Better resource utilization
By Kenneth Stoltz
January 29, 2007
Better resource utilization is a hot topic in the petroleum industry. Research and investments in Integrated Operations (IO) could generate billions for society. The Norwegian Oil Industry Association has estimated that the profit from the rapid introduction of IO on the Norwegian continental shelf (NCS) can be NOK 250 billion in the period 2005-2015. The new Centre for Research-based Innovation will enable NTNU, SINTEF and IFE Halden to make important contributions towards achieving this profit. The greatest potential lies in increasing the recovery rates from oil fields and rationalizing operations.
The new Centre will develop a knowledge bank, methods and tools for integrated operations for upstream petroleum activities that will bring substantial progress and revitalize the technologies and practice in the industry. The added value of adopting IO will be seen in additional commercial finds of oil and gas, increased recovery rates, reduced costs, longer life for petroleum fields, reduced environmental loads, and improved safety measures.
Profits in the hundred billion class
Imagine having a cow that you only milk half-empty every day. You do not have to be Keynes to realize that it does not pay in the long run. The black hydrocarbons have been Norway’s cash cow for years, and now there is a real hope that every udder, or rather, every well will produce even more of their precious drops thanks to technological innovation.
The global thirst for oil will not be quenched by sky-high prices or peak oil pessimism: This year alone we will consume 31 billion barrels of oil. Professor Jon Kleppe at NTNU is working to increase production from every well drilled in the earth’s crust.
”Thanks to stronger focus on integrated operations it should be possible to increase the recovery rate from many fields by a good percentage. An idea of the net value of this is that an overall increase of just 1 per cent in the recovery rates for all fields that are currently in production on the NCS represents some NOK 300 billion in increased income, with an oil price of USD 75 per barrel," Kleppe explains.
He is director and prime mover of the new Centre for Integrated Operations in the Petroleum Industry (CIO) in Trondheim – a unique centre compared with what can be found in other international universities of technology.
This is a Centre where academia and industry will cooperate closely. Apart from NTNU and SINTEF, the Institute for Energy Technology (IFE) is also behind the Centre. Together, these three partners have entered into alliances with Stanford University and Delft University of Technology as well as a long line of powerful corporate partners such as Statoil, Hydro, Total, Gas de France, ConocoPhillips, Shell, Petoro, Aker Kværner, Kongsberg Maritime, and IBM. The Research Council of Norway has also awarded the Centre the status as a Centre for Research-based Innovation (CRI).
Lubricating the oil machinery
It is far more demanding and expensive to extract oil from deepwater and Arctic areas compared with onshore facilities. However, the disadvantages of a harsh climate can be turned to something positive – giving us a competitive advantage in relation to other oil-producing nations regarding state-of-the-art technological solutions.
”Internationally, Norway is a pilot nation in the development of IO. We do not have to look further than the installations on the Ormen Lange and Snøhvit fields to understand that Norway has been a progressive pioneer in technology development,” states Jon Kleppe.
The new solutions will also change the horizon along the Norwegian coastline from the traditional silhouettes of massive oil platforms with gas flares burning like Olympic torches against the blue sky. The director of this new Centre predicts that these concrete colossuses at sea will soon be history.
”Oil platforms protruding from the sea will disappear. Instead, the production installations will be placed directly on the seabed with pipelines and communication lines to the shore. The Snøhvit field is being developed like this,” adds Professor Kleppe.
This involves a totally new strategy for the operation of oil fields. The control room monitoring operations will be moved on shore, and there will be more direct and continuous communication between the control room operator and the production workers for the field. The production workers will be equipped with “computer clothing” that keeps them online at all times.
Innovation and spin-offs
The research activities at the Centre will bring innovation for all partners. For oil companies and suppliers this involves participation in pilot projects, testing and implementing new methods, work processes and information systems into their organizations.
The innovative work at the Centre is likely to produce new enterprises. NTNU and SINTEF already have a very strong track record with rapidly growing spin-offs in the petroleum sector. A small selection of these are the following companies: Reslab, Cybernetica, Prediktor, Computas, SICOM, Sense Intellifield, EMGS, Voxel Vision, Pera, Corrocean, Seabed, Fedem, Seres, Ceetron, Inside Reality, and Wirescan.
Cooperation and digitalization
The relatively new field of Integrated Operations is known by different names in the industry and the authorities. Synonymous terms are e-operations, e-field, Smart field, Field for the future, and Digital oil fields.
It is all about integration. Traditional borders are becoming erased as oil companies, suppliers, groups and people working offshore and onshore are linked through new types of cooperation using computer technology.
Operating oil fields from the shore
The activities at the Centre will focus on integration at all levels of the knowledge process from the collection of information to making smart decisions in real-time.
