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New frontiers for digital solutions in the produced water space

Digital solutions providers are poised to benefit as producers attempt to adapt to the new operational and financial realities wrought by the continuing pandemic and low oil price environment.

Since the current oil price downturn began, the pace of upstream infrastructure development has slowed everywhere, with the shale sector particularly hard-hit. While producers and water services companies are hesitant to deploy capital, investment in digital solutions that can help them remain competitive will continue to be appealing.

Digital services are not new to the shale sector, but offerings have evolved alongside clients’ changing needs. Companies such as SitePro started out in the produced water space by providing automation solutions for disposal operations, later expanding into other areas of fluid management such as chemical dosing, water transfer, remote control, real-time monitoring, measurement-as-a-service and digital ticketing.

These technologies have resulted in better process control, safer operations and more precise management of consumables, all while reducing costs and increasing efficiencies. With COVID-19 pandemic restrictions now complicating upstream operations and low oil prices forcing widespread budget cuts, the case for adoption is growing stronger.

“The desire to digitize as a way to save money and be more efficient is very high right now across both services providers and producers. Three years ago, we were at four on a scale of 1-10, and as of Q4 2020, we’re at nine because of layoffs in the industry,” William Fox, chief product officer of software company Data Gumbo, told WiO. “Every process has to be redesigned to be more automatable and have fewer touches.”

Blockchain breakthrough

Digital services providers continue to develop advanced technologies to further optimize key aspects of onshore produced water management. One example is Data Gumbo’s GumboNet blockchain network, which uses data gathered by third-party digital solutions such as electronic field tickets and tank levels to execute smart contracts.

“The smart contract, which is agreed to by both sides, establishes rules and prices, then consumes field data to produce charges,” Fox explained. “One block equals one charge or one invoice. Each block contains all of the field evidence and calculations to form an immutable, transparent and auditable record that is guaranteed to match across parties.”

Not only does Data Gumbo’s system identify and flag irregularities for human review, thereby cutting down on paperwork and expediting dispute resolution, but it also saves producers money by using verified field data instead of manual inputs – which are prone to human error and often reflect estimates rather than exact numbers – to calculate bills.

“There’s hard cost savings in the form of removing contract leakage,” Fox said. “Accurate volumes mean you only pay for the volume that really moved, and not the rounded up volume on the ticket.”

Data Gumbo has proven the benefits its blockchain technology can bring to the produced water sector through several water-hauling projects. Most notably, the company piloted GumboNet with Blockchain for Energy (a consortium of 10 producers formerly known as the Offshore Operators Oil & Gas Blockchain Consortium) and Nuverra Environmental Solutions at Equinor-operated wells in the Bakken Shale. The pilot resulted in process workflow reductions from 90-120 days down to 1-7 days. DataGumbo has also recently started new projects in the Bakken and Marcellus plays.

Coordinated approach

Another software firm looking to revolutionize onshore produced water management is Canada’s recently formed Galatea Technologies. The company’s web-based platform, dubbed Waste Coordinator, targets minimized operating expenditures by improving various aspects from scheduling and dispatching loads to selecting the lowest-cost waste facilities and best routes. The platform combines customer cost data with Galatea’s algorithms to establish a total cost for every load.

Similar to Data Gumbo, the company’s software can be integrated into various elements of producers’ operations to collect information such as tank volumes, which can then be used to schedule pickups from well sites. Waste Coordinator also automatically creates digital manifests that include information about water volumes and quality, as well as anticipated delivery times, allowing disposal operators to know what to expect for incoming loads. As soon as hauling and disposal receipts are uploaded to the platform, producers can review and approve invoices or immediately investigate anomalies that have been flagged by the platform.

“The end of every month is a scramble for accounts payable teams. There’s so much error in the documents,” Will Grisdale, sales and marketing leader at Galatea, told WiO. He added that that by digitizing receipt and payment information, producers and services companies can avoid paperwork hassles and compress transaction times, leading to significant time and cost savings.

With the prevention of production bottlenecks being producers’ top priority, important details regarding how third parties manage produced water once it is dispatched from the wellsite often go unnoticed. Water haulers’ decisions about transport logistics can lead to less-than-ideal routing, protracted wait times at disposal facilities and high disposal fees, resulting in excessive costs for producers.

“People are either too busy or don’t care, or – in a lot of cases – they’re technologically averse and like the way they currently do things. However, with the status quo, you get very little transparency and it’s very hard to audit the decisions that were made,” Grisdale said.

He explained that Waste Coordinator considers various data points such as road and weather conditions, distance, load size and service fees to route water haulers to the best disposal destinations. Producers that prefer to bid out water-hauling contracts can also analyze the data collected by Galatea’s platform on every load to negotiate agreements.

Since launching Waste Coordinator in July 2020, Galatea has secured both commercial and pilot projects in northwestern Alberta and southeastern Saskatchewan. The company is also in talks with a major shale producer to roll out a pilot first in the Bakken Shale, then potentially in the Marcellus Shale and Permian Basin.

As Galatea grows, it hopes its technology can facilitate a collaborative water marketplace for the oil & gas industry. Some possibilities Grisdale sees are the sharing of excess producer-owned disposal capacity and produced water for reuse in hydraulic fracturing operations. Both of these ideas center on producers using Galatea’s platform to identify which of their local peers has what they need, how much is available and at what price.


New vision for water handling

Galatea Technologies

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