Cognitive systems can be applied to oil and gas operations
The first EnerCom Oilfield Tech & Innovation Day featured IBM (ticker: IBM) and Flotek Industries (ticker: FTK) presenting in the keynote lunch.
John Brantley, IBM’s World Wide General Manager Oil & Gas/ Chemicals Industry, spoke on the digital transformation of the oil and gas industry. Like other industries, oil and gas can be significantly improved by adding modern computerization.
Companies are recognizing this opportunity, and 68% of oil and gas companies have invested a combined $100 million in data analytics over the past two years. This investment will bear fruit, as according to Brantley 80% of large oil and gas companies will run their business with help from a cognitive/AI agent.
IBM is using its Watson system to develop cognitive agents for oil and gas companies. Brantley reported that without cognitive solutions, IT and data analysis in an oil and gas company can only analyze about 20% of all data. Cognitive systems can examine the vast majority of data that falls through the cracks. For example, cognitive systems can analyze day reports, video and sensor feeds to find what data is important.
IBM has already partnered with several companies to apply cognitive programs to oil and gas operations. The company is working with Gazprom to develop an analytics platform to identify optimization opportunities, which is already creating significant improvements in recovery factors.
IBM has also partnered with Repsol to analyze the company’s historical data. Watson will be used to analyze 30 years of exploration data, to identify which factors are most important to engineers. This training will allow Watson to examine future data, automatically filtering information for analysis.
Complicated vs complex
Flotek has partnered with IBM in the push to bring cognition to the oil and gas industry. Flotek CEO John Chisholm illustrated the application of cognitive systems by identifying the difference between complicated systems and complex systems.
Building a jet engine or creating an iPhone are complicated activities, but they involve working with known, well-understood variables. Five o’clock traffic in LA, by contrast, is a complex system, depending on numerous variables that are not always known. According to Chisholm, completing modern unconventional wells is also a complex system, depending on variable geology and well characteristics. Most current activities in oil and gas use problem solving strategies for complicated problems to deal with what are actually complex problems.
Flotek and IBM have produced Wyatt, a program for analyzing well data and improving completion and reservoir performance. This gives companies the ability to use complex analysis on oil and gas problems, identifying optimal processes. Flotek intends to apply this system as RC2, reservoir cognitive consultant. The company is moving quickly, and intends to begin commercialization of RC2 next year.
