#11 digital energy journal - february 2008

8/9/2019 #11 Digital Energy Journal - February 2008

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February / March 2008 Issue 11

Associate Member

RunningDISKOS,Norway's datarepository

Media supporter

How Odfjell

Drillingmonitorsplatformsfrom shore

Modellingflow in longpipelines


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PHODOC

INTEGRATED OPERATIONS VISUALISATION

PhoDoc is an integral Integrated Operations solution that allows

offshore and onshore teams to collaborate, plan operations, visualise

projects and transfer knowledge.

www.phodoc.com

Using existing datasourcesto interac t and visualise

Collab orate ac ross compa nies,data systems and disc iplines


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Contents

How to make good decisionsPalantir Solutions hosted a seminar in Aberdeen about how to make decisions and use

decision analysis tools.By Dr.Bart J.A.Willigers,senior consultant,Palantir Solutions

Roxars structural modelRoxar has made big improvements to its structural modelling software,which oil and gas

companies can use to work out the outline structure of the subsurface

February / March 2008 Issue 11

February / March 2008 - digital energyjournal

Demand growth for offshore satcomThe amount of data transferred to and from offshore platforms is doubling every year -

and the costs are gett ing cheaper,says telecommunications firm Broadpoint

iPass - no hassle internet access while travelling

More and more oil and gas companies are using iPass,a service which enables you toget on the internet when travelling,without worrying about the hotel bill

Digital Energy JournalPublished by Digital Energy Journal Ltd213 Marsh Wall, London,E14 9FJ,UKwww.digitalenergyjournal.comOr www.d-e-j.com

Tel +44 (0)207 510 4935Fax +44 (0)207 510 2344

EditorKarl [email protected]

Technical editorKeith [email protected]

Consultant writersTracey Dancy,Paras Consult ingDimitris Lyras,Lyras Shipping

SubscriptionsKarl [email protected]

Advertising salesAlec EganTel +44 (0)207 510 [email protected]

David JeffriesTel +44 (0) 208 674 [email protected]

Digital Energy Journal is a magazine for

people in the upstream oil and gas indus-

try,t o help you keep up t o date with the

latest industry IT and communications

technology,services,opinion, practise and

learning.

Each print issue of Digital Energy Journal

print magazine is mailed to at least 2,000

oil and gas executives,with a further 500-

1000 copies distributed at trade shows,as

well as being downloaded approx 2,000

times as pdf.

Subscriptions: 195 a year for 6 issues. To

subscribe, please contact Karl Jeffery on

[email protected]. Alternat ively you cansubscribe online at www.d-e-j.com

Printed in the UK by THE MAGAZINE PRINTING COMPANY

www.magprint.co.uk

Communications

Reducing supplier enablement costsHow do you reduce your number of suppliers without impacting

the quality of your purchasing?By Chris Welsh of Eiro Consulting

Peak moves to MicrosoftPeak Oilf ield Services has moved to Microsoft accounting software.We asked Renate

Hill,vice president of finance with Peak Oilfield Services why she made the decision

Modelling 600km pipelinesStatoilHydro,ExxonMobil,Chevron,ENI and Shell have invested NOK 63m (USD 11.5m) into a

new computer system to model flow through long pipelines in three dimensions

SensorTran makes fibre optic easierUS company SensorTran has a mission - to make fibre opt ic

temperature sensing systems easier to install and use in oil wells.

SchemaLogic - making a plan for your dataUse this software to put together a company wide document plan and enable people

to change it if i t doesn't do what they want

Landmark to operate DISKOS databaseLandmark has won the cont ract to manage DISKOS,a database of

Norwegian petroleum data, from 2009 to 2014

Odfjell - new integrated operations softwareOdfjell Drilling Technology has released a new version of its PhoDocsoftware,which

enables companies working on offshore platforms to collaborate

Intelligent Energy Exhibition previewThe Intelligent Energy Conference and exhibit ion, to be held in Amsterdam on Feb 25 -

27,promises to be one of the most exciting events ever held about IT in oil and gas

Exploration and drilling

Oil and gas production

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5/40February/March 2008- digital energyjournal


3

Oil and gas services company Halliburtons

product service line, Landmark, has won a

highly coveted contract to run Diskos, Nor-

ways database of upstream E&P data, from

2009 to 2014.

Currently (for the period 2004 through

2008), Landmark has the contract to provide

the software for DISKOS, whereas Schlum-

berger has the contract to operate the serv-

ice; so Schlumberger is operating a service

which runs Landmark software.

But from 2009, Landmark will operatethe system as well, while continuing to be

DISKOS software provider.

DISKOS was established in 1992 by

the Norwegian Petroleum Directorate (a

government agency under Norways Min-

istry of Petroleum and Energy), working to-

gether with oil companies Norsk Hydro,

Saga Petroleum, Mobil and Statoil, as a cen-

tral location to store and manage seismic,

well and production data for the Norwegian

continental shelf. At the point of tendering

in 2006, Diskos had 17 members.The companies decided at the time that

they could reduce their data management

costs and improve data access by having a

centrally managed system.

The data is not shared between the

member companies unless they are legally

obligated to share it or choose to do so; oth-

erwise, they can keep their data private and

control who can access it, even though it is

maybe on the same hard drive as their com-

petitors data.

Norway has certain rules in place about

making seismic data public after a certain

period of time, e.g. 3 years after it has been

created. If the data is already on DISKOS,it is a simple matter to make it public.

This is a different system to (for exam-

ple) in the United Kingdom, where compa-

nies are obligated to release seismic data af-

ter five years, but in order to obtain it, you

need to write to the oil company that created

it, and they have to spend time and money

extracting it from their systems for you.

Oil and gas companies are not legally

required to join DISKOS to meet their Nor-

wegian regulatory reporting requirements,

but the government creates a very strong in-centive to participate, says David Holmes,

regional practice manager, information man-

agement, at Landmark.

At the point of tendering in 2006,

Diskos had 17 members in total.

The stakeholders in the Norwegian

market see real benefits from DISKOS be-

ing in place, Mr Holmes says.

The government can look at the

DISKOS consortium and say, we are satis-

fied that one of the most important assets of

this county our petroleum data is in an

environment which is secure, controlled andprotected.

Interestingly, many companies addi-

tionally use DISKOS as their principal

archive for master data, rather than keeping

it on their own systems.

If you have all of your seismic data

loaded into DISKOS, what motivation

would you have to manage another copy

yourself? Mr Holmes says.

About DISKOS

Doug Meikle, regional vice president, Hal-liburton, has described DISKOS as the

most significant and largest of the multi-

client databanks in the world and the model

for other national repositories.

DISKOS includes the final processed

seismic data, well log data and monthly pro-

duction data.

Currently there is around 100 terabytes

of data on-line in the system.

Companies pay for the service by an

annual fee plus a fee per transaction (submit-

ting or downloading data).

Data can be submitted either electroni-

cally, or posted on a tape and loaded in. It

can be accessed online.

Benefits to governments

Landmark believes that many more govern-

ments around the world would benefit from

having a system like DISKOS.

First of all, it saves them a big headache

of doing it themselves. They have an obli-

gation to ensure that all of their nations rel-

evant hydrocarbon related data is protected

in perpetuity. says Mr Holmes.

Meanwhile, if people are considering

making oil and gas investments in the region,their confidence in the data will surely be

improved, knowing that Landmark, a recog-

nized oil and gas software leader, is perform-

ing quality control checks and managing the

data.

The fact that we are involved adds a

lot of credibility to the data, he says.

Many of the people perusing the data

will be other oil and gas companies consid-

ering whether to make investments in the re-

gion, and having data with a higher confi-

dence attached to it will improve the invest-

ment proposition.New entrants can easily see all the

available well, seismic and production data.

It gets very easy for new entrants to en-

ter the market.

Governments want to be able to pro-

mote inward investment into their regions,

he says.

Countries around the world are realis-

ing that having a national data repository

is not so much a status symbol, but a criteria

in being able to attract investment.

