IT and enterprise systems key to successful shale development (February 2014)

Price Waterhouse Coopers’ analyzes unconventional development from engineering standpoint.

A three part publication* from Price-WaterhouseCoopers (PwC) looks at shale/unconventional development from an engineering perspective. The report describes a ‘changed environment’ where oil and gas companies and their E&C** partners are engaged in many repetitive activities and handoffs between functions that look more like manufacturing operations than traditional drilling and production. Here, IT and enterprise systems are ‘emerging as enablers that significantly improve decision making and drive productivity.’

As PwC’s John Doherty explained, ‘E&C companies can leverage their  flexibility and existing skill sets to respond to these issues, taking on a leadership role  for their oil and gas clients.’ The trick is to ‘balancing supply and demand’ with a process known as ‘manufactured drilling.’ This leverages a supply chain approach to balance forecast demand for resources (labor, equipment, rentals and materials) with operational requirements.

But shale drilling has some ‘non-manufacturing’ characteristics. It is not demand led—rather a ‘push’ process driven by the availability of land and capital. It exposes a hybrid paradigm somewhere between continuous and discreet manufacturing. Here PwC advocates just in time scheduling and efficient frontier analysis to balance project cost, project schedule and asset revenue. The approach is claimed to save up to 30% operators costs.

* New conventions for unconventional development for the engineering and construction industry.

** Engineering and construction.

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