Smarter Planet     Leadership Series          Repsol:          Discovering the          Benefits of Smarter Oil          a...
geologically complex. What all of its drilling options had in common was the                Sub Salt Wellun Express       ...
orchestrator of solutions was essential as his team sought to pull together the elements of a winningstrategy. Most eviden...
that for a project like Kaleidoscope, which was aiming for a clear shift in our exploration model,we needed out-of-the-box...
Repsol’s management saw its faith in Kaleidoscope amply rewarded. The most obvious measure                                ...
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Repsol: Discovering the Benefits of Smarter Oil and Gas Exploration

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Optimizing the most advanced
seismic algorithms for its new
HPC solution enabled Repsol
to run them in one-sixth
the time. The resulting edge
in both increased seismic
mapping accuracy and shorter
time-to-action has made it not
only more agile competitor but
also better at measuring the risks
of deep water drilling. Its 50%
success rate is well above the
industry average of 20%. This
case study examines Repsol’s
calculated gambit—and how it’s
paying off.

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Repsol: Discovering the Benefits of Smarter Oil and Gas Exploration

  1. 1. Smarter Planet Leadership Series Repsol: Discovering the Benefits of Smarter Oil and Gas Exploration For Francisco Ortigosa, Director of Geophysics for Madrid- Leadership based Repsol, being transferred to Houston—arguably the “capital” of the oil industry—was an important milestone, Spotlight Spearheaded by Francisco akin, he jokes, to an actor going to Hollywood. It was 2001, Ortigosa, Director of Geophys- and Ortigosa, whose previous stints included time in Egypt, ics, Repsol has embarked on a groundbreaking strategy that Colombia, Venezuela and Russia, had embarked on an employs highperformance important mission. His company had resolved to expand its computing (HPC) like no other energy company had before operations into the Gulf of Mexico and Brazil. One important it. Repsol is achieving deeper aspect of his job was to observe what the crowded field of insights on drilling risks and opportunities, while gain- competitors in the gulf was doing right and to take away ing the agility to act on them lessons that Repsol could apply in its own operations. faster than competitors. How Repsol Got Smarter In the ensuing years, one clear lesson came across was that Optimizing the most advancedimitation—being a follower—was a path to be avoided. Such was the consensus seismic algorithms for its new HPC solution enabled Repsolof the multidisciplinary task force that Ortigosa led comprised of experts from to run them in one-sixthRepsol’s research, production and other key business areas. The discussion the time. The resulting edge in both increased seismiccame to a head in a particularly decisive meeting, held in Houston in 2005, mapping accuracy and shorterwhere Ortigosa laid out a simple, but compelling calculus. “We realized that every time-to-action has made it not only more agile competitor butincremental step we took would be matched by our competitors. As late entrants also better at measuring the risksinto the Gulf of Mexico, that means we stay behind our competitors,” Ortigosa of deep water drilling. Its 50% success rate is well above theexplains. “Our breakthrough was the realization that we needed to take two steps industry average of 20%. Thisfor their every one and ‘leapfrog’ the competition.” case study examines Repsol’s calculated gambit—and how it’s paying off.Looking For Tomorrow’s GrowthRepsol’s decision to expand from its primary, land-based properties (in North Africa and SouthAmerica) into the Gulf of Mexico and offshore Brazil reflected its need to replenish declining reserves.To find substantial new reserves—in an era when all the “easy oil” has been discovered—Repsolrecognized that its best options lay far offshore, in fields that were not only deeper but also more Let’s Build a Smarter Planet
  2. 2. geologically complex. What all of its drilling options had in common was the Sub Salt Wellun Express 300 prevalence of salt domes, mushroom-shaped layers below the ocean floor Salt Well feet 300 ft. left behind by the evaporating of ancient seas. While salt domes provided the perfect structure for trapping large oil 1,250 ft. 1250 deposits, they also exemplify the trade-off between opportunity and risk that feet characterizes major oil finds in the post-easy-oil era. In addition to the inherent challenges of deep water exploration, finding deposits below the salt layer is made more difficult by its crystalline structure, which adds a great deal of The Benefits of Repsol’s “noise” to seismic imaging data. Getting the kind of detailed picture of sub-salt Smarter Drilling conditions that lessens the risk (and $150 million cost) of drilling a dry hole • Increase in drilling success rate to 50%, compared to requires oil companies to run powerful imaging algorithms—requiring lots of industry average of 20%, high-performance computing resources—to filter out this noise. The fact that through improved ability to quantify drilling risks few oil companies had successfully tapped sub-salt deposits attests to the • The savings from only one difficulty of meeting this challenge. avoided “dry” well ($150 million) are equivalent to eight Jumping Ahead In Exploration times the money spent to develop Project Kaleidoscope. That’s where the need to leapfrog comes in. Repsol’s leadership realized that as • 85% reduction in time30,000 ft. a relatively small player in