Mr Holmes notes that the number of oiland gas exploration companies in Norway

has grown dramatically to over 70 in the past

18 months, and part of this growth might be

attributed to the high quality data which is

Landmark to operate DISKOS DatabaseLandmark has won the contract to manage DISKOS, a database of Norwegian petroleum data, from 2009 to

2014. Many of the companies operating on the Norwegian continental shelf use it to manage their data

The government can say,we are satisfied

that one of the most important assets of thiscounty our petroleum data is in anenvironment which is secure,controlled andprotected. David Holmes,regional practisemanager- information management,Landmark


6/40digital energyjournal - February/March 2008


available to potential investors.

Landmark is already selling the tech-

nology to China, Nigeria, Kazakhstan and

Brazil amongst others, and will be very ac-

tive at the annual National Data Repositories

conference, held in Feb 19 to 21 2008 in

Capetown.

A similar PetroBank MDS system has

been implemented by Crown Minerals in

New Zealand. They are very pleased with

the results of that system how that has

made it very easy for companies to evaluate

the data, he says.

If you talk to any country around the

world thats interested or investigating where

they should go in their data management

strategy, they can take a trip to Norway and

talk to Diskos, Landmark and Schlumberg-

er.

Countries which keep their production

data as a state secret could still benefit fromusing PetroBank MDS, because they have to

ensure their data is well managed, whether

or not it is distributed or not, he says.

DISKOS software and service

For DISKOS, Landmark provides its

PetroBank MDS software, a tool specifi-

cally designed for master data storage, which

is used both by governments and oil and gas

companies.

PetroBank MDS has an open API (Ap-

plication Programming Interface) allowing

access both from Landmarks front-end tool

(either a light weight web based front end

powered by Autonomy search or through a

more sophisticated Java based data manage-

ment interface) and also from other vendors

applications. Using these tools, users can

search, select and download data.

Around 10 Landmark staff will work

full time on DISKOS, doing quality control

checks on the data and feeding it into the

system.

Data quality is one of the most impor-

tant issues, Mr Holmes says. You dont

want to end up with a national data reposito-

ry where no-one trusts the data thats in it.

When data is loaded to PetroBank

MDS it is carefully quality controlled, so weknow that once its gone in, its good. When

people log into the DISKOS database they

know that they can trust the data thats in it.

Quality control cannot turn a bad lot of

data into good data, but it can recognise how

good a data set is and, if necessary, reject it.

For example with seismic data, if

theres a fault with the processing and the re-

sulting trace data is compromised we cant

fix that but what we can do is assure our-

selves that the data is formatted correctly

the trace lengths are all correct, he says.

We can check the data is conformant to the

relevant standards.

Data which is obviously incorrect can

be rejected. There are certain times when

data is submitted to us with obvious prob-

lems in it, eg amplitude problems. As part of

the Quality Control process we take a times-

lice of the data, and we would certainly go

back and say, this doesnt look quite right,

he says.

Including Prestack stack

Landmark is now expanding the scope of the

system to include prestack and field data,

which is massively increasing the size of the

database.

For every gigabyte of post stack data,theres 50 of pre stack and 80-100 GB of

field data, Mr Holmes says.

Right now field data and pre stack

data is typically in tapes in a warehouse.

Every 3-4 years the tapes start to degrade,

they are pulled out, remastered onto new

tapes.

DISKOS will manage this process, and

make sure the data will be maintained in per-

petuity. .

Computer systems are being developed

in oil and gas which can work directly onprestack data, and there is a benefit to this,

because (like HD TV) the higher resolution

data can help geoscientists make better qual-

ity decisions.

If an interpreter is working on post

stack data they can immediately pull out

the prestack data, he says.

The next generation of the system will

have more sophisticated contextual search

functionality. We can do searches for exam-

ple where the user types in 27-4 and the sys-

tem knows its a well ID and not my birth-

day, he says.Landmark is making it easier for com-

panies to integrate DISKOS data into their

own corporate systems. People can do

searches across multiple data stores, he

says.

PetroBank MDS has also been moved

onto a Linux platform, which makes it pos-

sible to run on a much smaller scale, he says.

Weve already had sales of the solu-

tion to smaller oil and gas companies, who

will use it to manage their own seismic da-

ta, he said.So you can purchase PetroBank MDS

either as a piece of software, or a fully man-

aged Landmark service.

Above - the 1.2 petabyte tape robotic libraryBelow - the DISKOScomputer room


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Integrated operations software

Odfjell - new integrated operations softwareOdfjell Drilling Technology has released a new version of its PhoDoc software, which enables thedifferent companies working on offshore platforms to collaborate and see what they are doing

www.phodoc.com

Odfjell Drilling Technology has released a

new version of its PhoDoc software which

enables the different parties involved in

drilling rigs to collaborate and visualize the

rig environment.

The software can take dynamic data

from rig operators, drilling contractors, and

other service providers, to create a visualisa-

tion of the offshore platform.It can take data out of many different

sources, including document databases and

process management systems.

It has a detailed picture of the platform

itself, taking data from the General Arrange-

ment diagrams.

You could see the solution perhaps as a

platform, gathering data from different da-

ta sources and making it available for peo-

ple to use, to make decisions, plans and put

together documents.

Our solution is a window into variousdata sources which are interpreted with our

visualisations, says Erick Larson, section

manager, Integrated Operations with Odfjell

Drilling Technology.

The service has been set up by Odfjell

Drilling Technology Interactive Services De-

partment, which has a team of 15 people.

The product started life more than 5

years ago as an archive system for photo-

graphic documentation for Odfjells own rigs

and has grown from there. This is where the

name PhoDoc comes from (Photographic

Documentation).

The product was made available com-

mercially in 2006. StatoilHydro and Cono-coPhillips have chosen to visualize some of

their rigs with the product.

Odfjell Drilling, the parent company,

owns or operates three semi submersible

drilling rigs in the North Sea, and also sup-

plies personnel for 18 fixed and floating pro-

duction platforms for StatoilHydro, Conoco-

Phillips and Talisman.

Version 3.0The latest release, version 3.0 has a greater

focus on interaction between users and thedata then previous versions, says Mr Larson.

There have also been improvements in

the data security.

The development of our new version

was in part done to make our database more

robust and secure, he says.

We have included a number of tech-

nical and procedural measures to secure the

system.

ApplicationsSome functions that are possible with the

system are accessing equipment specifica-

tions, accessing safety information, work

permit tracking or equipment tracking withmaintenance system integration, and access-

ing procedures or process descriptions. The

functions are tailor-made to clients needs

and available data sources.

Onshore staff can use it and as a quick

reference tool, or to visually plan activities

offshore.

Using the system, Odfjell has improved

planning and co-ordination; it has also im-

proved communication between on and off-

shore operations. Both of these can help re-

duce the need for unplanned offshore travel.

Future developmentsIn the future, the visualizations can be fur-

ther developed to include real time 3D im-

Odfjells PhoDoc software -from shore,you can monitor what is happening on the platforms


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technology, and then actually implement

them with operators and other partners.

We provide the support necessary to

manage and implement integrated operations

in offshore drilling.

The management of change and inte-

gration of new technology tools into work

processes can require support at technical,

user, and management levels, says Mr. Lar-

son.

Fully developedMr Larson emphasises that PhoDoc is not a

research project.

Our solution is based on what users

can take advantage of today, he says.

The systems that we have seen pre-

sented in past conferences are often research

projects that dont focus on the return on in-

vestment or integration into work processes,but rather technology or the wow-factor.

I like wow, but I lead a commercial

unit that sells products and services to help

customers today.

Our products functionality is based

on user demands, such as user-friendliness,

integration with existing data sources, inte-

gration into work process, collaboration op-

portunities with onshore and offshore teams,

access to rig environments, and access to ex-

pertise.

