AI-based optimization drive connects thousands of wells in North America and the Middle East
July 10, 2020
A new AI tie-up between a North American asset management solution provider and a Middle Eastern machine learning specialist will pave the way for global oil and gas operators to register annual savings of $200,000 per well.
In late June, Vancouver-headquartered mCloud Technologies announced an agreement with United Arab Emirates-based tech firm nybl to help oil and gas operators optimize well production.
mCloud, a provider of asset management solutions combining IoT, cloud computing, artificial intelligence and analytics, signed a mutual reseller and a global service agreement with nybl, an AI start-up. Included in this agreement is cooperation with nybl to deliver a joint solution that will connect and optimize an initial 2,000 oil wells in North America and Kuwait. Cooperation on this solution is now underway.
mCloud and nybl will deliver complete asset optimization solutions to oil and gas operators worldwide, initially targeting over one million oil and gas wells employing artificial lift technology such as Electric Submersible Pumps (ESP)s, and plunger lifts in Western Canada, the US, and the Middle East. nybl's lift.ai™ and mCloud's AssetCare™ platform will together provide oil and gas well operators with an integrated capability that uses AI to eliminate unplanned outages and continuously monitor the lift equipment at every connected well.
Costantino Lanza, mCloud's Chief Growth and Revenue Officer, said teams are already engaging with additional customers to bring joint capabilities to specifically targeted oil wells all across North America, with connections to commence in the second half of 2020.
The timing is particularly opportune for this solution, according to Lanza, given the downturn in oil prices which will prompt oil and gas customers to expedite their digital transformation efforts as they respond to the new normal of being cost-efficient and enabling remote work through AssetCare's mobile capabilities.
Saving costs is hardwired into the mCloud’s solution’s DNA. “The major value propositions are around optimized production and then avoiding unplanned failures,” explained Lanza. “So we are placing these pumps before they fail downhole because if they do fail downhole, it is a couple of hundred-thousand-dollar exercise to get them replaced. So if a few months ahead of time you can schedule it accordingly, pull it out of the well and get it repaired or replaced on a planned basis, you do not have the expense of having to fail downhole.”
Lanza describes mCloud’s offering as not selling technology, but delivering results for customers. “We are focused on delivering value so we knew that we had to pick certain markets and get very good at them, with the knowledge and an understanding of those markets.”
It moved into the oil and gas sector after acquiring Autopro based in Alberta in Canada’s oil patch last year. “We saw that as the entry point to bring cloud and IoT to the oil and gas market, operating remote midstream facilities. We had a good success with that. And working in unconventional gas production we could optimize technologies that had been deployed.”
AssetCare console
This is where it came across nybl. After being introduced to its CEO Noor Al-Nahas, mCloud realised it was building a similar model. Said Lanza, nybl was “deploying AI in the way we were deploying it, which is not a pure data science model but using physics and chemistry in conjunction with AI.”
“That’s what the folks at nybl have done very successfully. They've applied this methodology to ESPs and been able to demonstrate that you can predict failure months in advance, avoiding downhole failure which can be quite a costly remedy should that happen. In addition, by using real-time data you can optimize on an ongoing basis,” said Lanza.
Supervisory optimization
mCloud's focus now is to expand into supervisory optimization, which would enable clients into play the entire field and the gathering systems – optimizing production across the fields, while not overloading the system.
In this, mCloud plans to build on the relationship it formed with the Alberta company it acquired in 2019. Explained Lanza: “The company’s sweet spot was updating the control systems around remote midstream facilities, gas plants and other things. In employing the technology, mCloud has put in additional sensors on each of the wellheads and that that is exactly what the Alberta team has engineered, designed and implemented in the past.”
This initial focus of the nybl deal is on 2,000 wells, but in a large unconventional field such as in Alberta, there could be a couple of hundred wells associated with it. The scope for future growth is therefore substantial.
In the Middle East meanwhile, nybl already has a large contract with Kuwait Oil company and Kuwait will play host to the initial rollout. “We did the first 20 wells in June,” said Lanza. “We're expanding and are hoping to add quite a few more in the third quarter of this year.”
However, the ultimate size of the market is considerably larger than the initial few thousand wells. “Kuwait has another several thousand wells out to tender right now with the request for proposal due in August,” said Lanza.
Future steps will be to focus on the unconventional space, for example deploying capabilities in plunger lift technology as seen in the shale gas world.
“Customers in Texas, in the Permian Basin, Western Alberta and the Bakken fields -- they have a lot of potential for this technology. And while there are competitive technologies around a single well, we're going to be approaching the market as an entire field optimization show. That could be a real differentiator us,” said Lanza.
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