Integrated Operations also involves the total integration of the organizations working offshore and onshore, through a radical digitalization of all activities. Offshore and land-based work is fused, and people and groups are linked by advanced operation centres. Oil and gas fields can be operated and controlled from the shore, and researchers envisage totally new cooperative relations internally within oil companies, and between oil companies and suppliers.
Practising in digital control rooms
A brand new digital control room has just been built at the new Centre in Trondheim. In practice this is a simulator for the operation of oil and gas fields on the Norwegian continental shelf (NCS). Here, students and industry staff can practise and do research together in a genuine work environment with access to data from the platforms and other installations on the NCS in real-time.
The main activities at the new Centre will be research, innovation and of course, education. There is currently a severe lack of petroleum engineers in the oil industry. NTNU has been the largest supplier of such experts in Norway for decades and the new Centre means that the university’s capacity will increase to 150 master’s candidates over the next five years. In addition, some 30 doctoral candidates and approx. 400 staff in industry will take continuing education at the Centre. The educational challenge is to train the next generation of petroleum engineers to be experts both in their field of specialization and trained in team work and mastery of the new digital tools.
The object of the Centre for Integrated Operations in the Petroleum Industry is to develop and test new methods that are not yet adopted by industry. Four programmes are prioritized: Drilling and well construction, reservoir management and production optimization, operation and maintenance, and cross-disciplinary integration.
The executive managers at the Centre, Jon Kleppe and Jon Lippe, believe that the players in the global industry have not yet understood why Norway is spending money on this.
“I presume this mindset is difficult to sell in Houston,” said Professor Kleppe, who makes a point of being different from oil companies.
”We are not going to do the exact same thing as industry, because that would make us superfluous. We do not necessarily have to come up with everything ourselves, but make use of the top expertise within any area.” The Centre will also transfer experience from other sectors to the oil industry, for instance land-based processing industry, nuclear power, space travel/defence, and telemedicine.
The management at the Centre stresses the advantages of combining industrial and long-term perspectives with knowledge development, dissemination, and knowledge sharing.
“It is very important that our partners feel ownership in relation to the Centre, as we believe they already have. With our 7000 employees and an annual turnover of almost a billion dollars, NTNU, SINTEF, and IFE hold a unique position internationally by covering a broad range of the knowledge required to solve the challenges in Integrated Operations. As far as we know, no other research environment can match our comprehensiveness and depth in these areas,” concludes Jon Kleppe, Director of the Centre.
Go to IO Center's website
Center for Integrated Operations in the Petroleum Industry (IO Center)
New knowledge and technology within Integrated Operations (IO) will provide increased efficiency in production processes, increased the recovery rates from oil and gas reservoirs, and improved standards for safety and the environment.
Norwegian University of Science and Technology (NTNU)
Director of the Centre and Chair:
Professor Jon Kleppe, Department of Petroleum Engineering and Applied Geophysics, NTNU
Jon Lippe, Department of Petroleum Engineering and Applied Geophysics, NTNU
SINTEF, Institute for Energy Technology (IFE) – Halden
Statoil, Hydro, Total, Gaz de France, ConocoPhillips, Shell, Petoro, as well as Kongsberg Maritime, Aker Kværner, FMC, and IBM. Several companies are currently considering joining as partners.
International academic partners:
Stanford University, Delft University of Technology, Carnegie Mellon University, and Kyoto University.
NOK 40 million per annum for 8 years. (EUR 5 million/USD 6.5 million). The cooperating oil companies contribute NOK 18 million, the Research Council of Norway contributes NOK 10 million, the service and systems suppliers will invest NOK 6 million, and the partners NTNU/SINTEF/IFE will invest NOK 6.5 million per annum. In total, NOK 320 million over the next 8 years (EUR 40 million/USD 52 million)
10-20 professors from NTNU
20-30 researchers from NTNU/SINTEF/IFE
30 doctoral candidates
5-10 experts from internationally leading universities and knowledge institutions
10 persons from cooperating oil companies and suppliers
Centre for Research-based Innovation (CRI):
The establishment of the Centres for Research-based Innovation emphasizes Norway’s long-term prioritizing of R&D for the business sector. In 2006, a total of 14 Centres were established.
The main objective for the Centres for Research-based Innovation is to enhance the capability of the business sector to innovate by focusing on long-term research based on forging close alliances between research-intensive enterprises and prominent research groups. (In the long run this basic research will also benefit small and middle-sized enterprises that lack their own research departments.) The total budget for the 14 CRIs will amount to NOK 2 billion over the next eight years. Here the contribution from the Research Council of Norway is NOK 1 billion. The host institution and partners contribute NOK 500 million each.