Oilman Magazine Mar/Apr 2019 : simplebooklet.com

IN THIS ISSUE Feature Subsea Technology Innovation on the Horizon By Sarah Skinner pages 20 21 In Every Issue Letter from the Publisher page 2 OILMAN Contributors page 2 OILMAN Online Retweets Social Stream page 3 Downhole Data page 3 Oil and Gas Trade Groups by Profession page 7 OILMAN Columns Promoting Water Management How Technology and Eco Conscious Drilling Practices Can Conserve Water Tonae Hamilton page 8 Winds of Change How Big Oil Will Profit from Offshore Wind Emmanuel Sullivan page 22 Interview Arun Santhebennur CEO Petasense Tonae Hamilton page 24 Building Business Relationships One Name at a Time Josh Robbins page 29 Engineering and Maintaining Pipelines with Software Eric R Eissler page 30 Interview Ashley Gilmore CEO Tracts co Tonae Hamilton page 31 Texas Railroad Commission Rings in New Year with OIL Database Emmanuel Sullivan page 32 America s Energy and Environmental Stewardship Mark A Stansberry page 33 Behind The Scene The Iron Orchard Sarah Skinner page 35 MFG Chemical CEO Keith Arnold Talks About New Plant and MFG s Future Eric R Eissler page 36 Hustle Innovation are Showing Profits While Reducing Flares Jason Spiess page 38 The Revival of Oil Rigs and Platforms through Reefing Tonae Hamilton page 40 Guest Columns Energy s End to End Game Brent Potts page 4 Heavy Oil Production and the Low Quotes of Petroleum Tulio Pulgar page 6 Quality AI is Transforming the Oil Industry Mark Le Dain page 10 2019 Diversify or Disappear for Energy Utilities and Resources Colin Beaney page 12 The Oil and Gas Industry Takes a New Approach to Alleviate Truck Order Backlog in 2019 Brian Holland page 14 Why Lesser Injuries Matter The Case for Hand Safety TJ Scimone page 16 Corrosion Control in Hydrocarbon Facilities Nirmal Surendran Menon page 18 Critical Success Factors for Field Service Apps Mike Thompson page 26 How Much Has the Oil Industry Been Robotized and What Would It Gain in Taking This Further Raul Palencia page 28 Managing Water for a Profit Randy Huffman page 34 Oilman Magazine March April 2019 OilmanMagazine com 1

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LETTER FROM THE PUBLISHER There has been political discussion about drastically changing our energy market as we know it today The Green New Deal has surfaced to the forefront of American politics A scaled down version of the plan was introduced recently and calls for transitioning the United States to 100 percent renewable zero emission energy by 2030 The framers of the resolution ultimately want to stop using fossil fuels entirely Most of the Green New Deal s lofty ideas stem from the Green Party Browsing the party s website they mention ending energy extraction and infrastructure such as fracking drilling and oil trains Their energy plan also intends to remove natural gas pipelines and infrastructure the cleanest energy source today The bold scheme also provides for full income and benefits for those that are displaced by the shift away from fossil fuel employment How will this work and at what cost The Green Party says the Green New Deal pays for itself in healthcare savings from the prevention of fossil fuel related diseases The party also mentions the plan will be funded by cutting our military budget by 50 percent because we ll no longer need to safeguard fossil fuel supplies and routes of transportation around the world Reading the Green New Deal reminds me of Venezuela The Venezuelan economy is in total collapse and the oil and gas sector is struggling to produce a commodity that is the sole source of their nation s economy Take some time to read the entire plan not just on energy but also on healthcare education housing and economic programs America is now the leading producer of oil and gas in the world Do we want to lose ground on our energy independence and our economic system that is built on capitalism for socialism Emmanuel Sullivan Publisher OILMAN Magazine CONTRIBUTORS Biographies Gifford Briggs Gifford Briggs joined LOGA in 2007 working closely with the Louisiana Legislature After nearly a decade serving as LOGA s VicePresident Gifford was named President in 2018 Briggs first joined LOGA formerly LIOGA in 1994 while attending college at LSU He served as the Membership Coordinator and helped organize many firsts for LOGA including the first annual meeting Gulf Coast Prospect Shale Expo and board meetings He later moved to Atlanta to pursue a career in restaurant management He returned to LOGA in 2007 Mark A Stansberry Mark A Stansberry Chairman of The GTD Group is an award winning author columnist film and music producer radio talk show host and 2009 Western Oklahoma Hall of Fame inductee Stansberry has written five energy related books He has been active in the oil and gas industry for over 41 years having served as CEO President of Moore Stansberry Inc and The Oklahoma Royalty Company He is currently serving as Chairman of the Board of Regents of the Regional University System of Oklahoma Chairman Emeritus of the Gaylord Boone Pickens Museum Oklahoma Hall of Fame Board of Directors Lifetime Trustee of Oklahoma Christian University and Board Emeritus of the Oklahoma Governor s International Team He has served on several private and public boards He is currently Advisory Board Chairman of IngenuitE Inc and Advisor of Skyline Ink Thomas G Ciarlone Jr Tom is a litigation partner in the Houston office of Kane Russell Coleman Logan PC where he serves as the head of the firm s energy practice group Tom is also the host of a weekly podcast on legal news and developments in the oil and gas industry available at www energylawroundup com and a video series on effective legal writing available at www theartofthebrief com 2 Jason Spiess Jason Spiess is an award winning journalist talk show host publisher and executive producer Spiess has worked in both the radio and print industry for over 20 years All but three years of his professional experience Spiess was involved in the overall operations of the business as a principal partner Spiess is a North Dakota native Fargo North Alumni and graduate of North Dakota State University Spiess moved to the oil patch in 2012 living and operating a food truck in the parking lot of Mac s Hardware In addition to running a food truck Spiess hosted a daily energy lifestyle radio show from the Rolling Stove food truck The show was one of a kind in the Bakken oil fields with diverse guest ranging from U S Senator Mike Enzi WY to the traveling roadside merchant selling flags to the local high school football coach talking about this week s big game Joshua Robbins Josh Robbins is currently the Chief Executive Officer of Beachwood Marketing He has consulted and provided solutions for several industries however the majority of his consulting solutions have been in manufacturing energy and oil and gas Mr Robbins has over 15 years of excellent project leadership in business development and is experienced in all aspects of oil and gas acquisitions and divestitures He has extensive business relationships with a demonstrated ability to conduct executive level negotiations He has developed sustainable solutions successfully marketing oil and natural gas properties cost effectively and efficiently Steve Burnett Steve Burnett has been working in the oil industry since the age of 16 He started out working construction on a pipeline crew and after retirement finishes his career as a Pipeline Safety Compliance Inspector He has a degree in art and watched oil and art collide in his career to form the Crude Oil Calendars He also taught in the same two fields and believes that while technology has advanced the valuable people at the core of the industry and the attributes they encompass remain the same Oilman Magazine March April 2019 OilmanMagazine com MARCH APRIL 2019 PUBLISHER Emmanuel Sullivan MANAGING EDITOR Sarah Skinner ASSOCIATE EDITOR Tonae Hamilton FEATURES EDITOR Eric Eissler GRAPHIC DESIGNER Kim Fischer CONTRIBUTING EDITORS Gifford Briggs Steve Burnett Thomas Ciarlone Jr Joshua Robbins Jason Spiess Mark Stansberry SALES Eric Freer To subscribe to Oilman Magazine please visit our website www oilmanmagazine com subscribe The contents of this publication are copyright 2019 by Oilman Magazine LLC with all rights restricted Any reproduction or use of content without written consent of Oilman Magazine LLC is strictly prohibited All information in this publication is gathered from sources considered to be reliable but the accuracy of the information cannot be guaranteed Oilman Magazine reserves the right to edit all contributed articles Editorial content does not necessarily reflect the opinions of the publisher Any advice given in editorial content or advertisements should be considered information only CHANGE OF ADDRESS Please send address change to Oilman Magazine P O Box 771872 Houston TX 77215 800 562 2340 Original cover photo provided by Hunting PLC

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DIGITAL DOWNHOLE DATA Week Ending March 1 2019 Connect with OILMAN anytime at OILMANMAGAZINE com and on social media OilmanNEWS OIL RIG COUNTS Source Baker Hughes Stay updated between issues with weekly reports delivered online at OilmanMagazine com Colorado 34 Last month 35 Last year 30 Louisiana 65 Last month 62 Last year 59 North Dakota 56 Last month 58 Last year 47 Oklahoma 115 Last month 122 Last year 124 Texas 503 Last month 514 Last year 489 U S Total 1 038 Last month 1 045 Last year 981 Per Barrel CRUDE OIL PRICES Source U S Energy Information Association EIA Brent Crude 65 07 Last month 59 71 Last year 64 23 WTI 55 80 Last month 55 29 Last year 60 98 Barrels Per Month SOCIAL STREAM RETWEETS CRUDE OIL PRODUCTION Source U S Energy Information Association EIA November 2018 Colorado 15 334 000 Last month 15 364000 Last year 12 615 000 Louisiana 3 696 000 Last month 3 886 000 Last year 4 260 000 North Dakota 40 916 000 Oklahoma 17 404 000 Last month 42 630 000 Last month 17 858 000 Last year 65 909 000 Last year 15 031 000 Texas 145 041 000 U S Total 356 995 000 Last month 146 330 000 Last month 358 192 000 Last year 117 097 000 Last year 303 098 000 Million Cubic Feet Per Month NATURAL GAS MARKETED PRODUCTION Source U S Energy Information Association EIA December 2018 facebook com OilmanMagazine OilmanMagazine Colorado 166 197 Last month 157 303 Last year 141 944 Louisiana 247 622 Last month 246 421 Last year 207 106 North Dakota 69 921 Last month 64 966 Last year 54 010 Oklahoma 264 060 Last month 252 679 Last year 220 016 Texas 711 456 Last month 679 444 Last year 615 496 U S Total 2 945 864 Last month 2 849 159 Last year 2 534 983 Oilman Magazine March April 2019 OilmanMagazine com 3

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OILMAN COLUMN Energy s End to End Game Oil Gas Companies are Becoming More Agile and Intelligent by Embracing an Enterprise wide Digital Approach By Brent Potts For a company whose parent has a reputation as a technological innovator Shell Aviation was an anomaly a business that continued to rely heavily on the archaic paper driven processes and practices that many of its siblings under the Shell umbrella had shed in favor of data driven digital approaches Then along came SkyPad In a matter of months the cloud based end to end refueling app developed by Shell on the SAP Cloud Platform transformed the experience Shell Aviation delivers to its airport customers Implemented on a pilot basis at a handful of airports around the world starting in mid 2017 SkyPad quickly airlifted Shell Aviation and its airport customers out of the largely analog environment of the aviation apron into a simplified and significantly more efficient digital way of doing business Now more than 18 months later the company has deployed the app throughout its entire aviation network which includes more than 100 airport locations across four continents and 36 countries The mobile SkyPad app integrates streamlines and simplifies what was often a laborious error prone manual set of processes by digitally connecting each step of the refueling ticketing process the frontline airport staff involved in those steps and the back office Using Skypad on their mobile device operators gain access to pre populated information about each flight that requires refueling All they have to do is enter and upload meter readings and time into the system then obtain signatures from pilots and or maintenance engineers once fueling is complete The app also shows Shell how to allocate vehicles and resources most efficiently based on flight schedules that adjust in real time In a business where every second counts the app is proving to be a massive time saver according to Jodie Boardman Shell into plane operations manager at Liverpool U K John Lennon Airport one of the first facilities where Skypad was deployed Shell calculates that it has cut average transaction time by one third from 48 to 32 minutes saving an average of 13 3 hours per day per airport Transaction data that took 24 to 48 hours to get into the system under the old paper based scheme now arrives almost instantly The accuracy of that data has improved markedly as has the overall efficiency of fueling operations at the airports that Shell Aviation serves 4 Not only does SkyPad enable airport operations staff to work more efficiently freeing them for higher value work it creates quicker turnaround times for airlines so their customers spend less time on the tarmac or at the gate waiting As for Shell Aviation it now has a globally scalable tool for optimizing its airport refueling operations With the ability to monitor and manage stock levels at each of its airport installations in real time the company gains fast data driven business insights that it can use to more effectively manage fuel price risk on a global basis At the airport or at the wellhead an end to end digital ecosystem such as the one put in place by Shell Aviation can be the lever for an oil and gas company to improve productivity and efficiency in the field and in the back office By connecting assets to a central digital core using IoT sensors companies have the means to collect and analyze data in real time to gain a clearer and timelier multidimensional perspective on their operations and their assets With the right digital core tools and apps they can Efficiently sift through structured and unstructured reserve data then deploy their exploration production gathering processing and transportation resources accordingly Centrally monitor maintain and manage the condition and performance of assets to maximize uptime Using machine learning tools tied to the digital core they can develop a predictive maintenance program for specific equipment assets for example This kind of IoT connected data powered approach isn t reserved for energy super majors like Shell Whether it s in their traditional extraction activities in their commercial businesses or in new beyond the barrel enterprises oil and gas companies large small and in between are seeing the wisdom in moving to an enterprise wide cloud based environment to simplify and integrate previously siloed and outdated business processes and practices Tools such as sensors predictive analytics and machine learning are helping energy companies to transform themselves into more nimble and intelligent enterprises and to do so virtually on the fly Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of drik www 123RF com A simple standard digital core along with widely used industry templates enabled London U K based E P startup Assala Energy to become fully operational in Gabon West Africa in a mere six months That included some heavy lifting on the IT side where networks data centers end user computing and more than 70 applications plus data and documents had to be integrated into the digital core What s more the company was able to apply a greenfield solution to the brownfield data it had on the oil and gas reserve holdings around which it was building its business reserves it had acquired from Shell Data specific to those assets were integrated with the greenfield solution greatly simplifying and speeding up the startup For Assala investing in an end to end digital system was about more than speed to value explains Jonathan Davis the company s IT transformation director As an ongoing benefit we now have a system that is relatively simple and standard and makes it easier and lower cost to support And I think down the line we will start to look at some of the applications that sit around that digital core in terms of how they can also assist Assala in delivering their business more effectively in a more cost efficient way Brent Potts is senior director of global marketing oil and gas at SAP

