern countries have drilled wells, oil has often flowed from the ground as water down a river. As such, some in the industry say they have not been pushed to develop new technology for sustaining or boosting production.

While the Middle East as a whole might be late to the DOF technology party, some Middle Eastern countries that are currently operating high-tech DOFs are leading the industry when it comes to data management, says David Johnson, vice president of Research and Innovation of Petrolink Services, Inc., a global leader in oilfield operations data management and delivery.

Rather than relying on proprietary solutions, some Middle Eastern oil companies are sharing data among all companies that work on their wells. As a result, they are breaking down silos and becoming a fast prototype for optimizing information management in a DOF world, Johnson says.

DOF boom

Petrolink’s team in Saudi Arabia giving a geosteering demonstration in its Saudia Arabia-based RTOC (real-time operations center).

As oilfield operations become increasingly complex, especially in offshore areas, investments in DOF technology continue to grow. In terms of revenue, the DOF global market is expected to reach US$33 billion by 2022 – its compound annual growth rate (CAGR) increasing by 4.8%, according to RnR. While Western Europe and North America continue to dominate the market, the Middle East is expected to outpace all five world markets with a CAGR of 5.9%.

“It may be the world’s richest hydrocarbon habitat, but as the development of new fields and maintaining or expanding output levels at existing ones is becoming more complex, the region’s national oil companies (NOCs) have begun adopting the DOF concept…,” wrote James McCallum, the CEO of LR Senergy, a Houston-based energy services company, in a November 2015 op-ed piece in the Arab News. “From Abu Dhabi to Kuwait, from Oman to Saudi Arabia, regional NOCs have started to embrace the concept and are now actively engaged in implementing numerous DOF projects.”

Major fields, such as Saudi Arabia’s Ghawar oilfield, are on the decline, forcing countries to adopt DOF technologies that maximize oil recovery in onshore reservoirs, as well as facilitate higher productivity, lower costs, and reduced exposure to health, safety and environmental risks in offshore locations.

“While many Middle Eastern countries have offshore acreage that has been in production in the Persian Gulf, more offshore operations are to be expected,” says Julian Pickering, CEO of Geologix Systems Integration Ltd., based in the United Kingdom.

While Saudi Arabia has been the largest offshore oil producer in the Gulf, Iran, Qatar and the United Arab Emirates (UAE) are the major offshore producers of gas. However, because many of the Gulf’s hydrocarbons have already been discovered or are currently being exploited, oil companies will be casting their eyes on the undeveloped reserves in non-associated gas fields in the Gulf and on untapped oil and gas reserves in the Mediterranean and Red seas, according to MEED.

Technology needed

To do this, countries will have to invest in strong DOF communication infrastructure so that offshore platforms can communicate with the onshore environments, Pickering says.

Such technology might include fiber optic cables or maritime wireless networking, which is replacing conventional satellite communications with higher bandwidth and high-speed communications. Wireless communications can facilitate remote monitoring and control during production, and allow for troubleshooting at earlier stages while maintaining a consistent flow of product.

What’s more, building DOFs from scratch today has its advantages.

“Because of their later entrance into the advanced technology market, most Middle Eastern companies are committing to good technology and making sure they have solid plans and operations procedures,” Pickering says. “They are learning from other areas that have been more exploratory. They are building real-time operating centers and centralizing operations and providing areas where subsurface teams can work with drilling teams and so on.”

DOFs are highly instrumental in offshore reservoirs, as they allow control of a well from remote locations. Through instrumentation and automation as well as IT services, they are commonly known to improve reservoir, production and drilling optimization, safety management and the ability to maintain and repair equipment.

Furthermore, DOFs enhance collaboration, support decision-making, integrate big data and automate workflows – both horizontally in operations and engineering, and vertically within the company, inclusive of as many disciplines as possible.

DOFs also are seen as lifesavers as the industry loses thousands of experienced workers to attrition, Pickering says. They require fewer workers to be stationed on platforms, enabling them to transition to onshore control centers and manage operations in smaller teams.

“Digital oilfields have got a big role to play in the current climate in oil and gas,” Pickering says. “More than 250,000 people from the industry retired in 2015. That’s a heavy loss of expertise. In addition, a lot of equipment has been decommissioned and it will not be easily available in the future. Digital oilfields are about making people work more efficiently and smarter.”

Setting precedents

The Middle East may not be as “cutting edge” as the rest of the world when it comes to DOF technology, but it is at the forefront of operating DOFs with open standards for data transfer and communication, Johnson says.

“In developing digital oilfields in North America, we started with developing the best technology and we came up with amazing software, like 3D seismic, geosteering and real-time monitoring,” he says. “In the Middle East, they are starting with data management and integrating their teams, which is essential to boosting output. Silos still exist in North America, but they are coming down in the Middle East.”

Tired of “translating” the data it received from a multitude of service companies into one consistent format, Saudi Arabia adopted WITSML (Wellsite Information Transfer Standard Markup Language), an industry initiative based on XML (Extensible Markup Language) technology to provide open, non-proprietary standard interfaces for technology and software that monitor and manage wells, completions and workovers, says Jay Hollingsworth, chief technology officer for Energistics, a nonprofit membership organization that manages WITSML.

The first to adopt this practice, Saudi Arabia’s leadership has encouraged other countries, such as Kuwait and the UAE, to consider doing the same, Hollingsworth says.

“The Middle East has a unique view of the world in which everybody working for them is a part of their service provider infrastructure,” Johnson explains. “Countries are beginning to manage their data infrastructure in a way that makes it completely open to all parties working on those countries’ wells. But the information is secure and the technology works for everybody. It provides a neutral and natural way for competitors to do what they were hired to do without having to worry about their competitors.”

Prolific in oil with access to world-class DOF technology, the Middle East will continue to be a frontrunner in oil production, speculates Johnson, and a trendsetter of data management in this world of big data that continues to grow.