2015 feb spe student summit presentation allen sinor

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©2015BakerHughesIncorporated.AllRightsReserved.
© 2015 BAKER HUGHES INCORPORATED. ALL RIGHTS RESERVED. TERMS AND CONDITIONS OF USE: BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES THAT THE DOCUMENT TOGETHER WITH ALL INFORMATION INCLUDED THEREIN IS THE
CONFIDENTIAL AND PROPRIETARY PROPERTY OF BAKER HUGHES INCORPORATED AND INCLUDES VALUABLE TRADE SECRETS AND/OR PROPRIETARY INFORMATION OF BAKER HUGHES (COLLECTIVELY "INFORMATION"). BAKER HUGHES RETAINS
ALL RIGHTS UNDER COPYRIGHT LAWS AND TRADE SECRET LAWS OF THE UNITED STATES OF AMERICA AND OTHER COUNTRIES. THE RECIPIENT FURTHER AGREES THAT THE DOCUMENT MAY NOT BE DISTRIBUTED, TRANSMITTED, COPIED OR
REPRODUCED IN WHOLE OR IN PART BY ANY MEANS, ELECTRONIC, MECHANICAL, OR OTHERWISE, WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF BAKER HUGHES, AND MAY NOT BE USED DIRECTLY OR INDIRECTLY IN ANY WAY DETRIMENTAL
TO BAKER HUGHES’ INTEREST.
Working Smarter, Not Harder
The Role of Innovation in Oil and Gas
Allen Sinor
Vice President, Global Accounts
Baker Hughes
4-6 February, 2015
SPE Gulf Coast Section
2015 Student Summit
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The Perfect HSE Day
Recordable injuries or incidents
Serious spills/releases
Motor vehicle incidents
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Our Purpose
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Industry Challenges
 Increasing cost
– We need to drive efficiencies
 More remote areas
– High end complex technologies to remote regions
 Experience gap
– 44% personnel <3years experience
 Need to use unconventional
extraction methods
 Technological challenges of drilling
– Pressure, temperature and extreme weather conditions
 Significant operational risks and environmental impact
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The Current Oil “Crisis”
NORWAY PULPIT ROCK
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Global Demand and Complexity
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The BIG Question
Why do we explore, drill and develop oil and gas wells?
To make profitable returns for our investorsD
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Decision Strategies Oilfield Breakfast Forum 5 April 2012, Helge Hove Haldorson
Up to $16 dollars
for four bottles
(280,000% MU)
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Current Outlook: The BAD
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Future Outlook: The Not So Bad
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0
10
20
30
40
50
60
70
80
90
100
0
100
200
300
400
500
600
700
800
1975 1980 1985 1990 1995 2000 2005 2010 2015E
LiquidsDemand/LiquidsSupply+OPECSpareCapacity(mmbbl/d)
RealCapex($B,2013)/RealAvg.WTI(2013$)
Source: Barclays, Bloomberg, IEA, EIA
CAPEX
Oil Price
DemandCapacity
Worldwide Outside NA NA
2014
Oil Price - $92/bbl
CAPEX - $680 billion
Demand – 91 mbd
Capacity – 94 mbd
Demand, Price and CAPEX
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Historical Active Rig Count
0
10
20
30
40
50
60
70
80
90
100
0
1,000
2,000
3,000
4,000
5,000
6,000
1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
LiquidsDemand/LiquidsSupply+OPECSpareCapacity(mmbbl/d)
ActiveRigCount
Global NA Intl Capacity Demand
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Oil Economics by Basin: This is Why Oil Price Matters !!!
Source: TPH. Assumes $3.75/mcf NYMEX
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Sources: Thomson Reuters Datastream, IEA. Nov. 27 data for oil price and foreign exchange. Graphics by Vincent Flasseur/Reuters
Breakeven Oil Prices
$92/bbl
$117/bbl
$52/bbl
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Increasing Demand in a Changing World
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Our Global Population Has Exploded
Source: US Department of Commerce and US Census Bureau
The World Gains One Person Every 13 SECONDS!
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Our Global Population Has Exploded
Source: U.S. Department of Commerce and U.S. Census Bureau
2014 – 7.3 Billion
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Beijing, China: 21,000,000 People
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Sao Paulo, Brazil: 12,000,000 People
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Source: Reuters, July 16, 201420
The U.S. is Now Number 1 in Energy Consumption
July 4, 2014 (Bloomberg)
 U.S. became the largest
gas producer in 2010
 U.S. became the largest
oil producer in Q1 2014,
exceeding 11M boe/day
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©2015BakerHughesIncorporated.AllRightsReserved. Non-OECD countries will account for 86% of the
increase in global energy use in the next 20 years
Source: Organization for Economic Cooperation and Development (OECD)21
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37%
18%8%
27%
8% Petroleum and Other Liquids
Coal
Nuclear
Natural Gas
Renewable Energy
Source: U.S. Energy Information Administration Annual Energy , AEO2014 Early Release
Overview, December 16, 2013.
