Bringing reality to the oil sector

20 October 2000
Special Report Oil & Gas SGI

The roughnecks might not approve and the old-school prospectors might sniff with disdain, but times are changing in the oil and gas sector.

The industry's well-established penchant for new technology has seen it open its arms to a Silicon Valley company that specialises in the niche market of computer graphics and visualisation.

Virtually no Hollywood blockbusters with special effects worth mentioning have been made without the aid of SGI technology, and what's good enough for Hollywood is good enough for everyone else. The same might be said for NASA, which has been using SGI systems to worry about the surface of Mars.

SGI is, among other things, the producer of specialist hardware that aims to provide the optimum platform for the visual display of data. Sophisticated projections on to 180degrees, and even 360degrees, surfaces allow for an entirely new representation of data. Three-dimensional imaging allows users to point a stick into the heart of the image and have a particular section enlarged, rotated or manipulated in any number of ways.

The key to these 'Reality Centres', as SGI calls them, is the speed at which massive amounts of data are processed, and the specifications of the visualisation and projection technology.

The company has not been slow to realise how systems that lend themselves to analysing the Martian landscape might be of benefit to the oil and gas industry. Using data from satellite and seismic surveys, from geological analysis and test rigs, models of oil or gas reservoirs are carefully built.

The analysis of these models allows potential operators to reduce the amount of guesswork about what a well might look like and what it might contain.

'Our Reality Centres allow people to effectively climb into an oil reservoir, have a look around, and point out features to other people who are looking at the same thing, ' says Jean-Philippe Degrendele, SGI's general manager for the Middle East and North Africa. 'What we facilitate is having drilling engineers, geologists and other highly specialised experts communicating effectively with each other. These people don't speak the same languages in terms of expertise but they can all understand images.'

The idea is that a shared experience allows for a shared understanding and improved communication that, in turn, will lead to better decision taking. A handful of people looking at the inside of an oil reservoir are more likely to generate a better plan for its exploitation or management than a handful of people staring at reams of numbers.

The cost-savings of better decision making can be massive. Degrendele recalls a conversation with an official at Texaco, which is an enthusiastic user of Reality Centres: 'He said it was a question of numbers. The cost of drilling a dry well can run to about $40 million and the cost of a Reality Centre is between $1 million-5 million: save yourself from drilling one dry well and save a lot of money.'

In such a context, it is not surprising that the number of Reality Centres installed around the world by oil companies is growing fast. 'A year ago there were about 25 in operation and there are now several hundred, ' says Degrendele. 'All the major oil companies are going to buy them. Put simply, this is a useful and affordable technology.'

The installation of Reality Centres in the Middle East is in its infancy, but the potential is huge. Abu Dhabi Company for Onshore Oil Operations (Adco), a subsidiary of Abu Dhabi National Oil Company (ADNOC), has been the first to order a Reality Centre, but negotiations with several other regional heavyweights are well advanced.

'We expect to sell to all the national oil companies in the Gulf, ' says Degrendele.

'In fact, we expect a number of deals to be signed before the end of the year.'

He adds that Reality Centres already installed elsewhere in the world are currently being used to process and image Middle Eastern oil and gas assets. SGI technology is already having a more than virtual impact on the reality of the region's largest industry.

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