The oil and gas industry is evolving in the digital age but many producers, especially the enterprise ones are aggressively catching up. Their antiquated operational processes have already begun to lag behind in this modern age of rising efficiency and high labor costs. Those companies that have resisted change know they need to move fast in the race to intelligent, connected oilfields. But since many are still nursing their failed attempts, there are inhibitions. 2019 will be a make or break year for oil and gas firms to invest in connectivity, big data, and the IoT, or risk dropping out of the race entirely.
Accenture's 2017 digital trends survey for the upstream oil and gas industry revealed a key finding, “companies fear that not keeping pace with the rate of change will make them non-competitive.” Nearly 40 percent of respondents said they were worried about the risk of being left behind if they don't continue to invest in digital programs. The trepidation comes from past failures, bad technology vendors, and a lack of technical knowledge. There is no dispute though that digitization must still happen.
The Accenture survey also discovered that more than 70 percent of companies plan to invest “more'” or “significantly more” in new digital areas such as high-performance computing, wearables, artificial intelligence (AI), robotics, blockchain, and virtual reality over the next three to five years. Others, meanwhile, still haven't successfully deployed a network of sensors or field automation that will generate the data for the entire system to sustain.
Sensors or SCADA systems can be embedded to monitor well health and attached to legacy systems or equipment to gather and analyze for real-time visibility of dynamic oilfield components. This continuous stream of information is analyzed by big data engines to create actionable insight throughout the operation. Adding AI can speed processes, improve efficiency, and offer an accurate prediction. The field will not be tied to routes and constrained with paper-based manual processes. Workers can focus on what needs attention as they get equipped to pump by exception leveraging digitization of systems and processes, Mobile devices deliver information to field workers through user-friendly apps that save time and instantly share updates with the back office removing opacity in communication.
That will be the new standard level of digitization in the oil and gas industry in 2019. While the most progressive firms may be starting their development of blockchain, robotics, and virtual reality, others are still at the beginning of their digital journey. For all companies, that digital journey starts by generating data. Data is the new oil, and automation instrumentations are the new pumps.
Improved Operational Efficiency
According to Rigzone, the oil and gas industry will be facing more labor shortage in the next couple of years as the Baby Boomer-aged workers begin to retire and there are fewer people with industry expertise to assume the vacant roles. This along with looming labor shortage would pose the biggest challenges to oil producers looking for growth in oil-rich regions like Permian. The only way to still meet the growth and expansion plans without overshooting G&A is to make each field worker double the productivity and that means flawless field efficiency. And here comes the need to make a concerted move towards digitized connected oilfield that pumps by exception. AI, Big Data, Cloud and Mobility drive this evolution. “Big data analysis and remote visibility will help companies better manage their assets and use their findings to optimize production. Leveraging the capabilities of Industrial Internet of Things (IIoT) can reduce troubleshooting time from days to minutes, which leaves more time to spend on other operational aspects of the business.”
More For Less
The oil and gas industry is not immune to the cyber-physical revolution sweeping across every other industry. In fact, data is crucial for the success of the oil and gas sector more than most because it generates greater accuracy and efficiency, aiding each worker to deliver more. When every field worker is attending to the most critical task on priority, the field saves time and effort that translates to more oil for less cost. Even small improvements to oilfield efficiency can make a notable financial impact.
With IIoT integration, equipment health and production volume can be captured in real-time. The field workers get prioritized alerts on their mobile devices based on their proximity to the incident. The seamless integration of various systems, SCADA, ERP, Production Accounting and legacy software ensures allows for intelligent workflows that ensure both field and office are on the same page. The ability to integrate all systems data in one platform not only provides real-time visibility but saves up to 40% time every day for each field worker translating in value worth millions of dollars.
The oil and gas industry has a major impact on global GDP. According to Oxford Economics, industry-wide adoption of IoT could increase the global GDP by as much as 0.8 percent, or $816 billion over the next decade. “With lower oil prices being the new normal, profit margins have tightened and oil and gas companies must take this opportunity to invest in innovative technologies rather than conduct knee-jerk cost-cutting.” The financial gains of cost reduction and the time saved will be invaluable as the market landscape becomes even more competitive.
Those leading the digitization race are already benefiting from the advantages of an intelligent, connected, and mobile oilfield. As they accumulate more and more data they are able to achieve greater and greater levels of efficiency and productivity, allowing them to stride ahead of the chasing pack. The sooner firms start leveraging data the greater the benefit. Predictions suggest that the oil and gas industry will invest heavily in digital in 2019, leaving just a minority of “old fashioned producers” behind. What is your company's digital strategy for 2019?
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