By Alex Code
How do small companies gain the benefits of cutting edge technology without having the budgets of the “Oil Majors?” Cutting through the hype for trendy tech like “Big Data” and artificial intelligence, this article focuses on real steps your company can take to implement cost-effective technology to improve efficiency, hedge yourself against downturns and produce more oil/gas with fewer dollars.
Beyond the Hype
Terms like “Big Tech” make things sound fancy, but the fact is those terms are referring to technologies that only really makes sense for the Oil Majors/Supermajors. If you have millions of dollars to spend on technology, you can pay big consulting companies to do big things. But what kind of system do you implement when you’re a small company that is still built around a boots-on-the-ground workforce making important decisions?
The reality is that trendy tech like “big data” and artificial intelligence that makes decisions based off of complex algorithms doesn’t match where most small companies are at. Many smaller players don’t have consistent, reliable and easy-to-access data on their operations. They need technology that provides them with consistent, reliable and complete data that empowers people – in the office and on the ground – to make better and faster decisions. Those kinds of data collection, record-keeping and reporting systems don’t have to cost millions of dollars and they shouldn’t require a new, highly trained workforce to maintain them.
Through the rest of this article we’ll provide guidance on what types of software will offer the highest return on your tech investment and what features you should look for.
Software that pays for itself
Software companies would like you to believe that just having good software generates value but software is just a tool. It generates value by enabling companies to do one or more of these things:
Helps people be faster at doing things they already did
Provides better work and information organization, by establishing clear and repeatable processes
Ensures companies can maintain their institutional knowledge through turnover
Helps people do things they couldn’t do before
If your company doesn’t have specialized systems to help you run your business, then you should start by focusing on Items 1 and 2. Once you do this, it will feed Item 3 and set the stage for Item 4. For example, Company A is not using any specialty software but wants to get more efficient. They might start by using a field data collection app to record activities in the field. This helps staff work faster because they don’t have to write down notes on paper and send them to a data entry person for entry into a spreadsheet or other digital format (Item 1). Next, the company may determine that managing their data in a bunch of disparate spreadsheets is hard to follow and keep organized. Moving to a database will keep the information better organized and easier to enter (Item 2). Once the database is in place, Company A realizes that they don’t have the locations of their wells and flow lines stored anywhere. This is added to the database by their staff which has the benefit of making that information available to everyone in the organization (Item 3). Once all of this information is centralized, they are able to do easier analysis on where the people in the field are encountering issues and whether those issues are location and/or age dependent (Item 4). This establishes a new maintenance program which proactively addresses maintenance issues before they become problems, saving money and headache. As you can see, adoption of these new systems builds on itself. Laying a strong foundation helps support further efforts down the line.
The key to enjoying these benefits is an organized, easy-to-use system to store your key data and make it accessible to everyone on your team. In other words, your software and information systems should help people find and use the information they need when and where they need it. Once you equip your staff to make intelligent and timely decisions, the software really will be paying for itself.
Getting Started with Digitalization
As an oil and gas company, business is complex. You deal with contracts, regulations and land rights. That’s before you even start producing. Once you’re producing you have a whole new set of regulations, production information, well maintenance, facility operations and more. Handling all of this in one digitalization effort can be overwhelming and cost too much to absorb in one year.
We suggest starting with areas were your staff ends up spending the most time, administrative work your staff enjoys the least, or areas where you’re running into potentially costly problems. Here are a few ideas to get you started.
Collect better production data
If you’re lucky, your production is coming in through a metering system on telemetry but few companies have all of their operations on telemetry. Often production data comes in through multiple avenues. You might have a few key wells on telemetry and the rest are coming in through charts and meter readings taken in the field. If your staff are taking these readings in the field and then bringing spreadsheets or paper back to the office where someone has to organize it and enter it into a master system, consider implementing a mobile system that workers can take into the field, enter the information, and have it all stream into a common database. You’ll end up with more accurate data, faster and with fewer man-hours spent on data entry.
Production data analysis tools
Production and well pressure data is key to ensuring proper operation and maintenance of your wells. The previous section recommended using tools to better collect data. Here we focus on having tools that allow you to analyze it quickly. By employing tools that allow you to graph production through time and perform analysis on the data, you’ll be able to make faster and better decisions than you were able to when the production information was in disparate spreadsheets. Or worse, paper files.