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OILMAN COLUMN Heavy Oil Production and the Low Quotes of Petroleum By Tulio Pulgar There is no doubt one of the biggest challenges in the oil world is to put a barrel in the surface of API American Petroleum Institute low gravity oil If the oil well has a natural flow it may be observed as time goes by that its natural decline will show a more prominent tendency than the one we find in a medium or soft oil well Factors such as geology the sand thickness and the consolidation of the sand itself are additional elements to consider when it comes to determining how complex the secondary recovery process can be or what method should be applied to maximize the retrieve of heavy and extra heavy oil Another obstacle to overcome is the type of BHA Bottom Hole Assembly of the well This is due to the significant decrease of the efficiency of production equipment in horizontal wells The characterization of oil is possibly the determining factor of how much operational and economic resource the oilfield operator should earmark to sustain the rate over time and how often the optimization plan will be applied are additional charges for the investment in maintenance and infrastructure that sustains the process steam units concentric pipes thermal tapes continuous injection of solvents gas lift submersible pumping mechanical pumping pipe systems for steam transfer diluents fluid handling stations and operations staff are without a doubt values to take into account when petroleum price is low The private operators clench their engineering departments trying to reduce investment costs and maximize the recovery of hydrocarbons while keeping their physicochemical properties intact All of this can happen in an economic environment of stability in oil prices which makes it self sustaining but what happens when the volatility of a convulsed market immersed in geopolitical variables tilts prices to the point of converting the very process of oil production as a waste of money The price fluctuation in the past decade went from 146 to 50 USD in a short time starting in mid 2014 The operational cost of producing a barrel of oil is about 30 unlike the 60 fracking process In the case of heavy oil wells during the enhanced oil recovery process there The cost benefit analysis of any other productive process should follow the statement that the revenue of the process must cover the costs and generate profits so that the oil business can go on This analytical exercise must be set as a routine so a company can keep up with the new technologies and take advantage of its resources in the most effective way This means more protection for our organizations investors and employees during the low quote times with an eye on the horizon of healthy profitable and environmentally friendly production fields 6 New practices and technologies are making their own way to provide more efficient services replace processes and optimize the production Even new methods of production energization of reservoir oil improvement generation of Nitrogen in situ inertization and flushing lines advanced chemicals inhibitors without neglecting a marked trend to create eco friendly products Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of batareykin www 123RF com Tulio Pulgar is the CEO of Tundra Drilling Well Services Inc He has production specialist experience in heavy oil reservoirs and is a private oilfield operator Mr Pulgar is also an advisor for new technologies and chemical product development Tundra Drilling Well Services in the last years has given solutions to complex problems in production management and distribution of heavy crude oil in the United States Mexico and Venezuela

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OILMAN COLUMN Promoting Water Management How Technology and Eco Conscious Drilling Practices Can Conserve Water By Tonae Hamilton Water plays a key role in the production of oil and gas In fact unconventional oil and gas exploration typically relies on vast amounts of water With water being utilized so frequently in the oil and gas industry it is important that water be used efficiently and wisely during production processes as to not disturb or deplete the natural resource With water management and conservation increasingly becoming a larger topic in the oil and gas industry more oil and gas companies are developing or investing in better drilling practices and green technologies U S Water headquartered in Minnesota provides water and process treatment and environmental solutions to a variety of industries including the oil and gas industry Their mission is to provide cost effective integrated solutions utilizing engineering equipment chemistry and other elements to improve customer operations and promote water conservation David Schneider Senior Business Development Manager of Energy Services and Gene Hatcher Director of Energy Services shared their thoughts on the importance of water management in the oil and gas industry U S Water s initiatives for water treatment and better oil production and how technological solutions and ecoconscious practices have been improving water management efforts When asked about the importance of water treatment in the oil and gas industry Schneider and Hatcher discussed the shortage of water in the industry and therefore it is crucial that proper water reuse and management be implemented for the sake of the industry s future They explained that with the limited supply of water it is imperative that water be used for the proper application The water being applied to oil and gas systems must be clean of solids bacteria and other impurities as to not contaminate the reservoir well and other production equipment agreed Schneider and Hatcher Schneider and Hatcher were asked to explain how U S Water s products enhance the productivity of oil plants To help clean the water before it enters the system U S Water offers a process and production chemistry line that is designed to improve well injectivity and increase disposal volume said Schneider and Hatcher Our products clean up and prevent deposition in gathering and transportation lines They also shared how in processing facilities their solutions 8 are able to remediate unwanted precipitates by preventing system fouling and plugging Our automation and monitoring programs provide system operational data to ensure safe consistent chemical programs said Schneider and Hatcher Schneider and Hatcher were asked how much they believe the oil and gas industry has improved in water conservation and oil recovery in the last 10 years They shared that while water conservation and oil recovery efforts in the oil and gas industry are not 100 percent perfect there have been major improvements to water overall The majority of companies put forth R D efforts in the conservation of water and correct application for water management explained Schneider and Hatcher They added that now there is a better understanding of how removing large amounts of water from the ground impacts the environmental climate of a particular area Continued research and development efforts have progressed water management and conservation initiatives Maximized oil recovery has kept the water cleaner than it has ever been stated Schneider and Hatcher In addition Schneider and Hatcher were asked about the improvements U S Water has contributed over the years to the oil and gas industry regarding upstream production pipelines and salt water disposal They explained that U S Water has helped reduce gas consumption and treatment costs and increase site safety through their efforts We ve provided proper application for water systems keeping water as pure as possible through advances in chemicals such as emulsion breakers scale inhibitors biocides surfactants and other chelating chemistries shared Schneider and Hatcher We are also looking into improvements for equipment and engineering control Schneider and Hatcher were then asked about any new products or technologies they re currently working on They shared how they are Oilman Magazine March April 2019 OilmanMagazine com Colorado Upstream Well Application with EZ Feed currently working on alternative frac chemistries to lower dose rate and increase performance We are working on next generation water enhancement products pipeline cleaning chemistries gas processing and SWI SWD injectivity chemistries Schneider and Hatcher further explained When asked why they think it is important for oil and gas companies to invest in solutions that aid in water management treatment Schneider and Hatcher explained that water must be measured and managed like any other production input or byproduct or the sources of water will become limited The industry s water consumption and environmental practices are subject to regulator shareholder and community scrutiny expressed Schneider and Hatcher Not only can prioritizing water management show environmental stewardship it can mitigate risks and improve operations When asked what products they d like to see developed to aid in water treatment and conservation or oil recovery they shared how they d like to see the further advancement of water reuse chemistries We should continue to look at alternative water sources such as industrial waste water being used for oil and gas applications after being cleaned and converted for fresh water use explained Schneider and Hatcher Schneider and Hatcher further noted the importance of seeking alternative means of lowering the cost of water treatment as water becomes ever scarcer

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OILMAN COLUMN Quality AI is Transforming the Oil Industry By Mark Le Dain Quality governs what crude oil is worth and where it can be delivered What is often described as a uniform commodity actually has a range of qualities that impact the end use and ease of transport Despite the importance of quality and the long history of the industry product qualities remain difficult to measure accurately and in real time It s a daunting task for the industry as product moves quickly and mixes constantly irreversibly changing the composition The result is that industry participants are often buying selling and transporting a crude oil stream without full clarity on content This creates inefficiencies across the supply chain as the right products aren t getting to the most suitable end markets This costs all participants time and money Crude qualities have become increasingly variable Recent supply additions have primarily come from shale which has higher decline rates than conventional production This means oil infrastructure will have different supply sources flowing through it in only a few years which contrasts with infrastructure asset lives spanning decades Extraction methods have also changed significantly and new completion techniques combined with enhanced recovery methods have further impacted stream compositions Additionally global shifts in refined product demand and new environmental regulations simultaneously increased quality dependent price variability All of this has led to a push for more quality specifications across the supply chain to drive increased transparency and liquidity Some of these new rules have already been implemented For example as of January the CME group added five new quality parameters to the NYMEX WTI contract The added rules and the increased focus on quality are making the subject much more important for companies Midstream companies are perhaps the most affected by increasing crude variability making it difficult to keep track of the quality of volumes they gather That variability has caused refineries to push for more detailed specifications on delivery Compounding the problem is the fact that pipeline development is constrained in parts of North America meaning pipeline companies are forced to deliver a variety of crudes for their clients using the same infrastructure leading to increased batching and associated transition zones Midstream companies need to keep track of the crude quality in all trucks pipelines tanks and terminals in order to properly schedule deliveries that meet specifications To attract 10 volumes to their existing assets in an increasingly constrained market and maintain delivery specifications pipelines need to have a clear focus on quality demands To support this they need to build robust measurement programs These programs are difficult due to the complexity of accurate measurement combined with the sheer volume of data points A pipeline company could easily transport millions of barrels a day and every time a given barrel is mixed with another barrel the combination has entirely new properties It is the ultimate big data problem combined with the fact that certain properties require complex tests This challenge of accurately assessing crude quality which is both a measurement and data analysis issue is a problem that is well suited to the Internet of Things IoT and Artificial Intelligence AI The key advantage of IoT is its ability to aggregate and organize vast amounts of data in real time AI s advantage lies in its ability to make optimal operational decisions that take into account the massive data sets collected by IoT technology Even with organized data it is difficult for humans to identify patterns and actionable insights With the quantity of data in the oil and gas industry it becomes almost impossible AI can learn to recognize important trends and if provided with a set of optimization criteria can be used to recommend real time operational changes Simply put it makes data useful Energy companies have already started to implement IoT systems to combine data from instruments distributed across their operations Management can now manage field activities recognize potential issues and analyze current and historical data all in real time from head office On top of that these systems also validate timestamp organize and cross correlate across measurement sources third party labs field labs on line analyzers etc with effectively zero human interaction Even processes that used to be completely manual such as a centrifuge test have now been completely automated to reduce data errors and connect directly with data systems Many clients of Validere use a Centrifuge Tube Reader for this very purpose it uses machine learning to automatically analyze tube readings and upload results to the cloud eliminating the human error and time typically associated with the test All of these developments lead to data that is more accurate real time and useful for operational decisions Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of Weerapong Khodsom www 123RF com With AI innovative midstream companies that have invested millions of dollars in complex measurement infrastructure are gaining the ability to optimize the use of that infrastructure Leveraging millions of data points from their measurement programs AI can now identify where measurement resources are overallocated and underused or insufficient and adjust accordingly It can pre emptively alert management of unfavorable quality trends before they lead to off spec shipments that would have to be off loaded and recycled which is extremely important for an industry that continues to be a leader in safety performance It can also identify opportunities that may otherwise be missed without a broad view of all facility data This includes the identification of compatible quality crudes from new suppliers optimal allocation of producer shipments and pre emptive predictions of comingled qualities based on physical and statistical modelling Product quality has always been a constraint on operational decisions but innovative companies in the industry are now dealing with it proactively rather than reactively Quality management is an increasingly important opportunity for midstream companies and for oil and gas producers and refiners They are seeking out industry partners that care about quality and are using IoT and AI technology in aggregating and interpreting data to both save costs and increase revenues Mark Le Dain is head of strategy at Validere and prior to joining Validere worked as an investment banking vice president focusing on energy and infrastructure transactions Validere is a technology company that uses AI and IoT to optimize oil and gas quality measurement for energy companies across North America Mark holds a Bachelor of Commerce Honours from the Queen s University School of Business and is a CFA charterholder

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OILMAN COLUMN 2019 Diversify or Disappear for Energy Utilities and Resources By Colin Beaney Renewables accelerating even faster than previously predicted customer experience CX and user experience UX driving demand for more diversified energy business and payment models In 2019 energy and utility companies face the challenges of an industry rapidly diversifying decentralizing and digitizing The sure fire way to keep up Make sure you stay ahead Prediction 1 By 2040 66 percent of the global energy market will be in renewables driving an urgent race to diversify in 2019 By 2040 the equivalent of a whole new China and India will have been added to the planet s global energy demand a 30 percent increase on today The IEA International Energy Agency reports that by 2040 renewables will meet 40 percent of the planet s energy demands This will also be driven the report says by enormous efficiency improvements on the supply side Diversification beginning now is key to seizing the opportunity And as the table shows Global Green Hotspots this is not just a European trend Worldwide the direct use of renewables to provide heat and mobility will double by 2040 So in 2019 traditional major energy providers and even heavy industries will all be racing to adapt to the rise of renewables The Last Mile Heats Up And as they compete to capture the green euros of more proactive eco conscious consumers energy and utility companies will focus more and more on smart grid management and customer service Take National Grid Smart in the U K Its solutions support the U K based National Grid s new smart meter initiative The initiative expects to fit 26 million domestic smart meters in the country by 2020 powering national energy efficiency Using IFS Applications the company offers national energy suppliers a fully managed smart meter service with asset financing and installation managed logistics and customer communications also feeding critical data from engineers in the field via IFS Mobile Work Order application These advanced capabilities in the last mile deliver a powerful competitive edge for energy providers Prediction 2 By 2023 75 percent of utilities 12 Photo courtesy of Leo Wolfert www 123RF com assets will be digitally connected but how they re integrated will be make or break For proactive consumers diversification means more options over which energy they use how much they pay for it and even how they can store and sell it back For energy and utility companies it also means more complexity And the urgent need for accessible data throughout A recent IDC Report says that over the next five years the need to power predictive maintenance and extend asset life cycle will drive 75 percent of critical utilities assets to be digitally connected But it s how well integrated AI and IoT technologies are that will ultimately turn all this data into value Integrated Smart Drilling One of our customers in the offshore drilling sector operates one of the youngest but most advanced fleets of oil rigs in the industry including the largest harsh environment jack up rigs in the world deepwater drillships and semi submersible rigs All are run as individual business units earning revenue in locations as far apart as the Gulf of Mexico Africa and South East Asia In a typical situation like this an integrated system undoubtedly helps increase efficiency quality and reduce operational costs Before the company rolled out IFS Applications globally its software landscape included six separate software systems In 2018 we saw a growing number of energy and utilities companies look to upgrade their Oilman Magazine March April 2019 OilmanMagazine com GLOBAL GREEN HOTSPOTS India and China By 2040 solar will be the largest source of low carbon energy capacity in the world A major factor will be the rapid deployment of solar photovoltaics PVs in China and India China 33 percent of the world s current wind and solar PV power is currently in China The country accounts for more than 40 percent of global investment in electric vehicles IEA The scale of China s clean energy deployment technology exports and outward investment makes it a key determinant of momentum behind the lowcarbon transition Brazil The share of direct and indirect renewable use in final energy consumption will rise from 39 percent today to 45 percent in 2040 in Brazil compared with the global rate of 9 to 16 percent European Union By 2040 renewables will make up 80 percent of new power capacity in the EU Wind power will become the leading source of electricity soon after 2030 with strong growth in both onshore and offshore

