IT & E-Commerce
| | Net Empowered Seismic Decisions | By : Dan Bernard
Special Consultant
| A major seismic data firm recounts success after putting its crucial project manuals on a secure Web site. PGS'' innovation suits well the seismic sector''s obsession with efficiency. But analysts say the key is not the Net itself.
| | Close collaboration can maximize the likelihood of locating reserves while minimizing expenditures of money and time.
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he science of finding oil and gas reserves is detailed and time intensive. Producers hungry to strike must consult continually with their seismic specialists to strategize on where to gather exploratory data and how to process it.
Seismic data is generated by sending sound waves into the ground and measuring how long the waves take to bounce back off of geologic formations beneath the surface. Producers use the data to deduce the location of geological elements that are prerequisites to forming reserves of oil or gas.
Close collaboration can maximize the likelihood of locating reserves while minimizing expenditures of money and time.
| “A truly effective Internet-based solution for the upstream oil and gas industry must preserve existing relationships and business practices while leveraging technology to streamline inefficiencies.”
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Such planning has typically meant a lot of paper-pushing; sending seismic studies to decision-makers in each of the participating companies, then waiting for them to read the data and react. Given that the seismic exploration business depends on adapting the latest technology for data collection, it''s not surprising that the industry has also embraced new information technology for discussing that data. And, as has been the case across the spectrum of professions, the Internet has virtually eliminated the factor of distance between the decision-makers, bringing efficiencies and saving time.
For Petroleum Geo-Services (PGS), the use of the Internet has meant creating “online project manuals.” The oilfield service company, which has headquarters in Oslo and Houston, gathers and processes seismic data for oil and gas companies. PGS has offices and offshore data-collection facilities around the world including in Egypt, the United Arab Emirates, Azerbaijan, Kazakhstan, and Nigeria.
Project manuals are an ongoing record of the technical data gathered, along with the minutes of meetings held to discuss the findings and possible ways of proceedings. In the past, the manuals were kept in paper form in a single location, with photocopies sent to other decision-makers. Three years ago, PGS began placing the data on a secure Web site with password protected access granted to key executives, project managers, and technical staff at the involved companies. Data processors based at offshore facilities can use satellite phone connections to log in as well.
“Before, obviously, all the information would be kept in a ring file in your room. It''s not something that anybody else could look at. You may not be in the same country, and even if you are in the same country, you may not be able to have a meeting every single day,” said Chris Alton, marine processing manager for PGS Data Processing in Cairo. “As it stands now, anybody working on a project, whether the employee or the client, can call up the Web page and see all the information that he needs to see in a number of mouse clicks. It puts all the information at your fingertips. It''s not really a particular financial benefit; it''s more of a benefit in terms of a smooth operation of the work.” In addition to work for clients in France, the UK, South Africa, and Canada, PGS’ main work in Egypt is for BP Amoco and International Egyptian Oil Company (IEOC), a subsidiary of Italy’s ENI-Agip group. In Saudi Arabia, it processes data for Saudi Aramco. “Frequently, we''ll have a client in one country, we’ll be in another country, maybe we’ll have someone else working on it in a third country, and maybe someone will be working on it from a vessel,” Alton said.
Attractive Efficiencies
It''s not casual reading: The initial data analysis often presents a client with the choice of a number of analysis methods, sometimes with significantly different price tags.
“To get from a situation where you have raw data on magnetic tape to a situation where you have a product that you can use to actually identify where oil and gas may be, that is a fairly complex and time consuming process. It typically takes four months to get from one position to the other. Depending on what you do, there are different wants to improve the data, and what''s good for one project may not be good for another,” Alton said. “You need to be in constant contact with the client in terms of checking if the work is OK and deciding what to do or which process to use. We can say, ‘OK, we know that the best thing to do with this data is this process, but it’s going to take a year and it’s going to cost you $3 million. On the other hand, we can do this, and it won''t be as good but it will take two months and it will cost you $300,000.’ And everything has to be a joint decision.”
