David Zahn
Ambyint, a leader in well optimization and in the application of artificial intelligence in the oil and gas space, recently tapped its COO, David Zahn, for a question-and-answer session regarding the use of AI in the oil patch. That exchange appears below.
Q.: How has the pandemic and/or oil price crash accelerated the outlook for widespread adoption of AI in oilfield operations?
A.: It hasn’t really—at least directly. Operators did not wake up after margins came crashing down and say we need some AI to save the day. After cutting capital and operating costs—and going through a period of bunkering down—they have emerged looking for solutions that reduce costs and increase production on producing wells with smaller operating staff. This has naturally led many to search for technology answers, where we find AI as perfect fit. We’ve seen our opportunity pipeline build steadily over the second half of last year and are bullish on 2021.
Q.: What role will AI and other digital tools play in the recovery of the oil and gas market in 2021?
A.: In a typical day, an engineer focuses on 20 or so wells—typically the ones requiring the greatest attention. With the smaller operations teams that we have today and typically hundreds of wells under the purview of that same engineer, manual processes, disparate data sources, and legacy technology isn’t going to get the job done. In fact, it never really has. For instance, in a rod lift field, 85 percent of all wells are under optimized, which means costs and deferred production are unnecessarily high. AI gives operations the ability to manage and optimize all wells each and every day.
Q: What might be some future trends in the area of AI?
A.: Two trends come to mind:
- Edge computing is one trend. We did an industry survey a year ago of roughly 30+ operators on their edge computing strategy and adoption. The majority were in the very beginning stages of forming those strategies and the use cases were rudimentary and sparse. We saw a trendline that predicted edge computing adoption to accelerate starting in 2021 primarily driven by production optimization, predictive analytics, and similar use cases. The downturn from 2020 we feel will actually speed this trend even more. And we are seeing this come to pass today in terms of adoption as well as vendor support, including at Ambyint, but others also, such as Agora and Schneider to name a couple.
- Another trend to watch is diminishing DIY AI initiatives. A number of operators have gone this route in the past and only achieved limited success. In fact, many operators suffer from too many legos and not enough built value. Vendor-based AI solutions mature faster and benefit from leveraging data across operators and basins, creating greater value than when siloed.
Ambyint recently debuted its new well optimization assessment that evaluates key segments that are leading companies to a higher level of competitiveness in the industry and then identifying if any opportunity exists to leverage industry best practices, process improvements, and technology for value realization. For more information, go to Ambyint.com.