U.S. Energy Consumption
2040
32%
18%8%
30%
10% Fossil Fuels: 82% in 2013,
reduced to 80% by 2040
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Our Customer Base is Evolving
IOCIOC NOCNOC IndependentsIndependents
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Our Learning is Inconsistent
Learning Curve Case Studies
35
Sequence
Days
Applying New Technology Losing Key Personnel Forgetting Curve
Sequence
Days
0
50
100
150
200
250
0 5 10 15 20 25 30
No Learning
Days
Sequence
0
25
50
75
100
0 1 2 3 4 5 6 7
Fast Learning
Sequence
0
25
50
75
0 5 10 15 20 25 30 35 40 45 50
Slow Learning
Days
1977 1984
0
25
50
75
100
0 1 2 3 4 5 6 7 8 9 10 11 12
Sequence
0
10
20
30
40
0 10 20 30
Sequence
DaysSource: SPE 15362- The Drilling Performance Curve
0
100
200
400
500
0 5 10 15 20 25 30
Days
300
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And, Failure is Not Acceptable
2010 Deepwater Horizon Disaster
April 2010
Died: 11 workers
Lost: Deepwater Horizon
Spilled: 200,000,0000 gal
Market Cap Loss: $100B
Industry Impact: ONGOING
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What Lies Ahead?
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The Future?
It is no longer about drilling “further and faster”
It is about Safety, Consistency and Cost of Ownership
Key Pathways
 Reservoir
 Digital
 Materials
 Automation
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Reservoir Challenges
Even after all of these enhanced oil recovery steps (primary, secondary and tertiary)
have been taken, it is still not uncommon for 60 – 70% of the original oil to be left in the
reservoir. So, if you think about that, there are billions of barrels of discovered oil that
we’re leaving in place. Unconventional reservoirs are worse, averaging 90%.
“In the past 100 years – in all of human history – we have consumed 1 trillion barrels of
oil. There are several times that much here,” said Roger Day, vice president for
operations for American Shale Oil (AMSO).
The oil shale deposits found on federal lands in Colorado, Utah and Wyoming contain
an estimated 4.285 trillion barrels of oil in place according to the U.S. Geological
Survey — enough to sustain America’s fuel needs for over a century.
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Well Construction: With RSS or RNS
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Technology Enablers
Vintage
Area Contacted
(ft2)*
Reservoir permeability
Gas Oil
Vertical
Open Hole 1800s 200 10 100
Perforating 1920s 500 10 100
Fracturing 1940s 3,200 1 10
Big Fracs 1980s 240,000 0.01 0.1
Horizontal
Open Hole 1980s 8,000 1 10
Bi-Wing Fracs 2000 1,200,000 0.001 0.01
Complex Fracs 2005 10,000,000 0.0001 0.001
Many-Stage Complex 2009 20,000,000
0.00001 0.0001
40-stage frac 2011 28,000,000
EVOLUTION OF COMPLETION TECHNOLOGY
Source: EOG Estimates, Baker Hughes Estimates
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Vertical Fractured Well
1880s 200
1920s 500
1940s 3,200
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Horizontal Fractured Well
1880s 200
1920s 500
1940s 3,200
1980s 240,000
1980s 8,000
2000 1,200,000D
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Long Horizontal and Multi-Stage Frac
1880s 200
1920s 500
1940s 3,200
1980s 240,000
1980s 8,000
2000 1,200,000
2005 10,000,000
2009 20,000,000
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40 Stage Frac
3
1880s 200
1920s 500
1940s 3,200
1980s 240,000
1980s 8,000
2000 1,200,000
2005 10,000,000
2009 20,000,000
2011 28,000,000
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But, the Rest of The Unconventional Story
70% of unconventional wells in the U.S.do not reach their
production targets 1
40% of all frac stages fail to contribute to production2
73% of operators admit they don't know enough about the subsurface to
develop an effective fracture design 3
Less than 10% of the 15,000horizontal wells drilled annually in the
U.S. are logged 4
5% recovery factors are common in shale gas plays 5
1 Welling & Company, 2012
2 E&P, 2012
3 Welling, 2012
4 SPE Workshop Prague, 2012
5 O&GJ, 2012
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Unconventional Geoscience- utilizing the “Science”
 Geochemistry
 Lithology
 Mineralogy
 TOC
 Lithofacies
 Total Porosity
 Siliceous
Brittleness Index
 Porosity
 Permeability
 Fluid typing
 TOC
 Dynamic & Static
Geomechanical Properties
 Pressure Gradient
 Suite of core analyses
ROTARY CORES
PowerCOR™ /
MaxCOR™
MINERALOGY
FleX™ / RockView™
Spectralog™
MICROSEISMIC
FracXplorer™
ACOUSTICS
XMAC-F1 / SoundTrak™
NMR
MReX™ / MagTrak™
BOREHOLE IMAGING
STAR-HD™ / StarTrak™ / UltrasonicXplorer™ /
GeoXplorer™ / Earth Imager™
RESISTIVITY/DENSITY/NEUTRON
HDIL™ / RTeX™ / OnTrak™ /
LithoTrak™ / ZDEN
 Structural & Sedimentology
 Borehole Stress
 Fracture
Characterization
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Digital in “Our World”
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Why Digital Oilfield?
