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Oil and Gas to Focus on Optimization Despite Price Boom

By FutureOn Today

Oil and gas companies are unlikely to loosen their exploration and development purse strings anytime soon as the future remains uncertain. It’s predicted that they will instead focus on production and operations optimization while investing heavily in energy transition strategies.

As we emerge from Covid-19 the demand for oil has rebounded – crude oil prices have more than doubled in the second quarter of 2021 from a year earlier. Market analysts predict that prices will reach $78 a barrel, their highest in almost three years and may even reach $100/bbl by next year, a trend fuelled by a predicted surge in travel once pandemic restrictions are lifted. However, despite this positive outlook, oil and gas operators are acutely aware that this boom could also mark the final surge in oil prices.

Due to the recent market volatility coupled with the overall market downward trend over the past decade, oil and gas companies are less inclined to splash billions on new projects that could take upwards of ten years to deliver a return on investment. Although the demand for oil is unlikely to abate in the near future, there is also considerable pressure on companies to speed up their journey to Net-Zero and to ease off developing new greenfield projects.

Generating high returns is a top priority

A demand for better cost efficiencies, increased production and cleaner energy is making optimization a more attractive investment than exploration. Similarly, the pull towards lower-carbon fuel provides companies an additional incentive to explore options to modify existing assets for green energy production.

“Higher oil prices allow us to extract more value from our existing businesses, which in turn will generate more resources for our spending on transformation in line with our energy transition roadmap,” Repsol Chief Executive Josu Jon Imaz told Reuters in a statement.

Supermajors, such as Shell and BP, have made big promises to anxious investors about high returns from the sector, which has been performing poorly over the past decade, and are therefore unlikely to throw the spending discipline they’ve practiced during the pandemic to the wind any time soon. Research by McKinsey & Company predicts that discipline in finance, capital allocation, risk management and governance will be critical to the future success of the oil and gas industry.

Drive value through the adoption of digital solutions

It’s estimated that throughput from existing assets could be improved significantly – in upstream, average performers have more than 20% opportunity, and even top-quartile performers could improve production by 3% to 5%. These figures suggest leading companies are likely to prioritize scaling up investments in technology, digital tools and data-driven solutions.

Oil and gas technologies are evolving so rapidly that they now offer the industry a myriad of digital solutions to help them achieve their performance goals. Advanced technologies, such as digital twins, IoT sensors, AI powered analytics, and 3D modelling will transform how companies operate for the better. 

The Covid-19 crisis, in which demand for oil almost stalled completely, has also prompted many company leaders to reconsider how their teams collaborate, deliver projects and the management processes needed to run a more efficient oil and gas project. Greater connectivity through cloud-based platforms and the digitalization of data and processes enables teams to work more effectively no matter their location and in real-time.

Optimize your digital tool box

Digitalizing the toolbox needed to deliver an oil and gas project on budget and ahead of schedule is an investment companies should be giving serious consideration, given the current situation. With the future uncertain and the possibility of a re-emergence of Covid-19 or a more virile variant, business leaders should not discard the lessons learned during the crisis – adaptability and resilience is paramount.

Even before the pandemic, the energy industry was in a period of transformation, but now the industry fundamentals have changed and things are likely to get tougher. To be able to compete in this new business landscape companies will need to embrace a new way of thinking, champion innovation and adopt superior operating models.

With its powerful 3D visualization tools and central data hub, FutureOn’s FieldTwin and FieldTwin Design makes optimization, planning, and decision making easier and faster. FutureOn’s cloud-based tools enable projects to continue despite social distancing and help minimize the need for crew to be offshore. Taking this approach addresses many of the issues the industry has faced since the first lockdown in early 2020 and will continue to face until we reach mass Covid-19 vaccination, which could potentially take until 2024.

To find out more about how FutureOn’s cloud-based digital twin solutions can support your company in achieving its performance and production goals or for enquiries about partnership opportunities please contact us or book a demo.


Digital Transformation in Upstream Oil and Gas Can’t Wait

By FutureOn Today

If the oil and gas industry is to survive in the current market and thrive in the Net-Zero market of tomorrow, companies cannot afford to drag their feet when it comes to digital transformation and embracing digitalization. To speed up their maturation up companies need to start cutting through the digital deluge to streamline their digital tool box. 

It’s important companies adopt a future-ready mind-set now if they want to stay ahead of the pack in an increasingly competitive environment. Operations need to be smarter, more efficient, cleaner and increasingly responsive to changing economics. As the cost of digitalization drops and a wider range of advanced technologies become available, companies who play the digital revolution right could gain a serious advantage over their upstream oil and gas competitors. 

