11/23/2015

Sponsored by

THE GAME CHANGING IMPACT OF

DATA & DATA-DRIVEN SOLUTIONS
IN THE UPSTREAM OIL & GAS INDUSTRY

Shahab D. Mohaghegh
Intelligent Solutions, Inc. & West Virginia University

Outline
• The Data Revolution
• Journey of Data in Our Industry
• Confusion:
– Digital Energy & Petroleum Data Driven Analytics
• Data Driven Solutions in the Upstream
• Petroleum Data Science
• Some Final Thoughts
– Roles, Players, Objectives, Academia, Startups
• The Way Forward (Road to Adoption)

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Game Changing Role of Data in our every day life

DATA REVOLUTION

The Data Revolution

• Data is the new buzz word.
• It is changing the way we:
– Shop,
– Receive news and information,
– Manufacture,
– Farm,
– Receive healthcare,
– Plan travel,
– …

Data-Driven Solutions
• Data-Driven Solutions are now used across
multiple industries:
– Self-Driving Cars (Google, Apple, Bez, Nissan, Tesla)
– UPS (Fleet Tracking Devices) to cut operational costs
– Boston and Rio (event anticipation) to cut municipal
costs
– Healthcare, Pharmaceutical, Manufacturing, Retail,
Consumer Tracking, …

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Data-Driven Solutions
• In oil and gas industry:
– Drilling ahead of the bit (on-bottom and off-bottom NPT
prediction)
– Formation Evaluation (Core-Log Correlation, Synthetic Logs)
– Reservoir Modeling (Data-Driven Reservoir Models)
– Reservoir Management (Smart Proxy)
– Production Optimization (Hydraulic Fracturing optimization in
Shale, Re-Frac Candidate Selection & Design)
– Surface Facility Modeling
– Accurate estimation of the discharge rate only days after the
Deepwater Horizon incident (coupled smart proxies).

How Data is Used Now and How Will it be Used in the Future

DATA JOURNEY IN E&P

The Data Journey

• Deterministic Solutions (numerical, Analytical, etc.)
– Our today’s understanding of the physics (model) dictates the
type and the quantity of data used.
– Data is there to serve our models.

• Data-Driven Solutions
– Data is the major source of information about the asset.
– Data serve as the main building blocks of the models.

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The Journey of Data in the E&P

• Data plays two major roles (goes through two
phases) in the E&P industry:

– Phase 1. Consumer of Resource: EXPENSE

– Twilight Phase: The transition mode
– Phase 2. Contributor to the Bottom-line: ASSET

The Journey of Data in the E&P

• Phase 1. Consumer of Resource: Data is an “EXPENSE”

Decision To
Data Is Measured Transmitted
Measure

Stored, Warehoused

Arranged in the Made Available

Retrieved
Database in Dashboards

The Journey of Data in the E&P

• Phase 2. Contributor to the Bottom-line: Data is an “ASSET”

Data-Driven
Analysis
Data-Driven
Models & Workflows
Decisions for
Asset
Make Use of Existing Workflows. It Requires: Management
(a) Open Mind
(b) Domain Expertise
(c) Basic Understanding of AI & Data Mining

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The Journey of Data in the E&P

• Twilight Phase: The transition mode – learning the trade –
testing the water

Cleaned &
Summarized

Basic Statistics

Visualized
Build Your Own Workflow. It Requires:
(a) Massive Amounts of Patience
(b) Domain Expertise
(c) Expertise in AI & Data Mining

The Journey of Data in the E&P

Decision To Stored,
Transmitted
Data as a Consumer

Data Is Measured Warehoused

Measure
Data = Expense

of Resources

Arranged in the Made Available

Retrieved
Database in Dashboards

Cleaned &
Basic Statistics Visualized
Summarized

Data-Driven Decisions for Asset

Data-Driven Analysis
Models & Workflows Management

Data = Asset Data as a Contributor to the Bottom-line

Much Clarity Needed in the Role of Data and People Involved

CONFUSION

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Confusions
• What is the objective of Petroleum Data
Analytics?
• Who are the main players?
• What is the role of IT and Engineering in the
Petroleum Data Analytics?
• Who should be doing What?

The “Data Confusion” in our Industry

• People are most productive when their roles
are well defined and clear.
Digital Energy
Petroleum Data-Driven Analytics
• They ARE NOT the same thing.
• One’s ability to distinguish between these
activities, is a function of his/her
understanding of role of Data in E&P.

Confusions
• In general data-driven analytics includes two major components:
– The IT Component Digital Energy
This component of data-driven analytics deals with data
infrastructure, data standards, data maintenance, and on-
demand data delivery to the scientists and engineers.

Petroleum Data-Driven Analytics

– The Engineering and Geosciences Component
This component of data-driven analytics makes use of data in
order to perform analysis, build workflows and models that
directly impacts operational efficiency and ultimate recovery.