As a leading drilling company withover 30 years experience, we have a basis

understanding and market position that most

software technology developers do not. So

our development is aimed to meet the chal-

lenges that the guy down the hall has,

he says.

digital energyjournal - February/March 2008

ages, but customers havent asked for 3D

within this scope so far, Mr Larson says.

Mr Larson would also like to develop a

logistics module for the system, so items can

be tracked, as they are transferred from a

supply ship to a deck, with a live visualiza-

tion.

You could use the same system to plan

in advance how a supply ship is going to be

unloaded.

There is enormous potential for the sys-

tem to visualize intelligence since it

threads together different databases.

For example, identifying where work

permits may conflict based on safety or

equipment availability; or where training is

necessary based on a crews profile and

equipment specifications.

Other projects on which Odfjell

Drilling is working include this kind of in-telligence, says Mr Larson. It is clear that

as Integrated Operations solutions and ac-

ceptance mature, great possibilities exist.

Co-ordinationOne of the biggest reasons users like the sys-

tem is that it can help people in all the com-

panies involved to co-ordinate their activi-

ties, and share their data.

Users can set up projects on the system

using the drawings and live data, they can

get other people involved, put together ateam, assign tasks, and work on it.

The communication is not limited to

people within in the company; rig owners,

operators, drilling contractors and any other

authorized users can also use the system.

A completion process on a well, for

example, involves several different contrac-

tors and a lot of different equipment you

have to plan for, Mr Larson. Its a choreo-

graphed ballet about how and where youre

going to place your equipment.

Before the system was introduced, peo-

ple would do this kind of planning on paper,

which can get very complicated.

The system can provide answers to

questions when and where planning is being

done and which involve a variety of differ-

ent information, such as what are the load

limits of a crane or deck.

There can be challenges persuading

companies to work together, but it is also

something companies are increasingly get-

ting comfortable with.

Persuading the companies to provide

access to data is always a challenge, Mr Lar-

son says.We are not immune to these commer-

cial and organisational challenges in work to

integrate data from various sources.

However, because the system only

reads the data, rather than writing it, the in-

volvement with third parties data does not

have to be too involved.

Implementing integrated operationsOdfjell Drilling also offers consultancy serv-

ices for integrated operations.

With the aim of increasing safety andeffectiveness and reducing costs, Odfjell

Drilling is ambitious in its implementation

and provision of integrated operations meas-

ures.

Therefore, they have developed servic-

es to help identify appropriate measures and

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9/40

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Intelligent Energy exhibition previewThe Intelligent Energy Conference and exhibit ion, to be held in Amsterdam on Feb 25 - 27,promises to beone of the most exciting events ever held about IT in the oil and gas industry

The Intelligent Energy conference in Ams-

terdam on Feb 25-27 is led by star speakers

Ben Verwaayen, chief executive of UK

communications giant BT; Helge Lund,

CEO of Norwegian major StatoilHydro; An-

drew Gould, CEO of Schlumberger;

Malcolm Brinded, executive director

E&P for Royal Dutch Shell, and Amin Nass-

er, vice president, Petroleum Engineering

and Development at Saudi Aramco.

Here is a round-up of what some of the

companies exhibiting will have on display.

Aclarowww.aclaro.com

Aclaro will exhibit its software petroLOOK,

which can be used to provide executives

with an overview of the company activities,

providing comprehensive and flexible analy-

sis / reporting, which they can use to make

decisions.

It can take information from many dif-

ferent sources, including accounting, re-

serves, daily field production, land, econom-ics, budgeting, planning and marketing.

It can draw data from software from

SAP, Microsoft, Hyperion, Landmark,

Schlumberger, CGI, IBM, and Merrick Sys-

tems.

The analysis tools are also designed to

ensure consistent, repeatable and verifiable

analysis and reporting.

Users can sift through corporate data

and quickly find and analyse underperform-

ing assets, or significant variances between

actual and reported numbers.

Aclaro has a number of supplementarymodules for reserves reporting, budgeting /

planning, and financial reporting.

Baker Hugheswww.bakerhughes.com

Baker Hughes ProductionQuest will exhib-

it its SureFlo full bore flowmeter (see image

below) to be fitted downhole, which has a

special design to enable well service and in-

tervention tools to get through it.

It measures the flow using an expand-

ed section within the tubing string, instead

of a constrictive venture profile. Flow rates

can be measured with +/- 5 per cent accura-

cy with this tool, combined with STAR pres-sure / temperature technology.

This is the companys latest develop-

ment in downhole flow meters.

It will also demonstrate its Discrete

Distributed Sensing (DDxS) technology,

which can be uses fibre optics to work out

the shape of the oil well.

The system analyses the way light is re-

flected in the cable, to work out the cables

3D strain, and can then convert that into

shape information.

ProductionQuest is the newest businessunit of Baker Hughes, formed in 2006. It fo-

cuses on helping oil and gas companies ac-

celerate production, increase recovery rates

and reduce cost of ownership, using techni-

cally advanced production optimisation

products, services and solutions.

Baker Oil Tools will exhibit its latest

multi position downhole valve, HCM-S,

which can be actuated from the surface.

The valve can be used for controlling

flow reliably, without expensive well inter-

vention. It can be opened repeatedly at dif-

ferential pressures up to 3,000 pounds persquare inch, and 'maximum' temperatures,

Baker Hughes says.

The tool can be shifted from one choke

position to the next by applying pressure to

the control lines at the surface. The sliding

sleeve has the ability to move from any po-

sition to the fully closed position in a single

pressure application.

The seals are manufactured from pro-

prietary, non-elastomeric compounds that

are 30 per cent stronger than commercially

available materials. Baker Oil Tools has

combined several unique features to upgrade

seal performance and increase service life.Baker Oil Tools will also display its au-

tomated Surface Control System, which en-

ables all control and supervisory functions

to be operated through an easy to use inter-

face.

It will have other components of its In-

Force Intelligent Well Systems on display,

including system control architectures and

completion accessories.

CISCO

www.cisco.comAt the CISCO stand, visitors will be able to

see a demonstration of how developments in

data communications, including wireless

communications, can work in oil and gas in-

stallations to connect equipment and people

together, and the benefits, for example en-

abling experienced shore engineers to work

together with field engineers.

Oil companies are using technologies

like this to "improve quality, health, safety

and environmental awareness and compli-

ance, consistently across the enterprise.

Energisticswww.energistics.org

At the Energistics stand, you can find out

more about its activities, developing, deploy-

ing and maintaining collaborative technolo-

gies using open data exchange standards, in-

cluding WITSML and PRODML.

Energistics is a membership organisa-

tion. Its members are oil companies, oil serv-

ice companies, hardware and software ven-

dors, systems integrators and regulators.

A flowmeter which you can get tools through:Baker Hughes Product ionQuests new SureFlo full bore flowmeter


11/40



Halliburton

www.halliburton.com

Halliburton will be promoting its concept of

"Enabling the Digital Asset" at Intelligent

Energy, presenting solutions which address

companys biggest issues and help them

make decisions, supported by IT.

The right people can have access to the

best possible information about the asset,

fully updated, so they can make the best de-

cisions.

For example, people can use the data to

optimise production continually, rather than

through periodic expensive workovers, thus

reducing lost production;

They can make sure they drill the most

productive wells which maximize reservoir

exposure, by refining earth models to adjust

well paths while the drilling is going on;

They can optimise the placement of

fractures, using real time monitoring and vi-sualization techniques, thus maximizing the

performance of unconventional hydrocarbon

reservoirs.

The general idea of "Digital Asset" is

that you construct a collaborative working

environment, with real time data, for people,

where they can model, measure and optimize

their assets.

Experts in different disciplines can

work together, having access to the data

when and where they need it.

"The Digital Asset environment em-powers the workforce to see the big picture

for each asset and make fully informed deci-

sions," says a Halliburton spokesperson.

"Think of it as the key to the next trillion bar-

rels."