Record maintenance activities
If you wait until something breaks to fix it, you end up with more down-time and potentially costly clean-up work and regulatory hoops to jump through. That’s where maintenance tracking systems come in. Ideally, these systems work on all of your devices and are cloud-based, allowing your team to track how old your equipment is, when it was last worked on, and what condition it was in at the last time it was checked. With a system of indicators warning you about equipment that might need work, you can stay proactive and limit your exposure to costly risks.
File retention & quality
Through our years in business, there’s one thing all of our clients have in common. They hate their filing systems. In oil & gas, we’re talking about files and documents that occasionally date back a hundred years or more. It’s important to have a modern file system that is easy-to-use, easy-to-update, and doesn’t require you to buy a warehouse for storage. Digital filing systems can provide modern search capabilities coupled with instantaneous file loading so that your team can get the information they need without having to go sort through filing cabinets in the basement. Not only does making your files electronic improve your team’s access to information but it can also greatly cut down on the time and headaches involved in audits, compliance cases or other legal information requests: something every oil and gas company should be prepared for.
Asset Management
Do you know where your pipelines are and where they flow? Can you quickly give directions to every well you own? If your answer to either of those questions is no, then you’re opening yourself to liability and exposing yourself to issues if the people who do know the answers decide to leave your company. Asset management systems provide an overview of your operations, and serve as an excellent base for pulling in digital files, connecting production to specific wells, and seeing where potential issues are.
Land & Contract Management
Land management is complicated. If you’re dealing with multiple landowners and all of those landowners have different contracts, needs, and timelines, it will make your team’s life 10x easier if you start storing and tracking that information digitally. With the right software, you can have an aerial view of the parcels you have, the parcels you need, and the parcels you won’t get. A system that will really pay for itself will have schedules and reminders to help you stay compliant with your contracts and legal requirements.
Choosing your software
With so many options, features, and packages it might feel like you need a degree in computer science to know what you should be looking for. Here’s a cheat sheet of must-have features for any software you choose to implement:
Data Backup - The system you choose should provide you with automatic data backups to a second location. If the software is installed on your premises, then you need to have a back-up program that periodically stores a copy of that data in another location to ensure you can still access it in the event of a fire or theft. If the vendor stores your data, then you should ask them about their data redundancy and backup and ensure they have multi-site storage/backup.
Data Import/Export - Before you put your data into someone else’s system, ask them how you would get your data out should you need to move to another system. They should have a clear answer for you that doesn’t include lots of proprietary formats that only they can work with.
Remote access - Your team should be able to access your information from anywhere. Mobile technology and high-speed wireless internet can make data available in many, if not most locations. Your team benefits from solutions that put the data in their hands, whether in the office, in the field, or at home during a late night emergency. Not to mention, data collection is much more reliable when it can be entered on-site.
User friendliness - Your software should be intuitive and easy to use with minimal training. If it’s not, keep looking. Technical software has gotten away with being terribly designed for many years, but that’s starting to change as people demand work software that’s as easy to use as their personal apps. Bottom line: Your team shouldn’t require a ton of training and tech support to do their jobs.
Solves multiple problems - Unless you have a very specific need, most software you use should solve more than one problem. Each additional software application takes time and energy to learn and maintain. Consider cost, features, and the number of systems you’re already using. Try to keep the number of systems as low as possible while keeping costs down. Sometimes you can find cheaper, focused solutions. That’s great, just know there’s a hidden cost there.
Cost - Make a list of the things the application should do. Rank those items on a scale of “Must have,” “Want to have” and “Would be nice to have.” As you look at the applications, compare how they score with the “Must have” items. Costs can vary tremendously in oil and gas software, as can features. Make sure you get your “Must have” items and then look to trim costs on the other items.
In addition to those considerations, you should also look beyond applications typically labeled “for Oil & Gas.” While these applications may provide tailored solutions, you might also find that software targeted at other natural resource related fields or even more generic software may fit your needs and save you a bunch of money in the process.
Have more questions?
If you have more questions or don’t want to go-it-alone on figuring out how to use technology to improve your operations, let us know. Email us at contact@line-45.com or call us at (833) 254-6345.