a field of global energy giants, the company needed required advanced reverse time migration seismic algorithms a competitive edge, to develop capabilities that other oil and gas companies • Faster time to market for didn’t have. In the Gulf of Mexico, that required edge was speed—the ability new oil and gas properties by to process complex seismic imaging data faster than competitors, thus giving shortening the seismic data analysis phase Repsol the accurate and detailed information it needed to secure reserves • Reduced risk in bidding for 30,000 feet earlier than its competitors. Off Brazil, Repsol was ahead of other oil majors in offshore oil and gas leases attempting sub-salt drilling, the main challenge was to find and map deep sea drilling opportunities 2035 with a level of detail that had not been possible before. This would require new models and a 2007 quantum increase in the power of Repsol’s seismic algorithms. In his 20 years with Repsol, Ortigosa’s role has always been centered on finding and evaluating opportunity below the ground. He believes, however, that along the way, the subtleties of how he executes this role have evolved—with the sub-salt project a powerful case in point. “My job In under 30 years, global is to be a spark that provides a trigger for inspiration among a diverse group of perspectives so energy consumption will that we can synthesize their best ideas into an effective strategy,” says Ortigosa. This role as an increase by 50%
  3. 3. orchestrator of solutions was essential as his team sought to pull together the elements of a winningstrategy. Most evident was the need for a new level of computing power to enable the speed andimaging insights that would give Repsol competitive edge it needed to succeed. Leadership is: Orchestrating aEpiphany From Barcelona Diverse Set of Inputs In his 20 years in geophysicsThe project’s turning point came when Repsol was approached by parallel processing experts from with Repsol, Franciscothe Spanish-government-owned Barcelona Supercomputing Center (BSC), who outlined the benefits Ortigosa’s role has always been centered on finding andof optimizing Repsol’s reverse time migration (RTM) algorithms to run on IBM’s Cell Processor, evaluating opportunity belowan architecture first developed to run graphics-intensive video games. The BSC team specifically the ground. The sub-salt project highlighted how his jobpointed out how the PowerXCell 8i’s multicore processing architecture was especially well-suited to has evolved along the way,RTM’s specialized processing demands, and how IBM Research—through its expertise in optimizing with Ortigosa acting as a “sparkplug” to spur problemalgorithms to run on the Cell platform—could help maximize their performance. This meeting of the solving among a diverse groupminds was the genesis of an initiative that came to be known within Repsol as Project Kaleidoscope. of problem solvers.The vision embodied by Project Kaleidoscope constituted a fundamental change in Repsol’sexploration strategy, one that elevated the role of high-performance computing to top-tier strategicimportance. Adopting it required the team to sell the business case to the company’s senior Lessons Learned:management as well as the Board of Directors. With the business case laid out before them—driven The importance of Seeking a Diversityby lower risk, improved drilling success rates and a strong prospect of finding the long-term reserves of OpinionRepsol needed—management was excited. Nonetheless, there was a clear recognition among senior “We realized that for a projectmanagement of the underlying risks of going head-to-head with established competitors, especially like Kaleidoscope, which was aiming for a clear shift in ourin the Gulf of Mexico. But in the end, the company saw the prospect of success as significantly exploration model, we neededoutweighing these risks. out-of-the-box thinking in every dimension. Looking back, weSuccess Through Diversity see the diversity of our team— with people on both sides of the Atlantic—as a major reasonOne important reason for Repsol’s confidence was the depth and breadth of support the company for project’s success.”would rely on through key strategic partners. In addition to BSC and IBM, Repsol would also leveragethe resources of Stanford University’s Stanford Exploration Project (SEP), an academic consortiumfocused on creating more advanced 3-D and 4-D seismic models. In lining up institutional resourcesfor Project Kaleidoscope, Ortigosa was following a clearly defined strategy—that is, to maximizethe diversity of perspectives in order to provide the richest and most groundbreaking set of ideas.“Advancing seismic imaging to the next level of precision poses a multi-disciplinary challenge,demanding the best minds from industry, government and academia,” explains Ortigosa. “We realized
