global leader chemicals & petroleum industries steve … © 2009 ibm corporation building a...

1 © 2009 IBM Corporation

Building a smarter planet: Oil and Gas

Smarter Planet:Better Information, More Production, Less Cost

Steve Edwards – Global Leader Chemicals & Petroleum Industries

June 10, 2009


Smarter Planet: Better Information, More Production, Less Cost

The world is smaller and flatter.



The reality of living in a globally integrated world is upon us.

Frozen credit markets and limited access to capital.

Economic downturn and future uncertainty.

Growing concern about the effects of climate change.

Volatility in price and demand for energy worldwide.

The world is connected:economically, socially and technically.



Amount of oil, onaverage, that isrecovered from anexisting reservoir.2

33%

An oil field cangenerate one terabyte,or 200 DVDs’ worth, ofdata daily. An oil andgas engineer canspend up to 60% oftheir time mining thisdata.1

1 terabyte

The need for progress is clear

90,000

Man-hours required toexecute turnaroundeffort every twoyears on an offshoreplatform.3



The opportunity for progress is clear.

New technologies andalgorithms exist thatsignificantly reduce thetime to map and analyzeoil and gas reservoirs,thereby speeding time torecovery.1

85%more efficientseismic mapping

A 1.5% increase in recoveryfrom existing wells, onaverage, would yieldenough oil for half a year’sglobal consumption.2

1.5%increase inoil recovery

10%improvedassetutilization

Adopting best-in-classasset managementstrategies can reduceasset downtime by10%.3



This mandate for change is a mandate for smart.



For oil and gas organizations, this means finding a way to lead in anew environment shaped by three key factors.

ENERGY AVAILABILITY TO MEET THE WORLD’S GROWING NEEDS

Projections show energy consumption increasing by 50% by 2030.1 In Western Canada, theOil and Gas industry has already located massive unconventional resources, including OilSands. Will capital be available to develop cost-effective technologies to make the most ofthese unconventional resources?

ENERGY AFFORDABILITY TO CONSUMERS —PRICE, VOLATILITY—OF DIRECT AND

INDIRECT GOODS

Reduced exploration activity and a weakened service sector can and do impact the pricevolatility of oil and gas. Reducing the cost of exploration and development, and reducing thecomplexity of managing production facilities, can improve energy affordability.

ENVIRONMENTAL IMPACT

Implementing new technologies and capabilities that minimize drilling footprint or improve thesafety and reliability of operations can let us better meet the ever-increasing demands tominimize our impact on land, air, and water, and to conduct our business as safely as possible.



New technologies need to be applied to continuously absorb andapply the sea of information generated across their value chains andbeyond – transforming raw data into actionable insight



Today, smart oil and gas organizations are working to make betteruse of data in order to…

IMPROVE ASSET

MANAGEMENT

Boost asset availability, flexibilityand reliability to achieve greaterthroughput on a safe and cost-effective basis.

OPTIMIZE REGIONAL AND GLOBAL

OPERATIONS

Increase visibility, mitigate risk and lowercosts across the supply chain.

ENHANCE EXPLORATION

AND PRODUCTION

Capture and process a varietyof data to identify previously

inaccessible reserves andimprove well performance.

SMART OIL

AND GAS



They are doing so by becominginstrumented, interconnected and intelligent.



INSTRUMENTED

We now have the ability to measure, sense

and see the exact condition of everything.

Today, there are 1 billion transistors for eachperson on the planet.

By 2010, 30 billion RFID tags will be embeddedinto our world and across entire ecosystems.

Oil-well monitoring systems can analyze reservoirs that areover 5 miles below the earth’s surface.

Remote well-monitoring systems can improve

asset utilization—for example, by identifying

signs of wear before breakdowns occur—and can

reduce risk by allowing people to monitor and

control operations, such as pump speed, from a

safe location.



INTERCONNECTED

People, systems and objects can

communicate and interact with each

other in entirely new ways.

The Internet of people is 1 billion strong. Almostone third of the world’s population will be on theweb by 2011.

There are an estimated 4 billion mobile phonesubscribers worldwide.

One oil company manages, in real-time, over 100 fields,nearly 50 gas-oil separators and 11,000 miles of pipelinesinto 7 refineries and chemical plants—with just 2 dozenpeople in a remote operations center.

Connecting offshore and onshore support centers

for real-time collaboration across the globe

speeds decision-making and increases

productivity.



