Automation is spreading two ways through the Permian Basin oilfield. One, it is filtering down from the larger companies to the smaller companies. And two, it is going far beyond simple applications, like electronic gauges to measure liquids in tanks.
Matt Cosby, marketing manager at Resource Automation and Electrical, Farmington, N.M., believes that the rush toward automation in the oilfield is a reflection of changes in the broader world of business in general.
“From my perspective, it’s like things are in computer work—they’re advancing every day,” Cosby said. “More and more inventions and technology are coming into play and the learning curve has to be adopted by the integrators [the people installing and programming the different devices that go into the field]. We take different things in the automation industry and integrate them with what they [oil companies] have on location, to make it work for them. It means covering the whole gamut, getting everything set up from the electrical part, through the programming part, and the maintenance aspects.
“Back when I was selling, out in the Permian Basin, there used to be a lot more independents than there were [major] companies like ConocoPhillips, Shell, and Chesapeake. Those bigger companies were the ones that had automation at the time, but a lot of the independents didn’t, because in their minds they could [still] get to all the wells, or because they didn’t think they needed it, or because they assumed they couldn’t sustain the costs. But now the independents are realizing the advantages of it. They’re recognizing the benefits of being able to maintain, monitor, and control the problems—or prevent the problems—in the field.”
Changing economics have contributed to the move toward automation as well, Cosby said.
“When oil prices were down, you had half as many units pumping,” he said. “But now everybody’s blowing and going [laughs], and they’re pumping oil left and right. And to be able to maintenance those wells costs a lot, so automation allows them to monitor, to control, to better manage their field. Strategic and environmental concerns in the field have caused them to look at some of the possibilities that automation provides.”
Cosby said that Resource Automation, for its part, is constantly searching for ways to improve and optimize the oil and gas industry. The company has developed a number of products that have themselves arisen as solutions to problems that Resource Automation has encountered among oil and gas companies that either (A) don’t have automation, or (B) don’t have their automation working to its fullest potential.
He offered, as an example of something new in the field, a product called the Advanced Telemetrics Tank Gauge. Resource Management bought Advanced Telemetrics—the company, that is—partly on the strength of that product.
“There are a lot of devices out there that measure fluid levels in tanks,” Cosby said. “And this one, which is a digital gauge for oil and water tanks, does have a tank stick and on a single device measures precise water levels, oil levels, leaks, and temperature. But it also has a high-level shutdown—it will shut down production into a tank so that there will not be a spill. A lot of companies have products that can monitor levels and will send out alarms, but you still have to go out there and shut it down… and it may be too late by then. We’ve seen a lot of majors and independents [oil companies] switch to this one.”
Cosby’s boss, Brad Walls, the president of Resource Management, echoed Cosby’s remarks about the spread of automation from larger oil and gas companies to smaller ones.
“We’ve seen, over the years, a changing of the guard,” Walls said. “In the past, smaller independent companies were not overly eager to employ new technology because they had been very successful over the years without automation and, in their view, it was an extra expense that was hard to justify. Today, in companies that are mid-sized or even smaller, you are seeing people come into management positions—newer, younger guys—who are in tune with what technology can bring to their business. Before, those opportunities were not recognized.”
On top of that, there is the current boom in oil and gas, he said. That boom has meant that prices from suppliers are high. Accordingly, companies are trying to do more work with fewer people. There are fewer people, in fact, because people are hard to come by. And experience is hard to come by as well.
“So technology allows companies to deploy more wells, deploy more facilities, and do more with fewer people,” Walls said. “With technology and automation and the various controls that are available today, companies can refocus the people they have, and utilize them in different directions.”
Founded in the San Juan Basin, Resource Management was originally formed to bring state-of-the-art technology to the oil and gas fields of Northern New Mexico and Southern Colorado by offering “a solution to the complex relationship between production and environmental issues” that several high-end producers were experiencing. “Our goal was to offer a turn-key operation that benefitted our customers by optimizing their efficiency in the field, lowering their operational costs, and raising the productivity of their wells,” said Walls.
In its infancy, Resource offered artificial lift installation and production equipment repairs, but today Resource has matured into a fully-integrated technology solutions provider. In 2011, the company opened an office in Midland, to give it a stronger presence in the Permian Basin.
