SAIC Helping Major Oil Companies Lower the Cost of Production

At some point, lifting the remaining oil becomes cost prohibitive and production stops. But SAIC is helping the major oil companies develop solutions that extend the life of fields, in some cases, increasing the oil recovered by more than 10 percent.

"You stick a pipe in the ground, and siphon the easy-to-reach oil," said Rex Ballard, acting general manager of SAIC's Commercial Business Services Business Unit. But once the easy-to-reach oil is gone, "It costs a lot more to access the remainder of the recoverable oil in the field." That's why SAIC is working to help oil companies to increase production and extend the life of oilfields.

"Lifting cost," said Kunal Dutta-Roy, solution lead in SAIC's Integrated Production Management Program, "is the cost to recover a barrel of oil. So it's revenue divided by the operating expense, but it does not include exploration costs." Dutta-Roy has a Ph.D. in petroleum engineering.

During the oil boom of the last several years, operators had maintained an intense focus on exploration, "simply because people had the capital to spend with reasonable returns," said Dutta-Roy. According to Ballard, when the price of oil was rising to more than $80 per barrel, nearly "anything in their budgets was justified. They were saying, "I can drill in deep water" or deeper than 6,000 feet. "I can recover oil from shale or tar-sands. Almost anything was justified at $120 a barrel."

Spending on exploration has waned as the price of oil dropped precipitously, and the focus shifted from exploration to reducing lifting costs. "There's more focus on reducing lifting costs than there ever has been before," Dutta-Roy said. In the current economic climate, even though the price of oil has continued to climb back up, Dutta-Roy continued, "It is hard to rationalize exploration investments when the largest proportion of oil today comes from fields that are typically 15-30 years old."

Extending the Life of Elephants

These older fields are known in the oil industry as "elephants," or large producing fields. What the oil companies are trying to do, Dutta-Roy said, is "extend the life of these elephants by managing the reservoir intelligently to minimize trapping and stranding oil. It's cheaper to extend the useful life of a mature field than it is to develop a new field."

The biggest recent change in the oil industry has been the proliferation of technology that makes it possible to recover hard-to-reach oil more intelligently. What makes it possible to collect sub-surface data, whether it's down-hole, or subsea, is advanced sensors. SAIC is assisting its oil and gas customers in the design and use of advanced sensors that provide meaningful signals at high pressures and temperatures in order to generate the data required to make critical engineering decisions in the management of the reservoir.

One of SAIC's approaches is the use of information technology to optimize the production of a reservoir through near-real-time monitoring and control of the instruments and equipment used to manage the flow of oil in the field. While that capability is not unique, the approach is.

Collaboration Centers

SAIC has borrowed from the company's deep domain experience in military command and control to design and deploy "Collaboration Centers," which share information and consolidate the expert engineering resources in one place. That enables real-time engineering decisions about oil fields in hostile environments to be made conveniently and safely in remote locations.

While all of the major oil companies have some kind of solution for "digitizing" the signals generated by sensors in the oilfields, there "are many data access issues. SAIC is providing customers with the digital communications systems and networking tools not only to transmit the data fast enough to make decisions, but also to secure data that must maintain high integrity in order to make good decisions and to maintain safety in operations.

"Once the data is received at a Collaboration Center," Dutta-Roy said, "SAIC provides customers with the software applications to manage the workflows that cleanse and present the data to the user. SAIC's Real Time Data Management solution has provided data integrity management for several of our major oil customers."

Through the use of advanced visualization, data analysis systems, and high speed networks, SAIC is providing petroleum engineers all the information they need on a remote field in order to take actions that will optimize production in those fields.

SAIC is delivering a vendor-neutral approach that enables oil companies to transition from the conventional ad hoc operating processes to globally supportable tools and best practices.