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input #100 at www.controleng.com/information

 From the wellhead to the refinery…
It’s all about reliability

At every stage of the journey, the key to the success and growth of oil and gas delivery
is found in increasing production while managing costs and ensuring reliable delivery of
the products. From wellheads—either land-based or on ocean platforms—to pipelines
and refineries, the efficient, effective movement of petroleum products is critical to our
national economy, and to the success of the the oil and gas manufacturers.

The publishers and editors of Oil & Gas Engineering understand this mission. For more
than 60 years, we have published Control Engineering and Plant Engineering, the two
leading industry publications in the manufacturing sector. We have told the story of
how manufacturing has evolved at the control system level and on the plant floor.
Among our most loyal readers in that time are the people who manufacture and deliver
petroleum products.

Today, at a pivotal time in global petroleum production, we bring our years of expertise
in covering this market to a new publication solely focused on the challenges,
opportunities and technology in this exciting market.

Welcome to Oil & Gas Engineering. We have been a reliable voice in this market for
many decades. Now we bring that reliability to you beginning with this issue. This is
your publication, and we welcome your input on how we can better provide information
to help your facility run smarter, safer, faster and more efficiently.

OIL&GAS ENGINEERING FEBRUARY 2015 ● OG1

I NSIDE
OG6 DEVELOPMENTS TO WATCH
Thermal enhanced oil recovery techniques
Dr. Berna Hascakir at Texas A&M University gave Oil & Gas Engineering
insight into the intricate and varied world of thermal enhanced oil
recovery methods.

Benefits of heating heavy oil with medium-

voltage mineral insulated cables
Chet Sandberg uses low-voltage 1,000-meter long thermal heaters to
reduce viscosity in heavy oil in reservoirs in order to extract oil.

OG10
OG10 COVERY STORY
An engineering imperative:
integrating operations into design
To gain operational readiness and improve asset data builds for new
facilities, oil and gas companies look beyond simple data handoff to
collaborative methods.

OG17 INDUSTRY FOCUS

Understanding technology drivers in O&G
How and why oil and gas producers make operational decisions
at production levels. OG17
OG21 INDUSTRY TRENDS
Taking advantage of production downtime
during the supply glut
How the low price of oil is affecting producers in the U.S. shale oil and
gas and what can be done during periods of downtime.

OG23 INDUSTRY INTERVIEW

Staying in touch with the well site
Harry Ebbeson of PCS Fergusontalks about SCADA systems, codes and
standards, system integration, plunger lifts and even bluegrass music.

OG26 PRODUCTS
OG26
A selection of oil-and-gas related products that engineers will find useful.

OG2 • FEBRUARY 2015 OIL&GAS ENGINEERING

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W
elcome to the inaugural issue
of Oil & Gas Engineering! We
are debuting at a tumultuous
time as the oil and gas indus-
try has been turned on its head by over
production and the oil price crash that
started in October 2014.
Falling profits mean that many of the
high-cost and unconventional resource
plays are going to require greater effi-
ciency to maximize production and profit
for the producer. Oil & Gas Engineering
is here to address the latest and current
trends, products, news, and the ever
changing codes and standards that affect
engineers working in this multi-trillion dol-
lar industry.
As technology developed over the past
20 years, the hydrocarbon industry grew
and expanded into many new places
around the world; it is truly an internation-
al industry with super-major companies
working from the depths of the ocean in
the pre-salt plays of Brazil and West Africa
to the conventional fields of the Middle
East, to the unconventional plays of
Appalachian mountains in Pennsylvania.
Oil and gas is everywhere and now there
is the technology to extract it.
Founded in Titusville, Pa., in 1859, with
the first drilled well, the U.S. oil and gas
industry is the oldest modern market
in the world. However, the world’s first
known oil well was drilled with bamboo
in China in 347 A.D. While the U.S. is
of course now a major producer, there
are different technologies and innovations
around the world, including many geologi-
cal and environmental challenges not seen
in this country. Oil & Gas Engineering
aims to also cover the international scene,
including what engineers are doing world-
wide and how similar yet different their
jobs, tasks, and challenges can be in this
industry. Oil & Gas Engineering targets
engineers and other operational person-
nel responsible working at facilities and in
the field; in the upstream, gathering, mid-
stream and refining sectors. They design,
specify, implement, upgrade and maintain
equipment and technology in the areas of
process management, automation, cyber-
security, asset management, personnel
safety and maintenance/reliability.
There are major changes on the horizon
for 2015 due to oversupply, lower prices
and the entrance of the U.S. as one of
the world’s premiere producers. We hope
that you will join us as we document the
changes and major shifts in the oil and gas
industry and how it affects the engineers
working in it.
As this is a new publication, we are
seeking feedback on the content of this
magazine. Please send your comments
and suggestions to the email address
listed below. Your feedback has the power
to help shape, align and define the future
issues of Oil & Gas Engineering.
-Eric R. Eissler, Associate Editor
eeissler@cfemedia.com

OIL&GAS ENGINEERING FEBRUARY 2015 • OG3

More throughput,
less downtime.
Another way Siemens is fueling efficiency.

With global gas prices dropping rapidly, you can’t afford
to be on the defensive when it comes to downtime.
To keep oil and gas applications up and running at all
times, a proactive approach is essential.
Siemens automation solutions allow you to
continuously monitor your operations — on-site or
remotely — so you can identify potential issues and
correct them quickly. The data gathered through
ongoing monitoring can also help your operators make
better-informed decisions to improve asset utilization
and boost production.
The best path to greater productivity is a proven
automation strategy. And the best defense against
downtime is Siemens. Visit usa.siemens.com/oil-gas
today to learn more.

usa.siemens.com/oil-gas
input #101 at www.controleng.com/information
 Advertorial

Efficiency,Visibility and Reliability:

Keys to Lower Costs and Greater
Profitability in Oil and Gas Operations
By Jeff Jensen, Application Engineer, Siemens Industry, Inc.

F
alling oil prices and collapsing profit margins are driving the industry to lower costs any way
possible. While reducing labor costs and gaining supplier concessions can help, output must
continue if not increase, especially on completed wells, to meet commitments to buyers. Some
in the industry may persist in using time-tested manual methods and localized automation, but
the economics of continuing to do so just don’t add up. Nor do they scale, as new drilling and comple-
tion techniques increase service densities along with operating complexities.

The drive to retain (or regain) profitability has never been stronger or more urgent. The fact is, oil and
gas industry professionals – especially those involved in asset management, automation and controls,
and production, transmission or plant management – can accelerate the development and deployment of
technology solutions to lower the breakeven points of their operations. This paper provides ways to think
about how automation can increase operating efficiency, visibility and reliability to help lower costs and
boost profitability.

The paper also highlights four automation design principles that can help oil and gas companies acceler-
ate putting more automation to work in their operations or those of their industry customers:
• Eliminate
• Simplify
• Standardize
• Virtualize

As oil and gas industry veterans know, the current downturn may be painful, but prices will rebound. In
the meantime, highly leveraged or undercapitalized companies may close or consolidate with larger, better-
capitalized firms. But when the rebound occurs, the capital
investments made today by companies willing to carefully
consider and deploy automation solutions will still be generat- Check out usa.siemens.com/oilgas-
ing substantial returns through greater operational efficiency, resources for more Oil & Gas White
visibility and reliability. For those companies, their competitive- Papers on:
ness and profitability will never be greater.
• How to Develop Cost-Effective, Rugge-
dized Skid-Based Applications for Remote
For more details about Today’s drive for greater Deployments. Lessons from the Design and
profitability: Never stronger — or more urgent that Engineering of an Oil-Mixing System.
every oil and gas industry executive needs to know visit • Topic Paper: From Drill Bit to Boardroom:
www.usa.siemens.com/reliable-oil-gas-operations Four Ways to Accelerate Automation’s
Deployment Across Oil and Gas Enterprises.
• Topic Paper: Rethinking Automation: A
Revolution in the Oil and Gas Industry.