On an average DOF, project delivers >20% increase in NPV
Drilling &
Operations
Reservoir
Management
Production
Engineering
DOF
 Intervention
 Remote Control
 Offshore
 Drilling
 Substitution
 Productivity
 Monitoring/Control
 Completion
 Recovery
 Management
 Formation
 Characterisation
 RT Data Acquisition
 Production Optimization
 Asset Management
 Lower Opex
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DOF: Data Integration from Capture to Action
Data
Management
Field
Operations
Production
Engineering
Reservoir
Management
Data Capture, Validate  Access  Applications  Information
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Moving from a Legacy of Data and Application Silos
3rd Parties3rd Parties Equipment VendorsEquipment Vendors
Shore SupportShore Support
OperatorOperator Rig OwnerRig Owner Service Company 1Service Company 1
Service Company 2Service Company 2
Sensors & SystemsSensors & Systems
Video
Fire &
Safety
EGIS
Maintenance
Systems
Audio
Weather
Alerts
Radar
SCADA
Alarms
Access &
Identity Mgmt.
Panic
Button
LPR
Procedures
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3rd Parties3rd Parties Equipment VendorsEquipment Vendors
Shore SupportShore Support
OperatorOperator Rig OwnerRig Owner Service Company 1Service Company 1
Service Company 2Service Company 2
Sensors & SystemsSensors & Systems
Video
Fire &
Safety
EGIS
Maintenance
Systems
Audio
Weather
Alerts
Radar
SCADA
Alarms
Access &
Identity Mgmt.
Panic
Button
LPR
Procedures
Digital Collaboration PlatformsDigital Collaboration Platforms
…to Real-time Integrated Operations and Process Safety
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Remote Operations: remove geographic location and distance as a
barrier to safe, efficient operations
24x7x365, safe, globally consistent, high-availability, secure, standardized
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What If?
We could capture the data, images
and conversations to create a
comprehensive, integrated view of the
operation in real time and selectively share
with all those who need to know?
We could orchestrate the actors who
need to collaborate to interpret what
it all means and make decisions?
We could store the “movie” of the
operation to be replayed later?
We could use Digital to TiVo our industry
SAFETY
SECURITY
OPERATIONS
OWN THE DECISIVE MOMENT
2012 ACTE- Orchestrating Decisions in Real-Time
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Digital: Pathway to Global Knowledge
Knowledge
SkillsExperience
Behavior
What makes a person competent?
GOOGLE GLASS
Baker Hughes launched 160 new products in 2014.
The pace of innovation is exponential.
A future of wearable “TECH”
How do we adopt digital enablement?
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Materials
How do we leverage material science from other industries?
DefenseDefense
Material
Sciences
Material
Sciences
AerospaceAerospace
 Composites
 IN-Tallic™
 Compressed Coils
 Laser
 Additive
Manufacturing
MedicalMedical
 SRP Polymer
 Degradable
Thermosets
 Nano Medicine
 Fiber Optics
 Distributed Acoustic
Sensors
 E.M. Telemetry
 ExPhite™
 Magnetostrict D.T.S.
 Shape Memory
Polymer
 Brazed Bead
Matrices
AutomotiveAutomotive
 Tuned Vibrating
Absorbers
 Nano-Oil
Nano-TechNano-Tech
 Hydrophobic
Coatings
 ConFINE™
 Nano Microgel
Swelling Polymer
 Silapore™
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Materials
The next BIG game changers
 High temperature electronics
 Shape memory polymers
 Wear resistant materials
 Impact resistant materials
 Nano engineered materials
– Sensors
– Chemicals
– Drilling materials
– Reservoir surveillance
The prefix nano, derived from the Latin word nanus for dwarf,
means something very small. When we’re using it in metric
terms, a nanometer is one-billionth of a meter. Think about that!
Take a strand of hair and put at it between your fingers. The
width of that hair is 100,000 nanometers. A nanometer is about
how much your fingernail grows every second. So a nanometer
is really small.