IBMwww.ibm.com

IBM will exhibit a range of different solu-

tions, including early event warning tools;

integrated information frameworks; asset

monitoring; turnaround optimization; emis-

sions control / dashboards; deep computingvisualization; high performance computing;

using virtual worlds for advanced collabora-

tion; community tools; integrated operations

program management; people and change.

Kongsberg Intellifeldwww.intellifield.no

At Intelligent Energy, Kongsberg Intellifield

will exhibit its SiteCom data management

platform, and tools for 2D or 3D visualiza-

tion of data from different vendors.

The company will demonstrate its RealTime Intelligence software which presents

drilling information, key performance indi-

cators and other information useful for deci-

sion making.

Kongsberg Intellifield puts together

collaborative working centres for the oil and

gas industry, where people can work togeth-

er and see what is happening on large screens

on the wall.

So far, it has built over 150 collabora-

tive working centres for the oil and gas in-

dustry - the company calls them "integrated

collaboration environments."

The company offers services to design

and build and centres, and associated con-

sulting services for developing new work

processes, data integration, and the required

change management.

Merrick Systemswww.merricksystems.com

Merrick Systems will exhibit its software

and services for upstream and midstreamproduction operations, drilling operations

and engineering workflow management.

For oil and gas production, it has solu-

tions for field data capture, production ac-

counting and reporting, and a graphical pro-

duction dashboard.

For drilling operations it has a RFID

system, which can track the location and

condition of different assets used in the oil-

field.

Condition information can include

dates of the latest inspections, certification,

dimensions, where used, and location.Location information can include

whether the asset is on the surface (eg swiv-

el joints), downhole (eg drill pipe, bottom

hole assemblies) or subsea (eg risers).

Merrick has developed rugged RFID

tags designed for harsh handling and envi-

ronmental conditions in drilling operations.

It has developed intrinsically safe (explosion

proof) RFID readers. It has created a soft-

ware system to manage the data.

This data can be used with company

applications like ERP, maintenance manage-ment and analysis.

Merrick has an engineering workflow

solution, OVS (One Virtual Source), which

can be used to bring data together out of dif-

ferent data sources and applications, so that

engineers can do whatever they want with it

without having to ask anyone else for their

data.

Numerical rockswww.numericalrocks.com

Numerical Rocks of Trondheim, Norway

will exhibit is e-Core software, which can

generate 3D rock models based on reservoir

core plugs or drill cuttings.

From these rock models, it is possible

to calculate rock permeability, electrical re-

sistivity / formation factor, elastic properties

and sonic velocities.

Using this data, it is possible to find out

how multiphase fluid will flow through the

rock, by calculating its relative permeabilityand capillary pressure.

The technology has been under devel-

opment for 10 years, originally as a research

project at StatoilHydro, and then spun out as

a company in 2004.

The data can also be supplied faster

than with other core analysis services, the

company believes.

OTMwww.otmnet.com

UK oil and gas technology consultancy

OTM will have stands for industry projects,IWIS (Intelligent Well Interface Standardis-

ation (IWIS) Panel, which worked from

1996 to 2007 on developing an ISO standard

for an intelligent well, and SEAFOM, the

Subsea Fibre optic Monitoring Group, which

is promoting the growth of fibre optic sens-

ing in subsea applications.

SEAFOM currently has 35 members,

including 8 operators.

The original idea for the project came

out of an SPE conference in the US.

"SEAFOM is delivering real benefits tothe industry, saving money and removing

barriers for fiber optics to be used subsea,"

says a spokesperson.

The Joint Industry Project has a huge

knowledge sharing group - where real case-

Numerical Rockssoftware can put together asophisticated rock model, from analysing a

small piece of core

Track the location of your field assets usingMerrick SystemsRFID system

Intelligent Energy Expo preview


13/40

www.ipres.com

Single well and well campaign analysis

Ranking and comparison of wells

Production, injection and exploration wells

Well economicsCompletely stochastic

IPRISKwell

Well Planning

IntegratedDecision Support

Decisions

IPRES



cy, and improving drilling safety.

In doing so, it can help companies re-

duce drilling uncertainty and risk.

Paras Consultingwww.paras-consulting.com

Paras Consulting will exhibit its exploration

and production consulting services.

It can assist with overall business strat-

egy, information systems strategy, portfolio

performance management, subsurface

process improvement, play fairway analysis,

information management, data management,

knowledge management, application portfo-

lio management, and project / programme

management.

"With the unique advantage of being

truly independent, Paras is able to assist

clients in selecting "best in class" solutions,


Schlumbergerwww.slb.com

Schlumberger will demonstrate its Opera-

tions Support Center (OSC), which can be

used to monitor drilling activities remotely.

At an Operations Support Center, you

can analyse drilling data, update your mod-

els in real time, collaborate with colleagues,

and get expert consulting.

Schlumberger can build Operations

Support Centers for oil and gas companies,

putting together real time data infrastructure,supplying specialised software and skilled

experts, and helping them implement work

processes.

Sensornetwww.sensornet.co.uk

Sensornet will exhibit its Digital Monitoring

solutions using next generation fibre optic

technology to monitor flow distribution in

production and injection wells in real time.

Sensornets Digital Flow Profiling so-

lution provides continuous Production Log-

ging Tool (PLT) type data in highly deviatedand complex wells without the costs, risks

and deferred production associated with con-

Intelligent Energy Expo preview

study experiences are exchanged amongst

members - all supported with several techni-

cal working groups each led and run by the

industry.

The projects are run by OTM.

QuickWellswww.quickwells.com

QuickWells will launch its Computer Aided

Design (CAD) / Project Management soft-

ware for well completion engineers and

management.

The software can help the completion

design team work together effectively, in-

cluding engineering, accounting, procure-

ment and management personnel.

The software includes 2D and 3D com-

puter aided design tools, and drag, fluid dy-

namics and nodal analysis models.

It tracks revisions and design changes,

with a full audit trail. Because of this func-tionality, the software can also be used as a

general well data historian.

"At the same time as completion sys-

tems are becoming more complex, with the

requirement for multi-lateral and multi-zone

designs, the experience to design such sys-

tems is an increasingly scarce commodity,"


"It is vital for the operators to capture

completions knowledge effectively within

their organisations."

"The software is 'designed by comple-tion engineers, for completion engineers',

and aims to remove the frustrations and in-

efficiencies of working with the many unco-

ordinated software packages that are current-

ly required to design a complex modern

completion system."

Paradigmwww.pdgm.com

Paradigm will exhibit its Sysdrill Version

3.0, a new suite of well planning, drilling en-

gineering and real time geosteering solu-

tions.It can be used for quick and accurate

well planning, quantifying wellbore accura-

ventional production logging technology, a

spokesperson says.

The solution can be used to get a better

understanding of the flow contributions of

each zone, and to monitor transient events

and the integrity of the completion.

It is used to find out what the results of

production or injection changes are, and thus

optimise production and injection rates, and

ultimately improve planning for future wells.

Sensornet can provide hardware, instal-

lation, project management and interpreta-

tion services, working together with its part-

ner company FloQuest. It has offices in Eu-

rope, North America, Middle East and the

Far East.

Soalimwww.soalim.net

Soalim will exhibit its oil and gas IT and

consulting services for Algeria. It has devel-oped a solution package for a drilling and

production, which can connect to a

WITSML server on drilling rigs, or any oil-

field automation or information system.

This enables staff on Algerian oilfields

to be connected to company engineering ex-

perts and management.

Wireless Measurementwww.wirelessmeasurement.com

Wireless Measurement Ltd will exhibit its

range of oil and gas production monitoringequipment, which can collect and deliver

well head process measurement data. Autho-

rised users can access the information using

a web browser.

The company can fit pressure and tem-

perature sensors which are zone 0 intrinsi-

cally safe, can can be powered by battery or

solar, and transmit data by wi-fi, GSM or

GPRS to a centralised data historian.The

company has a new brief case product,

which enables sensors to be fitted on a well

head for short term use, with the data dis-

played on a notebook computer. This is de-signed for easy use, short term maintenance

monitoring purposes.