OIL&GAS ENGINEERING FEBRUARY 2015 ● OG5

DEVELOPMENTS TO WATCH
Thermal enhanced oil
recovery techniques
Oil & Gas Engineering spoke with assistant professor Dr. Berna Hascakir from the Heavy Oils,
Oil Shales, Oil Sands, and Carbonate Recovery Methods center at Texas A&M University to get
a glimpse of new technologies being developed to extract heavy oil and bitumen in unconven-
tional plays. She discussed microwave heating, steam-assisted gravity drainage (SAGD), and
in-situ combustion (ISC).
H
By Eric R. Eissler
eavy oils are rated below 22.3
API gravity and do not flow eas-
ily. Extra-heavy oil and bitumen is
rated below 10 API gravity and is
heavier than water. To extract this
type of oil, an enhanced oil recov-
ery (EOR) method is needed. In this case, a
thermal EOR will be sufficient for extracting
the hydrocarbons.
Oil and honey
Think of heavy oil as honey; slow, thick,
unyielding. By putting it in tea, the viscos-
ity decreases and that slow, thick honey
becomes fluid and smooth; it’s ready to be
extracted. It’s easy enough to pour some
honey into tea but rather difficult to heat oil
in the ground, encased in rock and perhaps
located in harsh environmental conditions
such as the Oil Sands in Alberta, Canada.
Microwave heating
One of the main up-and-coming technolo-
gies Dr. Hascakir spoke about is microwave
thermal extraction. Not a new technology,
it was first tested in 1970s but later dis-
banded because of costs and the lack of
success.
Microwave heating can target specific
areas of the reservoir, whereas other ther-
mal EOR methods usually heat the entire
reservoir, taking more time and using more
resources to heat. Imagine cooking some-
thing in a conventional oven versus a micro-
wave. The time and energy saved greatly
favors the microwave over the oven. Right
OG6 • FEBRUARY 2015 OIL&GAS ENGINEERING
now, this technology is in a pilot-testing
phase with a handful of companies—one
being Suncor in Canada—to see if this tech-
nology really is efficient in recovering more
oil with less energy. The primary challenge
to microwave heating is wavelength limita-
tions. It cannot be amplified.
To overcome this, an antenna must be
inserted downhole, but then another limita-
tion surfaces. The casing in the borehole can
absorb the microwaves, especially metal
casings, and in this instance the microwave
is not going to heat the reservoir but rather
heat the well. To remedy this, the well bore
should be made from plastic or porcelain
(these come with higher costs), which
allows the microwaves to freely pass though
the well into the reservoir.
In addition, prior to using microwave heat-
ing, a water concentration must be intro-
duced to the reservoir to absorb the waves
and heat the hydrocarbons. Despite the chal-
lenges associated with this technique, how-
ever, the industry sees it as a promising tech-
nology that may be commercialized within
the next five years. A major factor is the price
of oil. If the price climbs up again, then there
will be more viability in using this technology.
Unfortunately, the current low prices equate
to low profitability for producers.
Steam-assisted gravity drainage
SAGD is also an emerging technology
but geared toward bitumen reservoirs. It is
more effective than regular steam-flooding
methods (15% recovery rate), which are
Figure 1: This experimental setup of in-situ combustion shows the lighter viscosity of the produced oil versus the
bitumen. All images courtesy: Berna Hascakir
inefficient because they do not permit the
bitumen to be exposed long enough to the
steam. SAGD, with a recovery rates as high
as 70%, uses two wells: one introduces
steam into the bitumen, and the other is
used for extraction. The injection and pro-
duction wells are in close proximity to one
another and are located at the bottom of
the reservoir.
With this setup, the steam chamber
expands above the injection well and cov-
ers a large area of the reservoir. This allows
the temperature inside the steam chamber
to remain constant and equal. The desired
effect is that the bitumen remains hot as
it flows toward the production well. This
technique provides longer exposure to the
steam and keeps the bitumen flowing,
unlike the steam-flooding method.
In-situ combustion provides in-ground
refining and separation
ISC occurs when oil is produced in the
reservoir via combustion. Due to the fact
that thermal cracking reactions occur at
Figure 2: Dr. Berna Hascakir
elevated temperatures (~450 C), heavy oil in is an assistant professor at
place is cracked in light oil and some heavy the Harold Vance Depart-
ends such as ash or coke. Therefore, heavy ment of Petroleum Engineer-
metals and sulfurs are being separated from ing at Texas A&M University.
the oil and either left behind in the ground She directs research on ther-
in the form of ash or produced water (acid mal EOR at HOCAM.
water) or in gas form (H2S).
This method could provide many
advantages over other thermal
recovery processes, including
higher recovery rates, lower pro-
duction and capital costs, mini-
mal usage of natural gas and
fresh water for extraction pur-
poses, and a partially upgraded
crude-oil product. By refining in
situ, the oil requires less refin-
ing than the original oil in place,
saving steps in the refining pro-
cess. OG
Eric R. Eissler, Associate Editor,
Oil & Gas Engineering, CFE
Media. You can reach him at
eeissler@cfemedia.com
OIL&GAS ENGINEERING FEBRUARY 2015 • OG7
DEVELOPMENTS TO WATCH

Benefits of heating heavy

oil with medium-voltage
mineral insulated cables
Thermal enhanced oil recovery (EOR), which has been around for more than 50 years, is a relatively old
technology. But over the past 20 years thermal EOR has evolved to feature all kinds of tricks, including:
steam heating, water flooding, solvent dissolving, in-situ combustion, direct ohmic heating of the reser-
voir, microwave heating, and steam-assisted gravity drainage (SAGD). Thermal EOR is a technology that
keeps on learning new tricks despite its age.

M
By Chet Sandberg, PE any technologies have been amount of water is required and is extracted
proposed to reduce viscosity of along with the oil. Between two and seven
heavy oil to allow its extraction barrels of water are produced with each barrel
from reservoirs. Steam heating, of oil. This produced water may be considered
water flooding, solvent dissolv- hazardous waste because of high salinity, mud,
ing, in-situ combustion, direct and traces of drilling chemicals. While many
ohmic heating of the reservoir, microwave technologies are possible, an electrical heater
heating, as well as resistive heating elements may be an optimum solution both technically
are some of the techniques. Heavy oils, rated and economically.
less than 22.3 API gravity, do not flow easily.
Extra-heavy oil and bitumen is rated less than The reliable heater
10 API gravity and is heavier than water. The Electrical heaters have been thought of as
oil’s viscosity is temperature dependent, and solution for more than 50 years. However, the
even an 80 C increase will lower the viscosity technical capabilities of low voltage (fewer than
for easier extraction; see the real-world viscos- 600 V) have limited the use because of para-
ity chart. Steam, used in a SAGD operation, is sitic energy loss in the overburden and short
currently a solution, but the use of a significant lengths of heaters in horizontal wells. These
two detractors have made low-voltage heaters
Table 1: Heating Chart uneconomic for commercial applications, while
numerous short-length pilots (up to 250 ft) have
Cable Voltage 600 V 4,160 V proven this technique of viscosity reduction to
be technically feasible but not economic.
Power per foot 144 w/ft 140 w/ft
A major oil company has provided research
Operating Temperature 400 C 400 C
in the past five years that has enabled the
Length of heated section 250 ft 2000 ft
development of a medium-voltage (4,160 V)
Outside design diameter of MI cable 1.00 in. 0.75 in. heater system. This heater technology is now
Diameter of heater wire in MI 0.25 in. 0.155 in. available for commercial applications. An exam-
Diameter of Overburden wire in MI 0.25 in. 0.155 in. ple is a heater that can produce 1,000 w/m
Overburden Loss as % of Total 51.9% 11.8% and have a length of 1,000 m. This is a 1-MW
Estimated weight of 3 cables/foot 5.3 lbs/ft 3.0 lbs/ft heater that matches the horizontal-well drilling
technology. The following chart compares the
Overburden length 2,000 ft 2,000 ft
600 V system with the 4,160 V system. Note
Table 1: This chart provides a comparison between 600 and 4160 V heating cables. Cour- the limited length of the 600 V heater and the
tesy: Chet Sandberg increased weight necessary for transmission of
OG8 • FEBRUARY 2015 OIL&GAS ENGINEERING
 Figure 1: This chart lists four
Real World Viscosity types of heavy oil viscosities
4 classes based mainly on downhole viscosity:
Approximate viscosity at room - A Class: Medium Heavy Oil 25° > d°API > 18°
Substance
temperature in centipoises and provides a comparison to
water 1
100 cPo > µ > 100 cPo, mobile at reservoir conditions
- B Class: Extra Heavy Oil 20° > d°API > 7° household items as well as a
olive oil 100
glycerin 500 10,000 cPo > µ > 100 cPo, mobile at reservoir conditions comparison between Alberta
motor oil 1,000–2,000 - C Class: Tar Sands and Bitumen 12° > d°API > 7°
honey 2,000–10,000 µ > 10,000 cPo, non mobile at reservoir conditions Bitumen and Lloydminster
molasses 5,000–10,000 - D Class: Oil Shales
crude, which are found in Can-
Heinz ketchup 50,000–70,000 Reservoir = Source Rock, no permeability
peanut butter 250,000 Mining Extraction only ada. Courtesy: Chet Sandberg

