As oil and gas companies consider adoption of potentially cost-cutting new digital oilfield technologies to weather the prolonged low oil price environment, predictive maintenance and production asset optimization technologies ought to be at the top of their list, according to a new report.

In a survey of oil and gas industry professionals detailed in the Digital Oilfield Outlook Report: Optimizing operations to unlock the hidden barrels, which was released today, respondents ranked the two use cases as the top two of 10 digital oilfield use cases for their ability to deliver return on investment (ROI).

Sixty-four per cent of respondents said predictive maintenance could provide strong or the strongest relative ROI relative to other uses of capital, while 54 per cent ranked production asset optimization in the same category.

Both use cases represent relatively mature technologies that have the ability to generate ROI comparatively quickly, often with less upfront cost to implement compared to other digital oilfield technologies. They focus primarily on doing the most with what assets companies already have, maintaining systems and equipment at optimum levels while minimizing costly production upsets and downtime, notes the report.

Respondents outlined the main reasons predictive maintenance and production asset optimization technologies were rated top performers.

“Decreased unplanned outages were found to be the top perceived benefit of adopting predictive maintenance technology, followed by reduced maintenance and repair costs and improved safety. As unplanned outages can prove to be extremely costly to oil and gas companies already in deep cost-cutting mode, the ability of predictive maintenance to rein in this potentially pricey outcome plays well into today’s cost-conscious environment,” states the report’s key insights.

“Improved production/enhanced recoveries was considered the chief benefit of production asset optimization implementation, while reduced maintenance and repair costs and increased asset uptime rounded out the top three [benefits]. In a period of lower-for-longer oil and gas prices, a focus on these benefits could provide a boost to production asset optimization adoption,” adds the report.

In today’s prolonged low-price situation, when companies have already moved to cut costs by shelving or cancelling capital projects, driven down service costs, shed assets and gone through multiple rounds of staff layoffs, adopting digital oilfield technologies is seen as one of the few avenues left for companies to enhance efficiency and improve the balance sheet, said the report.

Digitizing the oilfield has the potential to transform the oil and gas industry, as it is transforming other industries such as communications, travel, consumer purchasing and transportation. According to GE Digital, the Industrial Internet — the business-to-business Internet of Things — has the potential to add a massive $15 trillion to global gross domestic product by 2035.

“Where digital technology can optimize oil and gas field assets and reduce costs, they in effect uncover hidden barrels by allowing companies to produce more for the same cost or enabling equivalent production at a lower price in order to reduce per-barrel costs,” the report said.

Predictive maintenance technologies include those that take data inputs from multiple sources and real time sensors and use analytic modelling techniques to draw out unseen patterns and make predictions. This enables issues to be flagged earlier than those using solutions employing simpler techniques, as well as offering diagnostic insight, the ability to prioritize issues by severity and suggestion of actionable measures that can be taken to prevent impending breakdown or failure.

Even small improvements in efficiency brought about by reduced unplanned outages can yield big savings, the report notes. Improving production efficiency by 10 percentage points can create an up to $220 million to $260 million bottom-line impact on a single brownfield asset, according to McKinsey.

Production asset optimization aims to improve how data is gathered, managed and analyzed to optimize production management and maximize output from existing assets. Advanced computer modelling can continue throughout the hydrocarbon production chain from the reservoir to the point of sale for field development planning, debottlenecking opportunities and optimization of asset value.

Existing and historic data sets can be combined and mined to provide data-driven insights to aid in decision making about the scheduling of activities like workovers, refracturing and enhanced oil recovery initiatives, according to the report. What-if scenario analysis of complex operational inputs can be performed by computer at levels far exceeding human capability, while ongoing operational performance can be enhanced with automation of routine processes and proactive management systems able to detect, diagnose and remediate production problems in real time.

The report, produced by JWN Energy with partners GE, SAS, Panoptic Automation Solutions and ABB Group, includes exclusive case studies detailing predictive maintenance and production asset optimization success stories. The report concludes with a list of recommendations that could ease and speed adoption of digital oilfield technologies. The Digital Oilfield Outlook Report: Optimizing operations to unlock the hidden barrels is available for free download here: http://www2.jwnenergy.com/digitaloilfieldreport-November-2016