Supermajors such as Shell, Equinor, Exxon and Total are already aware of this advantage and are investing heavily in technologies that will enhance their operating excellence while securing them a foothold in a market where fossil fuels will eventually ebb away. Market downturns and moderating operational gains have provided an extra incentive, or push some might say, for companies to save millions from their operating costs, and most importantly, make their assets work harder for longer. 

Consolidate your digital tool box

The digital world is a fast moving sphere with a web of interdependencies between technologies and it seems that every year more and more digital solutions reach the market. According to Gartner, out of the more than 200 technologies listed on Gartner’s Hype Cycle from 2000 to 2016, over 50 individual technologies appeared for just a single year.

Due to the capital-intensive nature of the oil and gas industry and high costs associated with switching, companies cannot adopt a trial-and-error approach to digital transformation. Oil and gas operators tend to be reluctant early adopters, preferring instead to wait and see how others fare with the technology, but it’s this hesitancy that slows down progress. In addition, previous digital failures may also be adding to this hesitancy on the part of management to invest further in digital new digital tools. 

Other companies, who are keen to progress to digital maturity and operational excellence, often take a multi-technology approach, resulting in a digital deluge that leads to information being spread across numerous different systems. This distribution of data means workers often waste time trying to find, access and transfer the data they need to do their job. It also means that workers may start to suffer digital fatigue and grow cynical towards new tools. Where there is no consistency towards digital upgrades, people will prefer to stick to what they know. 

Oil and gas players need to shift their mind-set and take a top-down approach to consolidate their digital tool box and data into one open API based platform, akin to FutureOn’s FieldTwin and FieldTwin design. 

Digital twins can help streamline your digital solutions

Digital twin technologies can help organizations speed up their digital transformation through digitalization of their processes and data at every stage of project lifecycle. FutureOn’s online platforms bring siloed data together to create highly detailed visualizations that are accessible and can be updated in real-time by team members. 

The digitalization of under-utilized data can also unlock value through increased operational excellence, a deeper understanding of production assets and streamlined workflows. 3D modelling, similar to a gaming environment, provides a real-life, immersive subsea experience from the desktop, thereby making it easier to plan, design, and create assets, which can significantly speed up the time to profitability.

GIS mapping data, bathymetry, topography, existing infrastructure and other physical constraints are combined with proprietary information such as reservoir data and well data and drilling can be used via a single platform to enhance project planning, design and operation. Metadata can then be introduced based on cross-industry standards. The result, built using FieldTwin API technology, is a virtual twin of a future project that can be utilized in planning and also allows for the creation of meaningful production and operational forecasts over time.

To find out more about how FutureOn can help your company digitalize your operation or for enquiries and partnership opportunities please  contact us or book a demo.


Data Silos Are Bad for Business and Here’s Why

By FutureOn Today

Over the last two decades technology has dramatically reshaped the operating landscape of the oil and gas industry, but for the industry to achieve the next leap in its road to digital maturity there needs to be an industry-wide buy-in to next generation digitalization and greater data sharing.

A steady stream of fluctuations in the oil and gas market has turned digital transformation and digitalization from an opportunity into a need – for companies to save millions from their operating costs and, most importantly, make their trillion dollar asset base smarter and more efficient. Oil and gas companies are increasingly recognizing the value of digital solutions and are already embracing the advances made possible by the digital revolution.

Innovative new technologies powered by big data have enabled industry players to operate more efficiently, increase productivity and enhance operational safety. However, the biggest and most impactful benefits of data have yet to be realized. Although oil and gas projects generate massive amounts of data, it’s often spread across multiple databases, spreadsheets, and servers. Due to its sheer volume and siloed storage, it lies under-utilized. 

Data hoarding hinders industry innovation 

Companies can be very territorial about their data and are reluctant to share with potential competitors. 

“Pivoting to a data-driven culture is hard enough. Now we’re trying to change the mindset from competing to partnering. Data sharing is important. The context of what is around it is equally important. We should get to the point of sharing more data, but we are all looking for competitive advantage.” – Kentaro Kawamori, vice president and chief digital officer for Chesapeake Energy

The widely and oft used phrase, “data is the new oil”, goes a long way to explaining why companies tend to hoard their data. But, this limited view fails to take into account that data is only valuable when used properly. If fully utilized data can create value by helping engineers to find ways to reduce drilling costs, increase operational safety and efficiency, increase well production and to set new industry standards. 

Building brilliant new digital tools, developing new processes and driving operational excellence on the back of big data will only generate the company limited benefits. The real value will be realised when data is combined together and all of it can be used democratically by everyone. Promoting initiatives to share and standardize data and software across the industry will benefit both individual companies and the wider industry. Even major players, who have massive databases of information, are likely to want to share their data in exchange for access to fresh data from another company. 