1,000,000

100,000

Viscosity comparison of
10,000
Viscosity cP

Lloydminster
1,000

100
Alberta Bitumen
Alberta Biutmen with
10 Lloydminster crude oil
1
0 50 100 150

Temperature DegC

the power to the heated section of the heater. splices, is beneficial as splices have
Even with the increased diameter of the 600 been a problem in other designs, which
V heater, the overburden energy loss is 51.9% increased the diameter at the splice
compared with only 11.8% for the 4,160 V by about a factor of three times. This
heater. has caused considerable deployment
issues, sometimes necessitating a
Long length EOR extraction larger well diameter.
The heater shown looks a lot like a standard While viscosity reduction is one applica-
mineral insulated (MI) cable heater. There are tion, preheating a SAGD operation also may
two important differences: be a major opportunity. In this example,
1) The increased ability for the magnesium a well with an initial temperature of 10 C
oxide (MgO) to withstand the higher would be heated electrically to a little more
voltage without electrical breakdown, than 120 C and then be steam injected to
thus permitting operation at 4,160 V. produce the “drive” to move the oil to the
2) The ability to manufacture the cable in producing well, located under the heater
long lengths, up to 2,000 m without well. This might produce a 50% reduction
in water injection, as well as
much less heat loss in the over-
burden.
These new technical capa-
bilities could enable use of
medium-voltage electrical heat-
ers in many applications for
downhole heating, including
viscosity reduction and flow
assurance. This technology is
ready to become mainstream
as product reliability and
deployment technologies are
now proven. OG

Chet Sandberg, PE, consults for

Figure 2: Magnesium oxide insulated cable. Courtesy:
MCAAA Ltd. in the UK and is an IEEE Fellow.
MCAAA Ltd., United Kingdom

OIL&GAS ENGINEERING FEBRUARY 2015 • OG9

COVER STORY
An engineering imperative:
integrating operations
into design
To gain operational readiness and improve asset data builds for new facilities, oil and gas com-
panies look beyond simple data handoff to collaborative methods and hub solutions that more
effectively bridge the worlds of plant design and operations.
T
he handoff of data from facility design
By Roberto Michel to the world of operations and mainte-
nance (O&M) is more important than
ever in oil and gas, given that the
industry is coming off a record year for
projects. Upstream capital investment
was up 18% in 2013 to $720 billion. However,
with costs escalating and energy prices down,
profitability is declining, according to research
from IHS.
The upshot is that not only are many new
assets coming online, but the industry now faces
a growing margin squeeze. Combined, these
trends elevate the importance of a smooth, accu-
rate transfer of data from engineering to opera-
tions to maximize productivity for new assets.
OG10 • FEBRUARY 2015 OIL&GAS ENGINEERING
Image courtesy: Harald Petterson, Statoil
Decades ago, the “handoff” used to be just
that—an abrupt transfer of documents and data
from engineering, procurement and construc-
tion (EPC) firms or other contractors to owner/
operators. Today, the handoff has become a
process, with new supporting technologies
such as Web-based hubs for engineering and
asset master data management, and formats
for sharing design data.
Solutions such as these are helping industry
companies such as super-major Shell and QGC,
an Australian natural gas explorer and producer,
improve handoff processes. Additionally, EPCs
and owner/operators can follow the ISO 15926
standard as a base model for information
exchange as part of handoff.
 ‘ The
There are multiple benefits to a smooth
handoff, according to Ralph Rio, a research challenge of owner/operators has been
director with analyst firm ARC Advisory Group.
“Getting the necessary information so that
to find a way to bring all of this data into a
you can properly run and maintain your assets single consistent environment that could
is important for asset uptime, asset longevity,
and the operational performance of the plant,” be used by operations and maintenance...
said Rio. “If the handoff issue is not handled One approach now gaining adoption is
well, all of these objectives tend to degrade,
but if the handoff is done smoothly, not only the implementation of a central information
can you start off new operations more effec-
store bridging the gap between engineering
’
tively, you have a basis for further improve-
ment.” and operations.
The end result is that owner/operators have
found ways to get better data into their enter- John Sanins, Bentley Systems
prise asset management (EAM) systems, the
key systems to execute plant maintenance.
However, the handoff challenge is complex. be used by operations and maintenance...
There are many entities involved in major One approach now gaining adoption is the
projects, multiple software systems to pull implementation of a central information store
data from, and while the days of paper-based bridging the gap
handoffs are largely gone, there are key col- between engineering
laborative steps, where engineers on both the and operations,” said
design and operations side of the equation Sanins.
must engage in effectively. The hub concept
makes sense for
Evolving methods handover because
John Sanins, senior director of solutions the challenge spans
management for Bentley Systems, a provider a complex mix of
of software for the design, construction, and contractors and
operations of infrastructure, mentioned that systems, conveyed
over the decades, there has been much prog- Greg Dee, president
ress on the handoff issue. In the days before of Hubhead Corp.
CAD, the handoff was “paper-borne,” he said, For large capital proj-
and usually involved sifting through docu- ects, there are EPCs,
ments and data duplication. equipment vendors,
The evolution of 2D and 3D CAD systems process control pro-
that could hold supporting data helped the viders, and in some
industry move away from paper-based hand- cases, third-party
offs, added Sanins, but owner/operators still firms that assist with
faced interoperability issues between CAD the asset data build.
systems used by EPCs. During the past There also may be a
decade, EPCs came up with Web-based hubs need to gather data
to more easily pass models, data and docu- from multiple opera-
ments to owner/operators, Sanins observed, tions systems such
but with multiple EPCs working on big proj- as spare parts man-
ects, the asset owners still had a need for agement and asset
a central-information management platform performance man-
combining engineering and asset data. agement. A hub acts
“The challenge of owner/operators has as a staging area to
been to find a way to bring all of this data into consolidate informa-
a single consistent environment that could tion. Image courtesy: Shell

OIL&GAS ENGINEERING FEBRUARY 2015 • OG11

COVER STORY

Once data is gathered, owner/operators

also need efficient ways to edit data, corre-
lating it with any necessary documents and
drawings, and creating task lists
3D visualization and data management
solutions can be used to visualize engineer-
ing data and associate data such as piping
and instrumentation (P&ID) diagrams with
the views, according to Mark Pyatt, a senior
director for SAP who leads its operational
integrity initiative for oil and gas. “It really
consolidates all of your information for oper-
ational simplification,” said Pyatt.
Training is another way that Web-based
visualization and data management aids
readiness. Users can tap the solution for
training on new assets, and some oil field
services companies use it as a training aid
for drilling and downhole casing procedures.
“It’s a great way to depict assets and
show how they go together, come apart,
with ties to standard operating procedures
(SOPs) and safety steps that should be fol-
lowed,” said Pyatt.

The people factor

There is consensus that technology alone
can’t meet the handoff challenge. The com-
panies which excel at handoffs tend to be
those that combine technology with organiza-
tional methods such as operational readiness
groups that work with EPCs on handoffs so
that the challenge becomes an interdisciplin-
ary process.
“Absolutely, the major owner/operators
have established operational readiness
teams,” said Dee. “Their job is to make sure
everything is ready to go.”
Industry companies are embracing the
operational readiness concept. At Williams,
a provider of energy infrastructure including
natural gas pipelines, input from the O&M
group is seen as a critical component of the
design and construction process, according
to Wayne Gatlin, manager of facility design
and drafting.
“The O&M groups are responsible for
operating and maintaining a facility for its
lifetime,” Gatlin said. “A key component of
that is to utilize operational experience and
insight during the design phase, working the
Image courtesy: Harald Petterson, Statoil EPC groups to ensure plant, station, and/or
OG12 • FEBRUARY 2015 OIL&GAS ENGINEERING
pipeline design and construction facilitates
long-term operability.”
Some companies employ phase gate meth-
ods for capital projects in which the next
phase of a project can’t move forward until
designated issues are resolved at the current
phase. According to Rio, methods like phase
gate, and participation by operational readi-
ness teams in design projects, contribute to
handoff success.
‘ You
are transferring
some data about new
infrastructure, but you
are also transferring
information on how to
best use and maintain
it. Someone has to
understand how to
operate and maintain the
’
plant.
Ralph Rio,
ARC Advisory Group
“There is a significant people factor involved
in this handoff issue,” said Rio. “Yes, you are
transferring some data about new infrastruc-
ture, but you are also transferring information
on how to best use and maintain it. Someone
has to understand how to operate and main-
tain the plant.”
Doug Gant, director of performance technol-
ogy with Fluor, an EPC that also offers main-
tenance and project management services,
agrees handoffs should be viewed from a
readiness perspective. “It’s a process, with
the aim being operational readiness,” said
Gant.
In many cases, O&M experts with owner/
operators or EPCs take part in design reviews,
making sure needs such as documentation
Helping operators navigate the
new operational landscape
T echnology such as document management, CAD visualization,
engineering data warehouses, and Web-based collaboration solu-
tions are all helping to make the handoff process more effective.
Ultimately, though, handoffs involve a heavy dose of human effort.
Kevin Price, enterprise asset management (EAM) product director
for Infor, asserted that moving data from design systems to EAM is
relatively easy, but then a verification process typically takes place.
“You can import data, but then someone has to go in and verify it,
which we call a comissioning process,” says Price.
Another success factor is training, and not just on physical equip-
ment, but on all the software that drives the industry’s increasingly
digitized infrastructure. It’s crucial that training starts early for the
various software user interfaces operators need to know, points out
Dave Huffman, business development industry solutions manager for
the U.S. chemical, oil, and gas sectors for Swiss-based ABB.
“The operators need to learn how to maneuver through the graphi-
cal environments that have been created for them,” said Huffman.
“Almost every automation vendor has a unique look and feel about
its product that operators need to learn to accomplish the tasks they
need to perform. Especially in today’s rapidly changing environment,
training helps to provide operators a more information-based view
rather than a traditional flowchart or a piping and instrumentation
(P&ID) style graphic view of previous generations, so that they can
respond better to abnormal situations and better manage plant KPIs.”
The biggest piece of advice is to have methods and supporting
technology in place so that O&M needs become part of the plant
design process. Other tips for handover include:
• Recognize there are multiple systems involved, not just plant
design to EAM, but also systems such as asset performance man-
agement, that might need to be tapped for data.
• For a complete asset data build, think beyond the asset data itself
to documents such as SOPs, tasks lists, and maintenance strate-
gies. The ISO 15926 standard provides a base information model
for handoffs, but individual owner/operators may have their own
maintenance strategies or best practice documents that need to
link to the data.
• Raise your awareness level of the latest technology solutions for
information transfer, visualization of design data, and Web-based
information management.
• Ensure designers receive relevant information on equipment per-
formance and reliability from like assets in the field.
• If you don’t have operational readiness teams or employ project
management methods such as phase gate, consider using them.
There is complexity to handoff challenges, but also consensus that
methods, which merge O&M concerns with plant design processes,
will aid readiness. The sooner this merge starts, the better. “If you
are only invited in at the final review,” Gant noted, “it’s a little late to
affect the design.”
OIL&GAS ENGINEERING FEBRUARY 2015 • OG13
COVER STORY