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Confusions
Decision Petroleum Data-Driven Analytics
& Required:
Implementation • This is the prize.
• The first attempt to create excitement in the
Engineering company.
(Analysis, Workflows, • Sell the idea and the technology to large
Models) number of engineers and scientists.
• Let it drive and determine the scope of IT
component.
IT
(infrastructure, standards, maintenance,
delivery, security, dashboards, …)
When it is Not Required:
WHEN IT IS REQUIRED: • While experimenting with the data-driven
• The data-driven technology has been successfully tested technology.
and success stories can be cited within the organization. • The company is assessing the utility of the
• Management has concluded that data-driven solutions are data-driven solutions.
to be an integrated part of everyday life in the company. • The technology is not yet completely sold.
• Resistance to data-driven solutions are minimal. • Resistance by traditionalists in the
• Streamlining data-driven solutions in IOCs and NOCs. company is considerable.
Digital Energy

Even More Confusion

• Within the context of data-driven solutions
there are confusion too.
• Is Data Mining the same as Statistics?
• Is Machine Learning and Artificial Intelligence
the same as Statistics?
• Not a new issue. Been around for decades.
• Differences are Philosophical as well as
technical. (Aristotle vs. Plato)

Game Changing Applications in the Oil and Gas Industry

DATA-DRIVEN SOLUTIONS IN E&P

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Data-Driven Analytics; Definition

• Letting data be the main driving force toward the
solutions that form the foundation of decision
making.

• What are the main building blocks of our models?

– Our today’s understanding of physics
vs.
– The Facts (data – field measurements)

DATA DRIVEN ANALYTICS

CONSTITUTES A PARADIGM SHIFT IN
HOW WE SOLVE PROBLEMS IN E&P

Incorporation of Data-Driven Analytics in the

Everyday Life of Petroleum Professionals has been
an Uphill Battle.

Paradigm Shift
“a change in basic assumptions within the ruling
theory of science” Kuhn, T.S. The Structure of Scientific Revolutions.
Chicago: University of Chicago Press, 1962. ISBN 0-226-45808-3

The techniques and technologies for data-intensive

science are so different that is worth distinguishing
data-intensive science from computational science
as a new, fourth paradigm for scientific exploration.
Jim Gray: (1944-2007) Legendary American computer scientist, received the Turing
Award for seminal contributions to computer science.

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Paradigm Shift
• Thousands of year ago: FIRST PARADIGM
– Science was Empirical (describing the natural phenomena)

• Last few hundred years : SECOND PARADIGM

– Theoretical branch (using models, generalizations)
• Kepler’s Law, Newton’s Law of Motion, Maxwell’s Equation,

• Last few decades : THIRD PARADIGM

– Computational branch (simulating complex phenomena)
• Theoretical models grew too complicated to solve analytically

Paradigm Shift
• Today: FOURTH PARADIGM
– Data-Intensive, Data Exploration, eScience
– Unify theory, experiment, and simulation
– Data captured by instruments or generated by simulator
– Processed by Software
– Information/Knowledge stored in computer
– Scientists analyze database/files using data management
tools and statistics

Role of Physics & Geology

• Application of Data-Driven Analytics in the
upstream, is intimately tied to physics and
geology.

• Domain expertise (NOT STATISTICS) is the most

crucial aspect of successful implementation of
data-driven solutions in any organization.

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Role of Physics & Geology

• Effective data-driven workflows are developed
in our industry by drilling, reservoir, and
production engineers that have become
expert practitioners in art and science of Data-
Driven Analytics.
• These workflows withstand the piercing
scrutiny of physics and geology.
• There is no way around this.

“Data-Driven Solutions” in the Upstream

• There are many success stories of Data-Driven
Solutions in the upstream oil and gas industry.
• Large number of case studies are available.
• More and more innovative solutions are being
introduced every day.
• Here are examples in: Drilling, Reservoir
Modeling, Reservoir Management, and
Production Optimization

“Data-Driven Solutions” in the Upstream

• Drilling
– Predicting NPT using real-time data (MWD-LWD):
• Tens of feet ahead of the bit, during active drilling (bit on-
bottom)
• Tens of minutes before the incident, during tripping and
reaming (bit off-bottom)
– Identifying the combination of impacting factors
– Recommending actions to avoid NPT

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“Data-Driven Solutions” in the Upstream

• Drilling

Distance from Occurrence

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100
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Confidence Occurrence

“Data-Driven Solutions” in the Upstream

• Reservoir Modeling
– Building comprehensive reservoir models based on
field measurements: (Well Construction, Well Logs,
Cores, Well Tests, Seismic, Production/Injection
History, Operational Constraints, etc.)
– History Matching previous production
– Validating the model through blind history matching
– Designing field development plans using the data-
driven reservoir model

“Data-Driven Solutions” in the Upstream

• Reservoir Modeling
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“Data-Driven Solutions” in the Upstream

• Reservoir Management
– Building “Smart Proxy” of the large, complex
reservoir simulation models without compromising:
• The complex physics
• Space-Time resolution
– Quantify uncertainties associated with the static, geo-
model
– Exhaustively search and optimize field development
planning

“Data-Driven Solutions” in the Upstream

• Reservoir Management
Smart Proxy (SRM) learns fluid flow
behavior from data generated by
numerical model and mimics it, with
high accuracy.

