Can oil tech increase productivity enough to save the industry?

Posted by Scott Johnson


Thanks to changing consumer and industry behaviours, it's likely that the demand for oil will begin to decrease sharply within 10 years. That means the race is on to improve upstream productivity.

Industry experts and others such as economist John Mills, Robert Gordon and Christian Odendahl have focused on various solutions to the wider global challenge. But productivity improvements, mainly driven by new tech, are doubtless the fastest and best way for individual companies to get themselves ready for this leaner future.

Here are three emerging trends that could help upstream oil stay in business right through the century.

Smart drilling and fishbone wells

According to a report this year by the Bank of America, oil demand could peak by 2030, and then enter decline. They suggest this slowdown will be driven largely by the uptake of electric vehicles. There's not much the oil industry can do about changing consumer habits when it comes to electric cars and trucks, but many believe there is enough slack in the system to ensure that the oil-demand glide path is gentle.

One of the great hopes of the industry continues to be ‘smart drilling', but now it's all about how we can use this group of technologies to help us overcome the challenges inherent in unconventional reservoirs. Gone are the days where horizontal smart drilling was an astounding innovation. Today it's about how to turn high-risk environments into profit and Gazprom have kicked off the new age.

A few months ago they announced they had successfully constructed a horizontal fishbone well, drilling for just 25 days, at one of the most risky locations in the world, the Vostochno-Messoyakhskoye field in the Arctic. Many are touting fishbone wells as the new drilling revolution, one that could eventually prove to be a cost-effective alternative to fracking.

Using data to collaborate and cut costs

It's clearly not going to be enough to find quicker more efficient ways of getting the oil out of the ground. To keep pace, companies also need to cut costs across the board, and potentially combine their efforts.

One of the way is using big data more effectively, and making data available to more people. In an industry renowned for its secrecy, this year one agency made took a big decision. In March this year, 130 terrabytes of North Sea geophysical and infrastructure information was uploaded to a new website by the UK Oil and Gas Authority (OGA).

This National Data Repository aims to, amongst other things: “Facilitate collaborative data interchange between relevant persons, the broader oil and gas industry, academia, and the regulator to encourage economic activity”; and, “ensure that maximum value is derived from petroleum-related information by ensuring the widest possible transparent access.”

There can be no doubt that opening up such a huge amount of data will drive new innovations and technologies. Academics have seized on it, and its value to oil tech companies can't be overstated.

People-tech in the oil business

Traditionally, the oil industry has been people-heavy, and that's not set to change rapidly. In the UK, according to the Oil & Gas UK's 2018 Workforce Report employment was set to rise marginally. But there can be no doubt that the oil and gas industry is losing jobs because many can be done cheaper and more efficiently by technology, including drones and robots. This trend is set to continue.

However, it's quite possible that these job losses will be backfilled by increasing numbers of IT, automation measurement and engineering professionals, and in support services. In the meantime, technology is helping improve the productivity of oil industry employees.

A good example of this is the use of centralised databases that consolidate real-time performance and make that accessible to all employees. That means onsite managers can identify problems incredibly early, and send crews out to the right place, and senior staff back at base and get an overview to inform strategic decisions. More importantly still, this kind of data can help increase safety.

Productivity in the oil industry is a perennial problem, but tech advances are coming thick and fast. Coupled with the industry's determination to bring new tech on board, I think it's likely that we could be predicting the decline of the industry a few years too soon

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