Technology helps deliver a smoother handoff

T he emergence of 3D CAD systems has turned

operational design into a multicolored, mul-
tidimensional landscape. It also requires a new
approach to both supporting this new technology
and integrating legacy data from 2D CAD as well
as paper systems. To meet these needs, suppliers
have come up with a wide array of tools to keep
all of that data in order and accessible.
For example, Bentley Systems’ ProjectWise is a
project information and workflow solution used
by EPCs, while for owner/operators, Bentley’s eB
Information Manager supports revision control
for asset data. The company also came up with an
open, portable format called i-models for collabo-
rating around CAD and non-CAD data. According
to John Sanins, senior director of solutions man-
agement for Bentley Systems, i-models are like a
PDF for engineering data.
QGC has made use of Bentley’s information
management software to improve handoffs for
its Queensland Curtis LNG project, a large facility
that turns coal-seam gas into LNG. In particular,
according to Sanins, QGC uses Bentley’s i-models
as a central component of its data warehouse
for viewing and sharing engineering data, while
using Bentley’s eB Information Manager and Data
Quality Server to consolidate and maintain asset
information in a data warehouse used by its oper-
ations and production group.
The LNG facility, which was set to start produc-
ing at the close of 2014, is massive, having close
to 700,000 pieces of equipment, four gas process-
ing plants, four water treatment plants, and a
pipeline network.
A project on this scale calls for efficiency in how
data is transferred and maintained. “The challenge
in industry is not only consolidating and normal-
izing data from engineering and getting it into a
central data warehouse, but also having mecha-
nisms to easily keep that data up to date,” Sanins
said.
Greg Dee, president of Hubhead Corp., said his
company’s NRX AssetHub supports visibility into
the progress of the data build through reporting
tools that convey how complete the build is on
a particular class of parts or equipment. “We are
a data editor and visualization tool that gets the
data ready to load into an enterprise asset man-
agement (EAM) solution,” Dee said.
If key pieces of supporting information, such as
serial numbers or maintenance plans, are missing,
the solution reflects that through a score. “These
features allow you to make sure that when you
need the data to be ready for operations, it will be
ready,” said Dee.
SAP, which offers EAM software, expanded into
the asset data collaboration arena in late 2011
when it acquired Right Hemisphere’s 3D visual-
ization technologies. According to Mark Pyatt, a
senior director for SAP who leads its operational
integrity initiative for oil and gas, the solution set
now is called SAP Visual Enterprise, and can be
used to visualize engineering data and associate
data such as piping and instrumentation diagrams
with the views, “It really consolidates all of your
information for operational simplification,” said
Pyatt.

for SOPs and spare parts are addressed
earlier on. “Optimally, it’s a process in which
the design process has nested, embedded
resources to represent the interests and
needs of operations and maintenance,” said
Gant.
This ongoing exchange works in the other
direction too, in that reliability data should
head back to designers. According to Gant,
some companies use reliability, availability,
maintainability (RAM) modeling techniques
and gather other data on failure trends to
ensure that new plant designs make use of
the most reliable equipment.
Equipment performance and reliability data
has always been needed and desired by the
design teams, according to Roy Whitt, senior
OG14 • FEBRUARY 2015 OIL&GAS ENGINEERING
VP and general manager for Asset Answers
with Meridium, a provider of asset perfor-
mance management solutions. According to
Whitt, In the days before PCs, when pneu-
matic instrumentation was predominant, engi-
neers would gather data from individual instru-
ment charts, manual operator logs, and field
notes to understand primary parameters such
as pressure, temperature, and flow, as well as
secondary criteria like inspection results, and
anecdotal information from shift reports.
This manual effort typically only came into
play when working on major new project
designs. With the advent of digital instrumen-
tation and distributed control systems, data
became more readily available through pro-
cess historians, and was applied to a broader
 Image courtesy: Shell

‘ The key problem now is being able to take the plethora of data available
and make sense of it—with confidence that a resultant analysis is accurate
enough on which to base a decision.’
Roy Whitt, Meridium

set of projects, though still fairly sizable in
scope. “Practices were inconsistent and the
analyses were very dependent on individuals
doing the design work,” he said.
Today’s computing power and low-cost data
storage allows engineers to gather and ana-
lyze much more data, but procedures to take
advantage of those analyses are still being
refined.
“The key problem now is being able to
take the plethora of data available and make
sense of it—with confidence that a resultant
analysis is accurate enough on which to base
a decision,” Whitt said. “Key information still
includes primary parameters to define the
‘operating envelope’ or ‘integrity operating
window.’ Reliability information, such as mean
time between failure (MTBF) as well as avail-
ability by equipment type and manufacturer,
can lead to better selection of equipment.” OG
Roberto Michel is a freelance writer and editor with
more than 20 years experience as an editor with
business-to-business publications.