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OILMAN COLUMN INTEGRATION IMPERATIVE By 2022 55 percent of utilities will use a core digital platform to automate optimize and orchestrate assets business processes customers and employees By 2022 utilities will need to overcome siloed initiatives by integrating and orchestrating change across the organization in their planning horizon applications Two major utilities in Norway Sogn og Fjordane Energi and Glitre Energi both chose to upgrade to IFS Applications 10 and this need for advanced capabilities and integration will continue to be a powerful factor moving forward The mining industry is a great example In 2018 most mining companies invested heavily in IoT sensors and technology 2019 will be the year these investments must begin to deliver And again integration will be critical Integration imperative Industry spotlight mining Companies that fail to integrate at least 50 percent of their operations and IT systems by 2022 will gain no value from digitalization regardless of strategy organization or technology focus 50 percent of mining companies that prioritize an integrated approach to tracking yield will achieve an industry leading performance by 2022 Companies that embrace continuous improvement and digital innovation as a single integrated business process will outperform peers in terms of profitability by up to 20 percent by 2021 Prediction 3 By 2024 25 percent of extraction and mining companies will have created digital twins Digital twin key driver 1 Integration The IDC FutureScape Mining report predicts that by 2024 25 percent of mining companies will have created digital twins specifically in order to integrate geospatial geological and mine operation insights to better integrate planning execution and maintenance Overcoming the challenge of siloed data will be a key driver of digital twins Digital twin key driver 2 Automation As reserves shrink companies are exploring ever tougher more remote terrain And in harsh environments like these automated equipment delivers multiple benefits Onsite robots are more cost effective resilient and able to operate for longer hours more accurately even in severe conditions With integration in place automated assets are perfect for digital twin simulations too Leveraging digital twins for automated assets massively cuts risk in both operational and investment decisions From planning to development to production and maintenance every dollar can be accounted for and measured before any risk is taken The savings and competitive edge this produces means that while traditionally high risk highautomation industries like mining and aviation pioneer digital twins uptake will soon follow in all industries where complex asset management is crucial Prediction 4 Energy and utility retailers will double their AI investments in 2019 as they battle to boost customer experience As we ve already seen the customer is priority 1 in the energy and utility sector right now In 2019 even more so The competition to enhance customer experience by improving convenience customization and control is intensifying In 2019 it will drive many retailers in the sector to double their investments in AI As energy and utility providers compete on customer service they ll look to provide a more retail like customer experience model One where customers can get the right personalized energy solution on the channel they want in just a few clicks Take HomeServe in the U K They install gas residentially and carry out approximately 300 000 calls and 200 000 visits a year When they installed IFS s AIpowered omni channel contact center solution it included all customer asset field service scheduling and parts information meaning HomeServe Gas agents no longer had to search in multiple screens or systems for different data all contextual data they needed to resolve customer requests is delivered to the agent as and when they need through their service desktop This transformed the experience that agents were able to offer customers AI Wins the Customer War on Two Fronts So AI delivers a double benefit It enables better customer experience as well as significant savings and efficiencies on the operational side Cutting supply costs will be essential to cutting prices and winning customer loyalty in an increasingly crowded marketplace But just as before integration will be critical to winning that war Energy and utility companies need omnichannel customer service centers just like HomeServe s offering voice and digital selfservice And they need to integrate all supply and enterprise data into one system Being able to join up the dots instantly from the field to the last mile of the consumers home is non negotiable if you re going to win customer engagement Again AI will be a powerful driver with the right integration Prediction 5 Oil and gas will invest more on assets and exploration again as demand outstrips supply I ve written before about the buoyancy of the oil and gas industry There is no doubt that in 2019 investment and exploration will rise again as demand for both oil and gas outstrips supply In 2019 the industry will resume capital investment in assets Price Waterhouse Cooper s 2018 Strategic Report Oil and Gas Trends 2018 19 shows how global capital expenditure in oil and gas dropped nearly 45 percent between 2014 and 2016 but will rise 6 percent year on year in the medium term evidenced by a string of major projects being greenlighted Gulf of Mexico BP goes ahead with Phase II of floating production platform Mad Dog North Sea Shell to launch Penguins field its first new staffed installation in almost 30 years Peru and Cote d Ivoire Tullow wins offshore production license BP Kosmos begin exploration offshore of Cote d Ivoire Ghana Namibia offshore Mauritania ExxonMobil enter exploratory phase This new investment is heartening But will it be enough Despite shale oil currently performing well its severe environmental impact still makes it unpredictable moving forward So in the near future oil demand will continue to outstrip supply Exploration extraction and supply will all therefore need to stay collaborative standardized agile and most of all cost efficient Three of the PWC Report s key strategic polices for 2019 point to how Refocus investment and efforts on asset maintenance especially true for companies that deferred maintenance beginning in 2014 Double down on digitalization leveraging advanced digital technology will drive efficiencies and new opportunities This could involve digital twins drones to inspect offshore platforms and data analytics to optimize production and reserves Develop talent for a new era of technology the industry needs new expertise in digital operations It will need to attract more data scientists and software engineers into the industry Oilman Magazine March April 2019 OilmanMagazine com 13

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OILMAN COLUMN The Oil and Gas Industry Takes a New Approach to Alleviate Truck Order Backlog in 2019 By Brian Holland Truck attainment has been a key challenge for private fleets for hire carriers and organizations that rely on trucking across many industries including manufacturing oil energy and gas This challenge has been accentuated by the backlog of orders for Class 8 heavy duty trucks largely stemming from an American Economy that has been booming ever since the Great Recession ended in 2010 and a decrepit industry philosophy toward truck procurement which is now shifting Class 8 truck orders and sales continued at a steady pace through much of 2018 as many companies saw the need to upgrade into newer equipment or add to their equipment to handle the increased demand in shipping goods via the nation s economic activity According to ACT Research Class 8 net orders equaled 506 300 units at the end of November the secondstrongest 12 month order period in history trailing only the 12 month period ending October Monthly orders 28 082 still outpace the number of units being constructed 27 973 as of November and while this gap is narrowing it continues to show extraordinary demand for new trucks Particularly for oil gas and energy brands these organizations will continue to feel the negative effects of an order backlog into 2019 if they continue their asset acquisition strategy based on functional obsolescence as opposed to economic obsolescence Businesses that shorten their asset management lifecycles based on a flexible lease model will be able to plan their replacements better and thus avoid the discomfort associated with the current backlog The vibrant economy means that more companies are shipping materials to job sites or goods across the country more businesses are in need of re stocking shelves and inventory more consumers are in need of goods ordered online and thus the transport of those shipments and as a result trucks are working overtime Trucks and transportation have been the essence of this economic machine Replacement and truck attainment strategies that help the economy stay active need to be carefully considered especially as we begin 2019 when companies take a closer look at their bottom line 14 The long standing business philosophy was for companies to make massive purchase orders of trucks and drive them for anywhere between five and ten years of service or even longer as a way to squeeze every nickel and dime out of the truck s usage However data and analytics are proving this model to be expensive and ineffective Instead private fleets and for hire carriers are realizing they can achieve more savings on the truck s overall impact to the bottom line as well as M R Maintenance Repair the highest variable and volatile cost of a fleet operation by moving to a shorter lifecycle When oil and gas companies drive their trucks as long as possible they run on functional obsolescence making decisions based on the truck s ability to stay on the road In most cases when firms let the truck command the timetable for replacement firms are left clambering to order a new truck based off limited planning cycles Today s backlog of truck orders is a result of this as the multiplier effect of many transportation firms and this philosophy have caught up to them Instead today s leading companies are taking a new approach Organizations are now focusing on a truck s individual TIPPINGPOINT the point at which it costs more to operate a truck than it does to replace it with a newer model Features such as the cost of fuel utilization finance costs and M R are all factored into arriving at each truck s unique TIPPINGPOINT giving fleet operations employees and finance departments a closer look based on data and analytics into determining and predicting the optimum time to replace an aging truck As an example a recent analysis of long term ownership versus shorter lifecycle management illustrates a significant cost savings over time A fleet that opted for a four year lease model on a truck would save roughly 27 893 per truck in comparison to a seven year ownership model because of the aforementioned factors such as fuel utilization financing and M R The shorter lease model is also cost effective when compared to just a four year ownership model showing average savings of 12 710 This approach offers flexibility to adapt to changing markets ultimately driving down operational costs while strengthening the corporate image and driver recruitment and Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of khunaspix www 123RF com retention efforts by continuously upgrading to newer trucks Companies are leveraging data analytics and wide ranging fleet studies that produce a fleet modernization and utilization plan projecting when aging equipment will need to be replaced This is especially applicable with today s fluctuating demand and the current booming economy as companies trying to acquire equipment solely based on demand are faced with equipment shortages and long lead times Recent changes to the corporate tax rate as well as new accounting standards have made it more appealing to lease equipment With these changes at least in the case of truck acquisition purchase of equipment remains higher compared with shorter term leasing of the equipment What s more leasing remains the preferred method for companies regardless if they have a stronger or weaker balance sheet In addition leasing also allows companies to evade the risk of residual value and the expense of remarketing By adopting this new outlook of shorter truck lifecycles industry organizations and transportation companies will become better equipped at swapping out their aging truck fleets in a more cost efficient manner as we progress into 2019 Brian Holland is president and chief financial officer at Fleet Advantage a leading innovator in truck fleet business analytics equipment financing and lifecycle cost management For more information visit www FleetAdvantage com

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OILMAN COLUMN Why Lesser Injuries Matter The Case for Hand Safety By TJ Scimone Oil and gas workers and employers are well aware that jobs in this industry are notoriously dangerous In fact the oil and gas industry is so dangerous that most workplace safety reporting focuses on severe injuries and fatalities It s understandable that so much focus is directed at preventing major accidents But unfortunately that means that the prevention of less severe injuries can get overlooked These less dramatic injuries may be more common in oil and gas than we are aware A 2017 E E News story states The Labor Department has long known the number of injuries in the United States is higher than it reports every year Former OSHA Chief David Michaels has put the undercount at between 30 and 60 percent It could be higher in the oil and gas industry Michaels has said there s a culture in the oil field of not reporting injuries That is lesser injuries are a big problem in oil and gas By ignoring their prevention employers are making a mistake Why Focusing on Preventing Lesser Injuries Matters In a strong workplace safety culture all injuries matter Environments where fewer small injuries occur are more likely to be environments where fewer major injuries occur In other words minor injuries are strong indicators of widespread safety issues and a weak overall safety culture which eventually leads to fatalities and severe injuries To demonstrate to your workforce that all injuries matter require that workers follow all safety protocols no matter how small Workers who are focused on safety details will remember to obey safety protocols in all situations When workers are focused on safety they suffer fewer injuries Hand Injuries A Great Place to Start An excellent place to start your focus on lesser injuries is hand safety Workers in the oil and gas industry need healthy hands to do their work and hand injuries are some of the most common in the industry lacerations smashes and impact injuries happen too often How to Prevent Hand Injuries Workers should always know where their hands 16 are and where they re going If they might encounter a hazard they need to use appropriate hand protection Major hand hazards in the oil and gas industry include heavy machinery hand tools and chemicals Preventing Hand Injuries Caused by Heavy Machinery Oil and gas workers are around a lot of heavy machinery Getting fingers or hands caught in these machines is too easy and too common Workers must always be attentive to where they put their hands and think ahead about the dangers they may encounter Focused calm attention and taking the time to methodically work through tasks around machinery keeps hands safer Preventing Hand Tool Injuries Hand tools cause several issues for oil and gas workers especially cutting tools so we ll focus there Many of the key concerns about cutting tools also apply to other hand tools Cutting tools add the additional risk of lacerations and punctures which are common workplace injuries Find the safest cutting tools available by searching for manufacturers that champion safety innovation When assessing a tool look at the blade this is the part of the tool after all that causes lacerations Is it a safety blade Does it mitigate the chance of getting cut And how does the manufacturer reduce blade exposure Is the tool ergonomic Ergonomics is important in the oil and gas world because workers often perform the same task repeatedly This can lead to overuse injuries which are common Ergonomic tools reduce hand strain and the chances of repetitive strain injuries Is this tool easy to clean Oil and gas workplaces are often dirty Workers may need to clean tools frequently to keep them in good working order It s a bonus if the tool and blade are noncorrosive and don t rust Of course tools used in the oil and gas industry often need to be non magnetic non sparking and non conductive Oil and gas workers often Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of Slice Inc use bronze copper or brass bladed tools to meet these restrictions Ceramic blades are an excellent option here Preventing Hand Injuries Caused by Chemicals Workers who handle dangerous chemicals must wear the appropriate gloves These will likely be different from the gloves they use to prevent lacerations so it s very important that they understand the difference and make sure they have the right gloves for the job The gloves need to be in good working order and they need to fit well and allow the hand and fingers to move freely Gloves that are restrictive or too large can be their own hazard Stay Focused on the Ultimate Goal Accidents and fatalities are preventable Safety protocols like those for keeping hands safe are typically simple and easy to follow A workplace that focuses on preventing lesser injuries is a workplace that will experience fewer major injuries on the path to none at all TJ Scimone is founder and CEO of Slice Inc which designs and manufactures unique safer cutting tools now used by leading companies in the oil and gas industry to reduce lacerations and overuse injuries All tools feature ergonomic handles and patent pending finger friendly ceramic blades which are non sparking nonconductive and non magnetic Safety is the driving factor behind all Slice innovation and the Slice Workplace Safety Blog

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OILMAN COLUMN Corrosion Control in Hydrocarbon Facilities By Nirmal Surendran Menon This article focuses on the corrosion control techniques to be applied in hydrocarbon facilities and its implementation by proper materials selection and requirements for new project installations This includes flow lines production lines inside process facilities including all associated utility pipelines The primary objective for establishing appropriate corrosion control strategies and materials selection is to ensure the safe and profitable utilization of the assets over the entire proposed life cycle Material Selection The material selection shall be done by taking into consideration safe operation total life cycle cost reliability fabrication maintenance weight and availability of materials All materials equipment and corrosion management activities for a hydrocarbon facility shall be based on the specified design life Carbon or low alloy steels are routinely used for hydrocarbon facilities oil gas production provided that the rates of general and pitting corrosion are maintained within acceptable limits either with or without the use of corrosion inhibitors All corrosion allowances for carbon steel will be recommended to give an expectation of the equipment lasting for the design life Preference shall be given to the use of corrosion resistant materials in place of carbon steel where the accumulated total life time corrosion using carbon steel exceeds 3mm It will provide improved plant reliability and availability or it will reduce inspection and maintenance requirements Industry practice and NACE allows the use of carbon steel with between 3mm 0 11811 inch and 6mm 0 23622 inch corrosion allowance A critical assumption in the prediction of service life is that certain operations such as maintenance repair and chemical treatment activities will be performed to achieve the reliability These activities include the operation of the facilities corrosion inhibition cathodic protection and internal and external coating maintenance Assessment of Corrosion The corrosion rate predictions shall be used to estimate an uninhibited corrosion rate for carbon steel in the service environment and to determine the corrosion allowance that would be necessary for the design life If this corrosion allowance is small enough to be economically and practically acceptable carbon steel may be accepted either with or without corrosion inhibition If the required corrosion allowance without inhibition is excessive the performance of corrosion inhibitor required to allow an acceptable corrosion allowance shall be calculated The potential for corrosion in the hydrocarbon facility pipelines is largely dependent on the presence of free water the presence of CO2 and H2S levels in the hydrocarbon operating temperature and pressure the amount 18 of dissolved CO2 and H2S the presence of dissolved oxygen the flow regime flow velocity and cavitation conditions the presence of bacteria causing microbiologically influenced corrosion or MIC Certain bacteria generally those known by the collective term Sulphate Reducing Bacteria SRB cause MIC in hydrocarbon systems and the presence and quantity of solids Condensing Phase Corrosion Condensing phase corrosion can occur in wet hydrocarbon pipelines where cooling of the hydrocarbon will result in condensation of water at the top of the pipe i e top of line corrosion under moisture condensing conditions in the vapor phase of plant piping top of the line corrosion can occur in long wet hydrocarbon and multiphase pipelines where the corrosion inhibitor cannot remain suspended in the hydrocarbon phase such as under stratified flow regimes Top of line corrosion usually only becomes a problem if the condensation rate is high the corrosivity is high due to high CO2 partial pressures and the temperature remains high at the point where inhibitor is totally lost from the hydrocarbon phase Top of the line corrosion rates in multiphase pipelines are usually lower than the bulk water phase at the bottom of the pipe because of the more limited exposure to the corrosive species and because the moisture condensation film is thin and becomes saturated with iron corrosion products which stifles the corrosion reactions Typically a moisture condensation rate or less is applied for pipeline corrosion modeling within the vapor phase which provides an order of magnitude reduction in corrosion rate compared with a bulk liquid phase Once the pipeline fluids have reached temperature equilibrium with the external environment the moisture condensation rate will normally be low resulting in low corrosion rates Erosion Erosion is the physical removal of wall material by the flowing process fluids Erosion is a complex issue dictated by fluid phase flow regime density solids content solids hardness and solids geometry Erosion corrosion and flow enhanced corrosion occur when the corrosion product film is physically removed by high hydrodynamic shear stresses at the pipe wall or the impingement of solids or liquids on the pipe wall The primary method of avoiding erosion and erosion corrosion is to design facilities with velocities below the limit given by API RP 14E which provides a reliable design that is tolerant of design changes and unexpectedly erosive flows e g from slugs of solids The U K Health and Safety Executive Research Report 115 provide a useful additional guide for systems for which API RP 14E may not be applicable Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of Warawoot Nanta www 123RF com Galvanic Corrosion Galvanic corrosion occurs where two dissimilar metals are bolted or welded together in the presence of a conductive corrosive environment In the presence of an electrolyte differences in the electrochemical potentials of the metals can drive corrosion into the more electronegative material resulting in localized corrosion around the metal join The speed and magnitude of the corrosion depends principally on the electrochemical potential difference between the two metals the resistance of the joint and the electrolyte the electrochemical kinetics of the corrosion processes in the electrolyte the geometry of the join exposed cathode to anode area ratios and distances the presence of coatings the presence of corrosion inhibitor which will reduce the corrosion rate of carbon steel and may prevent galvanic corrosion by forming a barrier film across the interface thus preventing ionic flow through the bulk electrolyte between the two metals Dissimilar metals should not be joined where possible particularly in wet or corrosive environments Insulating joints are not generally encouraged due to the difficulty in effecting electrical isolation and the potential for hidden corrosion when there is inadvertent short circuiting or when the insulating sleeves fitted to the bolts trap moisture There is also a possibility of generation of a spark should the joint be inadvertently shorted during maintenance or other activities Insulating gasket kits to be used to control galvanic corrosion shall also be not allowed Coatings shall be allowed to be used to control galvanic corrosion It is more effective to coat the cathodic material than the anodic material since this reduces the effective cathode to anode area ratio Under Deposit Corrosion Under deposit corrosion occurs in wet liquid hydrocarbon systems where solids usually sand from the reservoir or corrosion products settle out in low flow or stagnant areas The solids themselves can cause preferential corrosion under the deposit due to the differences between the chemical environment under the deposit and the bulk flow They can also prevent corrosion inhibitor reaching the steel beneath the deposit and can disrupt the

