Well monitoring and surveillance is the process driver for most of what counts as intelligent operations. Permanent monitoring of the production well bore and closely associated processes and infrastructure provide fundamentally better understanding of the well and reservoir.

For operators, well monitoring and surveillance reduces uncertainty and speeds up analysis time as well as improving diagnostics and enhancing employee safety. This system is thus a prime enabler for optimizing intelligent production operations.

"The oil industry paradigm has been very much driven by the subsurface modeling required to support a business," said Pieter Kapteijn, smart fields program manager for Shell Exploration Production. "Thus, we have spent an awful lot of time building the right geological model, doing the seismic interpretation, looking at uncertainties and at sedimentary processes to form the best possible description of what we thought was down there. And then we have decided where to drill the wells.

"However, we believe that you really need to complement that approach with a much more active monitoring and control effort because the real-time response of your reservoir tells you something about what is down there. Not only that, you can enhance that with 4-D seismic so that, for instance, you can actually look at the flood front developing through the field.

"We found that by adding pressure sensors and by adding control, you actually introduce a much higher density of data coming from the reservoir, and that helps you reduce the uncertainty bands you have around your reservoir model."

The resulting process, he noted, is faster than the traditional method of viewing and interpreting production logs and then updating the model, steps that together have a long cycle time.

"So we're looking at a hybrid approach where we still rely on superior subsurface modeling - static and dynamic - but enhance that with real-time dynamic surveillance," he said. "We can thus much more quickly hone in on the true performance of the reservoir rather than merely attempting that on a sample basis, a yearly basis or by guesswork."

Satish Pai, vice president of technologies for Schlumberger Oilfield Services, said, "We have a Production Center of Excellence in Oklahoma that's monitoring production data coming in from many, many wells in the area. There is a team of production experts who look at this data and ask, 'Why is this well not performing as well as the one nearby, and what can we do to improve it?' We call it monitoring, surveillance and diagnostics. You look at what's happening, examine the data and diagnose so that you can establish a remedial plan to improve the production. So that sort of loop on the production data is starting to take root. When you talk about real-time well monitoring, any artificial lift pump that Schlumberger sells today, for example, is enabled to transmit data in real time, and we offer clients a service called espWatcher that provides this data along with analysis."

As the spread of intelligent wells begets real-time production monitoring, Pai and others concede that data overload sometimes becomes a reality in the industry today.

"As we got into monitoring real-time drilling operations, for example, we had to adapt existing processes. In the past, the guys on the rig would make all the decisions. Today, all the data is coming in to real-time operations centers, and experts are looking at it. So we've needed to put processes in place as to who's in charge and who makes the ultimate decision. What is the role of the person on the rig? What is the role of the experts in the real-time operations center? With all of these processes, it's quite important that you get it right so that the ultimate efficiency gains from the new technology fully materialize.

"In general, it's sad to say, our industry has been quite conservative in embracing any new technology, and we've been slow to adapt to this new real-time, digital sphere as well. But the good news is that in the last 2 years, this technology has been taking off, and there is a very interesting correlation. The number of young people who have come into our industry in the past 2 years has been more than in the previous 10 combined. And these new people are, as you would say, a new generation. They are quite comfortable with technology, with computers, real-time data and multitasking, and they are starting to have an impact on the way we work."

During the past 5 years, the most significant advances in the monitoring business that Doug Meikle, Halliburton Energy Services Group vice president for the Landmark and Project Management product service line, has seen have been downhole electronics and overall system reliability.

"The dramatic increase in reliability expectations, coupled with the emergence of the intelligent well market, has seen significant growth in 'primary sensors' installations, predominantly pressure and temperature, for downhole deployment," he said. "Distributed measurements such as distributed temperature sensing, coupled with single-point reference sensors and more sophisticated interpretation software, are increasingly deployed to provide a more holistic view of wellbore conditions.

"Emerging technologies, including downhole seismic, electromagnetics and microgravity, are looking outside of the well bore at formation and fluid properties. This growing suite of sensors will most probably be critical in the future arrangement of competent, functional optimization capabilities."

For Baker Hughes, well monitoring and surveillance has become a core function of the company's production optimization business.

"The optimization process can be described by a 'fast-loop' and 'slow-loop' model," explained Joe Vandeiver, president of Baker Hughes Production Optimization. "The reservoir is developed and optimized in the slow-loop process, where time is measured in months and years. But when you focus on the well bore, the relevant processes and progressions are mainly on a fast loop, where time is measured in seconds, hours and days - maybe weeks, but rarely years. The fast-loop process is critical to optimizing each well that makes up the reservoir. Our focus at Baker Hughes Optimization is primarily the fast-loop process.

"However, while it emanates at the well, it goes back into the reservoir. Monitoring places your attention right at the nervous system of any intelligent well bore. It needs to be one of the first things you do because when it comes to optimizing production, what you don't know will hurt you."

While permanent monitoring was an insignificant part of the company's business a couple of years ago, it has taken on major proportions through last year's acquisitions of Luna Energy, Nova Technology and the remaining 50% of its QuantX Wellbore Instrumentation joint venture.

Using electronic or fiber-optic sensing technologies, permanent monitoring services encompass a range of wellbore variables including pressure, temperature, distributed temperature (with fiber optics), flow, water fraction and fluid density. Further measurements extend to artificial lift and flow assurance functions, including electric submersible pumps (ESPs) and chemical injection programs.

"We are basically doing a health check-up in the well bore with these kinds of technologies, which has huge benefits in identifying and controlling a whole list of problems," Vandeiver said.

Specialist well performance analysts in Baker Hughes's Production Optimization group can compare performance with well models and advise clients about optimal configurations such as choke settings, ESP speed and chemical injection rates.

"The determinations we make are based on our knowledge of the reservoir, the tools and the application at hand," Vandeiver said. "When things don't go according to plan, the well performance analyzer can identify the situation, notify the operator and aid an expert in troubleshooting the problem. We will provide consulting services as needed."

A significant ongoing company project involves monitoring chemical use for a producer in the Rocky Mountains.

"This effort covers hundreds of tanks containing chemicals that are injected at the well bore for de-watering and reducing hydrates," Vandeiver said. "The automated injection program is helping field operations achieve a significant production increase. Monitoring chemical storage with ultrasonic detection, we can keep precise track of tank chemical levels. We transmit the data via satellite and make it available to the customer on a secure basis through our BakerHughesDirect Web site, where the customer can monitor tank inventories and even injection rates in some cases.

"No longer does the customer need to send out personnel to drive hundreds of miles through the mountains in all weather to check tank levels. When tanks need filling, the customer can now generate electronic purchase orders that flow automatically to Baker Petrolite, which replenishes the tanks. Thus, field operations not only achieve cost savings but become safer as well."