Five Ways AI & Advanced Analytics Is Used In The Oil & Gas Industry
As one of the fastest growing and demand-driven industry, the oil and natural gas sector has witnessed tremendous expansion in terms of technological advancements. Despite the demand for cleaner energy sources, the natural gas continues to be preferred by a large number of countries with major governments and private players looking into emerging technologies like artificial intelligence and machine learning for enhancing the working of offshore and onshore drilling equipment and even to check the health of oil rigs. In India, vendors like Wipro has been closely working with domestic and international oil and gas companies to provide AI and data analytics solutions to business to tap into new avenues of growth. Through their AI and automation platform, Wipro Holmes, the company has been helping leading LNG company gain operational and business insight. Speaking to a leading tech portal about the Hindustan Petroleum Corporation Limited’s (HPCL) digital strategy, S.T Sathiavageeswaran, Executive Director- Information Systems said, “HPCL is effectively using analytics for management dashboards, reporting and decision making, data visualization, and geo map feature for sales analytics. In addition, HPCL has designed and implemented business analytics to provide industry performance analysis and insights with geographical analytical capability for the country, State, Districts, Zonal and Regional level comparisons.” In another interesting use case, HPCL, invested pre-seed capital in AI startup Tranzmeo, which uses AI and ML to analyse machine behaviour and predict anomalies. In this article, we look at these technologies that are aiding this process and the effect of it in the industry. 1) Automating tasks: The oil and gas industry is highly labour-intensive and these workers are employed in a highly precarious condition. According to a study by McKinsey, which observed the changing trends in the oil and gas industry, emerging technologies like AI and ML can automate 60-90 per cent of the routine tasks while identifying the best practices. By doing so, the lesser number of people are prone to danger while the employers have a larger benefit of reducing human error and increasing efficiency. Due to the increased level of AI/ML applications in the field, it is believed that the industry will employ more PhD-level data scientists than geologists in the coming years. The study then revealed that the industry could save as much as $50 billion in the coming decade, just by deploying AI and ML solutions. 2) For Hydrocarbon production: One of the primary task associated with oil drilling is hydrocarbon exploration, which requires companies to locate oil and natural gas beneath the Earth’s surface. By leveraging the capabilities of autonomous bots and drones, industry players want to replace humans while accessing extreme environments or high-risk regions. In a 2013 challenge, a French oil and gas company, Total opened up a competition for the public to design an AI-powered autonomous surface robot which could meet the specific needs of hydrocarbon exploration and production activities. The primary requirement from the bots was to create a smart report. “It must be able to not only read and record values from instruments, but also analyze any inconsistencies and independently deal with unexpected situations, such as detecting whether the readings are within the range of normal functioning, whether the terrain matches the 3D graphical map of the site, and so on,” the company said in their website 3) ESP monitoring: To maximise output, most offshore pumps use electric submersible pumps (ESPs), which considered to be one of the most efficient ways of extracting oil from deep within the earth. To optimise its functioning, Siemens recently rolled out a product which coupled AI and cloud for real-time monitoring of these ESPs, that are mostly installed in harsh condition and are prone to corrosion from seawater and deep water pressure. Siemen’s predictive maintenance solution called AI4ESP, has been designed specially to monitor ESPs remotely. By facilitating real-time analysis multiple data, the product was able to “provide a digital map of ESP operations, effectively creating smart pumps at the heart of a digital oil field.” By deploying the technology, the AI systems could detect anomalies by flagging off deviation and by sending alerts to the operators.”An anomaly in the data source detected by the AI system can reveal a potential failure several days before the actual failure of the ESP mechanism,” a representative of the company wrote in an article. It further increased the operations of the ESPs by providing behaviour labelling and real-time feedback loop between an ESP and its cloud-based operating profile 4) Production Optimisation – The application of AI cut across various verticals of the oil and gas industry. As oil pricing is highly fluctuating, the need for companies to optimise their production is important. Further, it is managed through enhancing an oil well’s life, which is in turn affected by factors like flow rates and pressure, among other things. Thus by using AI and ML, the algorithms can collect data from numerous sensors and other devices to give a real-time update thus providing the optimum operating environment. “The value of AI and ML can be applied in a different statistical model, which can help in improving asset management decision. Effective adoption of these learning techniques will be dependent on the integration, with data visualization and effective user interface design,” ” Vinodkumar Raghothamarao, Director Consulting, wrote in a leading website. 5) Reservoir management: With reservoir forming the core of oil and gas production, the degree of maintenance and optimisation that it requires is very high. Important data from the reservoir equipment and integration of various aspects surrounding the facility including information on geology, reservoir engineering, production techniques can be used to feed the AI systems can improve the functioning of reservoirs. “Fuzzy logic, expert systems and artificial networks are used to accurately characterize reservoir for optimum production output. Complex logics are required to derive a relationship between critical functions like algorithms defining the relationship between seismic attributes, and target lithological properties such as well logs and sand properties,”