Schlumbergers Operations Support Center (OSC) - monitor drilling activit ies remotely


15/40


16/40


17/40




6

Palantir Solutions held a seminar about de-

cision analysis tools in Aberdeen, U.K., on

Nov 30th, which was attended by Shell,

ConocoPhillips, Gaz de France, Chevron,

Dana Petroleum, RDS and UKTI.

Decision analysis tools and processes

are used by the oil and gas industry to opti-

mise the allocation of financial and human

resources to a portfolio of projects developed

by a company.

The decision analysis process is typi-

cally driven by multi-disciplinary teams who

plan the development of the asset.

During the process the team will inves-

tigate alternative options on how to developa project and assess the risks, expected gains

and feasibility of different development op-

tions.

Key findings are communicated to the

decision makers who assess the expected

value of the individual project in the context

of the corporate portfolio of projects.

Decision tools include complex models

that determine the expected production from

a hydrocarbon reservoir, economic models

that address the commercial aspects of an as-

set such as hydrocarbon prices, tax systemsand required investment, for example, as

well as a number of "softer tools".

These tools enable companies to assess

whether the analysis supports the decision at

hand, all relevant aspects of the asset have

been assessed and whether the preferred de-

velopment scenario is aligned with general

corporate guiding principles.

One of the world's foremost experts on

the subject of decision analysis Reidar

Bratvold, Professor of Petroleum Investment

and Decision Analysis at the University of

Stavanger, gave a talk entitled "Decision-making in the Oil & Gas Industry - A culture

of mediocrity".

In his presentation Professor Bratvold

discussed several inconsistencies and mis-

conceptions between common practices in

decision analysis and the corporate promise

to maximize shareholder value.

Betting on a coinProfessor Bratvold illustrated the concept of

risk aversion with a simple experiment. He

asked the participants at the seminar whetherthey were willing to invest in a "coin flip-

ping venture". A business partner in the ven-

ture would receive triple the amount they en-

tered if their guess, Heads or Tails, were to

be realised after a coin flip.

All the attendees to the seminar were

keen to participate in the investment propos-

al given an upfront investment of 10.

However when the experiment was re-

peated at increasengly higher stakes fewer

and fewer participants were willing to take

the "gamble", although the expected rate of

return remained the identical.

Professor Bratvold concluded that the

participants, just like typical oil and gas

companies, were risk averse in their decision

making. As soon as the potential loss gets

large enough to "hurt" or potentially bank-

rupt a company, managers hesitate to enter

the venture.The risk averse attitude, in terms of fi-

nancial risk, adopted by the majority of play-

ers in the E&P industry has resulted in a de-

cision making culture which systematically

aims to reduce the exposure to risk.

Professor Bratvold argued that this

frame of mind frequently causes companies

to sacrifice a large potential upside in order

to mitigate a much smaller potential down-

side.

The return on diversified portfolio of

stocks will be maximised if the companiesrepresented by the stocks are risk neutral, not

risk averse, in their decision making. The

risk averse attitude is therefore in conflict

with the interests of a well diversified in-

vestor.

Struggling with riskMany companies struggle with the concepts

of uncertainty and risk and in particular how

to manage risk.

Professor Bratvold illustrated this point

by the following statement made by a proj-

ect manager in the oil and gas industry: "Weuse P10, P50 and P90 investments estimates

in all our valuations", subsequently he ad-

dressed one of the engineers by saying, "I

want your guarantee that we don't spend

more than the P50 on this project".

[A P10 estimate is considered 10 per

cent likely; a P90 estimate is considered 90

per cent likely].

This statement suggests that the project

manager does realise the importance of

quantifying uncertainty by stating that it is

standard practise to develop different proba-bility weighted estimates on the required in-

vestment.

However, the second statement clearly

demonstrates that the manager does not un-

derstand the implication of a P50 estimate.

How to make good decisionsPalantir Solutions hosted a seminar in Aberdeen about how to make decisions and use decision analysistools.By Dr.Bart J.A.Willigers,senior consultant,Palant ir Solut ions

The likelihood that the investment is

higher than the P50 is actually 50%, a guar-

antee for a ceiling to the required investment

would be given by the P0, which is by defi-

nition an infinitely high number.

The implication of this misconception

goes beyond the semantics of decision mak-

ing. By demanding a guarantee that the in-

vestment will be less than the P50, the engi-

neer will be inclined to propose a P50 esti-

mate which is higher then his true expectedP50 estimate.

This results in the expected investment

requirement increasing and the company is

risking walking away from a profitable in-

vestment opportunity.

Improvements in corporate portfolio

management can only be achieved if all

stakeholders involved in the strategic plan-

ning and decision making process have a

clear understanding of risk modelling and

management.

In order to achieve this companies

should improve their planning, decisionanalysis procedures and embrace more prob-

ability-based and modern valuation tech-

niques than those typically used today.

"It puzzles and surprises me that com-

panies have no objection to embrace very in-

tricate procedures in their subsurface model-

ling whilst the same companies are very re-

luctant to adapt any enhancements in their

financial modelling", Professor Bratvold

concludes.

Palantir seminarsThe seminar held in Aberdeen, U.K. was the

first in a series, free of charge, hosted by

Palantir Solutions. Over the coming months

Palantir will announce the next one.

Dr.Bart J.A.Willigers,seniorconsultant,Palantir Solutions


19/40

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8

Exploration and drilling software

Reservoir software company Roxar has

made big improvements to its structural

modelling software, which geologists can

use to construct a model of the subsurface,

showing rock layers and faults, as a first step

to working out where the oil and gas is and

how to access it.

Roxar believes that improving the

structural model is "one of the most signifi-

cant productivity enhancement opportunities

available in reservoir management today. "

Conversely, if the structural model is

very wrong, the reserves calculations, pro-duction predictions and field development

plans will all be badly off.

"The structure of a field is one of the

most critical components of the reservoir

model," says Karen Hoffman, a Geomodeler

at Roxar. "It can account for the greatest un-

certainty in terms of in-place reserves."

In the North Sea, Ms Hoffman points

out, in over 40 per cent of fields, operators

have ended up either increasing or decreas-

ing their reserve calculations by over 50 per-

cent - subsequently drilling 60-80 per centmore wells than was originally planned.

"The structural model is the basic

framework that the rest of the model will be

built on," says David Hardy, product manag-

er for Roxar's integrated reservoir modelling

and simulation solution, IRAP RMS. "It's a

key component - it's the first thing you're go-

ing to be doing."

"The structural model is one of the

most critical parts - at this stage you're real-

ly defining the size, and the shape of the sub-

surface reservoir and quantification of the

hydrocarbon content," says Roxar marketingmanager Blair Shimmield.

"If you compromise on this part of it -

and don't get it as good as you can - you have

some serious ramifications - when you come

to plan your process for exploiting the field.

Everything from where you place your

wells, surface facilities, all these things are

dependent on getting the structural model

right."

Further more, improving the model

making makes life easier for people further

down the line."When the geologists spits out the grid

- the engineer will find it a lot easier to run

it through the simulators," says Mr Shim-

mield.

Many oil and gas companies are keen

to go back and refine and update their struc-

tural models after the field has gone into op-

erations, Mr Shimmield says, and they can

do this much more quickly with the new

software.

"In the past - people would assume the

structural model was correct, because mak-

ing significant changes to the structural mod-

el was so time consuming - in terms of cycle

time as well as resources. They would rather

fudge it with different porosities, not change

fault positions of faults."There is plenty of new data being gen-

erated all the time in the oilfield, from

drilling, coring and new seismic studies, and

this should all be used to refine and update

the structural model, so you can, in turn, up-

date the reservoir simulator and your deci-

sions of the best places to position wells or

the best way to optimise production. Roxar's

new tool makes this possible.

Roxar also believes that the system is

so easy to use that many different members

of the asset teams, not just the geologists,can be involved in updating the model.