Data sharing leads to industry innovation

Supermajor Equinor has led the way in terms of data sharing ever since it began offering public access to the data from a field off Norway called Volve. The release of this data directly led to the development of software to mine the field, and was also used by other companies to develop innovative products such as cutting-edge reservoir imaging software. 

The UK Oil and Gas National Data Repository has also begun offering well, geographical, field and infrastructure data about the offshore UK. Although it’s still early days for data sharing it’s a step in the right direction. Platforms like FutureOn’s FieldTwin and FieldTwin Design bring together proprietary technologies and external data from our partners to enable easier access to the right tools that will accelerate projects and lead to financial savings. When data and application silos are reduced, efficiency and operational excellence will increase. Working together is more effective than going it alone, particularly in an industry that is under fire. 

To find out more about how FutureOn can help your company break down data and application silos or for enquiries and partnership opportunities please  contact us or book a demo.


Generating Value With Digital Twins in Oil and Gas

By FutureOn Today

Technology is evolving faster than ever before: what used to be incremental steps is quickly becoming leaps and bounds. And, as digitalization spreads throughout the industry and new digital tools emerge, no industry or market can avoid the march of progress.

Digital technologies have transformed the way we work by solving some of the biggest challenges today’s market faces such as how to cut-costs while optimizing performance, and boosting production. 

Markets are more fluid and susceptible to fluctuations than ever before, a state exacerbated by the recent global pandemic. GlobalData analysts reported in a recent review of industry contracts that the number of global oil and gas contracts decreased by 28% between 2019 and 2020.

While oil prices are tentatively recovering post-Covid, hitting a session peak of $77.84 for its highest since October 2018, other external pressures are still squeezing the industry to find better and cheaper ways of doing business. 

Transformative digital technologies, like digital twins, can help operators solve these key business problems by enabling them to unlock an enormous amount of hidden value in their assets. Digital technology is already at work for the oil and gas industry in areas such as flow assurance, digital subsea mapping, IoT sensors to name just a few. However, we’re still missing a trick when it comes to data integration and data unity. 

The challenges to unlocking value 

Offshore oil and gas assets are highly complex facilities with very expensive equipment, numerous processes, and multiple digital applications. On top of that, they operate in a high risk environment that is physically difficult to access. Scoping, planning, building, operating and maintaining an asset requires a whole host of people from across various different disciplines e.g. engineers, specialized system experts, project managers, and maintenance crews to work together in sync to ensure it’s a smooth journey to profitability. 

Facilitating project teams collaboration, optimization of planning, and a more holistic understanding of the asset in a real-world context is where disruptive technologies can create value and support operators in reaching key milestones quicker. By creating an identical digital copy of an asset in a virtual environment, project teams are able to make faster and better decisions. When the quality of planning, execution and operation is increased so too is the value generated by the digital twin. 

It’s worth noting that digital twin technology isn’t the new kid on the block. In fact, digital twins have been used in oil and gas operations for a while. However, what the industry has been failing to do is use them to their full potential and, as a result, are missing out on the true value they could create. Too often when a digital twin is used, management fails to secure buy-in from the end users within the company and the twin sits there under utilized. When a tool sits there creating no value, management may then blame the tool and view it as a bad investment. 

Another problem can be company culture and the historic way projects have been carried out before. Department, data and application silos hinder value creation, and again leave the twin unable to reach its maximum potential. Everyday work hours are lost when people have to access multiple, most likely, isolated systems just to do their job. 

The limited data interaction between these applications makes this process even more time consuming and could lead to inaccuracies. Gathering data from different disciplines or production activities also eats into work hours that could be better spent on other aspects of the project and can delay decision making. 

Digital twins create value through optimization 

We have seen in our customer use cases that digital twins can help oil and gas companies to create value in the following ways: 

  • Reduce time-to-first-oil 
  • Accelerate production 
  • Reduce capital expenditure 
  • Enhance health and safety
  • Reduce need for revisions
  • Increase recovery rate
  • Reduce operating costs
  • Eliminate bottlenecks 

By allowing companies to accurately simulate and optimize an asset in the virtual environment before creating it in the real world, a digital twin reduces both guesswork and uncertainty of executing an oil and gas project. 

This digital twin allows planners to test risky what-if scenarios onshore thereby minimizing the likelihood of the unexpected happening in real-life. These simulations will help improve concept selection, increase accuracy in cost-weight estimations, reduce the time needed to determine project parameters and to identify opportunities to optimise asset value against capital expenditure. 

Digital twins also drive value through enhanced collaboration between disciplines, project life cycle stages, operators and contractors. Housed in the cloud, teams from anywhere in the world can access tools and data, update models and collaborate with each other using a digital twin platform. The virtual environment helps break down traditional barriers to collaboration and communication. 

