Oil and Gas Sector

Digital transformation in the Oil and Gas Sector

Industries today are rapidly accelerating technology adoption, with the immense potential of digital transformation fueling these efforts. The oil and gas sector too is no exception to this pattern. From the pandemic-induced disruption to the increasing demand for clean energy sources, the industry is dynamically changing. However, it is lagging behind in digital adoption.

Today, the upstream O&G segment is significantly brownfield, and investments in greenfield are threaded with caution. Therefore, the need of the hour is to make the brownfield more efficient and effective, with digitalization being one of the key avenues for the same. According to Deloitte’s Bytes to Barrel article, it is estimated that a 100-well project can generate annualized cash flows of $20 million by integrating automation protocols with cloud-based analytical platforms in a secure environment to circumvent common problems such as gas interference, equipment choking, damaged fluid pound due to over pumping, and inefficient recovery due to under pumping.

Building a Strong, Data-Driven Foundation

The convergence of Industry 4.0 technologies to enable digital transformation has made one thing clear – a data-driven foundation is key. Data-based insights can enable Oil and Gas companies to maintain assets, optimize production, reduce unplanned downtime among the various possible areas of impact. Creating a strong data-based foundation for digitalization involves three key functions. 

Firstly, data must be aggregated through system integration, sensorisation and the shift from paper-based management systems to digital systems. Today, several companies continue to function with outdated systems that are supplied by multiple vendors, leading to integration itself creating a flurry of challenges. Secondly, data must be orchestrated correctly, as seamless data flow between systems can only be achieved if the data is modeled in a unified manner. Thirdly, infrastructure management systems must be firmly in place. This involves installing hardware and software solutions, such as Edge and Cloud systems, to ensure a constant and uninterrupted flow of data. 

Edges are used to collect the data from various sources such as Controllers, Vibration Monitors, Anomaly detection systems, VFDs, PLC, SCADA, Field Historians, Switchgear, etc. Oil fields are dispersed, remote and unmanned. Therefore, having a right Edge and Edge Management strategy is very important for not just data flow, but for all stages of the cycle with adequate safeguards to ensure security and resilience enough to deal with communication disturbances.  

The Road to Digital Transformation – What Technologies Are Key?

Applications based on Drones, AI, ML, Augmented Reality, 3D printing, Digital Twins etc. are all part of the Digital Transformation bouquet in the Oil and Gas sector, and are making inroads into operations such as Spill Monitoring, Flare Monitoring, Surveillance, Inspections etc. Getting it right would involve curating the right combination of digital technologies to solve unique problems, increase agility, flexibility and scalability, and improve operational efficiency. Digital Twin, in particular, have had a significant impact, as it forms the fulcrum for all other technologies to latch onto and bring higher value. One of the early applications it enables is the well-known and well understood Condition Based Maintenance, but with effectiveness. Subsequently it leads to Predictive Maintenance and Reliability Centered Management, thus enabling savings Capex and Opex and improving Productivity and RUL of the assets. 

At the end of the day, businesses must remember that digital transformation is not a job that can be done within an isolated department. Rather, it has to be a cross-functional practice. In this process, it is business objectives that must occupy the forefront, not technology. For now, digital transformation is an enabler with humans being an integral part of the mix. For a digital transformation journey to yield outcomes, the actionable technology-driven insights must be translated into objective decision making. By combining technology with a robust and dynamic business model, the oil and gas sector can truly evolve and solve its most pressing challenges through a strategic digital transformation journey.

The article has been written by Rushendra Babu, CTO, Utthunga Technologies

One response to “Digital transformation in the Oil and Gas Sector”

  1. Claire Masters says:

    Interesting to know how building a strong data-driven foundation can help gas and oil companies develop insights that will ultimately help in the proper management of assets, production, and downtime. if I were putting up a business in this industry, I would understand how these technological solutions would be able to update old systems or integrate them to improve operations and ultimately lead to business growth. It will also be nice if third-party field services can also develop or adapt these systems to match the developments happening now.

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