Nanotechnology Helps 3-D TV Make a Comeback Without Glasses
- Dexter Johnson post, Consumer Electronics ShowD
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Polycrystalline Diamond
High purity micronised diamond on a WC substrate sintered at:
￭ High Pressure: 55 000 atmospheres (~800 kPsi)
– Picture a tower of 5000 family-sized sedans stacked
on a jar of peanut butter
– Approaching 80,000 atmospheres today
￭ High temperature: 1500°C (>2700 °F) – beyond the melting
point of steel
Higher pressures today are leading to
higher diamond density, and less
cobalt metal. This results in higher
strength, wear resistance and thermal
stability.
UHP cutters gave longer run to TD,
saving a bit and trip
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IN-Tallic™ Disintegrating Frac Balls
￭ Divert treatment and prevent wellbore blockage for
unimpeded production
￭ Frac balls disintegrate before or shortly after the well is
put on production
– Prevents frac balls being trapped on the ball seat by differential
pressure
– Assures that the frac balls are not blocking production
– Allows production from all stages of the well
– Prevents frac balls from piling up in low points of the well
– Avoids debris barrier in production string
￭ Disintegrates in brine, a common frac and formation fluid
– Requires no special fluid or intervention to remove the balls
￭ Lighter than aluminum but as strong as steel
– Allows the balls to be pumped easily in the horizontal section
– Exceeds ratings of some existing ball-activated fracturing
technology
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GeoFORM™ Conformable Sand Management System
Smart shape memory
polymer porous foam
material is run in on base
pipe and self-deploys into
conformance downhole.
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Automation
Many industries have acknowledged human limitations in managing repetitive
or complex tasks and they have turned to automation.
Automotive
Airline
Beverage and Food
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Automation: The BIG Reason
We can train our brain
“Aoccdrnig to a rscheearch at Cmabrigde
Uinervtisy, it deosn't mttaer in waht oredr the
ltteers in a wrod are, the olny iprmoetnt tihng
is taht the frist and lsat ltteer be at the rghit
pclae. The rset can be a total mses and you
can sitll raed it wouthit porbelm. Thsi is
bcuseae the huamn mnid deos not raed ervey
lteter by istlef, but the wrod as a wlohe”
- But miss details due to routine
People make mistakes
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Automation: What If?
 Brake assist
 Brake force distribution
 Smart stop technology
 Pre-collision system
 Dynamic radar
 Driver attention monitor with
closed eye detection
 Lane keep assist
 Vehicle stability control
 Hybrid controllers
5
The future was already taking shape in the automotive industry?
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Automation Opportunities in the Oil Field
Automation-less (not elimination) human intervention
 Manufacturing
 De-manning Rigs
 Semi Autonomous Drilling
 Semi Autonomous Well Control
 Intelligent Completions
 Data Processing and Interpretation
 Stay on plan consistently on every well
 Utilize surface and downhole data
 24/7 real-time surveillance, interpretation, and expert advice
 Detect, diagnose and avoid challenges before they occur
 Investigate, validate and collaborate for
enhanced decision-making
What if? We could give “advice” in real time, now
16th Annual Gulf of Mexico Deepwater Technology Symposium
Utilizing the Power of Case-Based Reasoning Technology for Enhanced Real-Time Risk Recognition and Hazard Mitigation
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© 2015 BAKER HUGHES INCORPORATED. ALL RIGHTS RESERVED. TERMS AND CONDITIONS OF USE: BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES THAT THE DOCUMENT TOGETHER WITH ALL INFORMATION INCLUDED THEREIN IS THE
CONFIDENTIAL AND PROPRIETARY PROPERTY OF BAKER HUGHES INCORPORATED AND INCLUDES VALUABLE TRADE SECRETS AND/OR PROPRIETARY INFORMATION OF BAKER HUGHES (COLLECTIVELY "INFORMATION"). BAKER HUGHES RETAINS
ALL RIGHTS UNDER COPYRIGHT LAWS AND TRADE SECRET LAWS OF THE UNITED STATES OF AMERICA AND OTHER COUNTRIES. THE RECIPIENT FURTHER AGREES THAT THE DOCUMENT MAY NOT BE DISTRIBUTED, TRANSMITTED, COPIED OR
REPRODUCED IN WHOLE OR IN PART BY ANY MEANS, ELECTRONIC, MECHANICAL, OR OTHERWISE, WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF BAKER HUGHES, AND MAY NOT BE USED DIRECTLY OR INDIRECTLY IN ANY WAY DETRIMENTAL
TO BAKER HUGHES’ INTEREST.
Working Smarter, Not Harder
The Role of Innovation in Oil and Gas
Allen Sinor
Vice President, Global Accounts
Baker Hughes
4-6 February, 2015
SPE Gulf Coast Section
2015 Student Summit
D
raftO
nly

2015 feb spe student summit presentation allen sinor

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