Digital Transformation and Continuity in Oil and Gas
When it comes to conversations with Oil and Gas clients, there is one phrase on everyone’s mind: Digital Transformation. A recurrent theme in our discussions, the key question is on its practical benefit: how can changes to digital practice contribute to improved operations, higher efficiency, and a reduction in both cost and risk?
Crucially, it’s in everybody’s interests to take some of the drama out of digital transformation. From the earliest days of oil and gas production, industry professionals have been seeking easier, safer, cheaper and more efficient ways to work.
And while the urgency has not always been the same – for example, when oil prices were at their height – finding a way to maximize profitability across the entire oil and gas chain has always been a concern.
Always ready to embrace the latest and greatest technology advancements, the industry has changed significantly in just a few years. Back in the early 00’s, there was a case in the Middle East in which an oil company took legal action against a supplier because a well had failed to deliver according to expectation. During the investigation and analysis – which carried on for months – locally recorded data was shipped on floppy discs for lab analysis. To make an already difficult situation worse, half the discs arrived corrupted – sand was never a friend to floppies!
Nowadays, a situation like that would be almost inconceivable. Not simply because data is now transmitted and analyzed remotely as a matter of course, but because the industry now has the tools and processes needed to make better-informed decisions in the first place – with advanced simulation and modelling now available from the beginning. The well would never have been opened in the first place.
However, as the volume of data continues to grow, the industry is faced with a more urgent question: how can we make sense of the vast amounts of information available? When even a single monitoring application can generate over 2TB per day, oil and gas companies need to examine how best to derive value from unprecedented volumes of data from across their enterprises.
In my own experience, I tend to think of the impact of new digital practices from two perspectives:
- Firstly, infrastructure – and specifically the shift to cloud
- Secondly, process – particularly around hyper-connectivity
The industry should look at both of these areas from the widest business view. Oil and gas companies depend on a specialist ecosystem of employees and suppliers and ultimately, sustainable success depends on their ability to work effectively together as an extended team – and they can only do this if the digital infrastructure and process connectivity supports the business objective.
Perhaps the best way to demonstrate this need is with a practical example…
When a rig team on standby costs a minimum of $100k every day, how can oil and gas companies minimize standby times and how can new digital practices contribute? The answer lies in taking advantage of the hyper-connectivity which all too often exists in a latent state, but which is too rarely recognized and exploited to the full.
Organizations need to be able to take a full process view to ensure that meaningful data flows between HQ and HR, between field workforces and job planners, and between equipment manufacturers and machines monitored onsite. Once we begin to recognize the value of this frequently untapped digital intelligence, we can ensure that it contributes directly and unequivocally to new standards of operational excellence. And this is not about radical transformation – it’s about taking the next step along a path oil and gas companies have been following for years – and most significantly, about exploring the relationships between data sources which until now have remained largely disconnected.