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OILMAN COLUMN formation of protective corrosion product films or provide a breeding ground for corrosion inducing bacteria e g MIC As per good design practice all systems should be designed to be free flowing avoiding dead legs low spots and vertical routings and should have sufficient velocity that water and solids remain suspended in the flow and cannot become trapped in low spots in the system Where solids may be expected to settle and cannot be removed upstream carbon and stainless steel pipelines should be provided with pipeline scraping pigging facilities to permit cleaning and mechanical removal of deposits Corrosion Monitoring Corrosion monitoring is to ensure that the design life will not be adversely compromised during service and to ensure the safe and economic operating life of a facility The monitoring may also be used to optimize inspection intervals that will invalidate inspection periods or endanger the plant In particular corrosion monitoring is required where corrosion is controlled by chemical injection corrosion inhibitor oxygen scavenger or pH stabilization Other factors which may be considered in determining a requirement for corrosion monitoring include changes in the operating environment which can lead to a significant increase in the corrosivity of the environment towards carbon steel either with or without corrosion inhibitors on pipelines with zero corrosion allowance The outcome of corrosion monitoring can lead to timely re assessment and adjustment of the system of corrosion management and also could lead to optimization of operational costs inhibitor dosing inspections cleaning etc The functional requirement of the corrosion monitoring system is that it shall detect and quantify trends in the corrosivity of the fluids and shall do so within a time frame short enough to enable corrosion mitigation measures to be instigated or adjusted before significant metal loss has occurred Corrosion Control Implementation If aqueous phase water is absent zero corrosion rates shall be assumed and carbon steel can be used If aqueous phase water is present apply de Waard and Lotz 93 to calculate the corrosion rate of carbon steel in the absence of corrosion inhibitor If the aqueous phase water is only present because of condensation consider the applicability of the moisture condensation rate criteria for applying an order of magnitude reduction in corrosion rate determine the accumulated corrosion of carbon steel over the design life in the absence of corrosion inhibitor from the uninhibited corrosion rate calculated If the accumulated corrosion of carbon steel over the design life is 3mm adopt carbon steel with the appropriate corrosion allowance as the material of construction without the use of corrosion inhibitor If the accumulated corrosion of carbon steel over the design life is 3mm determine whether corrosion inhibitor at appropriate availabilities or efficiencies is able to reduce it to 3mm adopt carbon steel with the appropriate corrosion allowance as the material of construction and apply corrosion inhibitor If the accumulated corrosion is 3mm consider the use of carbon steel with up to 6mm corrosion allowance Where carbon steel cannot be used choose a suitable corrosion resistant alloy CRA Nirmal Surendran Menon received his Bachelor of Engineering in Mechanical from Anna University Tamil Nadu India in 2005 and Master of Science in Project Management from National University of Singapore in 2010 He has more than 12 years of experience in EPC projects in the Oil Gas Petrochemical sector He is currently working as Field Engineer in an LNG Liquefaction Project in Southwest Louisiana His interests include pipeline system cleanliness and loss prevention in LNG liquefaction facilities as part of project execution QUALITY THROUGH RESEARCH E N V I R O N M E N TA L LY F R I E N D LY P R O D U C T S S P E C I A LT Y G R E A S E S O I L S CLE A NERS D EGR E ASERS THREAD COMPOUNDS WIR ELINE PRODUCTS VA LV E P R O D U C T S EPEND A F D B O M ITY SEA IL C O W V I S I T U S AT O T C B O O T H 2 4 0 9 O W W OIL CENTER RESEARCH LLC L PI P E C OAT I N G S I L E C E N T R w w w o i l c e n t e r c o m 8 0 0 2 5 6 8 9 7 7 e s a l e s o i l c e n t e r c o m Oilman Magazine March April 2019 OilmanMagazine com 19

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FEATURE Subsea Technology Innovation on the Horizon By Sarah Skinner A test question for third graders studying about the universe asked what color the Earth appeared from space and why The answer to this question is simple to an adult it s a widely known fact It s blue The Earth from space appears blue as it primarily covered by water approximately 71 percent of it in fact It is one of the most important substances on Earth and absolutely necessary for survival However within in the oceans seabeds lies one of Earth s most important natural resources In these bodies of water all over the world are vital structures put into place for supplying a large portion of the world s oil and natural gas The role that the drilling rig and platform perform in that water along with the components that are housed within it are invaluable to the success of this industry The complexity of their makeup is fascinating and although they ve been in existence over 80 years the technology making them more efficient is changing and progressing every day Hunting Energy Services has played an integral role in the worldwide offshore energy sector for over fifty years Their Subsea Technologies division is in Stafford Texas located about 20 miles southwest of Houston Within their facility they design and manufacture essential hydraulic subsea equipment that is specifically created for and used by customers across the globe They have some exciting things on the horizon that are being developed to meet industry and customer demand Their team has been and continues to work feverishly on new designs and ideas while at the same time working on adding improvement and variety to the staples they ve built their reputation on for years Fortunately enough they were able to sit down and meet with OILMAN to share their enthusiasm about the revolutionary and exciting things coming down the line Couplings With over two million installed hydraulic couplings are Hunting s Subsea Technologies main product offering Impressively there are no reported field failures to date attributable to a design flaw a testament to the careful planning used to create the thousands of designs in their catalog 10KSI and 15KSI couplings are commonplace but Hunting has pushed the bar their newest product is the 20KSI coupling We recently finished qualifying 20KSI tree couplings The main challenge was to marry an increased pressure rating along with increased allowances for misalignment and side loading All of these enhancements were in response to customer requests as they continuously work to meet greater challenges We are now in the process of developing 20KSI plate couplings 20 moving forward with an even higher side load capacity says Scott Stolle Coupling Engineering Supervisor 20KSI couplings are employed in subsea deepwater high pressure oil and gas systems where hydraulic control and chemical injection systems are required The coupling development is for use in Christmas Trees XT and Tubing Hangers TH and it includes features that allow larger misalignments between mating equipment These misalignments induce side loads between coupling pairs that are beyond the capabilities of previous equipment These couplings are also designed to meet API 17F requirements for mating speeds at 0 5 m s Another unique feature of the 20KSI XT couplings are the metal seals which withstand both internal and external subsea environmental pressure Another innovative coupling design is the Soft Seal Hydraulic Coupling Although the coupling itself is not new to the industry Hunting has developed a polymer seal female coupling that is interchangeable with a metal seal female The soft seal coupling is designed to lower cost and allows stab plates control systems to be configured with soft seal and metal seal couplings all in one plate Soft seal couplings are a reduced cost solution permitted for certain applications This is costeffective to the consumer because it keeps them from having to purchase several different types of males to adapt to a specific female coupling With more than 3 500 different male and female coupling designs they serve in a wide range of applications due to their custom tailored design characteristics The applications vary from lowpressure shallow water connections to the most critical component of HPHT and ultra deepwater systems Their personnel are available to assist in the engineering and design of couplings for special applications Metal Seal Couplings RS Series The RS Series compact hydraulic coupling line is designed for tubing hanger penetrator and subsea ROV flying lead connector applications where reduced size weight separating loads and travel distances are critical requirements UO Series The UO Series hydraulic coupling line answers market demands for a smaller lighter and higher flow coupler for extreme working pressures in ultra deepwater TO Series The TO Series hydraulic coupling line was developed for deepwater applications requiring the highest possible reliability under the most severe working pressures Oilman Magazine March April 2019 OilmanMagazine com RO Series The RO Series hydraulic coupling line is for hot stab diver or ROV make up applications used for subsea trees control pods manifolds and chemical injection TM Series The TM Series hydraulic coupling line is for both surface and subsea applications where manually threaded make up connections are desired Elastomer Seal Couplings AS Series The AS Series hydraulic coupling line is our highest pressure rated elastomer seal coupling designed for working pressures of up to 17 500 psi HCC Series The HCC Series hydraulic coupling line is for general economical purposes and low pressure applications generally utilized for hydraulic umbilical junction plates and is not recommended for subsea applications HO Series The HO Series hydraulic coupling line is designed for various intermediate pressure applications and primarily utilized for hydraulic umbilical junction plate tie ins power units and shallow water diver ROV stab applications AO Series The AO Series hydraulic coupling line is designed for ease of seal replacement and adaptable to a wide range of applications including flying lead connectors umbilical terminations and subsea junction plate assemblies Hunting s hydraulic couplings have been installed in subsea applications including but not limited to Subsea Trees Tubing Hanger Penetrators Production Control Systems Subsea Control Modules Drilling Control Systems ROV Hydraulic Flying Leads Chemical Injection Systems Installation Workover Control Systems ROV Hot Stabs Back Pressure Valve Hunting offers several different kinds of valves including drilling control valves and specialty valves However the one that has picked up a lot of steam in the last few years is their Back Pressure Valve The valve is installed subsea on dedicated chemical injection lines supplied by topside metering pumps For wells with sub ambient pressure the chemical being injected tends to drain faster than the topside flow rate which empties the supply line Side effects include improper

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FEATURE dosage undesirable fluid properties and even line collapse from hydrostatic pressure in the case of thermoplastic umbilicals said Josh Williams Senior Technical Sales Engineer Weighing in at just five pounds Hunting s palm sized BPV solves each of those issues by maintaining pressure in the supply line at a fixed value relative to hydrostatic pressure Hundreds of wells currently feature the valve primarily in the Gulf of Mexico Brazil and off the coast of Africa with zero reported failures and some units subsea for over 10 years Greenfield projects that are anticipated to become sub ambient in the future tend to incorporate the valve into a tree or logic cap while brownfield projects have tended to install the valve into a cobra head In one case study Hunting s compact valve prevented an Operator from replacing a multi milliondollar thermoplastic umbilical subject to collapse in service of a sub ambient well The valve is automatically depth compensated with no field adjustment necessary It is qualified for pressures to 15KSI water depths to 15 000 feet and flow rates up to 3 gallons per minute Chemical Injection Metering Valve Hunting has redefined subsea chemical injection accuracy and performance with their CIMV Chemical Injection Metering Valve It provides subsea chemical injection metering for multiple well field developments with long offset distances from the host production facility They have changed the game for deepwater and high differential pressure injection applications The CIMV is designed to reduce CAPEX costs by allowing chemical delivery to multiple injection points subsea from a single umbilical supply and OPEX costs by delivering chemical to within 5 percent of the desired rate With a maximum working pressure of 17 5KSI a maximum differential pressure of 10KSI and a maximum water depth rating of 15 000 feet the Hunting CIMV is ready for tomorrow s ultra deep and high pressure reservoirs With the addition of a new linear sensor for the positive displacement flow meter operator confidence is increased by providing instantaneous flow rate feedback and adjustment and precisely delivering chemical regardless of varying pressure and fluid conditions over a range of 2 gallons per minute down to 5 gallons per day Further development is underway Hydraulic Couplings Chemical Injection Metering Valve Photos courtesy of Hunting PLC to increase the maximum working differential pressure to over 16KSI increasing its utility in upcoming 20KSI tree projects The CIMV is exceptional because of the many benefits it offers There are no filters required multiple chemicals can be simultaneously delivered at controlled and verifiable injection rates it can provide continuous chemical injection despite loss of host electrical power and it is able to handle a wide variety of chemicals under a full range of differential pressures without regard to fluid properties Savings through Practicality Customer satisfaction often comes from providing savings to the bottom line Hunting is customerfocused to its core They strive to not only satisfy the customer s needs currently but to also anticipate what their potential needs will be in the future For instance in designing a new product like the 20KSI coupling they maintained the original footprint They took existing technology and made it withstand higher pressure without redesigning the mounting interface By doing it this way it drives savings to the operator The innovation satisfies and saves money at the same time The same concept ultimately applies to the CIMV as well Chemicals are very costly and by offering instantaneous feedback and dosage within 5 percent of set point it injects with such accuracy that there is little waste Given that fields are commonly producing for 25 30 years the savings add up over time Lifecycle Support Over the years Hunting has built a solid foundation within this industry and has obtained a reputation that keeps customers returning and new ones knocking at their door From paper design through production launch and into the lifespan of the product in the field the support is constant By strictly adhering to quality in every aspect of their operations they provide the industry s most reliable product solutions They have teams of certified and knowledgeable technicians that are able to provide on site services anywhere in the world and the flexibility to respond quickly to service requests with the ability to mobilize a team within 24 hours Hunting s field service capabilities include but are not limited to the following Assess damage of used hydraulic couplings Replace hydraulic coupling seals Help identify and resolve hydraulic coupling float issues on subsea stab plates Inspect serviceability of flushing and testing plates Service hydraulic couplings on umbilicals semiridged jumpers cobra heads trees pods and distribution manifolds Replace hydraulic valve seals Diagnose chemical injection metering valve CIMV issues Assist with deployment and retrieval of subsea chemical injection metering valves CIMV Provide training courses on proper Hunting product use Weldment services also offer a high quality and warranted welded hydraulic coupling assembly that is installation ready Hunting currently has over 1 000 different welded assembly designs that have been used in a variety of subsea applications Their welded assemblies are fully documented and tested to the most current NDT standards conducted by qualified and experienced technicians Through the years Hunting has continuously aligned our technical resources and capabilities to meet our customers needs ultimately positioning them for success Utilizing this focused alignment and synergistic approach we have created incredible technological advances Looking forward as our industry continues to strengthen cost effective technology driven solutions and customer satisfaction through innovation will be the foundation for Hunting s Subsea business We believe this platform will develop success for our customers in this difficult and competitive environment that we are faced with today said Dane Tipton Hunting Subsea Technologies President Customer satisfaction through innovation is their motto After meeting their impressive team absorbing their product knowledge and seeing first hand the dedication they have to their customers it s probably not possible to get more accurate than that Oilman Magazine March April 2019 OilmanMagazine com 21

