BP’s US Lower 48 onshore business is transforming the way it produces oil and natural gas by adopting high-tech innovations that enhance safety and reliability while lowering costs. Using cutting-edge technologies such as big data analytics, augmented-reality smart glasses, drones and advanced drilling techniques, BP is making its operations more intelligent - and more competitive
For the past two years, BP’s Lower 48 business has been pursuing big ideas in order to remain a leader in the US natural gas industry. Brian Pugh, Lower 48’s chief operation officer - production, believes the key to unlocking the business’s full potential, especially in a low price environment, is to embrace new ways of working. “If you look at any industry, every single one is being turned inside out by technology,” he says. “The energy industry is no different.” In fact, many of the new innovations being deployed across the Lower 48 business have been borrowed from other sectors, including the logistics, wearable technology and personal computer industries. “We’re trying to bring the consumer electronics revolution to the oilfield,” says Pugh. “In the past, it has been dominated by very specialized companies with incredibly expensive equipment that doesn’t evolve very quickly. Now we’re breaking down some of those barriers.”
As part of its new ‘Intelligent Operations’ operating model, Lower 48 is using a series of new technologies that automate many of the time-consuming, routine maintenance activities performed by operators in the field. “This new approach ultimately frees up their time to work more efficiently and creatively, and to focus on what’s really important,” Pugh says.
One example is Lower 48’s creation of an analytics-backed logistics system - inspired by parcel delivery companies - that helps operators make the most of their time spent at well sites. This includes an algorithm that develops dynamic routes for workers so that they’re being directed to the highest-priority wells, whether it’s for health and safety, preventative maintenance or performance optimization reasons.
“In the past, we had pre-defined geographic routes that everyone ran,” Pugh says. “Now our computer system is actually prioritizing activities based on the algorithm that we’ve created.”
During their site visits, operators are using smart glasses - safety goggles that enable workers to read sensor information on their lenses and communicate in real time with technical experts at a control center.
Using augmented reality, the experts can overlay instructions and data in the technician’s field of vision as they work on the equipment.
The glasses were piloted over several months at sites in Texas and Oklahoma and will soon be deployed across the business, including in Colorado, New Mexico and Wyoming. “The smart glasses greatly increase our productivity, and we’ve seen improvements in the safety and efficiency of our operations,” says Pugh.
To help its teams see things their naked eyes can’t, Lower 48 is deploying drones to perform routine well site inspections, detect potential leaks and, in some cases, serve as first responders. “If our alarm system notifies us of a potential problem,” Pugh says, "we can send a drone out in the field to get a better idea of what’s happening so that the operator can be better prepared as they respond to the situation.” The Lower 48 business has also developed an “industry-disrupting” alternative to the computers it uses to control a well. “Historically these units have cost thousands of dollars and are difficult to work on, because they require a very specialized skill set,” says Pugh.
Now Lower 48 is replacing those complex systems with small single-board computers - technology that was originally developed to help teach basic computer science in schools and developing countries.
The microcomputers are a fraction of the cost of the traditional equipment, which will enable Lower 48 to use them more broadly.
Taken together, the pilot programmes for these initiatives and others have yielded a 50 percent reduction in the amount of man hours needed to keep Lower 48’s wells online, as well as a 20 percent increase in production.
And over the past three years, as these technologies were being tested and deployed, the business cut its total operating expenses by nearly half.
“We’re creating a whole different way of operating—not just incrementally different on what we’ve always done,” says Pugh. “It’s not just a refresh of the same old ideas; it’s a fundamentally different way to work."
On another level
Deep below BP’s well sites, another innovative approach has proven to be a game-changer for the Lower 48 business. A specialized technique known as ‘multilateral’ drilling is revolutionizing the way that BP is extracting energy from its reservoirs.
The business completed its first-ever multilateral wells in 2015 in the San Juan Basin, located mainly in New Mexico and Colorado. Multilateral wells feature multiple horizontal wells connected to a single vertical drilling hole, or ‘wellbore,’ allowing producers to access more of the oil and gas in a given reservoir, while reducing the number of drilling sites.
Harris Cander, vice president of exploration and subsurface technology for Lower 48, spells it out.
“For the vast majority of the industry, for every one horizontal well that’s drilled, there’s one vertical—so it looks like the letter ‘L’,” he says. “The idea with a multilateral is that from one vertical well, you’ll drill more than one horizontal leg to it—so it looks more like an upside-down letter ‘F’.”
While there can still be sound financial or strategic reasons to drill a vertical well or a conventional horizontal well, multilaterals can deliver premier returns in some of BP’s reservoirs. Cander says that, compared to conventional drilling techniques, multilaterals can be more efficient and also can deliver safety, environmental and cost benefits.
For example, drilling multiple horizontal wells from one vertical wellbore requires just one drilling pad. “Having one drilling pad instead of several means there is less surface disruption, which helps to shrink the environmental footprint,” says Cander. “And reducing the surface footprint generally helps to reduce the carbon footprint, too.”
This drilling technique helps to boost production, unlocking pockets of oil and gas in fields that, in many cases, would otherwise be untapped. The business has achieved these gains without compromising its commitment to safety and the environment.
“Safety always comes first,” Cander says. “Many of the innovations we’re pursuing are improvements in efficiency, and the more efficiently we can do things, the more we are mitigating risks.”
The Lower 48 business has drilled at least one multilateral well in all five of its US regional business units. It expects that many of its new wells in the San Juan Basin will be multilaterals, and is pursuing similar well design improvements across all its operations.
Beyond the US, the Lower 48 business is collaborating with BP’s unconventional reservoirs technology team to share its drilling expertise with colleagues around the world, including those working on BP’s Khazzan tight gas project in Oman, which began production in September.
At a glance: BP’s US Lower 48 onshore business
- With operations that stretch from the Rocky Mountains to east Texas, BP’s Lower 48 onshore business is one of America’s largest natural gas producers.
- The business operates nearly 10,000 wells in seven oil and gas basins across Colorado, New Mexico, Oklahoma, Texas and Wyoming.
- BP Lower 48 produces natural gas - along with oil, condensate and gas liquids - from both conventional and unconventional rock formations. In 2016, it produced an average of 302,000 barrels of oil equivalent each day.
- It is one of the largest producers in the San Juan Basin of New Mexico and Colorado, where it operates approximately 3,900 wells.
- The business announced in August that it had brought online a highly productive natural gas well in the San Juan Basin’s Mancos Shale, highlighting the potential of the New Mexico field to be a significant new source of US natural gas supply.