The new tool has been under develop-

ment for 2.5 years, with a number of special-

ist geological staff brought into Roxar, and

also working closely with clients.

"It's a complete rewrite of our previous

structural model capability," says Blair

Shimmield, marketing manager of Roxar.

During the testing process, pilot stud-

ies were run in North and South America,

Asia Pacific, Russia, North Sea and in Iran.

Roxar also worked with a large amount of

customer test data.

Better than competitorsRoxar believes that customers can make

much faster reservoir models than they can

with competitors' tools.

"We know that with some of the com-

petitor products - they are as slow as or slow-

er than we were before," says Mr Hardy.

Traditional software systems can strug-

gle to model complex fault patterns, such as

low angle faults, nested faults and self-trun-

cating, Roxar says, but the new software hasnone of these limitations.

"We are now building models which we

know one of our biggest competitors hasn't

been able to model.

"One of our consultants has done a job

on a field where the competitor couldn't

build the model - the client had to make

compromises in the quality and level of de-

tail."

"It would require a very fundamental

change in the way our competitors build

their models to catch up - I don't know if

they would want to make this multiyear in-

vestment in making that change," says Ms

Hoffman.

Building the modelRoxar has aimed to make it much easier to

build a model, which should mean that peo-

ple are motivated to spend more time on the

details of it.

"It might not matter when you have 10

faults - but when you have hundreds of faults

- this kind of stuff is crucial to streamline

things quickly," says Mr Hardy.

The structural model, built mainly from

seismic data, is used as a basis for the next

stage of the process, which is trying to work

out what the different rock types are andtheir characteristics, and ultimately where

the oil is and how it will flow.

Putting together structural models has

got a reputation for being very time consum-

ing, cumbersome and labour intensive.

There are three steps involved in build-

ing a model - creating the fault framework,

creating the geologic model, and creating a

reservoir grid.

The company believes that its new soft-

ware can speed up the process of building a

model from a month to weeks or days. The

software can also enable models to be updat-ed more easily.

Perhaps more importantly, by making

it easier and faster to build the model, staff

will be able to build them more thoroughly,

making sure that the model takes into con-

sideration all anomalies in the data, rather

than finishing the job when it matches most

of the data.

"I think that often people make a lot of

compromises in building the model - be-

cause of the time constraints," says Mr

Hardy. "One of the things we're trying to sayis - you should be able to build what you

want with the model."

"What the new structural modelling de-

livers - is a huge step forward in terms of

Roxar's structural modelReservoir software company Roxar has made big improvements to its structural modelling software,whichoil and gas companies can use to work out the outline structure of the subsurface.We asked them to explain


21/40


22/40

During the early stage of the procurement

processes (identifying suppliers, selecting

them and placing orders), you can achieve

savings of up to 10 per cent by being more

effective.

Information you might use to help seg-

ment your suppliers includes: supplier per-

formance management, transaction volume /spend, supplier technology capability, sup-

plier preference, procurement strategy /

digital energyjournal - February/March 2008


0

Reducing supplier enablement costsHow do you reduce your number of suppliers without impacting the quality of your purchasing?

productivity for the people building the mod-

el."

"The previous tools weren't really ca-

pable of giving you the complexity you

wanted."

For example, if there is complex geom-

etry or interconnections between faults. "The

existing tools tended to struggle with that,"

says Mr Hardy.

"When you start looking at your aver-

age field - a lot of them have more complex-

ity in them," says Mr Hardy.

"In the past they started to leave it out.

It's good not to be constrained by the tool."

"There's certain types of structures that

are common in reservoirs that are often treat-

ed as special cases - it takes a lot of user in-

put - or other times they are so complex -

that present tools can't handle them - people

say, ok I'll ignore that fault, and this com-

plex situation - although that could be a verycritical," adds Ms Hoffman.

A good model

It is easy to recognise a good simulation grid

when you see one, Mr Hardy says, and they

can be tested with quality control tools. "We

know what simulators expect as a good qual-

ity grid."

The model is built up as a series of sur-

faces, to make the basic skeleton, and then

turned into a 3D vector grid, before passed

onto the reservoir simulator.

"You don't want overlapping layers,

and you don't want twisted cells," says Mr

Hardy.

WorkflowRoxar is very focussed on making software

support people's workflows. "You want to

say, here's the new data, rerun what I did last

time and give me the answer," says Mr

Hardy.

"The steps the geologist goes throughare not always the same. But in RMS you

can build a flowchart and put in different

steps you might go through.

The user can define the workflow and

then update it at any time".

Users can also work in parallel on a

number of different structural models for the

same piece of rock - for example, when ge-

ologists come up with two or three different

versions of what they think the rock struc-

ture might look like.

"When there were so many resources

required to build one model in the past, peo-

ple would stick with one," he said.

"But now because we can shorten the

cycle time - they can experiment with multi-

ple scenarios - for example, different scenar-

ios with permeability and so on."

"A lot of operators are encouraging

their geoscience staff to think in terms of

probabilistic decision making instead of yes

no decision making," he says.

"People want to understand the riskprofile of the decisions."

goals, current procurement implementation,

supply chain performance data, channel

strategy, industry standards, supplier classi-

fication, commodity sector operating

processes.

Once in contract, the benefits can be

derived from channelling spend to the cor-

rect suppliers. Benefits are realised throughefficiency and selection of the correct sup-

plier enablement channel (for example, busi-

ness to business, supplier portal or purchas-

ing / credit card).

At the later stages of the procurement

process (making orders, receiving the goods

and invoicing), you can achieve savings of

2-10 per cent by being more efficient.

Effective Supplier Segmentation gen-

erates a Road Map assigning a Supplier En-ablement channel to every supplier in the

most cost efficient manner.

By Chris Welsh,managing director of oil and gas procurement consultancy Eiro Consult ing,writing on behalf of oil and gas e-commerce company OFS-Portal

Factors a company might use to segment t heir suppliers

As you progress through the steps of the procurement process,the focuschanges from trying to be as effective as possible to trying to be asefficent as possible.


23/40




Commodity Analysis Filter

Rationalising your suppliers by commodity

sector reduces the number of suppliers to

consider for the road map.

It ensures spend is targeted to the right

suppliers and instils good procurement prac-

tice by moving your spend to suppliers al-

ready on contract and reducing rogue buy-

ing.

The graph below (bottom of page)

shows an example of plotting suppliers by

importance and spend and how to target

which suppliers to consolidate as part of the

rationalisation.

Contract Analysis FilterYou are probably better off if your suppliers

have contracts with you, and provide prod-

ucts and services to prices agreed in advance.

If your procurement strategy dictatessuppliers should be on contract then this fil-

ter will further reduce the total number of

suppliers currently eligible to be considered

for the road map.

Those suppliers not on contract and

which the buying organization wants to keep

in the supplier pool need to have contracts

put in place before being considered in any

supplier enablement activity.

The local procurement team should

perform this task.

Most commodities sectors support gen-eration of price books.

However the oil and gas exploration

and production segment is attuned to com-

plex services procurement in which the parts

and services have many variables which

drive pricing, this is not easily encapsulated

into a static price book.

Price books can be turned into cata-

logues within an e-procurement initiative

and price book purchasing is normally on

contract and enforces the buying organisa-

tions discounted price and targets spend to

preferred suppliers.

The list below shows a typical break-

down of suppliers in exploration and produc-

tion who are on contract, have price books

or need to be placed on contract. It is typical

in an organization to have only 57% of sup-

pliers on contract prior to any supplier en-

ablement activity;

Not on a contract 43 per cent

Pricing without a contract 3 per cent

Contracts without pricing 21 per cent

Contracts with pricing 33 per cent.

Effective Supplier Segmentation and

Road Mapping will ensure all suppliers are

enabled in a manner which best fits the pro-

curement organisations aims in a cost effec-

tive manner.

