This week, we are pleased to introduce John Parsons. John has over 35 years of experience in the Oil & Gas industry. John was VP of Engineering at Varco (now NOV), and has worked for some notable companies such as Baker Hughes as director of engineering, Dresser Rand as General Manager, and is currently the President & CEO of PML Exploration Services. PML provides mud logging services for oil & gas companies in the United States. It offers one and two technician mud logging services, remote mud logging services, and digital recording services. The company was formerly known as Petroleum Mud Logging, Inc. and changed its name to PML Exploration Services LLC in November 2006. The company was founded in 1964 and is headquartered in Oklahoma City, Oklahoma. John has introduced innovation and modernization to a traditional industry by utilizing an IIoT application for servicing its customers.
Real-time Gas Analysis in the Cloud (Case study with PML)
Real-time Analysis for Oil and Gas Drilling (Webinar with PML)
Q: I’ve always admired your knowledge of the oil and gas business. For those who aren’t as familiar, can you explain what your work in mud and gas analysis entails?
The term ‘mud logging’ refers to the muddy slurry that is carried up to the surface in the drilling process. This mud can then by analyzed to let the driller know what they’re drilling through so they can make decisions about whether to adjust their drilling process or continue on. This began as a simple process, but we quickly found out that it’s useful to know other parameters, such as how fast they’re drilling, what speed the bit is turning at, or how much weight is on the bit. This can also help determine the rock composition of the soil. It’s also a safety precaution, as it allows you to look at gas percentages and decide whether to weight the drilling fluid or mud, or take any other actions to ensure the safety of the crew while drilling the well.
Mud logging generally requires about 20-30 sensors, a gas chromatograph, a gas analyzer, and a lot of rig equipment to bring the data back so it can be analyzed for the client.
Q: There is a lot going on in the oil and gas industry with gas prices so low. How would you describe the climate today?
The industry has always been pretty cyclic, and we’re certainly in a downturn right now. Right now, the pricing for oil is below the cost of finding and extracting it the USA, so most producers in the US are either breaking even or even losing a bit of money right now. Once the supply evens out with demand as the world economy picks up we expect prices to improve again, but that may not be for another six months to a year.
Q: Do you think that with fewer dollars to spend in the oil and gas business that technology will play a stronger role?
When the US energy companies started looking at shale and fracking for gas and oil, they has costs up in the $80 and $90 range per barrel. Now with technology they’ve managed to reduce that to about $40 a barrel and sometimes even less. That’s all because of the technology that’s been developed in the last ten years. To be able to produce oil at $30 a barrel, clearly more technology is required. For our piece of the puzzle we’re certainly working on reducing costs on our side.
Q: PML has a very innovative solution for mud logging. Why did you decide to use a cloud-based system?
There were four reasons. One was to reduce operating costs. If we can see our systems over the internet we can make sure they’re working properly, we can recalibrate them, and ensure the customer is getting the service they’re paying for. Second is that we wanted the capability to be the lowest cost provider when margins drop like they have. Being able to price aggressively is important. Third, we want to make sure the data integrity is good. And last, there’s significant advantage to having the data available all the time, anywhere. That makes the wells safer to drill, and lower cost as well.
Q: what network infrastructure did you use to collect data from the remote sites, and why?
We use spread spectrum technology to gather data from the sensors. We don’t get as much time to rig sensors around the rig as we used to, so our new system is a wireless one. We use satellite links and cell phone modems to get the data from the rig back to the server. Today there is better cell coverage, so a majority of our systems are using cell modems.
Q: what is your typical ROI for your customers, and how can it be measured?
There are two measures. One is fairly simple – if a rig costs X amount of dollars per day and we can save them X amount of hours per day we can offer a clear ROI. Because of the quality of our gas analyzers they can decide whether to drill ahead or not. One of our major customers has told us that we’ve saved them much more than an hour per day on average on their wells.
The other calculation is more complex. This involves taking the data in their large database to evaluate the field. The quality of our data helps them evaluate where to drill the next well. That’s information that they don’t share with us, but the fact that they keep using us for gas analysis suggests that the ROI looks pretty good.
I think many people thought that mud logging would go away, but it’s a powerful thing to be able to look at the rocks and be able to determine where in the structure you are.
Q: How were the wells monitored before installing the cloud-based monitoring system? What advantages does the new system offer?
We used to collate the data on pieces of paper and fax it to them twice a day. That moved up to a digital log that we sent at the end of every shift, or every 12 hours. This allowed them to make some decisions about how to proceed. But by providing the information on a real-time basis they can look at it whenever they want to and if anything happens on the rig and they want to evaluate the situation and determine how to proceed, they can do so with a full set of information.
Q: What is the advantage of using an off-the-shelf SCADA/HMI package instead of building everything from scratch?
There are three advantages. The first is that we go to market much faster than if we’d built the entire thing ourselves. Two, it allows us to focus on what we know and understand, such as the wiring and networking aspects of the equipment itself, rather than the HMI tools. It allows us to have a smaller, more focused workforce, and also allows us to remain current in the industry without worrying about the software we’re using not being able to keep up with changes.
Q: What advantages do you offer over competitors?
We provide a more accurate service – our gas analyzers are probably the best in the industry right now. It’s taken us a few years to get there, but the quality of our data services is much better. Thanks to our network availability we are able to provide systems that are extremely reliable. Out of all the days of logging last year, we only had one outage for about two hours. I don’t think anyone else comes close to our reliability in the industry.
And because we can analyze our systems in real-time, if anyone needs maintenance, we can check out the rig remotely, and we know exactly what we need to do ahead of time. We also use software for predictive maintenance, so we usually pull systems out of circulation for maintenance before the client is even aware that they need overhauls.
Because we’re more reliable and more efficient, and because we’re not sending people out to maintenance the rig every day, our price point is significantly lower as well.
Q: How do you predict the oil and gas industry will change in the next ten years?
On the field end of things, I think the rigs will be far more automated with fewer people on them. The information we will be able to provide to the large oil company databases will be more comprehensive, and give them a better feel for what to do with their fields before they start drilling. This will also bring lower costs as well. There will be less waste in general.
Q: What do you think that customers will expect from HMI/SCADA products in the future?
Because of the complexity of the data going into datasets now, they’ll want more standardization in the way data is transferred.
Q: What advice do you have for someone entering this industry, and what advice would you give to yourself ten years ago?
If you want to get into the oil and gas industry right now, focus on Engineering. That’ll be the key going forward. It’s a highly technical industry.
For myself, I’d say that we should have focused more on technology so we’d be further ahead of the competition.