American Oil and Gas Reporter - January 2012 - 121

value by embracing information sharing
between internal personnel and outside
vendors. These technology companies tend
to be specialized, and in order to offer the
complete package, they must look for those
integration points to offer to customers.
Exploration, drilling and production
companies that are not demanding seamless integration among all of their enterprise services should do so. Small to
midsized independents will have access
to all of the same capabilities as the
legacy enterprise server applications, but
on a pay-for-use model. An accounting
application should support the automatic
integration of data from a drilling application to track against every line item on
an authority for expenditure. It should
do so in a way that does not require exporting a file from an application, attaching
it to an e-mail, and sending it to the corporate office so that it can be imported
later. Automation is now the standard.
The pay-for-use model of the cloud
has eliminated the need for capacity planning. It is nearly impossible to plan for
every data point that will be collected,
stored, processed and used by personnel
in the future. Companies spend a great
deal of money on storage and end with
excess capacity or face costly upgrades
later.
The good news is that the chief information officer no longer has to determine
how much storage or processing capacity
is needed, down to the last terabyte.
Economies of scale continue to drive
down the cost of storage and computing
power without sacrificing capability,
speed, redundancy or scalability. The
cloud offers a solution of gradual expansion and responsiveness to changes in
the marketplace or regulatory requirements. A company running on the right
cloud services can automatically increase
capacity as needed.
Earliest Adopters
The first to adopt the new cloud-based
technologies likely will be small to midsized independents because they have the
most to gain and the willingness to take
the risk in applying new technology to
their businesses. As they did in the start
of shale development when they utilized
offshore techniques for onshore exploration
and development, small to midsized producers will push the industry forward by
trying new methods. They see the value
in readily accessible information and will
be able to free more capital from backoffice expenditures.
The large players will follow suit with
private clouds, but will continue to struggle
with their desire to lock information down
and their goal of obtaining broader visi-

The evolution of high-performance computing technology is moving from distributed
clusters, to enterprisewide grids, to private and public clouds. From exploration, drilling
and production to midstream field services, cloud-based computing is changing the way
oil and gas businesses operate. The cloud is not simply adding new features to mobile
devices or storing data offsite, but is standardizing where data are stored, how they are
accessed and how companies interact with data.

bility into the entire operation. The innovators in cloud technology will be entrepreneurs who see tremendous opportunity
in the new cloud platform and leverage it
in ways that justify the risk for exploration,
drilling and production companies. In
the new frontier of shale plays, enormous
budgets are needed. The cloud allows
midsized operating companies to compete
with the corporate giants.
Until now, information was locked
away in silos and was not easily accessible
outside of a department within a company.
As the demand for information increases,
these walls will be broken down by a
skilled workforce that requires access to
information at all times.
Up-and-coming petroleum engineers
and related field experts should focus
closely on how to use the data as they
become more readily available. Enhancements in communication and document
management will allow a company to
utilize its workforce from anywhere around
the globe. That might include a consultant
in Denver working with an engineer in
London to put together the directional
plan for a six-well drilling pad in Pennsylvania. Once complete, the plan can be
sent to the drilling contractor automatically
for review and sign off.
In the near future, greater emphasis
will be placed on utilizing data from
more than one system to create new information never before analyzed. Consider
the various sensors and devices that are
connected to each drilling rig, recording
samples of data every second. The data
are analyzed by the foreman or mud
logger as needed on site, but much of it

is thrown away or aggregated to a lowerlevel resolution for long-term storage. If
the data were kept and easily accessible,
a software application for simulating a
new drilling technology could make use
of those data to apply the new techniques
to previous well conditions.
Exploration Workflows
The pace of unconventional oil and
gas exploration is likely to increase, or at
least continue at the current rate. Successful
land management will mean hundreds of
lease agents in the field, able to access
legal documents related to real property
from their laptops, prepared by centrally
located office personnel. Once a lease is
signed, the agent can securely transmit
the document to the company's secure
cloud-based repository, where it is immediately available for upper management
to track and review.
The lease requirements, tract information, sites and drilling plans all can be
stored in the cloud and accessed by field
personnel when the drilling site is built
and the rig moves in. Technological advances, smarter field devices and higher
demand for information have placed remote connectivity and central management
on nearly every drill site. Web-based
services allow supervisors in Houston to
monitor minute-by-minute progress of
the drill bit going down into a formation
in Elk City, Ok., and make decisions
from their home, office or on the road
from a smart phone.
The oil and gas industry has benefitted
from the increased capacity on servers and
client computers because companies operJANUARY 2012 121

American Oil and Gas Reporter - January 2012

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