May 17, 2020

Mitigating corporate risk with a real-time view of well integrity

Oil and Gas
well integrity
corporate risk
Liane Smith
Admin
6 min
reduce well failure and shut-ins by up to 80 per cent
Click here to experience this article in our digital reader Written by Dr. Liane Smith Well integrity management is becoming a vital element in manag...

 

Click here to experience this article in our digital reader

 

Written by Dr. Liane Smith

Well integrity management is becoming a vital element in managing corporate risk for operators. Given that the operational phase of a well life can last for over 30 years, one of the biggest problems is managing the huge volume of operating data necessary to ensure an optimum safe condition is maintained for the whole design life. Many oil and gas operators continue to rely on handover documentation and a patchwork of bespoke production management databases and spreadsheets to manage this data, such as annulus pressure readings, valve and seal leak tests, and well logs.

Yet consolidating raw operating data using a well integrity management solution with smart functionality and single dashboard user interface provides a relatively low-cost but powerful means of tracking the integrity of operating wells in real-time. Such systems allow users at every level to analyse and report on key performance indicators (KPIs) enterprise-wide, or instantly access more granular data at a per well per annulus level, apply exception reporting and traffic light warnings to highlight issues immediately and optimise repair and test schedules.

Indeed, taking a proactive approach to well integrity management is proven to reduce the risk of well failure and integrity-related shut-ins by up to 80 per cent. It can also extend safe operation beyond the original design life, a key challenge for those oil and gas operators having to deal with ageing equipment and facilities.

An emerging discipline

As a sub-set of asset integrity management, well integrity management systems exist both at a documentation and software level, and combine key well operating and production data within a framework for decision-making, management processes and organisational structure.

Recently, an ISO committee began working on an international standard (ISO/NP 16530) to provide guidance on well integrity management during the operating phase – i.e. from the handover of construction phase to abandonment. This will assure compliance with a defined safe operating envelope including a wide range of parameters for temperature, pressure and fluid composition and is designed to minimise the risk of an uncontrolled release of hydrocarbons or associated products.

Read more in July's issue of Energy Digital: The Future of Transportation

The ISO standard will also set out a test criteria philosophy according to type of well and exposure of risk to people, environment, assets and reputation. Complying with such guidelines will present a major challenge for oil and gas operators, since the required information falls into a number of distinct categories and must be acquired from a wide range of sources. In most cases, these sources are today scattered across the enterprise. Without software to manage well integrity data, it can take as much as 70 per cent of total project time just to assemble the necessary data for analysis during investigations concerning well integrity problems.

The cost of disparate data

Collecting operating well production data, chemical analysis of fluids, well logging data and annulus pressures is time consuming and open to error through manual data transfer. The required information is often held in databases or file systems located in different departments. The result is silos of potentially critical information, making it difficult to review and identify problem wells, while it can take weeks of intensive effort to collate the necessary information for annual audit and management reporting.

Furthermore, the frequency with which information is collected varies significantly. Operational and production data might be collected several times a day, whereas leak testing of well barrier components is typically performed every six months. Well logging or other inspections may occur every few years. Regardless of frequency, operators need immediate access to the latest available data in each of these areas.

Sustained annulus pressure for example, poses the greatest threat to well integrity, but if a build up of annulus pressure at a well is identified early on and remedial steps are taken in a timely manner, it is possible to return that well to a completely safe operating condition long before the situation becomes critical.

Pulling data silos together

Advanced well integrity management systems can interface to a wide range of third-party databases to collate the necessary information for analysis and identification of wells shifting outside critical safe operating limits, for the assessment of equipment reliability and well risk, and for real-time estimation of the corrosion in the well tubing. Data can also be acquired directly via tablet PCs in the field, entered manually, or via spreadsheet loader.

With operating well data consolidated within a single user interface, the addition of smart functionality enables operators to analyse the well condition automatically in real time and generate concise reports customised to their individual requirements. This ensures they have the specific ‘tools’ needed to satisfy local regulations, proactively identify potential problems and plan test schedules and repairs. They can perform risk evaluation against complex criteria, for example, assessing tubing condition based on varying production conditions or calculating maximum allowable annulus surface pressure (MAASP) values in real time.

Users can also generate and manage well handover documentation, track scaling issues and determine mean time to failure of equipment to establish risk-based inspection frequencies. But just as important is the ability to manage by exception, given the deluge of data faced by oil and gas operators today. With a system managing by exception and automatically identifying issues using a simple traffic light system, issuing email alerts and automatically risk-ranking wells that fail to meet safe operational limits; it is possible to establish effective control of well integrity.

Reducing cost and risk with real-time visibility

Many of the major incidents to have occurred in the oil and gas sector in recent history have been the result of a clash of routine activities. Accurate and real-time well integrity data ensures critical systems and equipment perform as expected, that production is optimised and that wells are operated in a way that maintains the optimum safe condition for their whole design life. The result is higher productivity and major cost savings for operators for a relatively low-cost software implementation that obtains maximum value from well integrity data. At the same time, presenting this information via a management dashboard provides senior executives and other users with a 360° view of well integrity at individual well, field and company level.

With tolerance to environmental and reputational damage at an all time low, oil and gas operators must ensure they have effective oversight of every aspect of their business. A well integrity management system with dashboard and exception-reporting functionality enables operators to prove adherence to corporate governance policies and regulatory demands, ensure high integrity of operating wells and manage risk as part of a robust and auditable process.

 

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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