Deriving Business Value from Implementing WITSML

Dr. Julian G. Pickering, Director, Digital Oilfield Solutions
Randy W. Clark, President & CEO, Energistics

The Wellsite Information Transfer Standard Markup Language (WITSMLTM) enables the upstream oil and gas industry to communicate wellsite information efficiently. The benefits for adopting a standardized approach to exchanging drilling information are intuitive for most drilling engineers and managers in the industry and usually include the following reasons:

»    WITSML allows energy companies to leverage their investment in highly instrumented fields and enables new capabilities for automation and optimization that would otherwise be impossible or difficult to achieve.
»    WITSML reduces the cost of information exchange between software applications within an operating company and between operating companies, joint ventures, partners, contractors, and regulatory authorities.
»    WITSML reduces the cost of replacing or substituting software which results in improved functionality.

WITSML, facilitated by Energistics, is celebrating its tenth anniversary this year with more than 50 member companies supporting its Special Interest Group (SIG) and is embedded in over 40 software products and applications used by oil and gas companies globally. So why has every new drilling operation in the last two years not used WITSML as its base data communications technology for near real-time data exchange and historical information? The answer lies in rate of adoption rather than proven functionality. In some energy companies, notably Statoil and Saudi Aramco, there is a proven understanding of the benefit that is provided by utilizing WITSML and as a consequence their master service agreements stipulate that WITSML must be used to deliver real-time drilling data. However, this is certainly not true of the broader oil and gas industry.

While the energy industry as a whole has been a late adopter of certain technologies, there have been several technology innovations such as 3-D seismic and horizontal drilling which have increased safety and made drilling operations more effective. However, adopting new technology, simply for efficiency, is often perceived by the industry as a “nice to have, rather than a need to have” decision.

For most oil and gas operators the approval and implementation of a project follows a rigorous process. The intent is to be as objective as possible and to answer questions such as:

»    Is the project affordable given budget constraints?
»    What is the timeline to delivery and how soon will I get payback?
»    What are the risks of the project failing to deliver?
»    If there are several project proposals which have the highest priority?

It is very easy for data communications to be overlooked completely in this high level decision process but usually they become critical once the project is underway. The challenge is quantifying the business value from implementing effective data communications and understanding the added business value from using an open industry standard rather than a proprietary solution.

In the early phases of most projects, usually prior to sanction, an Authorization for Expenditure (AFE) or similar document is developed setting out the business case for undertaking a project. For a project to go live, the AFE must either demonstrate significant business value or else fit into the category of a “must do” project to satisfy regulatory requirements or address Health, Safety, Security and Environmental (HSSE) issues. The question is – what is meant by significant business value and how is it measured in the case of a project adopating a communications protocol such as WITSML?

A good approach to addressing data communications requirements in the pre-project phase is to establish a clear understanding of how standards can mitigate risk and enable decision making and therefore be an integral part of the drilling strategy. This could take the form of a workshop, facilitated by a real-time data professional, attended by drilling engineers, supervisors and managers from the project team. The project team should identify what data is required, by whom and in what form. Having detailed discussions about the consequences of losing installed data communications will lead towards identifying business value but it is only the first step. If data communications are implemented from a business perspective they open up a wealth of opportunity.

Let us use WITSML as an example and review the cause and effect map shown in Figure 1 that looks at the premise that “WITSML is becoming a de-facto open industry standard for real-time drilling and production information”. The light blue boxes are consequences of the premise and an experienced project engineer could assign financial benefits to each of these boxes based on existing project knowledge. The dark blue box shows the business impacts which would have detailed cost savings assigned and be prioritized accordingly. The high-level map shown in Figure 1 illustrates the process, but for a real project, it would be structured in much finer detail.

Armed with factual information on business value in the AFE, the case for WITSML becomes much more compelling. Add to this the consequential value of deploying new software tools to analyze the real-time data and a likely future requirement to provide process or sub-process automation and suddenly WITMSL becomes an integral part of the drilling strategy.

In the case of a new well project, there are two distinct phases – well planning and well delivery. Both require service support to the well team from the sub-surface and drilling disciplines as shown in Figure 2. A number of software tools will be used by the discipline engineers and well team to support well planning and well delivery and this architecture will deliver far greater business value when planned in advance.

The individual processes are understood clearly in most oil and gas companies but the degree to which they are implemented in a coherent manner with efficient data sharing varies widely from project to project. The main reason is that the “do it as we have done it before” approach emerges and there is a lack of planning of the complete data flow. Data communications are sometimes perceived as a necessary evil, rather than as an opportunity for enhanced value delivery by the project managers and well team leaders.

The situation is complicated further if the software tools are sourced from multiple vendors, which is often the case. Although WITSML provides only a partial solution to this problem at the moment, the standard is moving in a direction that will improve considerably the efficiency of data exchange in the future, as development is accelerated by end user demand.

In conclusion, the subject of data communications should be a critical discipline in well delivery systems and the use of WITSML is likely to have a profound effect on the value of a project. Documented cases exist where WITSML has delivered significant business value but all too often standardization is not part of the project strategy. It may be that the project decision makers lack the technical knowledge of WITSML and the important role that it can fulfil. Under these circumstances the result, at best, is that the project delivers some business value in spite of data communication inefficiencies. A significant question to ask is what value could have been derived if WITSML had been part of the overall strategy? And more importantly what will the overall value be to the oil and gas industry once adoption and deployment of WITSML is universal?

For more information please visit the Energistics stand at the SPE Russian Oil and Gas Technical Conference and Exhibition, Moscow (26 – 28 October 2010) at Stand C-60 or visit
http://www.energistics.org/
and
http://www.digitaloilfieldsolutions.com/.

References
[1] Pickering, J., Grøvik, L., Franssens, D., Deeks, N., Doniger, A., Schey, J.:
“WITSML Comes of Age for the Global Drilling & Completions Industry”,
SPE 124347, Annual Technical Conference and Exhibition, New Orleans, Louisiana, USA, 4-7 October 2009.