The world's oil and gas companies have some of the largest private super-computers and are a big user of data, but they have only recently adopted data analytics. Now, however, combining those resources to create a ‘Digital Oilfield’ will see the industry shift from an era of machines assisting humans to one of humans assisting machines. But the oil and gas producers look best placed to benefit, rather than the supporting value chain.

Despite handling large volumes of data, Big Oil has moved only slowly towards an analytical digital world, preferring computer spreadsheets, paper-based orders and decisions based on gut feel. However, the oil industry’s downturn has accelerated interest in how ‘going digital’ could improve operations, efficiency, safety, resource recovery and, ultimately, profits.

Essentially, it means more barrels for fewer dollars.

Historically, the oil and gas industry has been a big user of digital technology, using digital control systems for downstream operations such as refineries and data-heavy analysis of seismic studies in exploration work.

But this technology curve has been localised around the analysis of oil and gas reservoirs: the culture of digital analytics has not spread. Now the industry looks to be progressing into the next phase, using data-based analytics across upstream operations.

The driver of the digital oilfield concept is lower operating costs, improved production efficiency, and increased recovery from the reservoir.

Digital technology can help companies manage assets better and make faster and improved real-time decisions, increasing productivity, engagement and improving job training. The impact of digitalisation on reservoir recovery could be greatest for shale oil and gas.

Data analytics is about more than just handling time-series figures. This technology can sort, correlate and analyse a range of information including sub-surface temperature, pressure or acidity measurements; above-ground equipment stress, vibration or leakage; plus responses from workers.

The new buzzwords are the internet of things, the industrial IoT, big data, predictive analytics and machine learning, cloud-computing, smart sensors, edge data processing, 3-D printing, mobility solutions and wearable technology, and automation.

Key strategic technology trends for 2018 are expected to include applications of artificial intelligence and advanced machine learning, intelligent apps (aiding employee mobility), intelligent things (eg autonomous drones and underwater vehicles), and growth in digital-twins (virtual real-time simulations of physical assets and processes).

Energy companies, consultants and think tanks have produced a wide range of outcomes from adopting digital technology. They estimate improved resource recovery of up to 40 per cent, capital-cost reduction of up to 20 per cent, operating expenditure falling by 25 per cent and production 8 per cent higher with 70 per cent fewer breakdowns.

The lost production from offshore platforms operating at the industry average of only 77 per cent of peak production has been estimated at more than USD200 billion a year. Even a 1 per cent productivity gain could save USD90 billion, says another assessment, while moving to predictive maintenance could cut unplanned downtime by up to 36 per cent. Some see a 30 per cent reduction in the man-hours needed to drill a well and 20 per cent lower overtime costs.

The digital oilfield will need new business models from suppliers to handle this increased focus on ‘life of field’ cost reduction. There is also a risk to the supply chain from predictively maintained oilfields that should need fewer spare parts and less downtime. This could impact the outlook for suppliers of equipment and maintenance services.

  • The oil and gas industry was slow to adopt digital analytics but is now well-placed to benefit
  • Significant cost cuts and productivity gains available for operators
  • But some suppliers could see a ‘digital downturn’ from more efficient maintenance

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