PGS’ clients quite appreciate the innovation. In addition to streamlining the consultation process, eliminating the time lag also lets PGS react quickly to changes in the available data processing technology, Alton said. As a bonus, the project manuals can be quickly converted into the final project report at the end of the process. That sort of time-saving fits in well with the recent drive for greater efficiency in the seismic data acquisition business, which has found itself squeezed by the downturn in the oil and gas industries. The push was underscored in late November, when PGS announced that it would merge with fellow seismic data firm Veritas DGC Inc. in the second quarter of 2002. The combined company will be the second largest firm in the geophysical services industry, boasting a library of 3D seismic data covering more than 400,000 square kilometers, equity market capitalization of $1 billion, and a total value of $3.5 billion. More to the point, the merger will allow the firms to cut costs by some $35 million a year by cutting administration and consolidating research activities. “Growing global demand for reliable seismic data coupled with ongoing consolidation, both among our customers and in our industry, make this an opportune time for this combination,” PGS Chairman Reidar Michaelsen and Veritas Chairman Dave Robson said in a joint statement.
It''s not about the Net
PGS isn’t alone in passing exploration analysis via the Net. Seismic data is among a broad array of hydrocarbon industry assets for sale on IndigoPool.com, the virtual dealing room that Schlumberger Oilfield Services launched in early 2000. Business magazine Forbes.com named IndigoPool as one of the energy industry’s leading business-to-business Web sites that year.
And some analysts foresee that high-tech knowledge management will spread beyond proprietary transactions. Jeff Livesay, CEO of WellBid, Inc., a Denver-based information technology company that caters to the oil and gas industries, predicted in Oil and Gas Executive Report in 2000 that energy companies interested in reducing overhead costs will move toward even greater sharing of knowledge via the Internet. “Software and communications advances will catalyze the … establishment of centralized, industry wide repositories of knowledge, or ‘experience warehouses’ of industry best practices,” Livesay wrote. “A truly effective Internet-based solution for the upstream oil and gas industry must preserve existing relationships and business practices while leveraging technology to streamline inefficiencies.”
Some steps in that direction are already apparent. In October 2000, a British public-private initiative launched an online repository of geoscientific information about the UK Continental Shelf. The “Digital Energy Atlas and Library” or DEAL at www.ukdeal.co.uk, created by British Geological Survey and the UK Offshore Operators Association (UKOOA), includes 2D and 3D seismic data, site surveys and proposed new seismic survey sites, as well as an array of information about UK offshore exploration and production activities. “By providing quick and simple access to a single, complete and reliable source of information, DEAL will eliminate costly duplication in data storage and shorten time spent on searches, freeing up industry specialists to look for new investment opportunities,” the creators said in a press release. But for PGS officials, the key innovation is not the Internet and the specific data that they''re sharing on it; it''s the process. PGS is among the seismic exploration firms that have made the Internet one facet of a far-reaching strategy of “knowledge management.” It''s a popular buzz phrase for business gurus and, inevitably, it also comes in acronym form, “KM.” In the ideal, a sound KM process can be visualized as multi-level flowchart in which information is gathered from all the appropriate parties; from customers to veteran employees and then streamed quickly to the responsible agents.
Of equal importance, the information is also stored in an accessible and durable manner. In the May 2001 edition of First Break, the journal of the European Association of Geoscientists and Engineers, authors David Lamb, Steve Nicholas, and Chris Reddish call that “organizational memory.” “Problems solved become more difficult in an organization that has restructured,” they explain. “The organization and systematic storage of practices and project histories is required to avoid resources being wasted to reinvent the wheel.”
Business author Dutch Holland contends that oil and gas exploration companies have a particular incentive to embrace KM because the volatility of the industry brings constant changes in management. “Accumulated knowledge often isn''t managed well. Too often it’s lost or not deployed in a way that helps to grow the company’s value,” Holland wrote in June 2001 for American City Business Journals. “That can happen when a project summary can''t be located and know-how must be regenerated … when too much geological and geophysical data can''t be found and must be repurchased and then re-analyzed … or when experienced exploration and production professionals walk out the door to positions with other companies and take vital company knowledge with them.”
Lamb and his co-authors stressed that more companies should focus on those sorts of organizational procedures for sharing information rather than fixating on the latest information technology.
“Knowledge management is not about an off-the-shelf IT solution; it is a balance of people, process and technology,” the authors wrote. “One of the primary reasons many knowledge-management initiatives fail is because too much emphasis has been placed on explicit knowledge and IT solutions.”
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