New Simulation Tools are Driving Down Oil and Gas Company Operational Costs

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According to the World Economic Forum, digital transformation in the Oil & Gas industry could unlock approximately $1.6 trillion of value for the industry, its customers and wider society. Digital transformation is emerging as a business strategy that leverages digitalization to lower costs and increase profitability across the business. As a broad technological movement, digitalization implies a high degree of connectivity and analysis of data and a vast acceleration in the ability to quickly assess fluid business situations and to make accurate predictions and decisions.  The amount of time and degree of investment required in the past to perform such work was prohibitive. Today, acquiring such abilities is both affordable and a prerequisite for remaining competitive.

The digital transformation trend is spawning new developments in the areas of simulation and virtual and augmented reality, particularly in the areas of oil and gas engineering and training operations. On the engineering side, process simulation enables company operators and engineers to virtually model a process in extreme detail without having to spend the time, manpower, or money physically testing their design in a real-world environment. It’s often performed during the design phase of a project or before a plant becomes fully operational to see how changes in equipment specifications, scheduling, downtime, and maintenance can affect a process throughout the duration of its life cycle.

Early adopters of these new approaches, include both end users and process design engineers working at Engineering, Procurement and Construction (EPC) firms. Both are experiencing speed, quality and productivity gains as a result of working with one application that allows them to visualize, test and implement process improvement. One global EPC leader, for instance, used dynamic simulation to evaluate the design of a flare stack operation.  The optimization resulted in savings of more than $25 Million on a single new facility.

Dynamic simulation can also be used for advanced control system design and troubleshooting. Once connected to a Distributed Control System (DCS), the virtualized model (often referred to as a Digital Twin) can be used for real-time optimization, together with automation software, to determine the optimal operating parameters for a process when specific targets and constraints are applied. In fact, one leading liquified natural gas (LNG) carrier saved over $1 Million on a DCS project by using dynamic simulation to test and optimize controls.[1]

Employee training boosts operator productivity

On the training side, new simulation tools offer oil and gas operators a safe environment where they can mimic all possible situations while reducing business interruption costs. Simulation software enables training for all kinds of applications and can be delivered in a 3-D, photorealistic, and interactive environment.

From online learning modules around individual equipment and small systems to complete instructor-led virtual-reality environments of an entire upstream, midstream or downstream operation, full-scope simulators are now available. Common techniques include: photo scanning surveys, laser scanning surveys, and existing 3-D computer-aided design models; all of which engage virtual reality to create real-world situations for operators. Training and simulation augment the situational awareness of operators so they can prevent production or output problems by anticipating contingencies and preparing for remedial actions. Within an oil & gas distribution center, for instance, a 3D view of the pipeline network lets prospective operators see where a leak could happen, if service isn’t performed within the next 3 months.

Most of these solutions can run today from a laptop, a tablet, or even a cell phone. To learn more about how simulation solutions can increase oil company profitability, download the Schneider Electric white papers “How Oil & Gas Technology Investments Help Executives Secure Project Payback in a Low Commodity Price Environment” and “3D Virtual Reality Workforce Enablement Technologies for

Safer Oil & Gas Operations.”

[1] Wiley, Livia, Schneider Electric, ““How to Remain Profitable in a Tough Oil Market”, 2015

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