Walls has said that Resource Management has invested in its own people, as well as in its product line. It’s not enough, he says, to just have quality products. Today’s technology solutions are also about having skilled personnel offering valuable services to customers. Walls says that, for his company, that means having “a family of trained professionals that range from installers to engineers, project programmers to journeymen electricians, CAD draftsmen to SCADA/telemetry IT support… all working together to offer a company model that exists as a full source, turn-key systems integrator, offering automation and control services from conception to implementation.
“We are often asked, ‘What are the top benefits of automation?’” Walls said. “It’s easy—less downtime, production optimization, environmental controls, and maximizing the workforce. It is a solution that has profited our customers for 17 years by optimizing their asset efficiency.”
David Savells, sales executive for Arlington-based Pan-Tech Controls, confirmed that automation is a growing field that continues to change and expand.
In March, Pan-Tech Controls merged with several other automation companies in the Gulf Coast Region to form a new company, Vector Controls and Automation Group, which can be found at vectorcag.com on the web. Pan-Tech is now a division of that group.
“The merger has aligned us with other processed instrument representatives to offer better coverage for oil and gas customers,” Savells said. “Our coverage area now is Southern Kansas, Oklahoma, Western Arkansas, all of Texas, and the eastern half of New Mexico. We have more than 40 application engineers in the region. They’re the ones who sell the process controls and automation
Throughout his market area “the drilling activity keeps increasing and new shale discoveries are popping up everywhere,” Savells said. “We are real active in the Cline now. We’re seeing a lot of activity in eastern New Mexico and on the western edge of the Permian Basin. There is an ever-increasing need for automation and surveillance of these oil and gas assets. It’s a security matter—security is an issue these days, because there is oil theft. People steal solar power equipment and batteries. The SCADA systems that are put in use on site are there for automation and to monitor production, but they are helpful in guarding against theft.”
SCADA is an acronym standing for Supervisory Control and Data Acquisition.
Like some of the other authorities whom PBOG spoke with, Savells said that the industry is definitely seeing a trend toward going wireless, where field devices are concerned.
“Customers are finding it quicker and easier to install than wired components,” he said. “They are also finding that the pricing has become comparable.”
And like some of the other sources cited here, Savells said that the customer base for automation technology is changing, with the shift being that more small and mid-sized entities are opting to purchase.
“We still deal with a lot of the major players—Oxy, Apache, Kinder-Morgan,” he said. But we are seeing smaller producers embracing automation as well. They find they can better evaluate these assets and better deploy manpower to address trouble spots. Typically, what a small producer can do, is look at a daily report from their SCADA system and evaluate which wells need to be tended to. When they do go out into the field, it is to work on equipment rather than just going on a milk run, driving past every well every day. They can let the SCADA system be their eyes and ears.”
Another technology firm, Unico U.S., markets a “Global Monitoring System” (GMS) via its sales and support staff in the Permian Basin—a group that numbers some 75 individuals in this area. Gary Ison, Texas Regional Sales Manager for the company, said that the GMS does more than transmit alerts.
Like Resource Management, Unico, via its GMS system, can do more than monitor—it can make adjustments on the fly. Their system can control the pump at the wellsite.
Ison said that things are changing rapidly in the oilfield. “What we are seeing in places like the Eagle Ford—or other places like that that have locations that can be very remote and difficult to get into—is that that is where remote monitoring is playing a bigger role.”
Elsewhere, Unico has had considerable success with a different product line: its own linear rod pump, a product that has opened up a new market for them. It looks radically different from a pump jack (see accompanying photo), but does the work that the pump jack does, only quieter and with no exposed mechanical moving parts.
“If you look at it, it looks like a pole sticking up,” Ison said. “It mounts right to the wellhead. It is very quiet, and there is a safety factor, because there are no exposed moving mechanical parts. So in urban areas, where a lot of wells have been closed in, and cities have built up around the wellsite, we’re seeing a lot of companies going back into the wells with these linear rod pumps.”
Rick Gearheart, who serves as engineering manager for communications and telemetry for Unico, agreed. “We have them running in parking lots,” Gearheart said. “It is an ideal solution for an urban environment,” The linear rod pump, or LRP, can be rigged with the Global Monitoring System, and well data can then be not only monitored around the clock, but stored as well—and analyzed and reported. The reportage can be transmitted via email, mobile app, and other means.
“If you can do yourself the favor of letting this kind of technology not only send data to you but analyze it for you and make suggestions, why not use it?” he said. “And why drive that distance [to the well] to figure it out yourself? When you get there, you are only able to work with what you see. But with this system, you have information that was collected over the last 24 hours, and all in a nice, quick, easy-to-read format.
