ZYFRA: Paving the way towards a digitized energy sector

ZYFRA: Paving the way towards a digitized energy sector

/ News & Interviews / Tuesday, 23 July 2019 10:08

For two years now, ZYFRA, a digital solutions company, has been active not only in the oil and gas sector, but also in mining, machinery, metallurgy, etc. To know more about its services and the importance of a digital spirit in the energy sector nowadays, Energy Review was able to conduct an exclusive interview with Igor Bogachev, Zyfra Group CEO.

What is ZYFRA’s main field of work and what are the main services the company offers?

Zyfra was established in 2017. It develops digital solutions for businesses in a variety of industries, including mining, machinery, metallurgy, oil & gas, etc. Zyfra’s solutions are used in predictive analytics and data analysis, process optimization, monitoring of industrial equipment and personnel. For all these areas, we have ready-made industrial solutions.

In oil and gas, Zyfra has developed several AI solutions for upstream to solve the most pressing production problems in this area. We realize that only an integrated solution could meet the customers’ needs. That is why our solution, Zyfra AI Oilfield Development & Production, allows optimal management of the field in terms of short-term and long-term recovery profile and balance of costs and benefits.

Another Zyfra’s cutting edge solution, called AI Artificial Lift, already works on hundreds of wells, providing significant improvements in oil flow without increasing production costs.

For metallurgy, we automated industrial safety management system VG Safety, industrial safety management and automatization of the tasks system, predictive repairs and maintenance of equipment and appliances, personnel positioning system, and collision avoidance system Orlaco. For miners, Zyfra also has several solutions, including intelligent mine and robotic railway transport for industrial enterprises.

How is ZYFRA digitally transforming the oil and gas sector through its services?

At Zyfra, we believe that the operational challenges we face today can only be addressed through the digital transformation of the oil and gas industry using IIoT, Big Data and Artificial Intelligence approaches, which is why we have focused on providing digital industrial solutions for exploration and production.

According to BIS Research, it is expected that by 2023 the volume of global IoT in the oil and gas market will reach $39.40 billion, growing by 24.17% from 2018 to 2023. The market growth will be driven by deployment of automation, control systems and sensors to manage IoT applications, BIS Research says. The Research Insights gives a similar forecast. By 2026, IoT in oil and gas industries will contribute more to the global economy than any other industry, and during this period the IoT In oil and gas market will be growing by 22% annually.

Zyfra offers advanced and cost-effective AI-based solutions for drilling and extraction operations (e.g., well placement, hybrid geosteering, geomechanics and petrophysics, HF design, and optimal control and predictive analytics to optimize multi-well production).

For the oil and gas sector, we have developed a system based on machine learning technology that consists of electrical submersible pump (ESP) software unit that uses AI to recommend different modes of well operation. Prior to that, the calculation of the optimal operating modes was done manually by the engineers and changed every three months.

The software used in Zyfra’s new solution analyses vast amounts of data on historic oil well production, and compares this against current key operating parameters, including the guarded oil flow rate, current frequency and levels of intermittence in the pump’s operation. From this it determines the mode the well should be operated in at any given time that is likely to produce the most oil in a set period. The technology has already been tested at 500 oil wells in western Siberia, Russia, over the course of three months. It has so far proven highly effective, boosting production by 1.5% and leading to additional profits of $2m.

More than 4000 wells – ranging from 500 m sidetracks to 6 km horizontal wells - have been drilled with Zyffra’s GeoNaft software tool. GeoNaft allows for a 5-7% reduction in non-productive drilling time, while improving in-zone drilling by 40% compared to conventional tools.

Zyfra offers a big portfolio of software products for production process management (MES) in continuous industries. Initially, these solutions were developed to meet the stringent requirements of manufacturing industries, such as refining and petrochemicals. The software creates intrinsic value for production by identifying areas of production where arbitrary losses occur, and prompts management to address inefficiencies.