SRM is trained using only a handful

of simulation runs.

SRM runs are measured in seconds.

“Data-Driven Solutions” in the Upstream

• Production Optimization
– Building predictive models of hydraulic fracturing
practices in shale using “Hard Data”
– Validating the models with new wells
– Extracting “Data-Driven Best Practices” from
historical data (no human bias)
– Designing Optimum frac jobs for new wells
– Ranking best Candidates & Design Re-Frac

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“Data-Driven Solutions” in the Upstream

• Production Optimization

What are the Characteristics of a Petroleum Data Scientist?

PETROLEUM DATA SCIENCE

Petroleum Data Science

• Do we need “Data Scientists” in our
organizations or “Petroleum Data Scientists”
• What is the difference?
– Should the emphasis be on the “PETROLEUM” or on
the “DATA SCIENCE”?
– Without the emphasis on “PETROLEUM” you are
hiring a generic “STATISTICIAN”.
• It is like hiring a Mathematician to do your
reservoir modeling.

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Petroleum Data Science

• Application of Data-Driven Analytics in the
upstream, is intimately tied to physics and
geology.

• A Petroleum Data Scientist (PDS) is a

petroleum engineer with training in AI, Data
mining, and Statistics. (not the other way
around)

Petroleum Data Scientist

• Unfortunately, our university Petroleum
Engineering Departments are not
(systematically) training Petroleum Data
Scientists.

• Existing Petroleum Data Scientists are mainly

self-trained, enthusiast that are being under-
utilized and often over-looked in their
organizations.

Petroleum Data Scientist

• Development of an International Petroleum
Data Science Academy is quite timely.

• This is can be accomplished by involvement,

input, support, and active participation of
NOCs, IOCs, large Independents, and service
companies.

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Questions that need to be Addressed

SOME FINAL THOUGHTS

Academia
• Why isn’t academia involved?
– Data Confidentiality in E&P
– Lack of Funding Sources (Industry needs to get
involved)
– Lack of Expertise (COMBINED petroleum
engineering AND data-driven technologies)
• Can academia have a role in the development
of the International Petroleum Data Science
Academy?

Startups
• The hype around data and data-driven
solutions has found its way in to the E&P.

• Along with the hype, many startups have

formed with the objective of bringing the
data-driven technologies into the upstream oil
and gas industry.

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Startups (The Warning Signs)

• We will come over and study your operation
and use your data to tell you how you can
enhance your operation.
• Give us your data, so we can tell you, what the
data is trying to tell you.
• We have a magic tool that can solve all (some)
of your problems, and we are not telling you
how its done.

Startups (The Warning Signs)

• Lack of Domain Expertise
• Lack of Data Mining & Machine Learning Expertise
• Lack of Transparency (Cloaked in IP Protection)
• Using examples related to :
• Social media (Facebook, LinkedIn, …)
• Retail: Consumer Relation Management (Amazon, …),
• Pharmaceutical (Medicine development, …)
• Any non-physics-based solutions ….

Where Do We Go From Here?

THE WAY FORWARD

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Important Decisions
• E&P Companies have two important decisions
to make when they are contemplating to make
the most of the data that is in their
possession:
1. Administrative
2. Technical

Administrative
• There are three administrative path to adoption
of Data-Driven Solutions:
– Develop in-house data solutions
– Completely Outsource
– Purchase (lease) data-driven solutions & train/hire
Petroleum Data Scientists

• Best Analogy: Numerical Simulation

Develop or Outsource?
• Using Numerical Reservoir Simulation analogy
• Majority of the companies would be better-off to
outsource.
• Some bigger NOCs and IOCs will decide to
develop their own technology.
– Not going to be as easy as Numerical Simulation
– Not all the details are published
– Many key solutions remain confidential

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Technical
• There are two main technical options available
when it comes to taking maximum advantage
of your data.
– Exploratory Data Analysis
– Complete Data-Driven Solutions (workflows)

Roads to Adoption
• There are two different approaches to adoption
of data-driven analytics:
1. Acquire Data Analytics Tools & Develop In-House
Solutions:
• Patience is required – Success is Possible
2. Acquire Complete Data-Driven Solutions
• Much better chances of Success – Quicker Response
• In both cases training of the workforce is
highly recommended.

Road to Adoption
• Make a culture of it.
• Everyone in the company must understand the
basics of data driven analytics.
• Some will become experts. They would drive the
innovation and use.

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Road to Adoption
• Data-Driven Solutions must be treated as a tool
to improve engineer’s ability to do their jobs
better.
• It works best when it is invisible to the end user.
• Start with a problem to solve.
• Manage Expectations.

THANK YOU

As Exercise at Intelligent Solutions, Inc.

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