“Today, we are walking around with supercomputers in our pockets,” Gearheart added. “And it is silly to just keep it in your pocket and not use it. Your time has a value.”
One of the larger companies to take a large stake in the automation industry is Emerson Process Management. Rusty Gavin, Director of Global Oil and Gas Production for Emerson Process Management, said Emerson is doing business in every major shale field around the world, the Permian Basin included.
“Oil and gas recovery in shale formations present operational challenges to produce,” Gavin said, adding that he felt Emerson can help operators achieve first oil more quickly using proven solutions and state-of-the-art automation technology.
“And by leveraging the power of our best-in-class benefits around wireless,” he added. “Emerson continues to work closely with our customers to develop production application solutions that improve reservoir yields and process insight, allowing for greater control and forecasting of reservoir activity and process changes.”
He said that one of Emerson’s strengths is its “strong wireless capability.”
“We are not selling wireless itself, we are selling a strong product offering that utilizes wireless technology,” Gavin said. “And that, in turn, is allowing for the monitoring of more of the field assets at the well site. It eliminates the need for costly wiring infrastructure, such as conduit and physical wiring. With a wireless system architecture, you can get things up and moving and producing much quicker.”
Emerson adopts a threefold platform in its commitment to its clientele, he said.
First, Emerson seeks to optimize the process for its customer. Monitoring devices gather vast amounts of data, and that data must be collected and analyzed for the oil and gas operator, to make informed decision-making quicker and easier.
Second, they seek to get a client to first production earlier, leveraging wireless technology.
Third, the company does its part to maximize its customer’s production returns. “That is how we affect the whole operator experience, in being able to maximize the recovery of oil and gas from the reservoir,” Gavin said.
In that last remark, he touched upon a broader approach that the company promotes, which is the intelligent field concept, leveraging real-time data collection and analysis across a field-wide production process, ensuring the reservoir is a primary focal point.”
Stuart Royal, regional sales manager for Wellkeeper in Midland, is another automation and remote monitoring professional who sees sustained exploration and production as a force that is revolutionizing the industry at the technology end. He considers the current level of activity in the Permian Basin to be the highest level the region has seen in its history.
“I think that the first quarter of this year was a record-breaker,” Royal said. “There seem to be a couple of ‘structural’ things that are going on in our market that are driving activity. One is people’s familiarity with technology. People today are more comfortable with technology and that is a trend that has greatly increased in the last couple of years. Typically, the oil and gas industry has been very hesitant to adopt new technologies. But what you are seeing now is that the kind of technology that we supply is becoming mainstream enough that people are comfortable with it. The other part of the picture is that there are a whole lot more competitors today for us [Wellkeeper] and, while that creates some difficulty for us, with competitors getting a larger share of the available business, it also increases the industry’s overall awareness of what we do. And that leads to more interest in our business.
“And high prices for oil don’t hurt the situation at all,” he said with a laugh.
Like others in his industry, Royal said that smaller operators are coming to realize the benefits of monitoring everything on a wellsite.
“That’s been a change,” he said. “It’s a change in the number of devices that people are monitoring. Historically, this business was always about gas well measurements. But what we’ve been seeing in the last couple of years is that people have gone beyond checking meters remotely, and they have started monitoring oil tanks, water tanks, pumps, the pumping unit itself, and more.
“Obviously, the Permian Basin is doing an incredible business,” he added. “What I am noticing, personally, is that there is a lot more drilling and a lot more monitoring in Eastern New Mexico. Especially in the Carlsbad-Loving area. It seems as though the Permian is busier than the Eagle Ford. I’m starting to get a lot more inquiries, too, about the Cline Shale east of Midland-Odessa—from that region east to Abilene. A definite uptick in that area. And I’m getting a whole lot more inquiries about airborne H2S measurement and monitoring. They’re specifically wanting to be able to monitor it remotely. That’s been hot—an area of interest. I don’t know if it’s been the technology that has driven that, or if the sensoring has become mainstream enough to be recognized, or if the price has come down enough to cause the interest. Or maybe more urgency placed on safety. Regardless, we’re getting more inquiries about it.”
Back at Resource Production, the sentiments are strong about the Permian’s productivity. Said Walls: “Even though it is obviously one of the oldest and richest oil and gas producing fields in the business, this area has tended, in the past, to be a little bit further behind with technology. But now, with the boom, people are trying to do more.
“Everyone wants to be in the Permian Basin,” he added. “It’s a great place to work, with a lot of good people and a lot of activity and good things going on.”