As I am sure you know the Oil and Gas industry is experiencing significant challenges as a result of the oversupply in the market and the resulting sustained decline in prices. While prices have recently moved up, the consensus is that the current environment will persist over the next year or so.
The logical response to this environment is of course to improve financial and operating performance. However Oil and Gas is a mature and conservative industry, and there are limits to how quickly the more traditional approaches to process and technology innovation can or will be developed.
I know that there have been many articles about how digital technology can transform our industry, but I have recently been challenged to articulate my thoughts on the subject so I decided to add my own, so here it is! Let me know what you think!
Digital technologies do offer many possibilities for realising major operational efficiency and I look at a number of these below. Any one of the technologies below could potentially streamline some part of existing processes. Implementing an appropriate set of them together that makes sense for your organisation could be truly transformative, but of course requires significantly more than just a technology roll out. I will talk more in another post about my thoughts on how companies can approach this challenge.
Many of the world’s largest technology companies have been increasing their focus on the digital agenda in the industry, including Schlumberger, GE and IBM among others, all looking at the potential of the convergence of information and communication technologies with more traditional operational technologies. The industry typically has considered IT as non-core technology and this is often reflected in organisational design. This is changing slowly as the industry understands that data and analytics, cloud-based services, and the industrial Internet of Things (IoT), will be significant enablers for the progression of automation into capital-intensive operations, and the expansion of remote operations centres with their increased reliance on connectivity both at the wider organisation and asset location levels.
Secure connectivity is a fundamental requirement for a digital transformation and will make the difference between success and failure. Connectivity requirements should be part of initial framing sessions for new projects and should forecast growth in data traffic over the projected life of the project.
The costs of oil industry capital projects are enormous but unfortunately as an industry we have often struggl the appropriate level of engineering information and ensuring an effective hand over to operations. Building Information Modelling (BIM) has huge potential for the industry to improve the process of creating and managing digital information related to an asset. It brings the possibility to identify potentially costly project delays with advanced 3D/4D modelling as early as possible. High-resolution animated “fly-through” video can be used to provide incredibly realistic project reporting. The information within these models can then be integrated into the workflow process during all project stages, from design, to detailed design and construction. The models can then be maintained, updated and used as a digital base for ongoing operations and will then enable a lot of the widely circulated use cases for mobility and augmented reality.
One big potential area for improving operational excellence is in the supply chain, especially in the areas of materials management, improved asset management and logistics and increased collaboration with suppliers. The potential for more effective inventory and logistics management tools supporting high quality real-time data and dispatch information can make a huge difference in improving how supply chain decisions are made, detecting and resolving any scheduling conflicts. When you know the location and status of each piece of equipment in your plant you can begin to know whether they are being utilised as called for in your activity plans and offer the potential to digitise and streamline processes such as the order and delivery of spare parts efficiently to the field.Cloud based information systems shared with suppliers also offer potential for improving collaboration across the industry.
Many companies started their digital oilfield programmes with the introduction of collaborative work spaces, and once the industry understood that this was not just a technology play they have delivered a step change for how field staff interact and work with HQ staff. There is significant potential to grow the capability and scope of these spaces into more complete environments that support not only day to day interactions of staff but monitor the complete operation including such aspects as tracking drilling operations, supply chain and logistics, support vessels or vehicle scheduling and movement, even going as far as tracking people especially in hazardous environments.Providing continuous insight like this through a central operating centre can enable the ability to coordinate the many moving parts of the complex system that is an operational asset into one of greater efficiency, allowing for quick decisions to be made where required for the whole operation. Optimum use of data, information and analytics will only facilitate this.
When improved connections are integrated with sensor technology, then we can begin to start eliminating the barriers of distance and vision. Video streams will become much more designed in, while connected sensor technology is becoming more ubiquitous and intuitive to use every year. So as long as you are able to securely architect the underlying data systems ,these solutions will enable you to predict when critical parts for critical infrastructure will need maintenance and automatically supplying the parts (as discuss above under improving the supply chain – think Amazon Prime for technical equipment) to a platform, minimizing delays and unplanned shutdowns.
Safe and environmental sustainable operations are rightly a major focus of all operators. IoT developments will have significant impact on safety through the likely growth in wearables, or “smart clothing.” The sensors in these garments will provide the ability to both monitor a worker’s physical condition and the current environment in which they are working while at the same time support their work. Robots and drones will have the ability to eliminate hazardous operations such as those in confined spaces but also provide regular surveillance capabilities not available today. Remote monitoring and robotics are beginning to change the way that the industry can approach process safety risk and the opportunity for risk mitigation through moving people out of the field.
Data analytics offers the promise for companies to begin to truly know and understand their data, to be able to see the information that is embedded within the data and gain valuable insights that then can be used to make key decisions. Capturing the right raw data is the first step in wielding the power of analytics and is a key enabler of any digital transformation. The next steps include storing the data, making it accessible to the right people at the right time, and analysing it. Finally, that analysis has to be communicated to those in decision-making positions, so they can use it. The best approach is a company business priority driven effort to embed big data analytics throughout your planning, exploration and production phases. Real-time visibility and tracking of assets can be compared against key operational metrics but can also against models that leverage historical data allowing for predictive analysis. One of the potential strengths of analytics is that it can uncover previously overlooked correlations and causal relationships.However taking advantage of your data and the power of analytics requires a data strategy, and significant effort and focus, which will be the subject of a later post.
Cognitive computing is the simulation of human thought processes in a computerised model and involves self-learning systems that use various techniques to mimic the way the human brain works. There is significant potential for the use of cognitive computing in the industry and a number of companies are already doing some very interesting things especially in the area of knowledge management and accessing the vast amount of unstructured data a company holds.
Of course all the above applies not just to Oil and Gas, so there is significant opportunity for different industries to learn from each other. If you have got this far I both thank and applaud your perseverance and please let me know what you think I have missed.