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OILMAN COLUMN Winds of Change How Big Oil Will Profit from Offshore Wind By Emmanuel Sullivan Offshore wind is new to the energy party The first offshore wind farm was installed off the coast of Denmark in 1991 Less than three decades later the industry is making big waves and starting to turn big profits Capacity is ramping up quickly and cost is dropping fast Europe increased offshore wind capacity by 18 percent in 2018 alone Cost per MW Megawatt has dropped 75 percent since 2014 The offshore wind farms are getting bigger and more prevalent Partnerships big and small are transforming the industry It s no longer a question of if and when offshore wind will become viable It s viable now Europe Leads the Way It is Danish company rsted that is the model for oil and gas companies In 2010 rsted formerly DONG Energy made the decision to transition to renewable energy Now 70 percent of its generation is from renewables Its goal is to increase renewables to 90 percent by 2020 This is not pie in the sky They now own 50 percent of the largest offshore wind farm in the world Walney Extension can generate up to 659 MW with 87 turbines located in the Irish Sea Nearly 600 000 U K homes are powered by Walney Photo courtesy of Volker Schlichting www 123RF com fact it was Equinor who bested itself It had paid the then record amount of 42 million for 80 000 acres off New York s coastline just two years prior United States is The Next Big Thing Massachusetts has a goal of 1 6 GW Gigawatts by 2027 However the American Wind Energy Association believes that the three leases will ultimately provide at least 2 4 GW of wind power Construction on the wind farms is a decade away The first offshore wind farm in America Block Island proved that it s worth investing in offshore wind in the United States Three European companies each shelled out 135 million for offshore leases 20 miles off the coast of Nantucket in Massachusetts One of the winners Norwegian company Equinor a major oil and gas company who changed their name from Statoil last year In New York also has an ambitious goal The state is targeting 2 4 GW by 2030 But they are also tasked with lowering the cost of offshore wind for the whole country The U S DOE Department of Energy selected New York to head up a consortium focused on offshore wind They will allocate research and development funds to projects that move the United States toward responsible and SUBSCRIBE TODAY Get the Oil Gas news and data you need in a magazine you ll be proud to read To subscribe complete a quick form online OilmanMagazine com subscribe Questions Call or email anytime Editor OilmanMagazine com 800 562 2340 Ex 5 22 Oilman Magazine March April 2019 OilmanMagazine com affordable offshore wind generation RCEA Redwood Coast Energy Authority and Castle Wind have proposed floating wind projects in California The state s goal is to derive its energy from 100 percent carbon free sources California s coast offers some of the highest wind resource potential in the country and offshore wind could produce more than 1 5 times the electricity the state currently uses in one year said Arne Jacobson Director of the Schatz Energy Research Center World Affairs Offshore wind is being harnessed around the world Many countries including South Korea Japan China and India are implementing or

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OILMAN COLUMN researching offshore wind projects myriad of experts in the oil and gas industry Equinor is working with Korea National Oil Corp KNOC to evaluate offshore wind in South Korea Their goal is to increase the country s renewable power to 20 percent of total generation by 2030 ExxonMobil s industrial division offers lubrication products and maintenance services for floating wind turbines Japan has a more pressing problem Since the 2011 Fukushima Daiichi Nuclear Power Plant disaster only nine of the country s 40 nuclear power plants are online To help bridge the impending energy gap Tokyo Electric Power Company has signed a Memorandum of Understanding MoU with rsted to develop offshore wind projects Energy analysts Woods Mackenzie estimate up to 4 GW online by 2028 Zentech and Renewable Resources International partnered to design a marine vessel that does double duty it installs wind turbines and decommissions oil and gas rigs Aker Solutions is leveraging 40 years of offshore oil rig experience to provide full lifecycle services to offshore wind farms Aker has also partnered with Principle Power to include WindFloat a floating foundation for offshore wind turbines in their projects make turbine installation and maintenance easier but must be built to withstand hurricanes The infrastructure and supply chain already in place for oil and gas could possibly be leveraged for offshore wind Offshore wind in the Gulf could become a reality with the help of non profits like the Business Network for Offshore Wind Their mission is to work with U S companies and talent pulled from the oil and gas industry to build a new supply chain for offshore wind energy Green Investment China s top oil exploration company CNOOC Ltd signed on at the beginning of this year to develop its first offshore wind project in Jiangsu province Gulf Island Fabrication manufactured foundations modeled after oil platforms for the Block Island Wind Farm It s not just the federal government who wants to invest in offshore wind Wall Street saw the value of investing in renewable energy long before talk of the Green New Deal Sustainable investment is a 12 trillion market in the U S 600 billion green bonds were issued last year New Frontier India wants to generate 5 000 MW of energy from offshore wind by 2022 and ramp up to 30 000 MW by 2030 Ecological concerns could thwart their plans Winds of Change The Gulf of Mexico has the potential to generate a massive amount of offshore wind energy Offshore wind development is taking off in the United States and around the globe The money the talent and the will to make it happen are in place Even those companies that lagged behind are picking up the pace and the oil and gas industry will ride the winds of change to big profits Built in Expertise Offshore wind is benefitting greatly from the IAI Pile Cutter for concrete piles Gulf states could generate up to 961 TW Terawatt hours of electricity per year Texas Louisiana and Florida are most promising Winds are mild but very steady Shallow waters would Automated Pile Cutters Improved Occupational Safety IAI Cutters are excavator attachments that are operated from the cabin so there are no risks of falling piles dust or HAVS issues Excellent Quality Cuts Compared to manual cutting IAI Cutters offer even five times higher productivity Cutting results are predictable and cut offs can be reused IAI Plasma Cutter for steel piles and pipes IAI Concrete Pile Cutters Steel Pile Cutter Q 350 Up to 350mm 14 Q 400 Up to 400mm 16 Q 350S Full cut up to 350mm 14 Q 500S Full cut up to 500mm 20 P 400 Steel piles and pipes Up to 400mm 16 1 877 219 1962 www iai usa com Oilman Magazine March April 2019 OilmanMagazine com 23

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OILMAN COLUMN Interview Arun Santhebennur CEO Petasense By Tonae Hamilton Below is an interview with Arun Santhebennur The interview text has been left in tack with only minor grammatical adjustments Tonae Hamilton How why was Petasense created and what is the overall goal of the company Arun Santhebennur My cofounder Abhinav Khushraj and I saw that the next wave of connectivity was going to help things in the real world get connected after social media and the consumer internet got people connected While we had both built our careers in building enterprise software products we were really inspired by the simplicity and seamless user experience that consumer IoT devices like the Nest thermostat and the Fitbit Smartwatch offered to end users We were convinced that providing similar plug n play connectivity and analytics insight to industrial machinery was going to disrupt manufacturing We launched Petasense in 2014 with the vision of becoming the Fitbit of industrial machines Taking the example of health you can choose to only go to the doctor when you are really sick or you can improve your health by continuously monitoring important parameters In the industrial world the same analogy can be applied machinery can be operated until something fails or you continuously monitor predict and prevent developing problems Our vision is to create a system for asset health that holds real time information of equipment performance The current practice of predictive maintenance is periodic and information is siloed We want to change that making asset health transparent to everyone at the plant across all assets We also want to integrate process data with asset health and use that to better operate machinery on a day today basis TH Being an IoT startup that specializes in machine learning in what ways do you hope to improve the energy industry 24 AS We want to see the energy industry achieve zero unplanned downtime and zero accidents We also want these assets to operate in the most efficient manner possible The energy industry has always been at the forefront of asset reliability and we believe they will be leading other industrial companies with IIoT to have real time visibility into the actual equipment condition Machine learning helps to sort through all the data One of our customers in the energy industry collected 1 4 million data points in six months compared with 5 000 using traditional walkaround techniques It is not possible for a human to analyze all the data being generated from real time wireless sensors Our ML algorithms combine 40 different parameters to generate a single asset health score that can be trended over time Safety and reliability have always been two sides of the same coin Having real time information about asset condition helps to eliminate safety incidents All personnel whether technicians or managers can see what is going on with all equipment and get notification via text or app Another improvement area that we see for the energy industry is in energy efficiency Valves and steam traps are important components in the energy industry and as many as of all steam traps have failed TH What products are you most excited for customers to use AS We are really excited about our Transmitter and Asset Reliability Optimization ARO Cloud software The Transmitter provides a way for our customers to wirelessly bring in information from hundreds of different sensor types With it you can do multi parametric monitoring meaning that instead of looking only at vibration and temperature you can incorporate parameters that show the actual operating condition such as pressure flow current and more This helps to see the impact of operating conditions on equipment performance and it means you will have better diagnostics because you are trending under similar process conditions ARO Cloud is our cloud based software that Oilman Magazine March April 2019 OilmanMagazine com collects trends and analyzes multivariate sensor data alongside the asset that we monitor We created the software with simplicity in mind A plant manager or technician can easily understand overall plant We have a visual dashboard where you can quickly see how equipment is performing and an asset centric event feed to share knowledge about assets It also has all the sophisticated tools that a vibration analyst needs to diagnose the actual faults and make repair recommendation The product that most customers are really excited about is our Vibration Mote which wirelessly collects vibration and temperature data It is often one of the first applications that customers put in place when they are setting up their IIoT projects They use it to monitor critical rotating machinery like motors pumps fans compressors etc TH Can you describe how your software optimizes how machines operate How does it affect oil and gas operations AS In downstream refineries are looking to improve overall operational reliability by deploying wireless sensors to monitor their balance of plant Current scheduled routes cannot provide the consistent data collection necessary to detect trends as many machines may not be operational during the collection runs Some defects occur too quickly to catch between routes and some are in locations that are difficult to access and are at risk for a safety incident In midstream the compressor sites and gas facilities can be up to 50 miles from each other requiring long periods of travel These sites are many times in remote locations where dangerous weather conditions exist like heavy snowfall By remotely monitoring these sites Petasense s ARO Cloud machine learning can show the maintenance and reliability teams the health of these remote assets and identify the equipment that needs maintenance This improves not only the overall reliability but also the safety program TH Are you currently developing any new products or software AS We are continuously releasing new software features This is the benefit of cloud based systems instead of waiting for one release per year we can immediately

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OILMAN COLUMN address customer requests and deliver improvements On average we have a new release every month We recently launched a smart measurement feature on the ARO Cloud software With this feature clients can set up a custom fine grained schedule for each Vibration Mote to take measurements This can help in scenarios where machinery is not running all the time We are also soon launching a machine learning driven bearing health score This can give technicians who are not vibration analysts a quick guide as to when they can replace bearings proactively TH What improvements would you like to see happen in the energy and chemical industries over the next five years AS I think a big improvement will be moving from proof of concept to full implementation of their digitalization strategy Many companies have been testing different technologies and starting small pilots and within five years I d like digital technology to be ubiquitous I think there is also a cultural change happening Younger workers are coming in and acceptance of mobile cloud machine learning and wireless sensing is increasing Companies will see dramatic shifts in what is possible But you can t get there without the cultural change from the CEO all the way to the maintenance technician TH Additionally how prominent do you think ML Machine Learning will be in the oil and gas power and chemical industries over the next few years AS Machine learning will be very prominent Every conference you go to today has tracks on Maintenance 4 0 IIoT AI and similar topics There is a huge interest and many companies have started testing it out 201819 are the years of proving the technology Within 3 5 years it will be proven and applied in new ways ML for Predictive Maintenance is widely seen as one of the earliest applications but there are so many other applications that we are seeing emerging I think in five years people won t even be calling it ML it will just be a feature that enables the workflows within industry Just as we don t refer to Siri as AI but as a digital assistant that helps get things done In the industrial world people will rely on ML as an enabling technology rather than separate LONG TIME RELIABLE RUGGED A T CONTROLS TRUNNION MOUNTED BALLVALVES in stock 9955 International Blvd Cincinnati OH 45246 513 247 5465 www atcontrols com Oilman Magazine March April 2019 OilmanMagazine com 25

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OILMAN COLUMN Critical Success Factors for Field Service Apps By Mike Thompson In 2018 America became the world s top crude oil producer for the first time in 46 years and the country is on track to become a net energy exporter by 2022 for the first time since 1953 That phenomenal growth also extended to the U S natural gas industry which became the world s fourth largest last year the heading of asset management For most companies with a limited digitalization budget replacing these is too expensive and cumbersome so any field app must interact smoothly with the existing system Additionally requiring extensive changes to how field teams work can cause inefficiencies and reduce adoption What s been dubbed the American Energy Renaissance is the result of a combination of a few factors including horizontal drilling costcutting measures and digital technology For example robots are replacing the traditional roughneck while drones smart drill bits and autonomous rigs are being tasked with drilling oil wells Meanwhile thanks to digitization those wells can be analyzed remotely on a computer screen in an air conditioned room rather than out in the field To address this major hurdle companies should seek solutions that mirror existing or optimized field processes with a minimum of upheaval for both field teams and developers This is crucial given that the work of field teams often must draw from and interact with multiple back end systems These data sources and the systems they pull from should be invisible to workers in the field resulting in an intuitive and unified app experience At the other end of the grid the utility sector is also going digital streamlining processes and providing greater customer satisfaction While there has been significant investment in smart meters and connected grid solutions this investment has been primarily focused on equipment replacement and largely by the largest utilities When it comes to field services apps developers must consider the needs of multiple parties Workers who have been on the job for years are easily put off by apps that don t respect their established protocols or that require intensive training so a successful app needs to be as userfriendly as possible Field workers aren t the only end users to keep in mind and an app won t get as far as implementation if it doesn t also appeal to the IT team and executives A successful field services app will have the following features However the area of field operations has largely been left out of the industry s digital transformation and field services often still rely on legacy or paper systems Unfortunately many companies that have attempted to implement field service apps have been frustrated by poor experiences Efforts to devise in house apps are often time consuming expensive and difficult to maintain while off the shelf apps suffer from inflexibility and performance issues Poor User Experiences Scare Away Users This state of affairs is costing employee time cutting into profit margins and leaving valuable data unmined However solutions now exist that can allow America s electric utilities oil and natural gas producers refineries and others to unlock new efficiencies through scalable affordable and customizable mobile apps It s a good time to look at why digitalization efforts have been stymied in the past and how a new generation of apps are overcoming these issues The Struggle to Align with Existing Systems One of the biggest challenges is that every company in the energy sector uses highly specialized legacy systems to coordinate numerous processes and workflow such as work order management and scheduling enterprise resource planning warranties maintenance records and the orchestration of voluminous data falling under think cutting edge technologies such as AR AI chat features or natural language processing are prohibitively expensive but this is no longer the case The real world potential for these technologies in field operations is enormous from AR giving workers the ability to remotely inspect pipes to voice based operations allowing workers to input data while wearing gloves or protective equipment The Need to Respect Enterprise Requirements Securing buy in from the in house IT team can be a significant challenge in field operations digitalization and for good reason The priority for the data center must be maintaining network security so the field service app has to connect with back end systems in ways that won t compromise their integrity or overwhelm them with data A successful app must therefore seamlessly integrate with ERP EAM and CRM systems Even more importantly to earn IT confidence in house developers need full access to the code base and retain control of APIs so they can continually make changes based on their needs skill sets and resources Smoothing the Digitalization Process The bottom line is that if an app doesn t offer a seamless and easily adopted user experience Simple interface Field teams need apps that there s no incentive to go digital The end result is are optimized for the specific job at hand and too many field services operations sticking with that don t force them to wade through pages outdated paper systems but the energy sector can of needless forms no longer afford to keep field operations dwelling in the past Instead it s time for operators to Performance regardless of connection embrace the tools that will lay the groundwork for Field teams are often by necessity working complete unified digitalization and the rewards it in remote areas with limited or no web will inevitably yield connection which means that the web apps marketed by some developers are all but Even if your company has been burned by poor useless A successful native app has to be experiences with field services apps in the past responsive regardless of internet connection a new paradigm now exists that will allow the with offline performance that goes beyond energy sector to digitize without alienating workers simple data caching This requires apps that or tampering with the overall structure of a automatically batch and chunk data to send company s operations high priority information back to the system Mike Thompson is vice first president of product Staged implementation Many energy marketing for Kony s companies have had poor experiences with commercial business Prior field service digitization so any new initiatives to joining Kony Mike led need the ability to start with a limited budget the systems management and a specific process to improve For business at SolarWinds focused on monitoring example starting within a small pilot program applications servers virtualization and storage inspections for example and then expanding He has also led product management and to add more use cases and features as needed product marketing teams for IBM covering cloud management and automation storage Access to advanced technologies management and high availability products Developers and project managers frequently Illustration courtesy of Juan Pablo Gonzalez www 123RF com 26 Oilman Magazine March April 2019 OilmanMagazine com