OIL&GAS ENGINEERING FEBRUARY 2015 • OG15

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INDUSTRY FOCUS
Understanding technology
drivers in O&G
How and why do oil and gas producers make operational decisions at production levels?
With such a large and complex industry, can we make sense of it all?
I
By Peter Welander magine this scenario: In a refinery in
some part of the world, an engineer
struggles with an old and worn-out
mechanical flowmeter. The rotor bear-
ings are shot, and it’s giving erratic read-
ings. He asks himself, “With a company
of this size, with all the money flowing
First in a series through here, why can’t we do some basic
Coming in April: instrumentation upgrades?”
The questions of why companies spend
Refining – money the way they do and how they
making money make investment decisions are complex
in virtually any company context, but they
the hard way seem particularly opaque when working in
as large and diversified an industry like oil
and gas. Why are companies the way they
are in this business, and are there keys for
working within them?
It’s complicated
A fully integrated company in this indus-
try has to deal with everything from find-
ing oil and getting it out of the ground to
‘Over
the last five to 10 years, the oil and
gas industry has seen many technological
changes ranging from drilling and
production (e.g., fracking, new offshore
drilling techniques, tar sands exploitation,
’
etc.) to refining and distribution.
putting it in your car. Names like BP, Shell,
ExxonMobil, and others encompass the
entire range. Others are more selective and
may only choose certain parts of the pro-
cess such as drilling or refining. There are
similar situations in natural gas production.
As CFE Media launches this new publica-
tion dedicated to a very large and complex
industry, let us pause for a moment and
consider some of the elements that make
it all tick. These are interesting times for
the industry as oil markets today seem par-
ticularly mixed up and many producers find
themselves in a difficult financial situation,
at least for the moment.
This article is the first of a series that
will examine the industry in general, and
then various segments one by one. We’ll
look at what producers are doing and how
they are undertaking projects to improve
efficiencies and keep up with a changing
regulatory landscape. We’ll consider what
technologies are being adopted, where, and
how proponents make a compelling busi-
ness case.
In many respects, oil and gas production
and refining gave birth to process industries
as we know them. Turning bulk quantities
of crude oil into kerosene and eventually
gasoline, diesel, and other products, set
the pattern for chemical and petrochemical
industries to come. Refineries are among
the oldest process plants we have, and the
entire production and distribution chain from
well head to your home’s gas meter or fill-
ing station is arguably the most efficient and
optimized activity on earth. The fact that it
has all developed to such a colossal scale
around the globe over the last 150 years
makes it particularly impressive.
At the same time, growth in demand
for the industry has effectively stopped in
many developed markets such as North
America and Europe. Depending on which
reports one believes, demand in China has
likewise slowed or stopped, although actual
numbers vary. Saudi Arabian production
policies to manipulate pricing notwithstand-
ing, demand slowdowns have had a major
impact on all markets. Whatever comes out
of the current situation, it’s safe to predict
OIL&GAS ENGINEERING FEBRUARY 2015 • OG17
INDUSTRY FOCUS
the picture of how oil moves around the
globe will be different going forward.
The fundamental things apply
Oil and gas companies, like all rational,
profit-driven companies, are investor owned
and therefore all about making money. They
want to be able to sell their products for
more than they cost to produce. (There
are national companies in various parts of
the world motivated by politics, but those
are a different animal.) When profit-driven
companies consider making investments in
any part of the production chain, they do it
with an expected return on investment or
because they are compelled by some type
of regulation. The things that make deci-
sions so complicated in this context relate
to scale and the number of choices.
So how do managers make investment
decisions? Nicole Decker is an energy sec-
tor strategist at UBS Wealth Management
and started her career working at Texaco. In
her thinking, the big companies dominating
the industry today got that way because
they generally made good choices.
“Companies do have to focus on the
business,” she said. “They also have to
keep shareholders happy. The one goal that
OG18 • FEBRUARY 2015 OIL&GAS ENGINEERING
Image courtesy: Cenibra
the company and shareholders all benefit
from is a return-oriented model where an
oil company will take a look at its portfolio,
see how it fits into the competitive land-
scape, and act accordingly. But they also
have to ask how projects within the portfo-
lio compete with one another.
“The business decisions as to where to
invest in one project or another, are driven
by which will yield the highest return.
When they can generate cash flow, they
can return that to the shareholders through
dividends and share buy-backs,” she said.
“You see that now with a lot of the large-
cap majors. There isn’t a lot of growth
going on, but the dividends continue to
increase and some of them are buying back
substantial numbers of shares.”
Growing without growth
While it may sound ironic, many com-
panies in this industry don’t want to grow
in the traditional sense. Every barrel of
oil or cubic foot of gas has to come out
of the ground somewhere, which makes
reserves hugely important. Where will it
be coming from next week or five years
from now? When production is growing
every year, it puts more pressure on finding
new reserves and that can be a very com- management have increased the amount
plex picture. If traditional sources begin to taken from each, extending well life and
decline, a company may have to make dif- production.
ficult decisions about finding new ones.
Of course, companies in industries that How companies make decisions
are not growing still need to improve prof- Let’s return to our hypothetical engineer
itability to keep shareholders happy and mentioned at the beginning. What are his
support their stock price. Strategies include prospects for seeing any improvements in
diversification, squeezing more out of exist- that facility? What would make the compa-
ing assets, and divesting less profitable ny decide to undertake an instrumentation
parts. Major integrated producers in this improvement program, or any other invest-
industry have frequently taken the path of ment opportunity?
divestiture when it comes to

‘
refining assets. We will look
at refining in greater detail in There are times within a company when you look at a
future installments, but for the project, and maybe there’s a six-month payback, but
moment let’s consider where it
fits in the larger picture. you don’t have the money so you don’t do it. Plant
Decker adds, “Refining is a personnel who are trying to operate and maintain the
notoriously low-margin business,
and it’s very cyclical. That’s the assets may consider it a stupid decision, and that can
reason why many of the large be a major frustration. In my experience, it seemed
companies want to shed refining
assets. They aren’t the highest like there were lots of good projects that never got
return assets in the portfolio.
Upstream operations generate
much higher rates of return.”
done. ’ Lee Swindler, Maverick Technologies

