High tech drilling is making US producers more efficient

In today's U.S. shale fields, tiny sensors attached to production gear harvest data on everything from pumping pressure to the heat and rotational speed of drill bits boring into the rocky earth.

The sensors are leading Big Oil's mining of so-called big data, with some firms envisioning billions of dollars in savings over time by avoiding outages, managing supplies and identifying safety hazards.

The industry has long used sophisticated technologies to find oil and gas. But only recently have oil firms pooled data from across the company for wider operating efficiencies - one of many cost-cutting efforts spurred by the two-year downturn in crude oil CLc1 prices.

ConocoPhillips (COP.N) says that sensors scattered across its well fields helped it halve the time it once took to drill new wells in Eagle Ford shale basin of South Texas.

By comparing data from hundreds of sensors, its program automatically adjusts the weight placed on a drill bit and its speed, accelerating the extraction of oil, said Matt Fox, ConocoPhillips' executive vice president for strategy, exploration and technology.

It is just one application, but if applied to the more than 3,000 wells ConocoPhillips hopes to drill in the Texas basin, those small sensors could lead to "billions and billions of dollars" in savings, Fox said in an interview.

"We started using data analytics in our Eagle Ford business," he said. "And everywhere we look there are applications for this."

The cost and complexity of such systems vary widely. Oil giants such as ConocoPhillips buy a mix of off-the-shelf and custom programs, along with data repositories. The Houston-based producer's employees use Tibco Software Inc's Spotfire data visualization package to analyze information from well sites.
This is yet another example of how OPEC's predatory pricing play against teh shale developers backfired on them.  Before the price drop. the US oil companies did not pay too much attention to this aspect of drilling.  Now is is what makes them profitable at low prices.  In fact, their cost of production is actually lower than that of most OPEC producers.


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