Key Innovation: Australian Worldwide Exploration puts IT to work to help it find buyers for oil from the offshore Tui field, which in the first year of production was worth about $2 billion .
Australian Worldwide Exploration in Brief
- 11-person company and 60 contractors operate the Tui area oil field
- Production from 4 wells is stored aboard floating platform 50km off Taranaki coast
- Oil field expected to keep producing until 2022
- Reserves estimated at 50.1 million barrels
- IT plays crucial role in producing and selling the oil
"We are entirely reliant on our IT network to produce and sell our oil." - Tracey Phelan, AWE business services manager
When Australian Worldwide Exploration (AWE) IT specialist Simon Knapman talks about platforms, it's not computers that he is on about. The platforms that matter to AWE are for oil production and are of a size and cost that dwarf even the grandest computer setup.
That doesn't mean, however, that IT isn't important in the activities of AWE, which since July last year has been pumping an average of 45,000 barrels of oil a day from the Tui area field off the Taranaki coast.
Production is controlled from a converted oil tanker, or floating production, storage and offtake (FPSO) vessel, moored in 120m of water 50km from land. A computer on that vessel - the Umuroa, which translates loosely as "long on energy" - has a cellular network connection to a server in Knapman's New Plymouth office, providing a vital information lifeline.
"The offshore operator runs a continuous virtual private network through to our server, accessing our Microsoft SQL database," Knapman says. Each morning, the operator - one of about 50 people on three-week rotation aboard Umuroa - files a detailed report of the previous day's production activities, updating the company's hydrocarbons database.
Among other things, the report lists the amounts of oil, gas and water pumped, the amount of gas flared, the quality of water that is discharged from the FPSO and the status of the equipment in use. That information is then distributed around the world, to AWE's partners, marketing agents and others, to enable the company to plan and sell the Tui oil at the best possible price.
AWE operates the Tui area oil project in a joint venture with three partners. AWE has a 42.5 per cent stake, Japanese company Mitsui 35 per cent, NZ Oil & Gas 12.5 per cent and Australia's Pan Pacific Petroleum 10 per cent.
The scale and complexity - not to mention cost - of the operation is enormous. Getting the field ready for production, which took less than two years, cost US$270 million.
Leasing the Umuroa from Cyprus-based owner Prosafe Production represents the majority of the operating costs. Prosafe employs the 200m vessel's 50 engineers and tradespeople, and a New Plymouth company, Offshore Solutions, provides the supply vessel and logistics which transport food and operating consumables to the FPSO.
The Umuroa, which can store 700,000 barrels of oil, is connected by flow lines to four production well "trees" on the seabed, upwards of 2km horizontally from the FPSO. The wells are over 3km deep. The ship is kept in place by nine anchors and isn't going anywhere for at least a decade - the oil field is expected to keep producing until 2022.
At a current rate of about two per month, tankers are shepherded into place by Offshore Solutions, and loaded with up to 600,000 barrels of oil - worth about $100 million at today's prices - for transporting to refineries on the Australian east coast, Thailand, Singapore and Hawaii. Loading the tankers takes two days, and can only be done in seas of less than 3.5m, so an hour-by-hour weather watch is maintained.
Knapman not only keeps an eye on the computers but, as marketing and systems analyst, has an important role in liaising with AWE's marketing agent, Mitsui. Mitsui sells the oil two months in advance, organises tankers, and completes the final deals with refineries. Tui's light sweet crude commands premium prices.
Information is everything in marketing an expensive commodity, especially when prices are as volatile as today and production costs high. So the daily report sent from Umuroa is vital for highlighting potential supply hiccups.
"We have to be alerted very early on so we can manage our forecasts and rearrange shipping schedules and refinery delivery schedules to coincide with production," Knapman says. A close eye is also kept on the world market, with teleconferences held three times a week with the marketing team in Australia and Mitsui in Japan.
Knapman says he's constantly looking for ways technology can help the business, so videoconferencing is under investigation as AWE country manager Dennis Washer tires of travelling back and forth to Australia, a seven-hour trip from New Plymouth.
Says Tracey Phelan, the company's business services manager: "We are entirely reliant on our IT network to produce and sell our oil."
Key Business Insights
If your mental picture of an oil field operator is of a company
employing hard-hatted roughnecks with oil-smeared faces, think
again. Australian Worldwide Exploration, which operates the Tui
area oil field off Taranaki, has 11 staff, just one of whom is
aboard the company's offshore oil production platform.
Far from operating heavy machinery on a heaving oil rig, his role
is to produce a production report for filing each day in AWE's
hydrocarbons database, on dry land in New Plymouth, via a cellular
network connection.
Half AWE's remaining staff have financial roles, managing payments to contractors who do the dirty work of pumping about 45,000 barrels of oil a day from four production wells.
Marketing and systems analyst Simon Knapman relies on the hydrocarbon database in his role as oil deal-maker. With marketing agent Mitsui, a joint-venture partner with AWE in operating the Tui area field, Mitsui sells the Taranaki light sweet crude two months in advance of it being pumped out of the ground.
To get the best price, he needs to know AWE's day-by-day production details, and what is happening in the global oil market. For an oil field operator today, therefore, information is the main tool of the trade.
Additional Resources
High oil prices and increasingly powerful computers are each
playing a part in renewed oil exploration. With oil topping US$100
a barrel, explorers can contemplate drilling in conditions where
costs were once greater than the returns:
http://www.energyandcapital.com/articles/deep-water-oil+drilling/619
And reinterpreting decades-old seismic data with today's
supercomputers is reviving prospecting interest in areas first
explored years ago:
http://www.gns.cri.nz/store/claritas/seismic_processing.html
Higher oil prices are sparking investment in new technology
tipped to stave off "peak oil":
http://www.economist.com/finance/displaystory.cfm?story_id=E1_GRNPVDG
The views expressed in this customer story and additional
resources are not necessarily those held by IBM New Zealand Limited
and IBM does not warrant the accuracy and correctness of any of the
information contained in the article.
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