In the News

Do You Know Where Your Frac Tanks Are?

Published in Well Servicing Magazine July/ August 2012 issue

By: Joseph A. Beatty, Telular Corporation

Managing remote assets is mission-critical for the oil and gas industry where high-value assets in far-flung locations are a normal part of business. In an industry scrambling to meet ever-growing demand, cutting-edge asset tracking solutions can deliver a significant return on investment (ROI).  Greater asset visibility will drive more informed decision-making and more streamlined operational processes, enable better record-keeping and billing, and reduce redundancies. For companies that lease and maintain oil and gas equipment such as frac tanks, simply adopting asset tracking units can result in significant labor and fuel savings. In fact, companies can greatly maximize revenues simply by improving management and visibility of oil and gas assets that are often spread out over hundreds of miles or even several states. By providing enhanced visibility, security and increased utilization, a remote asset tracking solution can allow fleets to perform at their standard levels with 10 – 15 percent fewer assets, or potentially expand their capacity by 10 – 15 percent without adding assets.

No longer forced to physically track down assets, companies that use remote tracking are able to cut a significant amount of manhours associated with yard/field checks, asset recovery and ensuring the right asset is available and dispatched to the appropriate job site. This saving grows exponentially when considering the thousands of dollars spent weekly in related fuel costs. For those companies who lease assets such as frac tanks etc., detention billing based on verifiable asset location data suddenly becomes a factor in recovering lost revenue and maximizing capital investments. Over a very short time, having achieved better overall optimization, fleets can recoup the cost of implementing asset tracking and start making more money while simultaneously improving customer service.

The need
Maintaining assets in remote areas over hundreds of miles can be chaotic and expensive. Not only must oil and gas companies send personnel to physically check on assets, but office employees must also keep tabs on all the resources. Poor record-keeping or faulty communications between personnel in the field and those back home can result in costly delays and unnecessary expenditures. This disorganization can lead companies to spend vast resources, man hours and excessive fuel on equipment-chasing. Unable to quickly locate assets, many companies simply replace them or incur unnecessary detention costs — decisions that can leave the original asset sitting in the field unused.

In an industry that’s growing fast to meet demand, technology is critical. Access to a robust satellite network capable of working anywhere gives oil and gas managers the answers they need to get the most out of every resource. With real-time asset visibility, they have the data they need to eliminate inaccuracies and ensure greater asset utilization and maximum capacity. Remote tracking provides information that’s crucial for decisions regarding inventory, equipment maintenance and compliance issues, such as the location, storage and transfer of hazardous materials. The benefits include: (1) global visibility, (2) improved utilization; and (3) enhanced security.

The solution
By using remote, satellite-based asset management solutions, oil and gas companies can keep careful tabs on the location and maintenance status of their equipment. An asset inventory or “site check” can be performed remotely – without expending transportation and labor costs to dispatch a technician into the field to search for units. In addition, these solutions can provide visibility of specific conditions, such as whether a piece of equipment has been subjected to tampering, or how long a particular unit has been in operation. The data asset tracking solutions capture is warehoused in a central location, in real time, so companies can avoid the labor costs of data entry and the potential for human error. All this information can provide insight into possible problems, help prevent breakdowns, reduce unnecessary equipment replacement and maintenance costs, enable operational improvements, extend equipment life and reduce costs related to unneeded trips. Remote asset management solutions improve effectiveness and save money in the following kinds of applications within the oil and gas industry:

Global visibility
Satellite-based systems give oil and gas companies complete visibility, anywhere in the world, without forcing them to rely on multiple providers or service plans. Unlike cellular networks, satellite-based systems can “see” anywhere in the world, even the most remote locations. Asset tracking solutions have been developed to operate even in the harshest environments through ruggedized devices. With this visibility, oil and gas companies have access to centralized, up-to-the-minute data on their resources.

For companies that lease their equipment to others, real-time, global visibility can also enhance billing and customer communications, and raise customer service levels. With asset tracking solutions that record when and whether equipment is in use, leasing agents can know immediately when they need to service equipment, such as pumps, rigs, generators, compressors and frac tanks that need to be regularly emptied and filled. They can also reduce the possibility of disputes over equipment, by being able to share asset visibility information in real-time with their customers.

Both the asset-owning companies and their customers can benefit from this higher degree of efficiency. Getting lost in the paperwork shuffle is expensive, and it hurts customer relations. Visibility means no more misplaced or “missing-in-action” assets, and no more trips to find them.

Improved utilization
The average cost of physically searching for misplaced or unknown locations of assets totals $1.40 or more per mile of travel. Many companies devote 3 or more miles per asset per day performing these manual duties per asset which over the course of a year and thousands of miles, the price of poor record-keeping can exact a heavy toll — well over $1 million a year for a company with 1,000 or more assets. In an industry racing to meet demand, greater visibility helps companies avoid mistakes and optimize deployment and ultimately win more business.

Field safety & asset security
Conservative estimates put the cost of oilfield theft at $1.5 billion or more each year. In addition, the industry is accountable for safely moving and disposing hazardous materials. Both issues point to the need to maintain a high-degree of security and safety for assets in the field. With features that include anti-tampering and maintenance monitoring, remote asset management technology can deliver real-time information that can help companies track and quickly recover stolen equipment. It also provides companies awareness of dangerous situations, track the movement of materials and provide visibility and transparency to regulatory bodies. The information companies glean from remote tracking solutions can help them meet and exceed regulatory requirements, as well as prevent issues such as theft, outages or equipment failures. It can also prompt rapid response or recovery of assets if problems are detected. The safety of oil and gas crews, the public, the environment and equipment all benefit from better asset visibility.

Many benefits from remote asset tracking
Staying competitive in the rapidly growing and complex trillion-dollar energy supply chain is anything but simple. Whether leasing a frac tank in the shale fields of the Dakotas or operating an oil well in the Alaskan tundra, energy companies confront many challenges of maintaining operations in remote locations in a high-stakes, competitive market. Equipment theft and downtime cost millions of dollars every year and can put operations in jeopardy. Remote asset tracking makes managing oilfield equipment more efficient by reducing the amount of time and money wasted searching for misplaced resources. The location of high-value equipment can be known at all times, in all places – allowing companies to secure and optimize every asset.

ABOUT THE AUTHOR: Joseph A. Beatty, president and CEO of Telular Corporation is a telecom industry veteran with over 25 years of experience. SkyBitz, a wholly owned subsidiary of Telular Corporation, is a leader in global remote asset management solutions, and in providing real-time information on the location and status of assets.

Link to full article in Well Servicing Magazine.

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