INTELLIGENT

We can respond to changes quickly and

accurately, and get better results by

predicting and optimizing for future events.

Every day, 15 petabytes of new information arebeing generated. This is 8x more than the informationin all U.S. libraries.

An average company with 1,000 employees spends$5.3 million a year to find information stored onits servers.

Increased use of digital oil field capabilities could boostworld oil reserves by 125 million barrels over the next 5-10years.

New intelligence transforms the way oil and gas

companies operate: increased field recovery,

lower costs and higher production rates.



An opportunity for oil and gas companiesto think and act in new ways.

Enhancing

exploration and

production.

Improving asset

management.

Optimizing

regional and

global

operations.

+ + =



Repsol: Breaking new ground in improving theaccuracy of deep-sea oil exploration by reducing by85% the time required to run the highly accurate—andcompute-intensive—seismic algorithms.

BP: Integrated asset management solution that keepsproduction levels high and downtime low resulting ingreater efficiency, lower costs, improved safety andoverall improved oil recovery rates.

2 Canadian Oilcos: working with IBM, dramaticallyreduce the time to simulate SAGD , EOR andconventional recovery, speeding evaluation anddevelopment of recovery strategies

StatoilHydro: Links advanced real-time sensingcapabilities in the field to collaborate and analyzeresources across the enterprise for an expected 5%improvement in oil recovery and 30% cost reduction.

Smarter oil and gas:Enhancing exploration and production.



PetroChemical Refinery: Integrated asset managementsolution to create one central data repository to track morethan 28,000 assets that resulted in six-figure dollar costsavings.

BP: First-of-a-kind emergency solution that translatesreal-time RFID data into actionable, visual informationfor new plant safety procedures.

International Oil Company: Implementing capability tovisualize their entire operation, call and retrieveinformation about production effortlessly and seamlessly,and collaborate with effectiveness and consistency acrossthe entire enterprise.

Smarter oil and gas:Improving asset management.

HPCL: Deploying RFID for tracking LPG cylinders toautomate the bottling and distribution process while alsomonitoring end-to-end asset movements for safety andsupply chain optimization benefits.



Through extensive instrumentation, a smart organization willaggregate previously siloed data, along with data from manyexternal sources, to achieve real-time visibility of its entiresystem, and make decisions more effectively.



Why take action now?

TO ENSURE GLOBAL SUPPLY

The Energy Information Administration estimates that by 2015, the oil and gas industry will beunable to meet global demand based on existing sources alone.

TO RETAIN DECADES WORTH OF EXPERTISE

As much as 50% of the oil and gas workforce is expected to leave the industry within the nextfive years. It is imperative that we capture and begin to apply its accumulated knowledgebefore it is too late.

BECAUSE, FOR THE FIRST TIME, WE CAN

The ability to instrument and interconnect billions of discrete data sources at all levels of globalactivity—within the industry and without—has finally enabled us to create the intelligencenecessary to turn the vision of smart oil and gas into a reality.



IBM’s solution strategy is aligned with the needs of oil and gascompanies.

ORGANIZATIONS ARE FOCUSED ON… IBM IS DELIVERING…

Enhancing exploration and

production

Improving asset management

Optimizing regional and globaloperations

High Performance ComputingSeismic Data MappingReservoir ModelingVirtualizationIntegrated Operations- Rotating & Static Equipment Monitoring- Well Performance Monitoring- Production Target Monitoring- Data ValidationIntegrated Information FrameworkAdvanced R&D Capabilities

Enterprise Asset ManagementHealth, Safety & Environment strategiesBusiness Performance ManagementSupply Chain OptimizationWorkforce Development

Integrated Operations Services- Rotating & Static Equipment Monitoring- Data ValidationEnterprise Asset ManagementTurnaround OptimizationIntegrated Information FrameworkRFID Strategies and TechnologiesAsset Lifecycle Management



Let’s work together to drive realprogress in our world.

We’ve only just begunto uncover what is possibleon a smarter planet.

The world will continue to become smaller, flatterand smarter. We are moving into the age of theglobally integrated and intelligent economy,society and planet.

There’s no better time to start building smarterpetroleum organizations—focused on providingenergy affordably and safely. And there’s nobetter time to invest in creating the kind of societywe all desire.

global leader chemicals & petroleum industries steve … © 2009 ibm corporation building a...

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