Using the best channelsYou can use an organisations procurement

strengths and benefit realisation figures to

produce a road map that identifies each sup-

plier, the supplier enablement channel best

suited to the supplier and the benefits deliv-

ered from enabling that supplier.

You can use software tools such as the

one developed by Eiro Consulting, to work

out which supplier enablement channel is the

correct choice for each supplier, eg purchase

card, business to business, supplier portal.

These tools allow you to answer ques-

tions such as; is it worth the expense of set-

ting up a business to business portal system

to transact with the supplier?

Testing your road mapAt this stage in the process a draft road map

will have been developed which represents

all the realistic suppliers to be included in

the supplier enablement activity.

The next stage is to apply detailed

knowledge to the base road map to ensure it

is realistic and test the assumptions used for

including suppliers in the map.

For many commodity sectors an ac-

cepted business model for transacting be-

tween buyer and supplier may exist.For example in the MRO (maintenance,

repair and operations) sector it is common to

implement Evaluated Receipt Settlement.

In the upstream oil and gas sector the

complex service delivery is commonly doc-

umented through Field Tickets at the rig site.

Eiro Consulting has seen many procurement

programmes fail to adequately address this

unique business practice in Oil & Gas even

though there is a solution available.

Refining the base road map with the

commodity sector industry model will fur-ther test the assumption of whether certain

supplier enablement channels are suitable for

the targeted suppliers. This check adds a re-

ality filter to the base road map.

The base road map needs to be re-

viewed by the local procurement specialists

in the region where the road map is to be im-

plemented.

Certain suppliers will need to be ex-

cluded from the road map or supplier enable-

ment activities because the inter-

action between the buyer and

supplier is fixed and cannot be in-fluenced by the buyer.

Examples can include gov-

ernment agencies, banks and reg-

ulatory bodies.

Removing these suppliers

from the road map ensure the

supplier enablement implementa-

tion can assess the cost to imple-

ment the road map correctly.

Most large organisations en-

gage with many global suppliers

as well as regional and local sup-pliers.

Suppliers experienced in e-

commerce or those operating on

a global basis will typically want

to engage with a buyer using a

Analying your suppliers:t ry to consolidate suppliers where youhave a low spend / transaction volume

Typical breakdown of suppliers in explorationand production


25/40


26/40

One final step in the process is to en-

sure the enablement planned in the road map

is agreed with the supplier.

A supplier survey tool has been devel-

oped to capture this and the road map should

be updated with the responses from the sup-

plier.

The survey can be deployed on a sup-

plier-by-supplier basis or en masse when a

project is launched.

Building up the supplier road map in

this fashion has proved to be a powerful way

to drive an organizations supplier enable-

ment activities.

It focuses on ensuring procurement best

practice is followed and helps ensure that the

right suppliers are included in the initiative

with the right supplier enablement channel

according to the economic case for

each channel.

Chris Welsh,managing director of oi l and gas

purchasing consultancy Eiro Consulting,and

UK representative of oil and gas e-commerce

company OFS Portal

4 digital energyjournal - February/March 2008


single approach across many sites and re-

gions.

This needs to be identified in the sup-

plier road map to ensure any engagement ac-

tivities are coordinated with the supplier at

the right level.

Making it workOnce the data for the road map has been col-

lected, filtered and enhanced, it should be re-

viewed by the commodity sector managers,

procurement leaders, local procurement and

relationship managers and endorsed as vi-

able.

The road map will form the basis of an

action plan to drive the supplier enablement

activities for an e-procurement initiative.

Once the road map is developed and

signed off, it can be used to drive supplier

engagement in the most cost effective way.

Peak moves to MicrosoftPeak Oilfield Services migrates to Microsoft accounting.We asked Renate Hill,vice president of Finance,with Peak Oilfield Services why she made the decision

Alaskan oilfield service company Peak Oil-

field Services has implemented a new Mi-crosoft Dynamics accounting system.

It was recommended to use Microsoft

Dynamics by its IT contractor, Arctic IT Ser-

vices, a Microsoft Gold Certified Partner.

"When (Arctic IT) recommended Mi-

crosoft Dynamics GP, I trusted it would meet

our needs. I was also very impressed with

the interface and ease of use," says Renate

Hill, vice president of Finance at Peak Oil-

field Services.

"When we first contracted with Arctic

IT to build Capture, I was very impressed

with their honesty."The decision to switch followed a move

in 2001 to develop a new job capture system,

running on Microsoft SQL Server. This was

also developed by Arctic IT Services.

The job capture system did not inte-

grate well with its existing Oracle financial

system, the company found.

It was also taking too long to respond

to customer requests. Any requests for infor-

mation and reports had to be made manually

to the staff who were running the system,

based in Texas.In 2005, when one of Peak's sister com-

panies was reorganised, Ms Hill proposed

that a shared services accounting department

be created to manage all of Peak's sister

companies.

Once a decision had been made to in-stall a new Microsoft system, the company

wanted one it could install quickly.

"We had about three months in which

to create an accounting system that would

support our five companies," says Ms Hill.

"Oracle wasn't the way for us to go. Our

feeling was that Oracle would require far

more time to customise and that it would be

too expensive to deploy and maintain," says

Renate Hill, vice president of Finance, with

Peak Oilfield Services.

The company often gets requests from

its customers for financial reports in differ-ent formats, and it was important to have a

system which could make this easy to do.

Ms Hill looks after a staff of 14 people,

who use the Microsoft Dynamics GP Gener-

al Ledger, Bank Reconciliation, Accounts

Receivable, Accounts Payable, Payroll, Hu-

man Resource, and Fixed Assets modules.

It is fully integrated with the field based

Capture system.

For example, invoice data generated in

Capture now updates the Accounts Receiv-

able and General Ledger in Microsoft Dy-namics GP, where the data is reflected in fi-

nancial statements.

Employee payroll information-such as

hours, rates, union, and cost codes-is trans-

ferred out of Capture into Microsoft Dynam-

ics GP to produce 700 payroll checks week-ly.

Peak Oilfield's accounts payable clerks

process more than 6,000 invoices each

month.

Some of these integrations are managed

as daily batch processes, whilst others are

handled through web services, enabling re-

al-time transfer of information.

For example, purchasing information in

the Capture application uses Web services to

integrate with the process of validating ex-

penses in Microsoft Dynamics GP.

The Purchase Order module, with cus-tomised forms and processes, is now being

deployed across Peak Oilfield's companies,

automating more than 3,000 purchase orders

a month and eliminating time-consuming

double entry.

With purchase order data available to

remote users through the Business Portal

feature in Microsoft Dynamics GP, field-

based employees can easily submit and view

the status of open orders without having to

request information from headquarters in

Anchorage.Arctic IT also customised the human

resources processes within Microsoft Dy-

namics GP so Peak could easily provide

safety records to its customers, which means

Additional Information

If you would like to implement a world

class supplier enablement programme or

want more information contact OFS Por-

tals representative: Dave Wallis e-maildwallis at ofs-portal.com


27/40February/March 2008 - digital energyjournal 25


that Peak Oilfield can respond more quickly

to requests for bids.

In less than two years after adopting

Microsoft Dynamics GP, Peak Oilfield Ser-

vices Shared Services Accounting depart-

ment increased its services from a company

of $75 million in annual revenues to five

companies with an annual volume of $250

million, without increasing its accounting

staff of 15.

"It's enabled us to automate processes

so that if we're dealing with 500 employees

or 1,000 employees, it doesn't put any addi-

tional burden on us. The software is easy to

learn, so new employees can come in and be

productive with it immediately."

About PeakPeak Oilfield Services is an oilfield service

and construction company based in Alaska,

with 2,000 employees and operations in An-chorage, Kenai, Prudhoe Bay, and Valdez.

The company began providing oilfield

support services and ice road construction on

Alaskas North slope, and has since evolved

into a group of sister companies which also

provide mining services, public works con-

struction, oil road tankers, and uninterrupted

power services for remote villages.

