At Chevron, Digital Technology Spouts Gusher of Savings

The oil and gas giant is networking its fields across the globe.

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"That single example is probably about a $4 million savings," he says. "And this kind of thing happens over and over and over again."

In a similar situation, when machinery at the company's enormous Sanha oil and gas field off the coast of Angola in Africa showed subtle signs of an irregularity, a Houston support team was the first to notice. Once again, the savings from potential damage and lost production were in the millions. There's also a safety aspect to the technology, which enables Chevron to quickly identify hazards that personnel on the ground might not see.

The combination of falling sensor prices and improved computer processing power and bandwidth has made the technology more cost-effective and attractive, Chevron's Siegele notes. As digital oil fields progress, sensors are being added to more types of equipment and are being used to gather a wider range of information, resulting in higher-quality statistics, says Jacobs, the analyst.

There has also been a marked improvement in the transmission of this content from the field to central offices, as fuel companies shift from satellite transmission, which can be sluggish due to limited bandwidth and latency, to fiber optics, which is more "reliable and robust," Jacobs adds. By comparison, in the pre-digital oil field days, less information was available, and the data that could be gathered was often assessed on-site based on experience and hunches, "rather than bringing this back and looking at it more holistically," he says.

For now, the i-field remains a work in progress. While Chevron already conducts computer simulations with employees, Siegele says it's developing a prototype based on computer games that could take the experience to another level. "This is more virtual walking through a three-dimensional space, and opening and closing valves, reading gauges," he says. Oil rig operators could train on new platforms before they've been built.

Also under consideration is the use of cameras at remote Chevron facilities to zoom in with precision on gauges, pipes, and tanks to conduct quick diagnostics when employees are not readily available. For now, these ideas are in their infancy—a lot like the digital oil field was a decade ago.

Corrected on 06/12/2012: A previous version of this article incorrectly identified the location of Chevron’s headquarters. They are in San Ramon, Calif.