PH’s AG&P gets rights to put up natural gas facilities in India
Atlantic, Gulf and Pacific Co. of Manila Inc. (AG&P) continues to expand its footprint in India as regulators granted the engineering firm rights to put up natural gas facilities and provide services to consumers in nine more concession areas. The Petroleum and Natural Gas Regulatory Board (PNGRB) in New Delhi on March 1 announced that AG&P and its unit AG&P LNG Marketing Pte. Ltd. won contracts for nine out of 50 geographical areas in the 10th bidding round for natural gas concessions across India. In this latest bidding round, AG&P won contracts to build the infrastructure network and to deliver gas to consumers in 23 districts spread out in the states of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala. In a statement, PNGRB said results of the latest round of bidding heralds an era that sees “the availability of convenient, environment-friendly and cheaper natural gas for more than 70 percent of the country’s population spread across 27 States and Union Territories.” The regulatory agency said that AG&P, along with 11 other entities that won contracts, are expected within the next eight years to provide more than two billion household connections for piped natural gas and install 3,578 compressed natural gas stations for the transport sector, in additional to building a total of 54,177 inch-kilometers of steel pipeline. “Further, the entities would be authorised to supply natural gas to industrial and commercial units in their respective (geographical areas) as per the limits provided in the CGD (city gas distribution) Authorisation Regulations,” PNGRB said. In the 9th bidding round conducted in November 2018, AG&P won the rights to build LNG facilities in the districts Kanchipuram and Ramanathapuram, which are both in Tamil Nadu. AG&P chief executive Joseph M. Sigelman told the INQUIRER that the company invested P1.6 billion in 2016 to upgrade its two manufacturing facilities in Batangas to meet rising global demand for its services. “AG&P has a dedicated LNG engineering team in Alabang, Muntinlupa, to support the company’s expanding portfolio of LNG projects in Asia, Africa and South America,” Sigelman said. “This team complements (our) global engineering operations in Houston, Texas,” he said. “More than 30 highly qualified Filipino engineers with gas industry experience have been hired in the last year.”
India imports more oil in 5 years of Modi govt; 10% import cut by 2022 remains a dream
India has further strengthened its position of being a net importer of oil during the five years of the Modi government, floundering on an ambitious plan that entailed reducing countrys import dependency of oil by 10 per cent by 2022. As per government’s estimates, the country’s import dependency on oil has increased from 78.3 per cent of total consumption in 2014-15 to settling at a new high of 83.7 per cent in the 10-month period of FY19. The increase has also been consistent with dependence on imported oil increasing in all the five years of the government with the number being 80.6 per cent in FY16, 81.7 in FY17 and 82.9 in FY18. Ironically, the country imported more oil to meet its domestic demand in the past five years even though Prime Minister Narendra Modi had set out a road map for reducing India’s crude oil imports by 10 per cent by 2022 in March 2015. “We cannot be living in a dream world. India has not been able to raise domestic production of oil and gas for the past decade. Some of its ageing blocks are now showing signs of fatigue while new discoveries and production is not coming online. If we aspire to move of the path of self-sufficiency, efforts to boost domestic production should go on a war footing,” said a former head of country largest state-owned explorer ONGC, asking not to be named. Though the Ministry of Petroleum and Natural Gas (MoPNG) has taken several policy measures to ramp up domestic production with reforms such as the Hydrocarbon Exploration Licensing Policy, or HELP, and taking a series of de-bottlenecking measures in NELP, or New Exploration Licensing Policy, and pre-NELP regimes, the results are yet to show on the ground. What is frustrating is that country’s oil production has stagnated around 35 million tonnes (MT) since 2007-08 onwards while domestic gas output has actually fallen for the past four years. Over the past 19 years, from 1998-99 to 2017-18, India’s crude oil production increased only by 8.8 per cent from 32.8 MT to 35.77 MT. The decline has come at a time when consumption is rising, pushing the country to rely more on imports. Higher imports have also meant rising import bill, pushing up the current account deficit. As per estimates, crude import bill in FY19 is expected to shoot up by close to 50 per cent to $ 130 billion, twice the level what government agencies were earlier projecting. If the oil import bill reaches closer to $ 130 billion mark, it would be close to levels experienced in FY13 and FY14 when international oil prices had skyrocketed and hovered over $100 a barrel for most of the year. The Indian basket of crude at present is just about $ 65 a barrel. This will make oil import bill for FY 19 the highest in the five years of the Modi government and very close to high import bill during UPA-II when the crude oil prices had breached all records to touch close to $ 140 a barrel mark.