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OILMAN COLUMN How Much Has the Oil Industry Been Robotized and What Would It Gain in Taking This Further By Raul Palencia The continuous changes in the oil industry lead us to start searching for new technologies and one of these is the processes automation in oil facilities Automated drilling systems mitigate the risk caused to drilling equipment reduce costs and improve efficiency Operating these systems remotely will be the next step in the oil industry allowing operators to use their most qualified specialists to monitor and control operations continuously without exposing themselves to risks When it comes to the oil industry s main activities we get into a different world for each one of them One of the most important activities of the industry is oil well construction since this is the connection between the hydrocarbon reservoirs within the surface While creating an oil well the industries invest in technology that saves time and money These investments go from mechanical to electronic equipment materials such as drilling fluids well material like pipelines and logistics among other things The human resources hired for these tasks tend to be the most important investment and the one that generates the most long term expenses to companies not only because of the payroll they represent but because of any problem that may arise regarding occupational diseases or accidents Automating processes to reduce jobs in platforms barges or drilling rigs are an activity in which the operating companies and some of the service ones have invested to overturn this type of system and thus reduce costs The solution that is visualized in the nearest future is to replace workplaces with new technologies that are capable of performing those tasks carried out during oil well drilling Several companies took advantage of this reality Statoil now Equinor the Norwegian oil company founded in 1972 Maersk Drilling located in Denmark and founded in 1972 and Schlumberger founded in France in 1926 among them These companies work in some countries as operators and in some others as service companies They were investigated around their annual net profits and it was found that their drilling costs and their occupational security methods are their biggest and most important investment At the same time they were reviewed about the innovations they have achieved to automate their processes in the industry considering the reduction of operational times in surface and bottom activities Also the impact they have on reducing the number of workers minimizing occupational accidents and incidents during the drilling process and decreasing operational costs Currently the daily costs of drilling on land locations are set around 250 000 USD per day In some cases it could reach 300 000 per day inhospitable sites or in war zones On the other hand drilling costs on offshore locations reach the 450 000 daily maximum costs Nowadays the oil industry has acquired important automations of its processes such as the following In the past chains or ropes were used by workers to activate and generate the torques required by pipes casing and BHA Bottom Hole Assemblies Currently the Iron Roughnecks took its place which works in a hydraulic and systematized way replacing the workforce and doing the work with greater precision efficiency effectiveness and offering better and major security The mechanization and automation of the driller operations and his assistants have allowed reduction to the exposure of the drilling team to the dangers that come with the operation of pipe manipulation The efficiency in the rig floor increases and while drilling it improves the wells quality The mechanized drilling equipment connects the drilling string to the casing s unions The automated system consoles allow drillers to routinely monitor and control all facets of drilling operations The company Equinor is dedicated to several sectors of the industry such as drilling exploration production and refining of crude oil being highlighted as one of the most complete companies of the three mentioned before At the end of the first quarter of 2017 it had a profit of 1 064 billion according to www preciodelpetroleo com It s also notable that by the end of 2016 the company registered losses of 2 9 Photos courtesy of Nabors Drill Floor Robot DFR 1500 28 Oilman Magazine March April 2019 OilmanMagazine com Drill Floor Robot DFR 1500 Multi Size Elevator MSE 350

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OILMAN COLUMN Drilling invested in the company Robotic Drilling Systems in order to design four robots that are able to replace a large part of the rig floor staff reducing not only the use of human workers but also potential accidents RDS Robotic Drilling Systems was acquired by Nabors in September 2017 This robot is capable of centering the drill pipe and screwing effectively It is a fully electric terminal it has a weight capacity of 2 200 pounds and the tip holding tool is easy to change Among its advantages there is the reduction of manual operations and maximization of the times that it takes to pick up pipes or casings Robotic Pipe Handler RPH 3500 Photo courtesy of Nabors billion approximately one billon refers to workers accidents in 2016 the company had a helicopter incident where 13 people died while going to offshore drilling facilities Considering this it becomes more necessary to apply the innovations required Under this premise in April 2014 Equinor in conjunction with Odfjell The almighty electric Roughneck is capable of applying a maximum torque of 270 KNm and it can handle torques in degrees In addition it s totally electric and easy to maintain Among its advantages there are simple connections and the possibility to not only work with pipes but also with casings The MSE 350 the boss in height is the replacement of the top drive elevators It has a capacity of 350 tons and it s able to increase even more than this limit with the use of more energy to maximize power Besides it s multimedia therefore it s not necessary to change pieces Among its most important advantages it s known that it saves more than 5 minutes per pipe trip and eliminates manual operations The Pipe Handler the perfect partner is fully electric with axial movements It s able to quickly raise the pipes to the rig floor automatically and has a capacity of 7 700 pounds Its main advantages are the ability to raise pipes to the ironing with speed and convert HTV operations into automatic These robots known as RDS work in perfect harmony replacing the tasks of the rig floor staff according to a Nabors news release and it was tested in the operational area of Kvaal In addition to Equinor Nabors also acquired this technology while Equinor is about to implement it in wells to be drilled in the North Sea Raul Palencia is an engineer and researcher with more than 10 years of experience as a Geologist He graduated from the prestigious University of Andes ULA later he received a Master s degree in Reservoir Engineering at the Venezuela Hydrocarbons University During his career development he worked for oil companies in positions such as field geologist reservoir engineer and reservoir simulation He has worked in Argentina Ecuador Mexico and Venezuela He currently resides in Texas Building Business Relationships One Name at a Time By Josh Robbins Walking around NAPE in February it seemed like everyone had the same idea Stay Positive The teams I met with were ready willing and able to stay to course and no matter the price of oil they were going to stay upbeat The booths filled the George R Brown Convention Center in Houston and according to reports about 12 000 people were walking around Deals were very similar to the summer NAPE show very mineral and working interest focused You could see teams that purchased on the fringe of XYZ play trying actively to sell anything not stapled down Digital vendors also had a giant presence at this year s show pushing automated processes in nearly every aspect of the business While NAPE is a great industry event the production deals that a lot of people were looking for were not there Finance teams were scouring each booth for a potential splash deal for their teams and nothing was on the floor The real change about this year s NAPE was that there were also no deals outside the expo If you ve never been to NAPE there are two distinct aspects of the show First the show itself and second is the events and meetups that happen after the show These meetups give everyone a great opportunity to network and reconnect Usually it s here that you hear of the off market deal But not this year This year there was a strange sense of sell everything and everything that was available was taken out to the floor of NAPE Because Beachwood works in the off market space every day we had a different view of NAPE We have been calling and tracking deals that are targeted and we know the teams that will sell in 2019 don t even have a booth at the event NAPE is all about relationship building and relationship creating There is a team that attends and sponsors NAPE every year called Western Land Services I watched as one of their team Josh Robbins members Sebastian Alvarado work the booth He read the name tag of everyone that came to the booth and asked what that company was specifically working on And that s what NAPE is about It s not to pedal swag or to pitch product it s to build relationships based on a truly customer centric focus It s never about what I m doing it s about what you are doing and how I can provide any value to you The industry is changing every day It is guys like Sebastian and teams building digital transformation software that are going to shape the business in the next five years NAPE was as it always is a great event and I m looking forward to next February Oilman Magazine March April 2019 OilmanMagazine com 29

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OILMAN COLUMN Engineering and Maintaining Pipelines with Software By Eric R Eissler In today s modern and more complex than ever oil and gas fields pipelines are the backbone of the industry Pipelines allow for the most efficient transport of gas and oil eliminating costly and environmentally unfriendly trucks and rail cars to get the hydro carbons from points A to B As the digitization of the oilfield is now more prevalent than ever pipelines are seeing many improvements that software and technology such as artificial intelligence and big data analytics can offer As pipeline systems become more complex so does engineering and developing new systems In this case specialized software for designing and engineering pipelines is also becoming more and more prevalent among engineers Pipe Dreams Do Come True The number one reason companies are adding these technologies to their pipelines is simple safety and security Much of the pipelines in the oil and gas industry are located in some of the world s most harsh and dangerous climates Attempting to have these remote pipelines monitored 24 7 by people is just not feasible This is where technology can step in and help out Pipeline monitoring systems are rather complex and consist of multiple interconnected systems which can continuously monitor remote pipelines through equipment that allows modeling such as flowmeters and valves and sensors The next component in this system is Artificial Intelligence AI can be used to detect and alert the system s human operators to potential issues such as leaks corrosion damage from extreme cold or terroristic activity Additionally these pipeline monitoring systems allow operators to capture and analyze remote operations through image analytics Finally it adds an increased intelligence factor by predicting and optimizing pipeline maintenance and integrity in remote places where humans might not often tread More often than not you would get some kind of trigger that sets off an alarm which was nothing Back in the day companies had to send a team out to investigate the matter It usually turned out to be some animals running around setting off the vibration detecting sensors Well you do this enough and people get tired of going just to keep finding the same non issue Which is why we are really happy to have camera systems and even drones in place The drones can confirm if there is a real reason to send a team out Smart pipelines have been able to reduce 30 wasted time and generally saves companies millions of man hours Sensors To make the AI work a pipeline needs to have sensors Many times sensors are just tossed into this general catch all but that is far from the case On pipelines there are vibration detectors accelerometers ultrasonic detectors for flow analysis and imaging Tie all this technology together with AI and the system will do things that it was never able to do before providing a complete and comprehensive pipeline monitoring system With AI integrated into this system the days of reacting to alarms are coming to an end because the AI is able to react and take the proper steps to fix the problem Back in the day there used to be people with radios driving around in trucks all day going from well to well or different sections of a pipeline to be able to convey instrument readings back to central Now we can get that data directly from the sensor or device No more pick up truck data round up Pipeline Design Software As the pipeline itself grows into a more complex system of sensors AI big data etc it is important to recognize that today s pipeline systems need to have much forethought and planning in order to be successful and to prevent leaks bursts explosions etc Building a system from the ground up requires computer aided drafting software which allows engineers to build better pipelines with more complex systems This kind of software focuses on namely Pipeline Design Analysis Hydraulics Oilman Magazine March April 2019 OilmanMagazine com Photo courtesy of Tomasz Wyszolmirski www 123RF com Facilities Pipeline Crossings Pipeline Corrosion Horizontal Directional Drilling Standards and Regulations All of which are factored into the design and development via specialized pipeline engineering software Now it is extremely important that new pipelines and the facilities they connect are designed in accordance with all applicable government regulations operating company requirements and approved stakeholder requests The interdependency between these entities as well as strict mechanical tolerances make it increasingly important that all engineering design and drafting work is performed to the highest standards This is now why it is essential that new pipeline networks are designed with software in order to meet the myriad of requirements that go into constructing a pipeline Smart Pipelines Are The Future As the oil and gas fields have been growing at a rapid rate it makes sense that pipelines provide the quick reliable and safe transit needed to ensure hydrocarbons get where they need to go Technology has allowed pipelines to become more interactive and responsive by using AI and a plethora of sensors to ensure the safety of the pipeline and the oil or gas that it carries Moving forward it will be hard to find any new pipelines that will not have this kind of technology because it saves time and money and allows workers to do other things which drives up efficiency in the oilfields and has a positive effect on the bottom line

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OILMAN COLUMN Interview Ashley Gilmore CEO Tracts co By Tonae Hamilton Below is an interview with Ashley Gilmore The interview text has been left in tack with only minor grammatical adjustments Tonae Hamilton What is the overall mission of the company and how do you hope to benefit other businesses with your products Ashley Gilmore Our mission is to help our customers improve their business by providing the most timely and accurate ownership knowledge throughout our clients tools Our computation engine and interpretation library eliminate more than fifty percent of the steps between the courthouse and the answers our client needs By providing transparency into workflows and project statuses our clients are able to better manage time and cost Tracts reduces an error prone process and auto computes ownership providing a level of accuracy our clients can t get through traditional manual ways By creating a single workflow Tracts standardizes ownership knowledge from a wide array of third party resources and then delivers that data in a consistent and always current method to their GIS CRM LMS MM etc systems TH Why do you think it is important for companies specifically companies in the oil and gas industry to use title management software leveraging tools uniquely designed for getting to the right ownership answers O G companies can gain greater levels of accuracy and efficiency The best title management platforms have computation engines that can calculate mineral and leasehold interest on the fly and can leverage interpretation libraries to automatically identify common title between areas of interest TH Can you describe the types of software tools you provide to your clients AG Our digital notecard captures twenty two dimensions of mineral and leasehold ownership Those notecards are then instantly processed through the computation engine to generate runsheets ownership reports and flow charts The interpretations are then indexed in the database and will be accessible as needed in future areas of interest Tracts doesn t just store the document it stores the legal interpretation done by the field landman in house team and attorney That interpretation can be pulled into any area of interest automatically instantly updating the new area of interests reports TH Are there any new software tools and products you are currently developing AG Right now we eliminate more than fifty percent of the steps required to manage title Our goal is to remove as many steps as possible in order to improve our clients IRR by reducing risk time and cost associated with title Our roadmap currently includes a GIS tool suggestive interpretations and auto tract identification TH In what ways have your title software tools benefited companies AG Title management platforms allow companies AG Our mineral buyer clients are able to review to add transparency and standardization to an title more efficiently and accurately This equates otherwise opaque and widely varied process By to more opportunities and a higher IRR Internal Rate of Return Our E P clients have prevented title defects and significantly reduced the time and cost involved with getting marketable title before drilling All of our clients can benefit from quicker more accurate due diligence during acquisitions and instant data rooms for divestiture TH How impactful do you think title management software will be in industries like the oil and gas industry in the next following years AG As AI improves and digital courthouses grow title management software will become more and more important to stay competitive Relying on spreadsheets notecards and legal pads will be the surest path to missed opportunities and busted title The future always seems far away until it arrives When AI can auto interpret documents and feed the output into a computation engine title defects in current and past leases will be instantly available to the highest bidder In the next few years title management software will be the shield companies need to ensure they have marketable title TH What improvements would you like to see happen in the oil and gas industry from a title management perspective AG A single online resource for title documents from current back to sovereignty is not only inevitable it is imminent Aside from what s already coming land departments are notorious for being slow adopters of new technology and we would like to see that change New mineral buyers and E P companies are fueling faster adoption trying to compete with older players It is essential that management teams look past the boots tickets and hunting trips and start aligning their interests with bigger waterfalls IRR and profits Now AvAil Able The Crude life CloThiNg www shirTsiCle Com TheCrudelife Oilman Magazine March April 2019 OilmanMagazine com 31