  4. 4. that for a project like Kaleidoscope, which was aiming for a clear shift in our exploration model,we needed out-of-the-box thinking in every dimension. Looking back, we see the diversity of ourteam—with people on both sides of the Atlantic—as a major reason for project’s success.”Today, Repsol’s strategic vision is realized in the Project Kaleidoscope’s high performance computinginfrastructure, located in Houston and running on a cluster of 288 IBM BladeCenter QS22 bladeservers and supported by a large network of IBM TotalStorage storage hardware. After experts fromBSC and IBM worked to optimize Repsol’s complex seismic algorithms for the IBM PowerXCell 8iprocessors at core of the solution, the Project Kaleidoscope infrastructure can run these algorithmssix times faster than Repsol’s previous computing platform, reducing a cycle that once took fourmonths to roughly two weeks.Insights Yield Payoffs The Parameters of Repsol’s Smarter DrillingWhat Repsol has effectively done is to radically shift—if not break—the trade-off between theaccuracy of seismic imaging and the all important variable of speed. Now Repsol has both. This has Instrumented Seismic sensing data capturedprovided exactly the competitive edge its planners conceived, an edge that has yielded measurable by Repsol is run through powerfulbenefits. Perhaps the most telltale metric is to 50 percent success rate Repsol achieved in the most algorithms that have optimized for maximum performance.recent year (considerably higher than the industry average) which signifies the company’s abilityto understand and manage drilling risks better than competitors. This enables Repsol to not only Interconnected Project Kaleidoscope’s high-avoid the time and capital lost on dry wells, but also to more accurately gauge and more effectively performance computing clustercapitalize on major of discoveries. This impact was seen in Repsol’s decision to purchase a major delivers a six-fold increase in processing throughput over thestake in the deepwater Shenzi field in the Gulf of Mexico, now one of the world’s largest offshore oil- previous platform.producing areas. The fact that Repsol was able to map the Shenzi field before any other companies Intelligentgave it valuable insights that it was able to take advantage of and position it favorably for future By rendering complex subsurfacedevelopment. structures such as salt domes in greater detail, Repsol can substantially curb drilling risk,As mentioned above, the powerful business case Ortigosa and his team presented to Repsol’s resulting in fewer dry holes and lost opportunities.senior management was an important factor in the company’s decision to go ahead with ProjectKaleidoscope. But it wasn’t the only factor. During the time Ortigosa and his team were assemblingthe business case, Repsol was also experiencing major personnel changes at the top. This includedthe appointment of Antonio Brufau as Executive Chairman, who was known to be open to embracingtechnology. Ortigosa explains: “Given the direction we wanted to take, we saw the change inmindset—the openness to new ways of doing business—as an ideal situation.”
  5. 5. Repsol’s management saw its faith in Kaleidoscope amply rewarded. The most obvious measure The Makings of Success…was the fact that the project came in on time and within budget and produced an impressive streak Receptiveness at the Topof exploration successes. On the broader stage, the magnitude of Repsol’s achievement was The powerful businessfurther underscored by the recognition it received from industry observers, including the Commercial case Ortigosa and his teamTechnology of the Year award at the Platts Global Energy Awards and being named one of the presented to Repsol’s senior management wasn’t thefive most innovative projects worldwide by the Institute of Electrical and Electronics Engineers in only factor in the company’s2008. Most recently, Petroleum Economist magazine named it the Energy Company of the Year for decision to go ahead. The fact that it coincided with a shiftembracing technology in all areas, from exploration to refining to investigating new sources of energy, in executive attitudes towardas well as in looking for more efficient ways of using the finite resource that is oil. technology—and “a new way of doing business”—created a favorable environment for the breakthrough approach that the team was proposing. Leadership is… Successful “Leapfrogging” For more information Please contact your IBM sales “The Kaleidoscope Project has had a profound representative or IBM Business Partner. impact, not only for the results it has obtained, but Or visit us at: because it has created a new trend in the manner ibm.com/chemicalspetroleum in which innovation is viewed within our industry.” Francisco Ortigosa, on how Kaleidoscope has changed the way the industry thinks about explorationAsked what the future holds for the oil and gas exploration industry as a whole, Ortigosa sees morechallenging environments—deeper and farther offshore—as a trend that will continue, with Repsol’srecent major deepwater finds off West Africa and Brazil good examples. To meet these challenges,Repsol is developing even more powerful algorithms that will take advantage of the advancedhigh performance computing capabilities that underpin Project Kaleidoscope. With that approach,Ortigosa sees Repsol leading a trend that others in the industry are likely to follow. “The KaleidoscopeProject has had a profound impact, not only for the results it has obtained, but because it has createda new trend in the manner in which innovation is viewed within our industry,” explains Ortigosa. “Withthis project we truly are inventing the future.”© Copyright IBM Corporation 2010 IBM Corporation 1 New Orchard Rd. Armonk, NY 10504 U.S.A. Produced in the United States of America January 2010 All Let’s Build a Smarter PlanetRights Reserved IBM, the IBM logo, ibm.com, BladeCenter, PowerXCell, System Storage and TotalStorage are trademarks or registered trademarks of International Business MachinesCorporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol(® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered orcommon law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Othercompany, product or service names may be trademarks or service marks of others. This case study illustrates how one IBM customer uses IBM products. There is no guarantee ofcomparable results. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.

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