A case study shows that oilfield data technology can bring striking efficiencies.
Traditional wellsite logistics data collection is limiting and needlessly expensive. A more efficient logistics solution was required. Innovative, cost-conscious, and safety-oriented oil companies and trucking companies such as Continental Resources and Wind River Oil Services operating in North Dakota's Bakken shale play recognized the need to change the model. Long-standing traditional processes, inefficiencies, and new requirements were discussed and analyzed. The resulting, fully-integrated system is live, proven, and game changing.
Situation
Oil companies and the trucking companies that serve them have been utilizing a paper-based system of data collection using paper run tickets for many years. Dispatchers organized their tasks either on paper, whiteboards, or sometimes in simple spreadsheets. The system worked in the sense that the majority of the data were collected. Loads were recorded and measurements taken using manual means. Load volumes were based on universal strap sheets, despite the fact that tanks varied slightly in size and shape. A 400 bbl crude oil tank rarely contains precisely 400 bbls. It may, for example, contain 403.09 bbl. The standard strap sheet immediately introduced inaccuracies by assuming all tanks contained precisely 400 bbl.
The few times software was used in the oilfield industry it was logistics software that had been written primarily for Over The Road (OTR) carriers rather than the types of loads being run in the oilfield. Problems that faced one part of the oil and gas supply chain were encountered to one degree or another throughout the supply chain. Not only were trucking companies affected, so also were the E&P companies, the Crude Oil Marketing Companies (COMC), the rig handlers, terminals, and others. Trucking companies would have to audit and manually enter data from hundreds of paper tickets a month. Those hundreds of paper tickets were then sent to their oil company customers who then had to manually process thousands or tens of thousands of paper tickets every month. The expense and inaccuracies were huge.
A few of the weaknesses of the traditional system studied included:
• Paper run tickets, which tend to be error-prone and often suffer from legibility issues because drivers are not all excellent writers. As a result, paper tickets often require transcription as well as reconciliation. In addition, the time between writing a ticket, delivery to a pusher, delivery to the office, and transcription can be more than a week and often more than a month.
• Vehicle tracking. Some methods of tracking are available, but they do not accomplish enough. For example, load stages are not included. Communications and instructions, if they exist, are insufficient for drivers and dispatchers. Also, the relationship between wellsite – crude oil hauler – terminal needed to be indicated. "Ghost loads" have their own negative implications, including wasted driver and vehicle time and inappropriate handling of loads.
• Time stamps. Accurate time stamps are needed but unavailable. Wait times need to be known in real time. Delays need to be addressed immediately rather than after the fact, and wasted time and effort need to be reduced or eliminated.
• Administrative reconciliation. Manual handling of handwritten run tickets is inefficient and time consuming. Illegible tickets often lead to compounding errors. These errors are often subject to financial penalties. Delays in reconciliation lead to delays in invoicing, which leads to slower cash flow.
• Efficient safety awareness and regulatory compliance. Electronic On Board Recording (EOBR) and e-logs required specialized equipment purchased from additional vendors. Driver Vehicle Inspection Reports (DVIR) were paper-based, labor intensive, and also required multiple pieces of equipment and vendors.
• Time-delayed data is expensive. Command and control is lost. Problems are not solved in real time. Rather, they may be addressed a month or more after the fact. Wait times are recorded rather than re-allocated. And, finally, opportunities are lost due to lack of complete situational awareness.
Objective
The goal was to improve efficiency, timeliness, lower costs, and increase the accuracy of the entire process, not only for the trucking companies, but for the oil companies providing data upstream and receiving data downstream. Problems that had plagued the oil industry for decades were discussed, addressed, and resolved.
An innovative solution had to be found to address both the trucking companies' and oil companies' concerns for greater efficiency, accuracy, and timeliness. Communications and start-up costs needed to be kept as low as possible in order to provide an efficient and cost-effective solution.
Qv21 Technologies' business leaders and developers, specialists in utilizing technology to help companies increase efficiencies, engaged with the largest crude oil marketing companies and oilfield services trucking companies to explore the possibilities of streamlining the entire system.
Solution
The result is a cost-effective solution that eliminates a wide range of inefficiencies throughout the supply chain. Working with Continental Resources, Wind River Oil Services, LT Enterprises and others in the Bakken, Qv21 Technologies developed an innovative, affordable yet advanced system that is easy to use for both trucking and oil companies alike – The LogisticsFramework™.
Well and tank data are retrieved from the oil companies using the technology. These data are then made available for use by the trucking companies. When a driver arrives at a wellsite, his in-cab handheld device already has all the details about that well; the tanks on site, the actual tank sizes and unique strappings, the tank IDs, and accurate tank names. When entering gauges, the volume of oil is accurately calculated based on the strappings provided by the oil company. No manual calculations need to be performed by the driver, and there are no longer approximations from a standard tank size.
Data entered by the driver are immediately transmitted back to the trucking company. Dispatchers know not only exactly where drivers are, but what they are carrying, when they arrived at a shipper or receiver, when they are expected to arrive at their next destination, what they have done that day, and what they are scheduled to do that day. Drivers, dispatchers, and managers also are aware of the drivers' duty status, Hours of Service (HOS) and vehicle inspection status through digitized and automated EOBR and DVIR modules. All of this is in real time.
Equally, data is now immediately available to the oil companies. Real-time reports are auto generated and sent to the oil companies so that they know volumes by destination, well, time period, month to date – virtually any criteria required. This enables management to make time sensitive decisions about production and oil movements without having to wait for the trucking company to assemble and send over reports in email.
Critically, the data loop is fully closed. As soon as the trucking company has confirmed loads are accurate, electronic tickets are transmitted to the oil companies – in a format that can be directly imported into back-end marketing or other ERP systems. Data imports can be further automated by direct submission to backend systems using web services and other machine to machine (M2M) technologies.
Paper tickets are still produced, but they are produced from in-cab, Bluetooth printers. They are legible and accurate every time, and as many clear copies as required can be generated. Photographic images of third-party tickets can be captured and automatically correlated to the respective data line item, enabling custody transfer as well as fast, accurate run ticket reconciliation.
The LogisticsFramework™ utilizes readily available Android-based smartphones or tablets as the in-cab device. The solution is, therefore, ideal for a company running leasers or owner-operators. Custom hardware does not need to be installed in a truck that the trucking company does not own, and the devices are inexpensive. Leasers working for multiple carriers can use the same Android device to log into each carrier system. One device allows for full integration with multiple carriers.
The technology not only solves the issue of in-cab hardware, it also solves the issue of start-up costs. The solution is provided as Software as a Service in the cloud. This means that companies do not need to worry about expensive start-up costs for servers or server licenses. Companies can begin using the system immediately. Qv21 takes care of all the hardware and software in their Tier One, secure data center. Companies only pay for what they use. Billing is on a per active truck per month basis – and fully prorated to provide as much flexibility to the client as possible.
Importantly, this is not a web application. It is a full application with all the rich functionality and performance that brings. It makes dispatching simple, accurate, and fun.
Conclusion
The data is live now to one of the largest oil producers in the Bakken region, Continental Resources, as well as trucking companies hauling crude, water, and other commodities. This represents a low-cost solution that adds immediately to profits and efficiencies in a wide variety of ways. Trucking companies, E&P companies, marketing companies, and others benefit from the improvements. E-ticketing. Real-time situational awareness. An end to waste and duplicated efforts. Those are just a few of the benefits of efficiencies achieved through the use of these logistics solutions.
About the author
Bill Biewenga is chief operating officer of Qv21 Technologies LLC. He has written numerous articles about how data can be applied to improve efficiencies.