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OILMAN COLUMN Texas Railroad Commission Rings in New Year with OIL Database By Emmanuel Sullivan With the new year a much anticipated online tool became available for those interested in statewide inspections and enforcement information within the oil and gas business in the state of Texas A searchable database was launched by the RRC Railroad Commision of Texas on January 23 2019 and is aptly named RRC OIL Online Inspection Lookup RRC is the Texas state agency that regulates the oil and natural gas industry among others within the state At the time of the launch Chairman Christi Craddick said RRC Online Inspection Lookup continues our efforts to use improved technology to deliver more accessible information to the public and industry on the work of this commission A user can search the website 24 7 using a variety of criteria including operator name lease name number API number County RRC District inspection date range and rule The data gathered from a search ranges from the period of August 2015 to present The database is updated nightly Government transparency keeps citizens informed and engaged The Railroad Commission has made great strides on transparency under our watch and I am pleased that through initiatives like RRC OIL we continue to lead the way said Commissioner Ryan Sitton Information can be obtained for one inspection or the entire state of Texas Only completed inspections will contain data otherwise the field is blank or will contain values such as unknown or 00000 This may be a result of the inspector not having information made available to him at the time of the inspection or the data in that field is not part of the criteria for the search you entered An example would be when lease and facility inspections are performed data such as an API number or Well Number would not be applicable and in those cases be left blank OIL accesses the inspection and violation data entered into their system by their staff of 158 field inspectors Not an easy task for the approximate 300 000 active wells within the state This small staff of inspectors have averaged more than 123 000 inspections of oil and gas operations within the last ten years and anticipate another 130 000 for the year 2019 When searching for a violation a record would be displayed for each violation that meets the search criteria Only the initial violation will be displayed No additional information will be displayed for followup inspections The same logic applies if a field is not applicable to the search criteria or the information is not available to the inspector at the time of inspection The field will be either blank or contain the values as unknown or 00000 Their data can be reviewed online from within the OIL database or can be downloaded as a data set and printed in txt format Data sets are updated weekly Disclaimers caution the end user that all information provided is continuously being updated and should be used for informational purposes only But even at that the use of the OIL database is a great starting point when researching this type of data If you have multiple pages of results the OIL database provides you with the appropriate button to navigate your results You can navigate page by page or click on specific pages to see the results of your search Options are also available for displaying more or fewer results and sorting within the results you have obtained In addition filters can be used on any column by entering a value within that field and only the data matching 32 Oilman Magazine March April 2019 OilmanMagazine com the filter will be displayed The online RRC OIL database is important to not only operators and owners but to the general public as well In 2012 the RRC began publishing quarterly reports of oil and gas enforcement data on its website Some found the report to be lacking in information and only a partial representation of the information at hand With the new OIL database specific information on every well active or inactive within the entire state of Texas can be found The continual updates of such information is key Statewide rules by which the RRC operate are also included within the OIL database Violations of such rules are linked to each inspection Operators owners and the general public can research this information to determine compliance Property owners can readily find information about wells that have been drilled on their land and determine the last time an inspection was performed This saves the property owner the tedious task of having to gain such information from the operator or from RRC itself Abandoned or orphaned wells have also been a major concern in Texas Some wells have been abandoned for years leaving property owners in a quandary as to what to do Until such time as these abandoned wells are plugged properly there is always a concern for safety ground water contamination and other

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OILMAN COLUMN environmental issues Using the OIL database a property owner can check the status of a situation such as this and determine the best step forward the general public in ensuring individuals have easy transparent access to data regarding the regulation of our natural resources Some consider abandoned wells an opportunity for future investments Abandoned wells are routinely bought by operators in hopes of future production A simple search of the OIL database would enable these investors a broader picture of where to make their next play With the exciting new features of the OIL database no more the time consuming and sometimes frustrating task of researching and making repeated phone calls only to be transferred to someone else who might have an answer OIL has all current information at hand for you to discover at the click of a mouse Commissioner Wayne Christian commented on the new OIL database feature of the RRC website saying This tool will be helpful to our agency the industry and most importantly Transparency has become a buzz word in today s climate RRC s OIL database has opened the door to having RRC become more transparent than ever Not only does it offer the means by which anyone can search for current information concerning inspections and compliance issues in the massive oil and gas reserves we enjoy here in Texas but with RRC s OIL database it has also brought the Texas Railroad Commission into the 21st century The RRC OIL database can be found online at the following link https rrc texas gov about us resource center research onlineresearch queries oil and gas inspections andviolations query or by going to the home page of the Texas Railroad Commission s web site at https rrc texas gov and looking on the right side bar for the link entitled RRC Online Inspection Lookup America s Energy and Environmental Stewardship By Mark A Stansberry In 1992 I founded the IEPC International Energy Policy Conference with the theme being Striving for Energy Efficiency and Environmental Preservation This underlying theme has been part of each conference event which has been held in Tulsa Norman OK Stillwater OK Washington D C Denver Houston Oklahoma City and other locations Twenty seven years later from the first IEPC conference America s energy and environmental stewardship continues to be addressed Especially the subject of climate change continues to be debated Also included in the climate change debate are the prospects of a carbon tax Many oil and gas companies are taking the lead in addressing environmentally sound policies Oil and natural gas will be in demand for quite some time The way we use and preserve energy are important concerns for our society gap between Republican voters and their elected leaders continues to grow More than 80 percent of Americans including nearly two thirds of Republican voters believe that the government should take action to reduce carbon emissions according to one survey As Mark Mills a senior fellow at the Manhattan Institute in a WSJ article states Even a compromise that yielded enough in subsidies to double the green tech progress of the past couple of decades would result in wind and solar supplying less than 10 percent of America s energy Even with subsidies it would be a struggle to keep nuclear power and corn alcohol at 10 percent of America s energy supply Meanwhile the absolute level of hydrocarbon consumption would still go up comprising a smaller share of a much larger pie Front and center for a carbon tax is Exxon Exxon has committed 1 million over two years to promote a national tax on carbon The United Nation s IPCC Intergovernmental Panel on Climate Change released a climate change report The writers of the report want to drastically cut carbon emissions by 1 5 degrees over the next few decades As I wrote in my 2012 book America Needs America s Energy Creating Together the People s Energy Plan a heated debate over proposed legislation for a cap and trade system occurred in 2009 Although the concept behind the cap and trade system seems simple the devil is in the details Future generations are depending on us Looking forward as we envision the future together we all should strive to make the planet a much better place to live Former Republican U S Congressman Ryan Costello states that the disconnect may be widest on climate change in which the National Energy Talk NET an Energy Advocate Initiative was launched July 31st 2017 in Elk City Oklahoma and meetings Mark A Stansberry have been held in Tulsa Edmond and Oklahoma City along with presentations in Houston Denver and other cities In 2019 NET will continue its efforts as a platform engaging a national energy dialogue Go to Facebook National Energy Talk to support learn more about NET Oilman Magazine March April 2019 OilmanMagazine com 33

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OILMAN COLUMN Managing Water for a Profit By Randy Huffman Removing salts from produced water can be one of the most challenging and costly endeavors facing those in the oil and natural gas exploration business While saltwater has always been a by product of traditional oil and natural gas production shale gas production has created excess water volumes sufficient to support a wastewater treatment industry all its own Not only does the production process itself require huge volumes of water for fracking flowback water containing high levels of salt continue for the life of the well Adding to the frustration of having to deal with these volumes of water is that water treatment is not the producer s primary business process Getting the mineral to the surface and to the market is where the producer s time money and energy is rightly focused Managing the large volumes of waste water however ends up consuming a significant part of the producer s attention and resources How might this model change if there were a cost effective way to remove and separate calcium chloride and sodium chloride into marketable products There is currently a lot of attention being focused on water management It has in fact become a separate industry developed to support oil and natural gas production But this new water industry can t survive by managing water as a dead expense There is just too much of it and all indications are the volumes will only continue to increase as more shale formations are explored So salt water has to become its own revenue stream Charging on the front end is standard procedure for managing someone s waste product But what if there is enough value within the waste itself to create a revenue stream on the back end This would be a game changer and producers could get back to what they know best if such a process were readily available Water management takes on many forms reuse recycling heavy brine production and other processes consume some of the wastewater but the go to solution for the majority of saltwater management currently is underground injection This can t be sustained With increased production there are ever increasing volumes of water that must be managed Additionally underground injection has its own problems Seismic activity public outcry reduced capacity and ever more stringent environmental rules are putting more pressure every day on underground injection as the primary solution for dealing with contaminated water It seems unlikely that underground injection wells as a primary disposal method for contaminated water will be able to support the shale gas 34 industry forever due to the ever increasing volumes of water coming from new wells Salt removal is an expensive and difficult process in the best of circumstances Separating the different salts into valuable commodities is an unprecedented advancement in water treatment technology Despite the ongoing efforts by many of the major players the oil and gas industry is still trying to solve this problem Separation efforts to date have left many producers with mixed salts that are deemed a waste product rather than clean sodium chloride and calcium chloride pure enough to be marketed as independent commodities There are several technologies currently being applied to this issue but there are problems associated with them that have not yet been completely solved 1 The creation of mixed salts which must either be sold at a low price or be wasted 2 Partial salt removal which leaves a highly concentrated but contaminated brine 3 Lack of understanding chemically of what constitutes complete separation of sodium and calcium chloride 4 Dealing with equipment plugging issues during separation 5 Understanding how to control the separation process proactive vs reactive plant operation 6 Understanding how the total salt concentrations in the brine and the varying amounts of sodium and calcium chloride affect price volume and overall economics The end goal of water treatment should be to beneficially use as much of the water as possible while reducing the amount injected back underground where there is potential to contaminate a clean water aquifer The purpose of a disposal well is to get rid of the impurities in the water not necessarily the water itself If the maximum level of impurities generally reached in water that has been pretreated and is ready for underground injection is only about 12 percent by volume we end up injecting a solution that is at least 88 percent water And with water being such an important asset that is expensive to move and treat it only makes sense to use what you have when you have it Once properly treated this demineralized water can contain less than 150 TDS Total Dissolved Solids and can be Oilman Magazine March April 2019 OilmanMagazine com Sodium chloride removed during the final step in the separation process using Clean Water LLC s patented technology used in agriculture for cooling or process water steam production or reused in the drilling and fracturing of new wells Add to that the value of clean sodium and calcium chlorides and we have significantly reduced the amount of waste and cost that needs managed and we have increased our revenue generation potential This is not a future goal The ability to turn produced water from a waste stream to a revenue stream is technology available right now If we don t manage our water it will certainly manage us The author is a former Cabinet Secretary of the West Virginia Department of Environmental Protection He is also a retired Vice Wing Commander of the 130th Airlift Wing in Charleston WV He holds a B S in Mining Engineering Technology and a Master in Business Administration Randy is currently an independent consultant and represents Clean Water LLC in the marketing of their salt removal and separation technology For more information contact Randy at 304 389 8173 randy c huffman gmail com You may also visit the Clean Water LLC website at www cleanwaterllc net

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OILMAN COLUMN Behind The Scene The Iron Orchard By Sarah Skinner Referred to as The Wildcatter s Bible The Iron Orchard was a classic Texas novel It spans three decades of the life and inner workings of the oil industry in the Permian Written in 1967 by Edmund Van Zandt under the pseudonym of Tom Pendleton The Van Zandt s were a prominent Fort Worth family and fearful of his tell all story he wrote under the alias so he could remain unknown and not under that shadow Van Zandt started out as a roustabout and worked hard in the tough conditions of the industry on which he based the book He wanted to be a writer but before he had the opportunity World War II broke out and he was deployed overseas Upon his return he attended law school at Southern Methodist University but realized courtrooms were not his passion and returned to the oil field For years this incredible literary piece of work was thought to make it to the big screen Time passed life happened and even Hollywood had adapted it at one time but nothing ever came of it Fast forward to 2014 in comes director and Midland Texas native Ty Richards I had the pleasure of interviewing Richards the week after The Iron Orchard s first big premiere weekend Richards was initially captivated by The Iron Orchard because it captured the history of the independent oil man in a really honest way It was a sign of the times in post war America The West Texas oil man is that mythic figure that has been noted in other books and films but it has never been a central figure It was my hope to be able to adapt that in an effective way to the screen I wanted to be the one to tell that story It was important to me because my grandfather worked the oil field in the 1930s and followed the similar trajectory to the main character of this book The whole post great depression era was in my grandfather s story too It was inspirational to me to tell that side of it and honor that in a way says Richards Richards partnered with the children of Van Zandt optioned the rights to the book and bought the movie rights on the handshake deal that he would honor the book to the best of his ability Aside from one big blowout scene with a budgetary constraint situation it s really close I feel like we ve done a really strong adaptation that follows the book and its trajectory What is carved out of the book is pretty accurate says Richards The film was totally financed and accomplished through industry contacts and independents in the industry This is a movie of the people and by the people Richards thought this was a wonderful story which was put in an interesting light back then and currently today Looking back and forward at any given time oil has been and will continue to be a controversial topic Back in 2013 when Richards went to his contacts in West Texas for financing he was reminded that this book was beloved and to accurately follow it would result in the budget climbing quickly It took several years to obtain financing and money was a challenge It became easy to see why independent movie makers did not take on projects of this caliber The biggest challenge was that there was always a race against time and money In terms of drilling a well every day out there turning that pipe is costing money With our low budget our daily operational cost was very minimal To try and rush through the number of scenes we had on a daily basis was often times staggering in 110 degree heat We also had drilling sites that were an hour and a half away and that cuts into your day when you re shooting says Richards The ability to work with the actors rehearse do stunts etc was brutal at times Although extremely rewarding they were always battling time Period films also present their own challenges If it s supposed to be 1946 everywhere the camera is pointed has to look like 1946 If a modern car is parked in the street or there is a car driving by that doesn t fit the time period it had to be removed It was always a battle of time and resources to make sure everything looked accurate but I think we nailed it for the most part says Richards The main partners of the film are an organization called The Wildcatter s Network They are a group of people that have a company where they invest in non oil and gas related things such as the arts A week or two before shooting started they had just kicked off their network and offered to be executive producers That was a turning point for us to be able to actually shoot The really cool thing about them is that we are constantly coming back and talking about how the film business is really similar to drilling and wildcatting a well You have the different people involved in putting together a well a land man an engineer a geologist etc In the film industry you have a book or an intellectual property right that is similar to a lease or the mineral rights Then you have a director or producer that comes in which is similar to someone like a land man or potentially an engineer if they are someone who is pushing the deal Whoever has the vision of it all Then you have the operator who comes in to actually drill which is like the production team that comes in to make a film happen says Richards With both you have incredible risks At one point it was one in ten wells made money and in the Indie film world it was one in 13 films made money The appetite and willingness for risk is very similar It is not by mistake that this film began and was completed with the help of wildcatters and oilmen It truly couldn t have been done any other way and it s something the oil and gas community can really relate to To see this incredible film you do not have to live in Texas It is beneficial if you do however in the very near future they plan to hit Louisiana Oklahoma New Mexico and other states where oil is like minded It s a working man s old school classic story and we want it to go where it will be received well says Richards The film only opened in Texas as of the date of this interview but the reviews have been positive across the board The film was not only praised but also admired and respected by people and their families who have been in this industry for generations The most exciting this is to have an older audience member come up and thank me and say it reminded them of their youth or one of their family members That s a testament to this and I feel good about it says Richards To Richards who set out to depict a real workingclass oil man story and honor Van Zandt and his literary masterpiece the respect and validation by these individuals means much more to him than the praise of a critic and that speaks volumes for character Oilman Magazine March April 2019 OilmanMagazine com 35

