The global upstream oil and gas segment has been suffering an unprecedented downturn for more than two years, which has seen CapEx reduced by well over $500 billion since the summer of 2014 and over 100 companies have gone bankrupt. However, ARC believes the longer-term outlook for oil and gas prices is still attractive as less industrialized countries continue efforts to grow their economies and meet the expected long-term increases in energy consumption in the coming years. As more owner-operators, independent E&P firms, and related stakeholders embrace the new “lower for longer,” margin-compressed environment, an increasing number are expected to resume their investment in intelligent pumps. Intelligent pumps can help lower costs, enhance production, improve recovery, and ensure more efficient operations with fewer experienced personnel. This is a vital investment that can translate into material ROI and continued survival.
ARC Advisory Group defines “intelligent pumps” as the combination of a pump and a variable frequency drive (VFD) with digital control capability. The latest generation of intelligent pumps can support energy management, application-specific algorithms, and pump OEM-specific application programs. At the same time, the term intelligent pumps is broadening to include the sensors that collect data and transmit pump system performance. While many companies focus on areas such as HVAC systems and motor retrofits, it is clear that pump system upgrades provide the largest energy savings potential. According to the U.S. Department of Energy, intelligent pumping offers the potential to add as much as 20 percent to an owner-operators bottom line. OEM’s can also often add extra value and differentiate their offerings by customizing their intelligent pumps to meet the unique requirements of specific end users.
Many operators deploy conventional time-on/time-off pump controls to prevent a pumped-off condition from occurring. These controllers stop the pumpjack for a predetermined period to ensure that fluid is available before restarting the lift. Although simple to operate and adjust, they do not ensure maximum production recovery and only work as a safety mechanism to prevent damages caused by pumping a dry well. Process efficiency can be improved with an intelligent pumping solution that employs a VFD to provide pump-off control by varying the speed of the well and maintaining an effective fill level. Efficiency can be further improved by using information about the condition of the well to optimize the pump speed.
The elements of an intelligent pump system include a VFD to control the pump motor speed; instrumentation to detect well conditions; and an embedded controller to operate the well, read the instrumentation, calculate an optimized speed command for the drive, and provide host communication. A fully optimized pumpjack system (aka rod pump) is not only more productive but also has higher availability and longer equipment life. Most of the wear and maintenance issues associated with pumpjack operation are reduced as the optimized system automatically reduces operating conditions that cause undue wear (i.e., fluid pound, gas compression). Optimized wells also require much less human intervention because the optimization adapts to changing conditions in the well automatically. Cases have occurred where the maintenance-related downtime for a pumpjack system has been reduced by as much as 80 percent. While that may not be typical, it shows how some of these systems running open loop are hurting the equipment.
Such a system employs a scalable, modular, and collaborative architecture that leverages intelligent pumping solutions and the capabilities of modern information technology to deliver actionable information directly from a well to the field’s central control station. This real-time data can prompt better and timelier decisions that improve production, and ultimately, shift the paradigm from merely operating a lease to managing it to its fullest potential. Some owners and operators of small-to medium-sized oilfields are less than motivated to make large capital investments in new oil wells. In such an environment, it’s critical to keep existing wells pumping consistently and at an optimum level. In addition to injection methods, intelligent pumping solutions can represent a more scalable investment to maintain and improve oilfield production. Also, the network connectivity provided by telemetry equipment can provide data for personnel to conduct operational assessments, including costs and payouts, to extend and maximize oil field performance.
ARC conducted an in-depth investigation in the market for Intelligent Pumps for the Digital Oilfield which provides extensive market analysis and forecasts. For more information on this and other available ARC market research, please visit our Market Research and Studies section.