In our experience, the introduction of a mass balance solution at refineries enables to reduce arbitrary losses by 1-1.5%, or about $4 million per year. Zyfra is anticipating considerable interest to its products, particularly in Russia, the US, Canada, Southeast Asia, Northern and West Africa and the Middle East.

What is your view regarding the oil and gas sector in the Middle East and North African region and is the company planning on any future partnerships in this market?

Zyfra was established in 2017, and it took us less than a year to enter the international market, in Europe, Asia, Africa and Latin America.

The MENA region, which is the biggest producer of crude oil in the world, is also one of the largest investors in the most advanced digital technologies and AI-based products. There is an understanding both on the level of the government structures and on the level of the oil business that without implementing AI-based technologies, the country and its oil and gas sector will lag far behind the competitors. Everyone is now striving to optimize production processes, reduce costs and increase profits.

Digitalization affects not only the oil and gas sector, but also other industries of the Middle East and North Africa economies, as can be seen from the enormous number of conferences on the subject and analytics from the biggest consulting companies. Saudi Arabia, the UAE and Qatar seem to invest most in digital technologies and AI-based products. But since there is government support behind these investments, all the countries of the region have relevant programs and investments. Recently, a study on these countries was published by PwC, and its analysts estimated that by 2030, artificial intelligence will earn Saudi Arabia 12% of its GDP, and the UAE - 14%.

The market potential and interest to AI-based products in the Middle East is enormous. Zyfra is in the process of negotiating cooperation in the field of high-precision horizontal drilling. We have a product that ensures the accuracy of oil drilling up to 30 cm. We are very interested in entering the oil market in the Middle East and we think we could claim a 10% share of the horizontal drilling market.

You recently inked an agreement with Gazprom Neft to develop digital products. How important are such alliances to the energy sector in order to offer the best services?

In June, Gazprom Neft and Zyfra signed an agreement to develop digital products for the industrial sector. We will work together to develop products in the areas of integrated planning, operational planning and record keeping at oil refineries, monitoring and product quality control. We hope that in the future this initiative will be of interest to both Russian and foreign companies from the oil and gas sector and producers of chemical products. Their main advantage will be technological innovativeness and their proven economic benefit in the form of substantial resource savings and lower losses.

In your opinion, what are the central challenges the oil and gas industry is facing nowadays?

I would divide the challenges and risks that the oil and gas sector faces into those where digital technologies and artificial intelligence are powerless and those where they can change the situation for the better. We all know that the situation in the global oil and gas sector is highly dependent on political factors, and in many oil-producing countries, and on the relationship between business and the authorities, but that there is no point in discussing what we cannot influence.

Let's talk about where AI can help oil and gas companies solve their pressing problems and increase their competitive advantage. AI is useful for predicting equipment failures, reducing drilling risks in seismically unstable areas, reducing the consequences of man-made disasters, distance logistics and monitoring hard-to-reach areas and helping customers to choose a particular product.

We all remember the April 2010 Deepwater Horizon oil platform accident, when more than 10 people died and 5 million barrels of oil spilled into the Gulf of Mexico. AI-based tools can help prevent such situations. There are robots equipped with the edge-cutting software that monitor the condition of pipelines located on the ocean floor and report potentially hazardous areas. In hard-to-reach areas, oil companies are using drones to conduct, for example, geo-exploration.

In earthquake-prone areas, AI will analyze huge amounts of data to ensure accurate drilling and reduce the risks that can result in large financial losses. Another opportunity that AI offers is predictive diagnostics of equipment. Real-time equipment monitoring and analysis of the data stored in the cloud make it possible to notice changes that are followed with 99% frequency by equipment failures.

Finally, the new technologies help customers buying oil and gas products to choose what they need from thousands of characteristics.

Ultimately, the use of AI-based technologies will lead to cost savings, process optimization and improved operational efficiency. However, all this is possible with cloud storage only. But all major oil and gas companies have already taken this step, often in collaboration with IT giants.

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