The role of technology

Over the past five to 10 years, the oil and
gas industry has seen many technological
changes ranging from drilling and produc-
tion (e.g., fracking, new offshore drilling
techniques, tar sands exploitation, etc.)
to refining and distribution. The most dra-
matic changes have been upstream, and
new sources of oil and gas have drastically
changed the overall production landscape.
Recent oil price changes have disrupted
these markets drastically. Some companies
carry on with the assumption that these
conditions are temporary and will return to
more typical levels. Others have optimized
production to the point that they can still
earn a profit even with prices as they are
now.
Whichever view one takes, it is clear
that growth of unconventional oil and gas
production has been driven by technologies
that have drastically reduced the cost and
time necessary to drill new wells and get
them into production. Improvements in well
Lee Swindler, oil and gas program man-
ager for Maverick Technologies, suggests
the drivers aren’t all that hard to figure out:
“A certain group of projects is safety driv-
en. Another group is regulatory driven, such
as environmental controls. Then there’s a
third group of projects driven by profit. In
lean years, your budget is completely spent
on just safety and regulatory projects, so
you don’t even get to the profit improve-
ment stuff. In good years you still have to
do the safety and regulatory, but you have
a little extra money to do some profitabil-
ity projects. Those are usually pretty easy
to rank based on your expected rate of
return.”
Paul Bonner, vertical market leader for oil
and gas for Honeywell Process Solutions,
sees the overall flow of capital influencing
decisions on a very practical level. “When
margins are very tight and people aren’t
investing capital, a lot of companies will
take on smaller improvement projects.
OIL&GAS ENGINEERING FEBRUARY 2015 • OG19
INDUSTRY FOCUS
‘ When margins are very tight and people
aren’t investing capital, a lot of companies
will take on smaller improvement projects.
That’s when we see advanced process
control or MES projects to increase yields or
improve energy efficiency. But those tie up
the available engineering resources. ’
Paul Bonner, Honeywell Process Solutions
That’s when we see advanced process con-
trol or MES projects to increase yields or
improve energy efficiency. But those tie up
the available engineering resources.
“So when capital is available and a
company is spending $1 billion on a new
process unit, they have to find people, and
they want the best and brightest, so they
often reassign all the engineers who would
have been working on those optimization
projects,” Bonner said. “If you look at any
business that supports both advanced solu-
tions and capital projects, you find those
are counter-cyclical. When there are big
capital projects, there aren’t smaller opti-
mization projects, and vice versa. For a
refinery, those resource decisions are gen-
erally made within the fence, not at higher
levels.”
Those points are important to under-
stand, but how does a company make deci-
sions on choosing one area of investment
over another within its portfolio? Does
all the money go to upstream ventures
because that’s where management sees
the greatest profit potential? Bonner said
that isn’t how it works in practice.
“If you look into how an integrated oil
company is structured, I think they have a
higher degree of separation than people
realize,” he said. “Their upstream opera-
tions are almost completely different com-
panies than their downstream. Moving
capital or moving people from one to the
other is like moving to a different company.
They’re different cost centers, they have
different vice presidents, so when they’re
OG20 • FEBRUARY 2015 OIL&GAS ENGINEERING
making investment decisions, which are
based on ROI, they’re being made at the
highest corporate level. They aren’t made
by some guy at the production level who
said, ‘Let’s not drill a well today; let’s work
on the crude unit.’”
Sometimes the answer is “no” to a proj-
ect that seems like a sure thing. Swindler
saw that himself earlier in his career work-
ing in the chemical industry. “There are
times within a company when you look at
a project, and maybe there’s a six-month
payback, but you don’t have the money so
you don’t do it,” he said. “Plant personnel
who are trying to operate and maintain the
assets may consider it a stupid decision,
and that can be a major frustration. In my
experience, it seemed like there were lots
of good projects that never got done.”
Other forms of investment
So far we’ve discussed investment in
the form of hardware and software. But
there are other elements to the picture: the
human side. Throwing technology at a prob-
lem is rarely a solution in and of itself. The
human capital side is a major element and
can make a huge difference to a company’s
success. Swindler sees that kind of thing
routinely in his travels as an integrator.
“Refineries operate with a lot of outdated
equipment, probably more so than any other
type of plant because of the age of their
assets,” he notes. “But work processes are
a mix. I’ve seen plants with old equipment
make impressive productivity gains by apply-
ing better work practices. Where people
make a commitment, operational excellence
can exist in some difficult environments.”
The ability to get people working toward
common goals may be the biggest key to
success. “You need everybody on board
to create the efficiencies that these com-
panies realize,” said UBS’s Decker. “It’s a
function of the human capital you give to
it, not necessarily the money you throw at
it. Most of the large companies will tell you
that. They emphasize the importance and
contribution of each individual.” OG
Peter Welander is a contributing content specialist
for Oil & Gas Engineering.
INDUSTRY TRENDS
Taking advantage of
production downtime
during the supply glut
While production may still be up in the U.S. for now, many new projects and
unconventional oil- and gasfields are going offline due to the high associated costs of
production. What can companies do while the price of oil is low? Upgrade.
F
By Eric R. Eissler alling oil and gas prices are great for
the end user, and everyone cham-
pions lower prices at the pumps.
However, these low prices are bad
for producers, especially those
working in unconventional oil and
tight gas, where associated costs are much
higher. These adverse effects really hit
small oil companies operating in U.S. shale
plays. As the price of oil wanes, the smaller
companies, many of which have borrowed
money to start operations, are losing prof-
its—fast. It becomes uneconomical to drill
for unconventional oil and tight gas at lower
prices.
On the other hand, production in Bakken,
N.D., and Eagle Ford, Texas, has been up
more than 3% since October 2014. The threat
of lower prices has actually spurred smaller
operators, which want to pay off debts and
disburse dividends, to increase production.
‘ The price of oil is not going to stay this low
for long, but it’s not going to rocket up to
$100 per barrel anytime soon.’
Oil from a stone
Producers are adopting the logic that
since no one can predict with 100% accu-
racy where oil prices will go next, it may be
wise to squeeze out as much as possible
before the price drops further. No company
wants to shut down any producing projects
now due to falling oil prices but because
of the initial cost to bring new wells online
and to produce. In addition, efficiency in
well engineering is key to the success in
unconventional oil.
Associated costs have come down over
the past few years due to advantages in
well engineering techniques and methods.
Even with the current low prices, the major
shale plays are still producing a healthy
profit.
The oil-rich Eagle Ford, according to a
study by energy investment management
company Tudor Pickering Holt, will still
be profitable even at between $30 and
$40 per barrel of oil. If prices were to fall
lower than that, companies may start to
close up shop and possibly sell off assets.
Many companies will still produce in 2015,
but they will have to rein in spending and
exploration in favor of using more efficient
methods to maintain and increase produc-
tion during this glut period.
That being said, while there will be fewer
new wells, production is set to increase.
The U.S. Energy Information Administration
(EIA) supports this claim by stating, “pro-
jected oil prices remain high enough to
support development drilling activity in the
Bakken, Eagle Ford, Niobrara, and Permian
Basins, which contribute the majority of
U.S. oil production growth. EIA expects
U.S. crude oil production to average 9.3
million barrels per day (bopd) in 2015, up
700,000 bopd from 2014, but down from
expected growth of 900,000 bopd.” That is
OIL&GAS ENGINEERING FEBRUARY 2015 • OG21
INDUSTRY TRENDS
only a 200,000-bopd difference, and
in the grand scheme of things it is
not very much of a drop.
Supply and demand basics
As it is with any commodity, prices
fluctuate based on the most basic
variable—supply and demand. While it
might be simple to say that the sup-
ply and demand of any commodity is
basic, it is not. There are many factors
and variables that determine the price
of a barrel of oil. Based on the current
situation and speculation, as produc-
tion rises, the price will continue to
drop and export will be seen as a way
to move the oil.
Because there is a prohibition on oil
exports from the U.S. (this was enact-
ed during the oil crisis of the late
1970s), there is not going to be that
natural outlet for exports to relieve
downward pressure on the price. The
price is only going to go so low until
demand goes up stemming from the
low price, but the moratorium on U.S.
oil exports slows the pace at which
the price will be able to increase.
Invest, renew, upgrade
If production is slowing down
and some projects are starting to
be put on hold, then what can com-
panies do in the meantime? Many
things, actually, but they are going
to require investments, which some
may be wary of making in time of
lower-than-expected profits. The
overall slowdown is beginning, how-
ever, and this may be the time to
OG22 • FEBRUARY 2015 OIL&GAS ENGINEERING
Image courtesy: CFE Media
upgrade and integrate systems for
increased efficiency when the indus-
try ramps up again.
Many of the companies that are
using this so-called downtime to
update systems and add sensors are
oilfield services companies, which
can use the lower cost of fuel to
finance these upgrades to systems
already in place. It can be thought of
as restorative hibernation. Moreover,
‘ Many
companies will still produce in 2015,
but they will have to rein in spending and
exploration in favor of using more efficient
methods to maintain and increase production
during this glut period. ’
new regulations on the oil and gas
industry being rolled out by the
U.S. government and Environmental
Protection Agency (EPA) will force
producers to better monitor sys-
tems, especially concerning meth-
ane emissions, which face a pending
curb to enter into force on January
1, 2016. Part of the EPA legislation
would require operators to mea-
sure pipeline blowdowns; replac-
ing pipelines is not the answer to
reduce emissions, proper monitor-
ing is. Adding sensors to pipelines
and other production equipment is
a trend that may begin happening
sooner rather than later given the
downtime. Even though the require-
ment has not entered into force yet,
the value of adding sensors now is
important due to the data and met-
rics that could be provided.
The downward spiral
Oil prices are still sliding down
to levels not seen in years, and the
effects on the industry are start-
ing to take shape with the advent
of 2015. Production has slowed in
high-cost unconventional plays but
not stopped. The price is not going
to stay this low for long, but it’s not
going to rocket up to $100 per barrel
anytime soon. The EIA forecasts that
Brent crude oil prices will average
$58 per barrel in 2015.
In the meantime, industry trends
point toward the many mid- and
large-sized producers weathering
the storm and preparing for elevated
prices by investing in automation
and efficiency systems. By doing
this, when the price of oil climbs
back up again, they will be ready
to take full advantage of the higher
price by maximizing production
through the integration and automa-
tion of control systems into oil and
gas infrastructure. The use of these
systems allows operators to get a
better feel for the integrity of com-
ponents and assist with preventative
maintenance, cutting costs in the
long term. OG
Eric R. Eissler, Associate Editor, Oil &
Gas Engineering, CFE Media. You can
reach Eric at eeissler@cfemedia.com
industry interview
Staying in touch with the well site
Oil & Gas Engineering spoke with Harry Ebbeson, manager of technical services and
customer support at PCS Ferguson, to get a better idea about what some of the specifics
are for engineers working in the oil and gas industry. Harry paints a multifaceted, in-depth
picture of working within 300 ft of the well site.
Q: What is your job and pri-
mary responsibility?
A: Manager of technical ser-
vices, customer support for
people using PCS Ferguson
products in the field, primarily
in gas production. Engineering
and development for well site
automation products in the
oil and gas industry. I have a
team of technical specialists
that I work with, and they are part of a larger automation-
focused group. PCS Ferguson is a product line company
within Dover Artificial Lift Systems (DoverALS.com). PCS
Ferguson is the result of a merger between Ferguson
Beauregard and Production Control Systems (PCS).
Our external customers are primarily independents
and some majors. Internal clients are our company sales
reps that sell into the industry. Field support services
from our Texas location are provided mainly in Texas,
Oklahoma, Arkansas, and Louisiana, but not limited to
these states as we also support operations in the north-
ern energy production fields in Colorado, Wyoming, Utah,
North Dakota, and Montana, as well as internationally in
Mexico, Canada, China, and Australia.
PCS Ferguson’s typical area of operations is within 300
ft of the well head: We try to touch every aspect of the
well site, including pad production, artificial lift control,
chemical injection, and resource extraction.
We have a core competency in controlling plunger lift
for liquids removal in gas production. Specifically, we pro-
vide monitoring and control of the entire well site, includ-
ing plunger lift, gas lift, chemical injection, tanks, and
other facilities within the typical production area.
Q: How many people do you manage for the field?
A: I manage six people in both the office and field. We
are not geographically bound, but we tend to work in the
southern states. There are areas of overlap with our engi-
neering team located in Colorado.
Q: Are you located in a small manufacturing facility?
A: We are more of a satellite engineering and customer
support office, but we work in conjunction with our engineer-
ing and manufacturing facilities in Texas and Colorado.
Q: What are some new technologies or processes that
you are working with now?
A: One of our new products is iChem, an automated
chemical optimization system. Prior to the advent of iChem
products, most producers had a small piston pump, solar-
powered or battery-powered with a tank full of chemicals.
These chemicals would be injected downhole to inhibit cor-
rosion, break up emulsions, etc. It was a bulk treatment and
there was not really any control over the amount of chemi-
cals being injected. We have created a series of algorithms in
conjunction with specialized pumps and controllers that man-
age the amount of chemical injected. It’s not always the case
that a little bit of chemical is good and a lot is a whole lot bet-
ter. You can easily reach the point where a large amount of
chemicals does no more good. We brought a level of control
and cost efficiency to the chemical injection side of things
with an automated control system.
Imitation is flattery, and we are no longer the only ones
doing this. We are seeing some others trying to enter
this space, but they don’t have the pump knowledge, well
expertise, or field presence that PCS Ferguson does. We
design and engineer in-house and test in the field, which
gives us an edge.
What’s really important is that the algorithms are inte-
grated into the control devices properly. There are many vari-
ables that have to be taken into account. You need to be sure
that if you stop production, the chemical injection process is
stopped, too. You don’t want to waste that expensive chemi-
cal, sometimes costing between $100 and $300 per gallon.
Generally, the iChem system is paid out within its first quar-
ter of installation.
Q: Are these pumps remotely controlled?
A: Yes, most of our products are remotely SCADA con-
trolled, as well as automatically controlled by algorithm and
input from the operator.
OIL&GAS ENGINEERING FEBRUARY 2015 • OG23
INDUSTRY INTERVIEW

