Digitalization in the Oil and Gas Industry

It describes the transition from an industrial age characterized by analog technologies to an age of knowledge and creativity characterized by digital technologies and digital business innovation. It is a generic term for the Digital Transformation of society and the economy, or should I say “Digitalization”? The explosion in the development of digital technologies during the past few years is beginning to change the way we work, and these technologies are likely to shape the future of the oil and gas industry over the next decade. 

The recovery in oil prices following the dramatic fall in 2015 spurred many operators to re-evaluate the potential of Industry in their workstreams. With business already disrupted, companies were more willing to consider new ways of working. And once some businesses begin investing in newer technologies and processes, others are forced to follow suit or risk being left behind in the following three to five years. In a 2017 survey, nearly 40% of oil and gas companies said they were worried about the risk of being left behind if they didn’t continue to invest in digital transformation programs - with 70% saying they planned to invest more in new digital areas over the following three to five years

Companies involved in oil extraction and processing are now facing significant risks caused by Covid-19. The International Energy Agency reported that oil demand shrinkage as oversupply worsens the price crash; oil prices have decreased by around 50% since January 2020. These challenges are exacerbated by the lack of analogous events in the past and require resilience planning and organization flexibility from the industry players. Some experts see digitalization as a “magic pill” that may provide companies with the tools needed to move through the crisis. But what are the key digital technologies and how can they be applied within the oil and gas industry?

Artificial Intelligence and Automation

Artificial intelligence (AI) is a wide-ranging branch of computer science concerned with building smart machines capable of performing tasks that typically require human intelligence. AI is an interdisciplinary science with multiple approaches, but advancements in machine learning and deep learning are creating a paradigm shift in a lot of industries. The potential applications for artificial intelligence and automation in the oil and gas industry are vast, from surveying and continuous monitoring to planning and forecasting and improving safety. High-risk environments such as an offshore rig or production facility can benefit from the use of both autonomous robotics and autonomous system monitoring to replace human presence in such high-risk locations.

There are many interesting applications for AI and automation such as inspection of offshore assets which we can use data gather by AI and synchronize it with an active database linked to maintenance scope and schedules accessed through a 3D representation of the platform, freely accessible to all. Then a key action can be automatically generated and sent to the personnel required to perform the actions. This type of AI and automation increases safety by reducing offshore time for personnel and by automatically flagging potential safety concerns and recommending action, whilst also reducing operational costs due to downtime and efficiency savings.

Data Analysis

The oil and gas industry produces a huge amount of data such as seismic surveys, drilling data, production data, or the monitoring of production and processing facilities (pressure, temperature, flow rate, etc..). So a new challenge has come to the scene after increasing our ability to generate, gather and store this data. Analysis of such a big quantity of data has been a major area of focus and innovation in the last decade. Research projects have covered applications in exploration, drilling, reservoir engineering, and production engineering. Some examples include the analysis of huge micro-seismic datasets, the utilization of big data analysis to optimize steam-assisted gravity drainage and cyclic steam operations on a heavy oil reservoir by analyzing data from over 14,200 wells in Chevron’s San Joaquin valley fields and optimizing the performance of electric submersible pumps (ESPs) by using data from over 200 million logs from 1,649 wells during a single year. 

The Internet of Things

The internet of things or ‘IoT’ describes the extension of internet connectivity between physical devices and everyday objects. Embedded with electronics, internet connectivity, and other forms of hardware such as sensors, these devices can communicate and interact over the internet where they can also be remotely controlled and monitored. In the oil and gas industry, we can use IoT devices and sensors to provide us with real-time data on equipment, pipelines, storage, operations, and employee safety. So it is a little surprising to see that the industry spends billions of dollars in leveraging IoT. Applying IoT technology can help companies to effectively maintain equipment and detect equipment breakdowns before it occurs. This leads not only to enhanced productivity with less downtime but also results in an improvement to the bottom line. In addition, this has the advantage of removing the need for physical presence and inspection in unsafe environments.

Mobile Devices

Bringing integrating mobile devices into daily operation is a big challenge to oil and gas companies so they spend a lot of money to make it realistic and efficient. This integration will improve communication, increase workers' productivity, and record better field data. Mobile technology also allows for real-time data monitoring via specialized software on smartphones and can have a positive impact on health, safety, and the environment (HSE). Companies have improved employee safety by using smartphone GPS coordinates to track workers in hazardous situations. Deploying mobile applications in combination with radio-frequency identification tags is making assets smart and their movements visible.

Drone Technology 

In the case of drone technology, this could have huge benefits in terms of monitoring and inspection of both inaccessible and/or dangerous oil and gas facilities. With the use of drones, visual inspections of such facilities can be carried out remotely, with high-quality images fed back in real-time to drone operators. Multiple facilities can be inspected within a matter of hours rather than potentially days if inspections are carried out in person. This type of drone inspection can then identify genuine issues and problems and direct teams to deal with them immediately, improving efficiency by focusing on those facilities that require immediate attention. Also with the help of drone technology, we can perform difficult-to-reach and dangerous inspections like inspecting offshore flares, this type of physical inspection can require production shut down before it can be performed.

Digital transformation cannot work without a transformation at the core of the business, from the people to the processes and technology. While there are challenges to digital transformation in the oil and gas industry, partnerships with tech specialists such as Microsoft will have a significant long-term impact on the oil and gas industry, helping companies digitally transform and implement connected technology into all facets of the organization. These technologies help organizations become agile, adaptable, and cost-efficient enough to survive in the current economy and continue to thrive long into the future.