Its customers include many oil majors

and the government of Alaska, and all of its

clients have different requirements.

It has 2,000 employees and annual rev-enue of USD 250m.

About Microsoft Dynamics GPMicrosoft Dynamics GP is a mid market ac-

counting software system which runs on Mi-

crosoft SQL Server database, part of the Mi-

crosoft Business Solutions family.

It was originally made by Great Plains

Software, a company in Fargo, North Dako-

ta, which was acquired by Microsoft in April

2001 for USD 1.1 bn.

New job costing systemPeak began using Microsoft software in

2001, when after an extensive search for a

new software and service provider, it en-

gaged with Arctic Information Technology

(Arctic IT) to replace its outdated proprietary

job costing and billing system and build and

maintain a reliable network infrastructure.

Arctic IT is based in Anchorage which

grew out of the IT department of Alaska ac-

counting company Mikunda Cottrell and Co.

It is a Microsoft Gold Certified Partner.

Arctic IT built a new job costing sys-tem called "Capture," to track all costs asso-

ciated with projects, which ran on a Mi-

crosoft SQL Server database.

Most of the processing for this system,

up to 3,000 transactions per month, is made

from Peak Oilfields centre on Prudhoe Bay.

One challenge when implementing this

system was that internet connections be-

tween Prudhoe Bay and Anchorage arent re-

liable enough for the Anchorage system to

take data directly out of the database in Prud-

hoe Bay.

Instead, the databases are synchronised

between the two locations.

There are 12 software installations of

Capture altogether, and it is being used by

30 people.

IT infrastructureThe system runs on Dell PowerEdge servers

with the Windows Server 2003 operating

system. There are two load-balanced termi-

nal servers hosting the 2007 Microsoft Of-

fice system.

Meanwhile, a Microsoft SQL Serverdrives both Microsoft Dynamics GP and

Capture with 14 databases.

The hardware and software are hosted

at Peak's Anchorage headquarters but are ac-

cessed by users at more than 12 other offices

and remote job sites throughout Alaska and

Eastern Europe.

There is a backup server which has

been used once in six years.

Better data access

According to Ms Hill, the ability to drilldown into invoice detail is vital.

Peak's chief executive officer frequent-

ly asks Ms Hill to provide him with detailed

information about vendors or particular in-

voices.

To respond quickly, Ms Hill uses the

SmartList feature in Microsoft Dynamics

GP.

"I just click on SmartList, put in the pa-

rameters for the information I want, and get

my answer," says Ms Hill.

"I export it to Microsoft Office Excel

and send it to my boss. What took days to dobefore I can now do in two minutes.

When I get requests for information, it's

usually wanted immediately."

Getting faster and fuller access to data

helps the companys decision making and

ability to operate profitably, Ms Hill says.

She cites a recent $25 million project

for which Peak Oilfield managers needed

weekly updates on expenses incurred, ven-

dors paid, and other factors. Having imme-

diate access to that information made it easi-

er for the managers to keep the project ontime and on budget. Previously, they would

have learned about excess expenses only

when it was too late to avoid them.

Faster access to vendor information and

tight integration between the Capture appli-

cation and the Microsoft software enable

Peak Oilfield to invoice for third-party ex-

penses more quickly, which in turn means

that the company is reimbursed more quick-

ly for those expenses by its customers.

Flexible ReportingPeak's oil-company customers frequently re-

quire the company to customise processes

and reports to accommodate their needs.

For example, they need nonstandard

data fields included on purchase orders, or

they want in-depth company and employee

safety records included on proposals and on-

going progress reports.

Recently, ConocoPhillips asked Peak to

be a start-up vendor for its new electronic

billing system, something Peak wouldn't

have been able to do with its previous sys-

tem."There was a discovery reporting tool

in Oracle, but I found it cumbersome and

never used it," says Ms Hill. "Reporting in

Microsoft Dynamics GP is fast, easy, intu-

itive. It takes the frustration out of trying to

access information."

"There's no doubt that we've improved

our cash flow because of this solution," says

Ms Hill. "And that means we're operating

more profitably."

Lower cost of OwnershipAll Peak Oilfield companies are managed inone installation of Microsoft Dynamics GP

with its multi-company feature.

Using Terminal Services in Windows

Server 2003, Arctic IT configured worksta-

tions at Peak's remote offices to update the

accounting system at headquarters in An-

chorage.

"Having only one main installation of

the accounting system really saves on our

cost to maintain and upgrade the system,"

says Ms Hill.

Future upgradeArctic IT is now working with Peak to up-

grade its system to include the Microsoft Of-

fice SharePoint Server 2007.

By March 2008, Peak Oilfield will be

live on Microsoft Dynamics GP 10.0.

Ms Hill is already planning for the en-

hanced functionality, including enhanced

business intelligence, Office Excel-based re-

porting, and flexible workflow automation.

"Because we work so closely with Arc-

tic IT, they're able to anticipate our needs andmake the best recommendations for us," says

Ms Hill. "They're the best kind of partner to

have."


28/406 digital energyjournal - February/March 2008


A consortium of oil majors, including Sta-

toilHydro, ExxonMobil, Chevron, ENI and

Shell, have invested NOK 63m (USD 11.5m)

into a new software system which can mod-

el flow through pipelines more accurately

than before.

The project is being commercialised by

SPT Group (previously Scandpower Petro-

leum Technology) and developed together

with the Institute for Energy Technology

(IFE) as the research partner.

The investment is being made because

current flow modelling systems are proving

inadequate for the longer pipelines that areincreasingly being installed, such as the

120km Ormen Lange pipeline or the future

600kmpipeline from Schtokmann in Russia.

The current flow modelling systems

leave something to be desired for modelling

highly complex flow from oil fields close to

the end of their lives, which can often be un-

stable and include a lot of water.

The longer the pipeline, or the more un-

stable the flow, the more significant small

errors in the modelling become.

About flow simulatorsMost Digital Energy Journal readers will be

familiar with the idea of a flow simulator,

which can try to work out how liquid is flow-

ing through a pipeline, to try to work out if

there are likely to be slugs or hydrates block-

ing the flow.

If the computer simulations indicate

that there are likely to be large slugs or hy-

drates, the operators can control and change

the flow, to prevent this from happening.

As longer pipelines become more com-mon (like Ormen Lange and Schtokmann)

and the flow regimes get more complex (for

example, including more water as the field

goes into its final years), it becomes even

more critical to model the flow more accu-

rately.

Flow problems with long pipelinesThe main flow concern with a gas con-

densate pipeline is that the accumulated liq-

uid content gets too large to catch in the slug

catchers at the end of the pipe.The slug can be not 500m but 5km -

you cannot build a slug catcher for that,

says Norbert Hoyer, executive vice presi-

dent, new business, with SPT Group.

A secondary concern, with both oil and

gas pipelines, is that the liquid may solidify

as it cools, to form solid hydrates.

You cannot allow hydrates blocking a

very long pipeline like Ormen Lange, Mr

Hoyer says.

Also, as North Sea reservoirs come to-

wards the end of their viable production pe-

riod, companies often find themselves deal-ing with more water in the flow. The reduc-

ing reservoir pressure can also make the flow

more unstable.

You have production challenges you

dont have at the start of the field, Mr. Hoy-

er says. That needs more improvement in

your predictive capabilities.

Stages of researchThe first phase of the research, called Hori-

zon 1, has been running since 2004, focus-

ing on gas pipelines, which typically carry 2to 3 per cent condensate.

The research has led to the develop-

ment of new simulation software. SPT

Group will deliver the first version of the

Modelling 600km pipelines

software to the consortium in the first quar-ter of 2008, and also incorporate it into the

next version of its flow management soft-

ware Olga at the end of 2008.

A second phase of the project is

planned, running from 2008 to 2011, which

will focus more on oil systems and slug flow.

Most of the companies involved in the

first stage of the project will continue with

the second phase, Mr. Hoyer says.

New technology

#11 digital energy journal - february 2008

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