others to stay abreast of what is going on, and then I look to

Q: What regulations and standards affect your job?
A: UL and CSA are the entities that affect us the most. They
are the governing bodies for class and division ratings and for
getting products certified, installed, and working in classified
atmosphere areas. Plunger lift systems, and oilfields in gen-
eral, have traditionally used field gas-supplied actuators-motor
valves. Every time one of these devices operates, there is a
little gas that is released into the air. While it is only a little bit
that is released, when you take about 1,000 wells with two to
four motor valves on them, there can be a substantial amount
of gas released into the air. We are always working on find-
ing ways to automate valve movements to limit these gas
emissions. Most of our controllers use electrically operated
latching valves, which are gas controlling valves. We have seen
an increasing use of electrically operated valves recently, but
since our control systems are solar and battery powered, elec-
trical demand is always a concern. We are also involved with
downhole chemical injection to prevent corrosion and deal
with other issues in the well.
I worked in air pollution regulation for a local control district
for almost 10 years and then almost 20 years with Shell as a
major producer, then a SCADA radio manufacturer, and now
with PCS Ferguson for six years. I have
see how that might interpret or interpolate into our piece of
the business.
Part of my role is to look at the marketplace as a whole
and then ask our people to scrutinize the specifics, and that’s
where I use a lot of trade journals and magazines. We also
watch our competitors, too, and see what kinds of moves
they are making and how that might affect us.
Q: Looking ahead, over the next five years, what do
you see as the major technology or engineering
challenge?
A: Scalability is really important, and so is interoperability.
You may drill one or two wells on a site, and then the next
year you might drill 10 more on the same pad, so the scal-
ability and interoperability are really important for system
integration. The PCS Ferguson 8000 Series of controller prod-
ucts are very scalable products.
Energy is also going to be important: How are you going to
power these components? Today, 99.9% of our products are
solar powered. Energy harvesting end elements may have
some play in the market for us, but they have not gotten to
the point where they are fully viable for us.

‘ You
been on both sides of the fence.
need to stay hungry. You need to know that
Q: Which codes and agencies affect
your work the most? you are a vital part of something. You need to
A: Again, it is UL and CSA. The big
keep your skills up. Keep learning. If you are not

issue for us is: Are our products certified
to work in explosive environments? If learning, you are stagnating.
the equipment meets those regulations
then, generally speaking, we are good to
go. However, our equipment is used by third-party contract
producers, and they must ensure that the equipment meets
standards that the owner/producer must meet. We are not
directly responsible for those, but that’s where the multiple want to pay $30 to $40 per month per well for a cellular con-
overlapping jurisdictions come into play, and we work with
our customers to comply.
Q: Which IEC standards do you deal with?
A: Primarily 61850, 6111s. IEC SCADA protocols are used
in the EU but not too much in the U.S. We try to stay up on
these and have a broad perspective on things in case one of
our international customers has requirements.
Q: How does the company keep up with all these
codes and standards?
A: We have some individuals who are tasked with staying
up to date with the codes and standards respective to their
division or work area. But generally, people tend to stay up
because they are always honing their skills. And they bring
that back. I use publications such as Control Engineering and
OG24 • FEBRUARY 2015 OIL&GAS ENGINEERING
’
Furthermore, new standards such as the ISA100 for wire-
less and IEC standards mean wireless connectivity needs
to be considered as well. If you have 1,000 wells, you don’t
nection. To remedy this, we are working with an OEM radio
for SCADA communications. The FCC is reallocating band-
widths and carving up the frequency spectrum, so private
radio is something that warrants consideration.
Q: What is your company doing to recruit and train
new employees?
A: We just finished building a training matrix for technicians
up to three levels. This range covers a new hire to senior level.
What I have seen over the years is that most companies
have downgraded their in-house training, and this has lead
to the problem we are facing today of the Big Crew Change.
Now that the crisis is encroaching, the companies are waking
up and saying, “What are we going to do now?” I feel that
trade journals are doing something to address this issue by
taking on more mentoring and tutoring approaches to content.
 We have a large population of people who are tech savvy
at the user level, and though they have that skill, they are
usually missing the knowledge of what’s going on inside the
device. The manufacturer’s side of the technology is taken
as a given. I see this stemming in part from the fact that we
don’t have a space race anymore. Engineering has fallen by
the wayside, because we are honoring sports figures, big
bankers, etc.
Q: Who is your competition?
A: Some of our competitors in artificial lift also offer auto-
mation and control. These include Weatherford, Well Master,
and Superior, but our biggest competitors in the automation
space are big players like ABB and Emerson. Dover com-
bined PCS and Ferguson Beauregard because it gave them
distinct artificial lift expertise and a large footprint in the
marketplace. We have dozens of “boots on the ground” and
years of experience on the well head. The well site automa-
tion market is extremely competitive as are other energy
sectors such as wastewater.
Q: How does the sales cycle work?
A: The salesman is working in the field, directly with the
producers, and he might sell a plunger lift or gas lift system.
These solutions typically include downhole equipment as
well as an automatic surface controller. Usually he will handle
the entire sale, depending on the installation. If it is more
advanced, he will enlist our help to engineer out the com-
ponents of the installation. We engineer a family of SCADA-
oriented wireless controllers and remotes, all part of our PCS
Ferguson 8000 Series, as well as artificial lift equipment such
as plungers and downhole tools. We work collaboratively with
our sales channel, and we will always bring a salesperson in.
This is not a guy in a suit. He works on-site, wearing a hard
hat, and setting up these systems. A majority of the work is
done by the salesman at the field level.
Q: Is the SCADA product proprietary?
A: Our automation systems are designed on an open archi-
tecture, and all of our controls communicate via ModBus.
After dabbling in a proprietary SCADA protocol, we standard-
ized on universal communication software a few years back.
Most of our major customers are using Cygnet as a software
host. Wonderware has a small portion of the market as well,
but Cygnet is the major player. Not surprisingly, Cygnet is a
Weatherford company, so we are integrating with a competi-
tor. This is pretty common in the industry.
15. What is the best part of the job?
A: I work with a group of very talented people, and the great
thing is we can see the direct results of our work. Exposure to
new technology is really great because we are encouraged to
think outside the box, and that is equally rewarding.
Because we are a smaller company, we don’t have to com-
mittee things to death before we try them. We are allowed to
innovate and implement. Sometimes we fail, and that’s OK as
long as it is not too often. Sometimes from the failures come
the best innovations.
Q: What is the most challenging part?
A: The cyclical nature of the energy industry. Our cus-
tomers have knee-jerk reactions to the price of oil without
regard to how long the price will be down. You have to plan
your company to withstand highs and lows. The other thing
is keeping up with personal technology. “Am I missing a
tool that could really help me out in the field?”
In terms of technology, I helped develop some devices
back in the 1980s that are still working today. They are akin
to a calculator with an auto-start button, but they work and
they are paid off and they are making money, so the pro-
ducers do not want to replace them until they are literally
struck by lightning and don’t work anymore.
‘ Scalability is really important, and
so is interoperability. You may drill
one or two wells on a site, and then
the next year you might drill 10
more on the same pad. ’
This is something that manufacturers do not understand
very well. When they produce something and sell it to a
company working in a capital-intensive industry such as oil
and gas, the producers expect that unit to work past its
payout date ad infinitum. For manufacturers, generally, they
would like to see products replaced every five years. But if
they don’t have really new and innovative features on them,
the energy companies are not going to want to buy it. There
is sometimes a disconnect between what is the latest and
greatest and what is truly functional.
Q: What do you like to do in your free time?
A: I have seven grandchildren, so I spend a lot of time with
them. I am a guitar player—bluegrass and other music—have
been playing since I was 13 and I built my first guitar and
amp. I try to stay healthy and active, and active at church and
in the community.
Q: What advice can you offer your fellow engineers?
A: You need to stay hungry. You need to know that you
are a vital part of something. You need to keep your skills up.
Keep learning. If you are not learning, you are stagnating. OG
OIL&GAS ENGINEERING FEBRUARY 2015 • OG25
NEW PRODUCTS