Identify both opportunities for optimization and potential obstacles 

A centralized and integrated digital twin platform like FutureOn’s offerings creates an open ecosystem of applications via an API-driven integration; that is, based on an open approach to the standardization of data. This means our end users do not have to login to multiple systems and can access everything they need from one central and secure online hub. Centralized data will help to ensure project continuity and to identify the resources needed for each asset. 

Legacy systems and new upstream projects can both benefit from the application of digital twin technology. Companies can use a digital twin to gain a deeper understanding of a legacy asset enabling them to assess the asset’s maturity and identify opportunities and obstacles as to where optimizations can be made to improve production. Similarly, for new projects, the digital twin enables planners to invest capital more efficiently and accelerate the time to first oil. 

Gartner predicts that half of major industrial applications will be using digital twins by 2021, potentially increasing their operational effectiveness by 10%. So, it’s safe to say that it’s only a matter of time before the industry starts realising the full value of digital twin technologies. 

To find out more about how FutureOn can help your company leverage optimize its operations or for enquiries and partnership opportunities please  contact us or book a demo.


Safely Leveraging Brownfields and Ageing Assets With Digital Twin Technology

By FutureOn Today

Price pressures and market uncertainty in the oil and gas industry are pushing companies to focus on driving operational excellence on existing assets to increase profitability through improved efficiencies.

It’s no secret that operational times in the oil and gas industry are tough. Financial pressures coupled with market uncertainty and increased geopolitical tensions are making the already arduous task of executing an oil and gas project much harder.

In this challenging environment there is an urgency for oil and gas operators to find ways to produce more with less resources. Striving for operational excellence is one route to achieve this; in other words, getting more bang for their buck from their existing assets.

Extending the life of brownfield sites or optimizing ageing production assets is one way to achieve this. Driving operational efficiency will be pivotal to unlocking the value from brownfields, tackling rising costs and helping to meet new environmental goals. Redevelopment also presents a major opportunity to access and accelerate reserves as fields mature.

Experts believe that the world may have reached a point globally where the potential for enhanced recovery from known hydrocarbon resources exceeds the potential from new discoveries, which makes the role of brownfields even more important for meeting the world’s growing energy needs.

One of the world’s leading supermajors estimates that optimization technologies have contributed to a 40% increase in their production at the world’s second largest field. While another says that redevelopment of the 30 year old Valhall field in the Norwegian North sea has been so successful it has increased the lifespan of the field by 30 years. However, developing an existing site or asset can be extremely challenging and dangerous without the right digital tools.

It’s vital to establish asset integrity before upgrading an asset

When looking at undertaking such a project, companies will need to consider the following: how they will design projects around existing complex infrastructure and how they will safely move machinery and teams around limited and sometimes hazardous spaces. It can be a lengthy, complicated and dangerous process.

There is also a risk that historic asset information integrity may be compromised, particularly if it is an older brownfield. Throughout its lifecycle, which can be upto 20 years or more, the field is likely to have been upgraded and adapted numerous times; however, records may not have been updated or are spread across a number of legacy platforms or different formats or they may be inaccessible.

So, for whatever reason, key project data may have been permanently lost along the way. Information gaps like this can cause major problems when it comes to planning projects; for example, a planned equipment upgrade may not fit safely.

Hiccups like this can delay projects, impact other planned upgrades and even necessitate revisions, all of which can lead to downtime and unexpected costs. More importantly, it can lead to a major mishap where worker safety, the environment and equipment is put at risk.

Digital twins form the baseline for life extension and optimization projects

High-tech solutions such as laser scanning, 3D modelling, visualization software and bathymetry data can be utilized by sophisticated software to create an identical digital copy of the asset.

The digital twin can be compared with the real-world asset to identify integrity discrepancies, allowing engineers to accurately simulate how upgrades will impact the asset and its operations. This will help them to determine whether the asset will last another five or more years and if it will be cost-effective to upgrade it.

Teams can use a digital twin to gain a deeper understanding of the asset within the context of their operations and in understanding the asset’s limitations; for example, the amount of weight a structure can safely carry.

An accurate digital twin provides a solid foundation for better decision making and for identifying the best way to optimize performance while reducing risk.

Digital twin platforms, like FutureOn’s offerings, bring together siloed data, including surface, map, well, reservoir, bathymetry, industry asset and historical data from a variety of sources together in a single interactive interface.

The real-time nature of our tools ensures that data is always up-to-date and accessible regardless of location, making it easier for project teams to access the information they need and to communicate changes across teams and departments.

Streamlining workflows and planning like this will lead to improved efficiency, enhanced project management, better costing calculations and fewer revisions. As digital twin technology advances and the urgency of life extension products increases, platforms like FieldTwin and FieldTwin Design are destined to become industry standard tools.

To find out more about how FutureOn can help your company leverage the value of brownfields or for enquiries and partnership opportunities please  contact us or book a demo.