Four Digitalisation Trends Transforming Operational Efficiency in Oil and Gas
Written by Stuart Gregg
We highlight a number of the most prominent digitalisation trends - some of which can be immediately adopted.
The oil and gas industry has been experiencing a number of acute problems in recent times. The COVID-19 crisis has exerted extra pressure on oil prices and reduced demand on the back of the carbon neutral agenda.
At the same time, the locations of reserves are becoming more difficult to reach which in turn increases the costs of extraction. These factors are forcing companies to seek savings in operational efficiencies and find ways to reduce the costs of exploration. Thankfully, new technological developments present a myriad of ways through which efficiencies can be sustainably gained.
Digitalisation is at the heart of technological transformation, and large parts of the oil and gas industry have already been improved by a transition to a digital-first approach. However, there is still more progress that can be made. The leading industry players are dedicating themselves to pursuing a digital strategy that improves efficiency, safety and sustainability.
Here, we highlight a number of the most prominent digitalisation trends - some of which can be immediately adopted.
Between 2016 and 2018, 90% of the world’s data was generated. The amount of data generated within the oil and gas industry reflects this. Machinery is now equipped with a wide array of sensors that generate numerous data sets. Analysis of these data sets can reveal areas where efficiencies can be gained, but as the amount of data increases so does the amount of computing power necessary to analyse it.
Traditionally, most data storage and analysis has been managed on-site, but the increasing amounts of data and the computing power needed are making this method more expensive and less efficient than the alternative. Increasing data means continually increasing storage capacity. Rather than happening at an on-site level, it can be uploaded to off-site cloud-based storage. This allows capacity to be scaled up without the expense of providing more on-site storage. The same goes for the actual computing of the data. By using a cloud-based computing system, the computational power can be increased without needing to install more on-site hardware.
BP is one of the world leaders in terms of moving to cloud-based solutions, having recently moved to close its European data centres and moved its operations to Amazon Web Services. It is a progression of its policy to house as much of its data as possible on the public cloud. As well as increasing efficiency and saving costs, moving to a cloud-based system increases sustainability. Amazon is making increasing use of renewable energy to power its storage and computing systems.
As with many industries, increasing automation in the oil and gas industry is seen as both an opportunity and a threat. Automation has the potential to decrease costs, increase efficiencies and improve sustainability and safety - but it also has the power to remove the human aspect and therefore eliminate jobs.
The key areas in which automation can have the most impact are in drilling operations, and diagnostics and inspections. Drilling is one of the costliest processes in the energy industry as well as one with the most safety risks for workers. The traditionally manual parts of the process, such as pressure drilling and pipe handling, can be automated. This reduces the safety risk for workers and speeds up the process at the same time.
Automation in machine diagnostics and asset inspections involves using drones or submersibles to undertake various tasks. As drilling locations become more remote and difficult to access, the use of these methods become even more appealing. Drones and submersibles can be used to monitor and inspect drill locations remotely with operators residing far away from the sites. This replaces traditional methods such as helicopters which are costly and inefficient. Companies such as ExxonMobil, Chevron and BP have all been early adopters of drones, utilising the tech to gain an edge.
The ultimate aim is to have a fully automated oilfield that is operational without the need for human labour - therefore de-risking operations and reducing life cycle OPEX expenditure.
Artificial intelligence, IoT technology, sensors and data analytics all work together to enable more accurate and timely assessments of when machinery will require maintenance. The previous method of maintaining machinery in the oil and gas industry revolved around planned maintenance - the machinery undergoes regular scheduled maintenance based on the number of hours it has been in operation. This can lead to over maintaining assets which in turn, results in further failures, production deferments, reduction in the asset’s lifespan and a rise in the overall lifecycle OPEX costs.
In predictive maintenance, the convergent technologies can detect when machinery is in need of repair or close to the failure point. This can result in fewer episodes of downtime as the asset notifies you when attention is required, rather than on a fixed schedule that is likely to be highly inefficient. The use of predictive technology improves safety, reduces supply chain costs, maximises inventory management and increases production rates via machine availability. Machine sensors work in conjunction with AI and machine learning to spot patterns and detect faults before they become critical. This helps to prevent dangerous accidents and avoid catastrophic events that can lead to spillages.
Most of the major oil companies are using predictive maintenance in their operations, and technology is expected to evolve further.
Compared to more traditional types of manufacturing, 3D printing is still relatively new. It currently accounts for just 0.1% of the global manufacturing market, but this share is going to keep increasing along with the size of its market value. Some estimations put the size of the 3D printing market at $32billion by 2025 and $60billion by 2030. More and more industries will start incorporating 3D and additive printing, and the oil and gas industry is certainly one that can stand to benefit from its use.
There are three main benefits that 3D printing can bring to oil and gas companies. The first is the ability to manufacture spare parts on-site When a piece of machinery breaks down, it leads to costly downtime. Waiting for a manufacturer to send a replacement part can delay this even further. By printing replacement parts on-site, this downtime can be minimised. A barrier to this process is the fact that equipment manufacturers prefer to manufacture and supply spare parts themselves to avoid other companies trying to make the same parts at a lower price or quality. One solution would be for OEM companies to license the rights for printing components to an oil and gas company, allowing for one-off printing or printing for a specified time period.
The second benefit of 3D printing is the ability to create prototypes at a much faster rate. These prototypes can then be used to establish proof of concept and to test before moving on to full-scale manufacturing. Shell used this exact technology in the development of its Stones deepwater project to 3D print a prototype of a piping system. This prototype was then used to demonstrate the system for the US authorities in order to gain permission to build and use it. GE Oil and Gas has also been using the technology to 3D print parts for its plant in Italy.
Finally, 3D printing will also enable oil and gas companies to reduce the inventory of spare parts that they need to hold. These take time to procure and so companies often keep a stock level of parts for future use. 3D printing can eliminate this by allowing parts to be printed as and when necessary - therefore dramatically reducing wasted investment that sits on a shelf waiting to be used.