Valve interlocking series for process safety control

The Kirk Eagle trapped key valve interlocking systems are designed to provide
process safety control in hydrogen cooled generator purging operations. The
Eagle series trapped key valve interlocking systems ensure that users follow a
pre-determined sequence of operation for startup and maintenance on generators
in power stations, refineries, chemical plants, and other industrial applications.
The Eagle series also features integral valve interlocks to fit every type and size
of quarter and multi-turn valves as well as bolt and electro-mechanical interlocks.
The Eagle series are made of 316 stainless steel with keyways protected by a
gasketed flip cover, which allows them to be used in harsh environments.
Kirk
www.kirkkey.com
Input #110 at www.controleng.com/information

Field device manager

Yokogawa’s FieldMate Versatile Device Management Wizard R3.01 is a software
program for configuring, adjusting, and managing a wide variety of field devices
used in factories and other production sites. In addition to device configuration,
adjustment, and management functionality provided in earlier FieldMate releases,
FieldMate R3.01 has added features that facilitate the management of memos,
photos, and videos as well automatically generating reports, making it useful for
routine maintenance tasks. FieldMate R3.01 runs on PCs (including tablet PCs)
that have either Windows 7 or Windows 8.1. It is designed for process industries
such as oil, petrochemicals, chemicals, pulp and paper, pharmaceuticals, foods,
and the iron and steel industries.
Yokogawa
www.yokogawa.com
Input #111 at www.controleng.com/information

Biodegradable fuel additive

The VpCI-705 is a biobased, biodegradable fuel additive to bio-fuels, produced
using renewable and sustainable raw materials. This product serves as a corro-
sion inhibitor, fuel stabilizer and water emulsifier for biodiesel, diesel, gasoline,
gasohol mixtures and other bio-fuels. It provides multiphase corrosion protection,
lubricity and elastomer protection all of the common engineering metals used
in automotive fuel systems including tin plated and galvanized steel, cast iron,
aluminum, copper base alloys, solder, zinc, and die cast alloys. It does not con-
tain trace metals, chlorides, chromates, nitrites, or phosphates. It absorbs water
in tank and fuel line and can be fogged into fuel tanks. It provides stability and
reduces the build-up of static charges that cause explosions.
Cortec
www.cortecvci.com
Input #112 at www.controleng.com/information

Flow meter, sensor

The SS Turbine Flow Meter/Flow Sensor features a unique infrared reflected digi-
tal output technology to help provide accurate flow monitoring and totalizing for
liquids in pressures up to 363 psi. The flow sensors applications in both low flow
and high pressure uses involving clear, opaque, neutral, corrosive, or aggressive
liquids such as diesel fuel, chemicals, cleaning agents, and other petroleum-
based liquids. Available in three tube diameters from 4.5 to 12.5 mm, with F.S.
ranges from 0.06 to 40 l/min, SS Turbine Flow Meters feature 316 SS and PFA
wetted parts.
Clark Solutions
www.clarksol.com
Input #113 at www.controleng.com/information

OG26 • FEBRUARY 2015 OIL&GAS ENGINEERING

Linear actuator
The FT45 model universal electric rod style linear actuator series has continu-
ous force rating to 40,000 lbf (178 kN), speed to 60 in/sec and stroke lengths
from 6 in to 8 ft. The FT45 Series can be applied across a wide range of lin-
ear motion applications and use alternatively to hydraulic cylinders. FT45 has
a continuous force rating of 10,000 lbf, filling the gap between the FT35 and
FT60 models. The FT45 features meet IP65 environmental protection stan-
dard on all mounting configurations. Its grease zerk fitting allows re-greasing
of nut assembly without having to disassemble the unit.
Curtiss-Wright Corporation
www.curtisswright.com
Input #114 at www.controleng.com/information

Mass flow meters

with color display
Backlit color display is added to rechargeable
portable gas mass flow meter options. The
handheld meters offer laboratory-class +/-0.8%
reading accuracy for field flow verification and
validation. The backlit color display provides
six hours of continuous operation for flow
verification in applications such as ambient air
monitoring inside air station enclosures, and
any other low-light setting in environmental,
manufacturing, and metrology industries. These
flow meters provide fast flow validation with
multi-parameter measurement, wide operating
ranges, and multiple true gas calibrations. The
integrated utility allows up to 20 personalized
gas compositions to be quickly programmed
and stored directly on the device.
Alicat Scientific
www.alicat.com
Input #115 at www.controleng.com/information

Temperature sensors
Current-to-pressure transmitters and thermocouples
The IPH2/IPX2 Current-to-Pressure (I/P) TS500 resistance thermometers and
Transmitter features 22 direct and reverse thermocouples are designed for uni-
output ranges, with switch-selectable versal use in the process industries.
reverse output standard on the IPX2. They have a modular design with a
Another new feature on the IPX2 is a remov-
wide range of sizes, materials, sen-
able electronics module. In certain abnormal
sors and transmitters. The TS500
conditions, a liquid “slug” can enter the air
thermometers and thermocouples
or gas supply of the IPX2. The removable
are suitable for the chemical, oil and
electronics module speeds the recovery
process by allowing the liquid to drain more gas, and power industries. The user
efficiently. When the removable electronics can use a wide range of process
module is combined with the clog-resistant connections, connection heads,
filtered nozzle and orifice that protects sensor types, transmitters and
against clogging caused by internal debris, displays to configure individual solu-
the result is a product that is easier to main- tions for a process. The TS500 fam-
tain and less prone to malfunctions caused ily supports Hart, Profibus PA, and
by unwanted material entering into the Foundation Fieldbus communication
system. Both products meet NEMA Type 4X standards, and can be integrated
requirements, and the IPX2 can be installed into the operating tools of process
in explosion-proof environments, making it a control systems.
popular choice for oil and gas applications in
hazardous settings. Siemens
www.siemens.com
Moore Industries Input #117 at www.controleng.com/information
www.miinet.com
Input #116 at www.controleng.com/information

OIL&GAS ENGINEERING FEBRUARY 2015 • OG27

NEW PRODUCTS
Modbus multi-purpose meter
The ProtEx PD6830X Modbus Scanner is a rugged, explosion-proof, NEMA 4/IP68
Modbus multi-purpose meter designed for accurate display and quick access of
information in hazardous areas and applications. It can accept up to 16 individually
programmed process variables (PVs) from multiple devices; four math channels
allow for calculations on multiple PVs. The SafeTouch through-glass buttons allow
operation without removing the cover for programming and operation in hazard-
ous areas. Its element-resistant enclosure provides three threaded conduit holes
and integrated pipe or wall mounting holes. Operating temperatures range from
-40 to 75 C.
Precision Digital Corp.
www.predig.com
Input #118 at www.controleng.com/information

Pipe wrap repair system

The SuperWrap II wrapping system comprises of a cold curing fluid grade epoxy
resin and a hybrid reinforcement sheet consisting of glass fiber and carbon
fibers, which have been woven together to give an optimized balance of strength
and flexibility. It is available with two different resin grades. The main difference
between these resin grades is the end service temperature and working life of
the resin. One has been developed for cool ambient temperatures above 5 C and
has a maximum service temperature of up to 60 C, while the other one has been
designed for warm ambient temperatures above 20 C and has a maximum ser-
vice temperature of up to 80 C.
Belzona
www.belzona.com
Input #119 at www.controleng.com/information

Hydrostatic testing units

The HydroForce Series of hydrostatic testing units are designed for accurate blow
out preventer (BOP), pipeline and wellhead testing. The unit is mounted on a
heavy-duty skid or trailer unit with integrated fluid containment and feature high-
capacity water tanks, 50-gallon fuel tanks, a choice of 80 to 325 hp John Deere
or Cummins Tier 3 or Tier 4 diesel engines, and pressures from 6,000 to 20,000,
with flows from 6 to 60 gpm. Pressures can be varied up to 20,000 psi with
the precise hand-adjustable pressure-setting fill lever. An exclusive, heavy-duty
internal check valve automatically holds downstream pressure when the lever is
released, which eliminates the need for an external foot gun.
Jetstream
www.waterblast.com
Input #120 at www.controleng.com/information

ADVERTISER’S INDEX
COMPANY PAGE NO. RSC NO. WEB/PHONE
AutomationDirect C2 100 www.automationdirect.com

Magnetrol OG16 102 www.magnetrol.com/thermalmassflow

Oil & Gas Engineering Newsletter C3 www.controleng.com/newsletters

Siemens Industry Inc OG4, OG5 101 www.usa.siemens.com/oil-gas

WAGO Corp C4 103 www.wago.us

Welcome to Oil & Gas Engineering OG1 630-571-4070

OG28 • FEBRUARY 2015 OIL&GAS ENGINEERING

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