We have been here before, right? It’s been called the Smart field (Shell), i-Field (Chevron), Field of the Future (BP) and now “digitalisation” is the new big thing.
But, is it so new? Is the industry that slow to adopt intelligent, smart or digital solutions or are we just getting lost in terminology soup? The short answer is yes and no to all three questions. The challenge is that, depending on your standpoint, you will have very different views.
“We’ve been talking about digital oilfield, intelligent energy for 15, getting on for 20 years,” says Stephen Ashley, Digital Transformation Solution Centre Manager, at the Oil & Gas Technology Centre (OGTC). “I think that was just a small core of people who saw the opportunity. You would go to an event and essentially preach to the converted. It was difficult to prove concepts and get that buy-in at the highest level to drive something through.
“What’s changed is the downturn,” continues Ashley, who was also global information management domain lead at Schlumberger. “That’s completely changed our view and gives us a bit of a burning bridge. What is also different this time is that these technologies are not just affecting our industry. It’s not about just us. Every industry is being affected.”
The oil and gas industry has made strides in data analytics, however. “Most companies collect and analyse data, it’s made available in collaborative environments and at desktops,” says Julian Pickering, who runs Geologix Systems Integration, an advisory company specialising in digital oilfield drilling and production operations. “The availability of information is much greater than it used to be. More and more we are looking at data analysis and there’s clearly been a step forwards in this space.
“There’s also been a lot of investment in infrastructure,” adds Pickering. “Most operator companies have well established infrastructure, for data gathering, visualisation, collaboration, etc. Now we need to refine what we do and turn the data that we have into information that can deliver greater operating performance.”
Pickering believes that data analytics is where the industry could make the long-term gains. This is an area that isn’t new to the industry, it’s just been relatively isolated in its application, especially around the subsurface discipline, which has traditionally been a fertile area for new technology in this area, says Pickering.
“Subsurface teams have been quite adventurous, using 3D visualisation and finding ways to integrate the different information you collect on reservoirs, and well placement,” he says. “That’s an area that’s been very well advanced.”
Drilling and production have perhaps been a bit slow in the uptake, however, he says. “To me, those are some of the areas where new technology could make an impact: to improve the efficiency of drilling and production systems, improve equipment availability, improve well availability, reduce the cost of producing from wells with artificial lift. Those are areas where we can really impact the bottom line.”
It’s not an overnight process. A lot of the problems, when it comes to adopting new technologies, are more cultural and financial than they are technical, says Pickering. Often, the problems arise because the time wasn’t taken to understand what the problems are that need solving and what people need to help them do their jobs better. This is even more crucial today, in an environment where many are operating with far fewer resources than they have had available to them in the past. “Rather than a ‘we have technology, how do we use it approach,’ we should go back and see what the problems are we would like solved,” says Pickering.
The automotive industry went through a true digital transformation, adopting robotics and automation to produce production cars, points out Pickering. “That was an enormous transformation over 10-15 years, driven by necessity,” he says. “There was a strong articulation on why it made a difference. There was no question about the value of it and to some extent that’s where we are with the oil and gas industry now.”
There’re also remnants of resistance, based on bitter experience. “A lot of the technology that’s come down the pipeline has either been oversold, has not delivered the value expected or the value is not fully understood and that makes it difficult for companies to see if it wants to invest in new ways of working,” says Pickering.
But, we can learn from other industries. Phil Greening, Associate Professor and Deputy Director of the Centre for Sustainable Road Freight, says that thinking you’re the only ones who can change your own business is a trap. If you don’t change from the inside, others will come along and change the industry – with or without you. “Innovation will come from outside. Look at how the book industry was disrupted by Amazon, music by iTunes, and there are many other examples,” says Greening. “Open up to the outside, invite competition and then position yourself to ride it out.”
Navigating these challenges isn’t easy, as they go across disciplines and departments and the tentacles of a digital business extend beyond the limits of single corporate entities. But the ground work has been laid, the industry is looking for solutions and there’s a huge amount to gain. Understanding where these technologies should and shouldn’t be applied, which will work the best and in what environment, in order to avoid failure or setbacks, may be the challenge.