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OILMAN COLUMN MFG Chemical CEO Keith Arnold Talks About New Plant and MFG s Future By Eric R Eissler Below is an interview with Keith Arnold The interview text has been left in tack with only minor grammatical adjustments Eric Eissler Could you give me an overview of your operations in the Oilfield and Lubricants and additives For the oilfields could you provide our readers some perspective as to where you operate and in what sector of the industry you work in up mid or downstream Keith Arnold MFG operates three plants in the North Georgia area The acquisition of our Pasadena Texas plant was made in March 2018 due to the fact that there was much business and it prompted the purchase of two new reactors one of which is 20 000 gallon in size We work in all streams MFG Chemical was founded in 1979 and started to evolve in the 1980s to become a custom contract chemical manufacturer This means that companies work with us to develop custom chemical solutions to meet their needs We started off by buying certain chemistries derivatizing these chemistries and selling it back to them Later we partnered with a large oilfield service company We were then channeling large oilfield services companies and used a partnership formulation to conduct business A lot of the chemicals we manufacture for the upstream sector are corrosion inhibitors emulsifiers fracking fluids and stimulations Again we are providing custom chemical manufacturing This custom chemical approach allows the chemical production to stay domestic in the USA so companies are not going overseas with their intellectual property our customers are large and have the chemists that can work together with us to produce environmentally friendly chemicals In this fashion we can be fast to react to our clients needs and then get the chemicals to market quicker We would love to see oil get up to 55 to 70 USD per barrel because this aids development and investment for cleaner and better environmentally friendly chemicals Furthermore the higher price of oil is better for the economy If it is too low the economy lags EE Energy production is the basic building block of the economy so it is important for it to be a robust healthy industry KA You are absolutely right EE Could you tell us some more about the recent Pasadena TX plant What type of operations are going on there KA This was a long time coming as we looked for a site for four years either a greenfield or a joint venture or an acquisition We were looking for a joint venture but the potential partners did not have capital to expand and MFG Chemical wanted to get into the gulf coast because of our customers in that area bulk rail car shipping and the proximity to the oil and gas market EE Could you tell our readers where you would like MFG Chemical to be in the next five years KA We are bullish on the market but volatility is everything When oil and gas is up the market is really up and when it is down it s really EE I see you are doing some work in fracking chemicals Could you elaborate as to what types of chemicals you are using to produce these fluids and what you are doing to ensure that the fracking fluids are not having a negative impact on the environment KA For sustainable fracking fluids most of 36 Oilman Magazine March April 2019 OilmanMagazine com down It is a market that swings wildly from time to time We have a customer base and we have a lot of them committing to contracts We would like to have three more expansions over the next six years and stay focused on oilfield production and rheology modifiers We are aiming to be more diversified throughout the oil and gas value chain Therefore diversification is the key to being successful EE On a closing note congrats on winning the Plant Safety Performance Improvement Honor Could you go into the details about how you achieved this KA We have been on the environment health and safety journey since 1979 and have been trying to change the culture to make safety a core value in every single thing that we do Each year we look at operations and training and submit to SOCMA for our performance improvement We do it because it lends itself to credibility for us and to our customers who are most important What is most important to customers is the commitment and safety standards of the company MFG Chemical LLC is a leading specialty and custom chemical manufacturer for a variety of global markets including agriculture asphalt graphic arts lubricants mining oilfield paints coatings personal care pulp paper and water treatment The company is headquartered in Dalton GA and operates four manufacturing facilities with world class product development capabilities in Northwest Georgia and Pasadena Texas

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OILMAN COLUMN Site Layout in Kenmare North Dakota Walter Breidenstein with Mini GTL 300 Unit Hustle Innovation are Showing Profits While Reducing Flares By Jason Spiess If this year s NAPE is any indication of what the energy marketplace is looking like then companies have their work cut out for them this year NAPE saw a huge increase of vendors and attendees exhibit space filled to the max and over 12 000 energy enthusiasts showed up The first thing I noticed was the booths It seems like every year there are a few more people Joe Dancy executive director The University of Oklahoma College of Law Energy Center said I tracked my mileage just walking back and forth from booth to booth and I put on over 6 miles just going up and down talking to people Dancy wasn t the only one who noticed the increase in energy enthusiasm and activity Josh Robbins CEO Beachwood Marketing agreed with Dancy s observations of the energy summit In the past the booths at NAPE for the most part hadn t taken up the entire convention center This year the booths ran the entire length of the convention center Robbins said There was a lot of people out there hustling Hustle and innovation were more than themes at this year s NAPE they were embedded in hearts of many who live and breathe the energy industry Walter Breidenstein is one person who not only breathes energy innovation but literally lives the lifestyle Breidenstein CEO Gas Technologies LLC has spent the past seven years nomading around the world living in a trailer on site reducing flaring 38 and saving money for oil companies The GasTechno process is designed to convert natural gas associated gas biogas landfill gas and other methane containing gases directly into commercially saleable methanol ethanol and formalin with up to 70 percent lower costs and at smaller scales than traditional GTL or small scale methanol technologies Breidenstein said According to Breidenstein when their process is coupled with either conventional NGL Natural Gas Liquids processing equipment or their latest proprietary shipping container based NGL system significant numbers can be seen Our GasTechno s Mini GTL plant converts 9 00 12 00 USD BOE Barrel Oil Equivalent associated gas into 70 plus BOE fuels and chemicals at the well site while reducing carbon emissions to meet compliance targets Breidenstein said While traditional NGL systems recover up to 25 percent of the associated flared gas volume our combined GasTechno NGL GTL solution recovers up to 89 percent of the associated gas and creates additional cash flow and economic value from formerly wasted resources bolstering Return on Capital Employed for our customers Their little science projects are now turning into big time savings for energy companies as Breidenstien is garnering interest from all over the globe We continue to receive a significant number of requests worldwide to license our technology on a project by project basis However given our global infrastructure with headquarters in Oilman Magazine March April 2019 OilmanMagazine com London U K and country offices in Moscow Mumbai Singapore and Kuala Lumpur we decided to offer exclusive country level technology licenses Breidenstein said He credits living on site and the crew s determination when building the system and process in order to make it nearly turn key for the industry Through working with our partners and developing a deep understanding and expertise on our technology a turn key flaring solutions is here to assist companies with biogas landfill gas and waste to energy producers Breidenstein said Along with our global manufacturing partners we are working together to address the massive global gas flaring problem and the growing biogas to biomethanol markets During 2018 the most advanced Mini GTL system was reconfigured to incorporate a patented drop in diesel fuel distillation system that completed testing in 2016 using funding from a U S Department of Energy Grant A successful feasibility study followed in 2018 on a compact modular system that will be offered in the exclusive licensing package The GasTechno diesel technology solution is the lowest cost diesel production system in the world Breidenstein said We now have the science the experience and the study to validate all our claims and success As mentioned earlier this science and savings did not happen overnight In fact Breidenstein spent seven months of struggles to get support in North Dakota for flare reduction

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OILMAN COLUMN margin per gallon He adds that if you look at the cost of production it includes zero cost for wasted gas This gives them a savings of almost 2 million per year in methanol costs and the entire Mini GTL plant and distillation unit are paid for in less than 1 4 years Breidenstein said When you take into consideration the new 100 percent Equipment Expense Deduction up to 1 million in the first year they have the plant paid for in less than 9 months Just incredible economics Ease of Delivery and 48 Hour Installation We had issues in North Dakota trying to get the state s attention on just about anything Breidenstein said After months and months of being ignored we had to move away from North Dakota to those who would just basically engage and emissions reduction projections Breidenstein continues citing numbers that are aligning with the state of North Dakota s goals Est 1991 The current price of Methanol delivered in North Dakota for the oil fields is 2 30 to 3 00 per gallon Breidenstein said Just imagine Take our cost of production of 0 78 per gallon less the price they are currently paying of 2 30 per gallon That is a 1 52 gross Since his growing experiences in the Bakken oil fields Breidenstein has been adding more data to his growing portfolio of shale play savings for Texas New Mexico and Colorado Hustling and keeping the innovation percolating Breidenstein believes solving the flaring issue can still allow an opportunity for companies to make money Let s turn 12 per barrel oil equivalent BOE of associated gas into 100 BOE liquids 21st Annual International Prayer Breakfast Oilfield Christian Fellowship Tuesday May 7Th 2019 Crowne Plaza Hotel Kirby 610 Houston Doors open 6 30 aM Breakfast 7 00 aM A Life more Abundant I came that they may have life and have it abundantly John 10 10 TickeTs Individual Tickets 50 Table 500 Table Sponsor 1 000 Gold Sponsor 3 000 Title Underwriter 10 000 scan To RegisTeR Guest Speaker table of 8 table of 8 2 tables of 8 2 tables of 8 Pay by check Oilfield Christian Fellowship of Houston P O Box 5259 Kingwood TX 77325 5259 Pay online www OilfieldChristianFellowship com For more info call 713 899 1675 Rick Muncrief Chairman and CEO WPX Energy Learn more about Rick s vast career by scanning this code Music by Camille Haley TheSisterDuo com About The Oilfield Christian Fellowship The primary ministry of OCF is to share the Gospel and make available custom Bibles God s Word for the Oil Patch to oilfield employees around the world with recipients reading God s Word in their native language Over 300 000 copies are in print in English Spanish Chinese and Portuguese and nearly 7 000 other Bibles in 52 languages have been hand carried to 69 countries To learn more about the OCF and how you can become involved go to our website at www oilfieldchristianfellowship com 501 c 3 nonprofit Oilman Magazine March April 2019 OilmanMagazine com 39

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OILMAN COLUMN The Revival of Oil Rigs and Platforms through Reefing By Tonae Hamilton In our oceans stand hundreds of massive oil rigs and platforms While many of those oil rigs produce millions of barrels of oil there are many other oil rigs that have been abandoned In the Gulf of Mexico alone sits 27 000 abandoned oil rigs With many abandoned oil rigs in the sea there has been much debate about what is the best way to handle them Although there are many ideas for how abandoned oil rigs should be handled one of the most popular yet often controversial ideas is to transform them into artificial reefs Turning rigs into reefs can provide many benefits to marine ecosystems with marine life gaining additional homes Blue Latitudes an environmental consulting firm that provides ecological solutions for the offshore industry has been engaged in the process of transforming rigs into reefs through decommissioning processes Their mission is to provide an alternative eco conscious solution to the complete removal of oil rigs by utilizing reefing Through reefing they plan to support ecologically valuable ecosystems while promoting the economic benefits to state and oil company stakeholders Emily Hazelwood and Amber Jackson co founders of Blue Latitudes shared the ins and outs of their rigs to reefs project how reefing has progressed and why it should be greatly considered in decommission initiatives as opposed to the complete removal of oil infrastructures When asked how reefing has progressed over the past few years in the Gulf of Mexico Hazelwood and Jackson shared that in 2018 532 offshore oil and gas platforms were converted into artificial reefs in the Gulf of Mexico Most of these artificial reefs were created from platform jacket structures in water depths shallower than 600 ft said Hazelwood and Jackson Hazelwood and Jackson further explained that the presence of oil and gas structures has not been limited to just the shallower coastal waters of the Gulf of Mexico and thus the possibilities of deepwater decommissioning of oil rigs have also been explored Since the late 1970 s deep water production in the Gulf of Mexico has continued to grow steadily and with it the placement of a variety of subsea infrastructure in water depths ranging up to 7 000 ft or more explained Hazelwood and Jackson Hazelwood and Jackson expressed how decommissioning in the deep sea has presented 40 Photo courtesy of PICHIT BOONHUAD www 123RF com new challenges to the traditional methods of complete removal and has ultimately forced the industry to seek an alternative such as reefing In order to entertain the potential to reef infrastructure in deep water environments the ecological impacts and long term sustainability of these structures will need to be addressed developing new industry standards for deep water decommissioning explained Hazelwood and Jackson Hazelwood and Jackson were then asked why it is important to consider reefing in decommissioning projects They explained that with the considerable expense and technical challenges attributable to decommissioning advanced and effective planning for decommissioning that includes a reefing option may ultimately benefit oil and gas stakeholders financially Selecting a decommissioning option like reefing can help streamline the platform removal permitting process address health safety and environmental concerns and serve to better align the oil and gas industry with regulatory and public stakeholders expressed Hazelwood and Jackson Hazelwood and Jackson further described how some platformtype reefs support a permanent fouling sessile community which is critically important to the surrounding fish community providing both Oilman Magazine March April 2019 OilmanMagazine com food and shelter The fouling community can contribute a constant stream of organic matter to the base of the platform at the seabed laying the groundwork for greater habitat diversity and energy transport within the platform ecosystem Hazelwood and Jackson further explained Hazelwood and Jackson were then asked about their rigs to reefs project and how they ensure it is handled properly They explained that establishing a platform specific ecological baseline is critical when collecting evidence of the potential immediate and long term ecological value to the marine communities when decommissioning platform structures The most effective way to evaluate the ecological value associated with oil and gas infrastructure is to develop a baseline understanding of the associated marine life through a combination of available scientific and observational data and planned biological surveys explained Hazelwood and Jackson As Hazelwood and Jackson further explained rigs and platforms that are transformed into reefs can help marine populations mix and reproduce thus increasing genetic diversity which can help fish and coral species become more resilient to changes in the marine environment

Oilman Magazine Mar/Apr 2019

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