PM Narendra Modi launches Rs 5,150 crore Ennore LNG terminal in Tamil Nadu
Prime Minister Narendra Modi on Wednesday laid foundation stones for five national highway projects in Tamil Nadu worth Rs 5,010 crore and the Rs 5,150 crore state-of-the-art terminal for import of Liquefied Natural Gas at Ennore near Chennai. At a function in Kilambakkam near Chennai, Modi inaugurated via video-conferencing two road projects, including two-laning of 122 km section of NH-38 that goes via Vellore, Thiruvannamalai and Viluppuram districts, and four-laning of 32km Avinashi-Tirupur-Avinashipalayam section of NH-381, in Tirupur. district Foundation stones were laid for four-laning of 116.5km Vikravandi-Sethiathope-Cholapuram-Thanjavur section of NH-36 in Viluppuram, Cuddalore, Ariyalur and Thanjavur districts, six-laning of 36-km-long Karaipettai-Walajapet section of NH-48 in Kancheepuram and Vellore districts and strengthening of existing carriageway of Gudiyatham bypass and Vellore bypass on NH-75 in Vellore district. The Prime Minister dedicated to the nation the electrified Erode-Karur-Trichy and Salem-Karur-Dindigul sections of the railways. Electrification of the sections cost Rs 321 crore. According to ministry of petroleum and natural gas, LNG from Ennore terminal will be transported to customers en route by pipeline right up to Tuticorin in South Tamil Nadu via Puducherry and Trichy. A pipeline has been laid to Bengaluru via Hosur to reach LNG to more industrial customers. The imported LNG will benefit Manali refinery, fertiliser plants, petrochemical plants and power plants, besides gas-based industries and transport sector. Tamil Nadu Banwarilal Purohit, chief minister Edappadi K Palaniswami, deputy chief minister O Panneerselvam and others were present.
Sinopec may ink 20-year LNG deal with Cheniere when trade spat ends
China Petroleum and Chemical Corp plans to sign a 20-year liquefied natural gas (LNG) supply agreement with Cheniere Energy once China and the United States end their trade dispute, two sources with knowledge of the matter said on Wednesday. Cheniere and China Petroleum and Chemical, known as Sinopec, reached a consensus in late-2018 on commercial terms after months of negotiations, but the signing of the deal was held back by the ongoing trade friction between the world’s top two economies, one of the sources, who has direct knowledge of the matter, told Reuters. “Without the trade spat, the deal should have been signed some time ago,” the source said, declining to be named because the matter is not public. In recent weeks, Beijing and Washington appear to have moved closer to a deal to end a bruising eight-month dispute that has seen the countries slap tariffs on billions of dollars worth of the other’s good. A resolution is widely expected to include stepped-up Chinese purchase of U.S. goods. Sinopec intends to buy close to 2 million tonnes a year of LNG from Houston-based Cheniere starting 2023, the two sources added, without giving a deal value. Cheniere may start delivering some supplies before 2023, said the second of the two sources. Based on the delivered cost of U.S.-sourced supplies into east China in January at $8.30 per million British thermal units given by Chinese customs, the 20-year deal would amount to roughly $16 billion. Sinopec and Cheniere both declined to comment on the status of a deal. The Wall Street Journal reported on Sunday that as part of a trade deal with the United States, China would buy $18 billion worth of natural gas from Cheniere. Officials from Cheniere visited Beijing in late February, said a third source, who was also familiar with the matter. Sinopec, a late comer to China’s LNG scene compared to domestic rivals China National Offshore Oil Corp (CNOOC) and PetroChina, has said it wants to more-than double its receiving capacity over the next six years to around 41 million tonnes annually, by building three new terminals along China’s east coast and expanding existing facilities. China, the world’s second-largest LNG buyer after Japan, imported just over 2 million tonnes of the super-chilled fuel in the first nine months of 2018 from the United States, according to Chinese customs. Imports have since almost dried up after Beijing announced a 10 percent tariff on U.S. LNG in September, with sporadic shipments in November and January, amid an escalation of the tit-for-tat trade war. In February 2018, before the trade war started, PetroChina’s parent company CNPC signed a 20-year deal with Cheniere to buy 1.2 million tonnes of LNG a year through 2043, with a portion of the supply beginning in 2018. Thanks to its shale boom, the United States is on track to become the world’s third-biggest LNG exporter by capacity in 2019, after Australia and Qatar. Cheniere said last week it planned to make a final investment decision to build a sixth liquefaction train at its Sabine Pass LNG export terminal in Louisiana in the coming months.