By: Rajesh Gharpure, VP and Global Head, Manufacturing, Energy, Industry 4.0 and ESG, LTIMindtree

Oil & Gas is a competitive and ever-changing industry, where business leaders are increasingly focusing on optimizing value delivered to their stakeholders, through investments in technology and resources. Fast depleting conventional reserves have caused companies to extract oil and gas from unconventional reserves to meet increasing demand for energy.

The Global petroleum market has also boomed because of growing population and increasing motorization in emerging markets. Geo-political uncertainties like unrest in Iraq, over flooding of market with crude by OPEC, which led to a crash in oil price, and stringent government policies have created problems for O&G companies. An increase in production of natural gas in the US; making it the largest exporter is a step forward to shift to unconventional reserves. These global trends have given rise to challenges such as managing volatile oil & gas prices, maintaining capital effectiveness, developing and retaining talent to operate latest technologies, etc. This has caused the O&G companies to alter their strategy. In order to tackle these challenges, the companies are focusing on hunting Oil & Gas in unchartered territories, acquiring assets through M&A deals, developing or acquiring technology expertise, and enhancing integrated operations.

Growing complexity in operations, coupled with huge growth in data is transforming the Oil & Gas industry, especially to look at digitization closely. There is an urgent need for companies to have better visibility into operations for real-time, and informed decision-making for improved efficiency. Going ahead, digital transformational technologies such as Big Data Analytics, Cloud Computing, Mobility, and Social Business will play a crucial role to stimulate key success factors such as exploration and production enhancement, performance and enterprise risk management, refining and retail optimization, operational excellence, human resource management, and agile business models.

Digital Transformation in O&G sector
The O&G industry has been generating large quantities of data, which should be leveraged for making good business decisions, and that’s where IoT, big data and analytics can prove helpful. Analytical tools are useful for real-time monitoring of the equipment, vehicle tracking, ensuring workers’ safety and most importantly, leak detection. Asset utilization is drastically increased by real-time monitoring, which in turn, causes reduction in operation cost, and in-field crew inspection. Big data analytics has also found its application in predictive maintenance, where failure of the equipment is anticipated, and repaired well in advance, reducing the unplanned maintenance, and hence, increasing the production hours. One of the important aspects of asset monitoring is leak detection using sensors, as at times, visual inspection can easily miss leaks, until it gets serious, and increase safety hazards.

O&G companies spend millions of dollars to drill a single offshore well, and only few percentage of wells become successful because the decision is based on limited information. Big data analytics and cognitive technology help in making strategic decision, while drilling for a new reservoir. The decision is based on the pattern recognition & comprehensive advanced analysis of newly acquired or archived data, to predict likelihood of drilling success. Big data analysis on various areas such as seismic, drilling and production helps engineers map changes over time, and provide decision support for making changes in lifting methods. User satisfaction can increase, as big data can be used to implement demand-response programs, and to identify usage patterns. It can meet various business requirements of the customer by responding immediately to the requirement, devising tailored offering for customers, and facilitating targeted interaction.

The massive amount of data, which comes from big data, needs to be managed and stored properly. This is possible with the use of Cloud computing. However, cloud computing in O&G companies was initially spurned due to security fears, even though the companies were aware of its powerful processing capabilities. But now, cloud computing has evolved and sensitive information can be stored securely. It can manage even – large, more complex and more geographically diverse ecosystems, generated by various stakeholders such as partners, suppliers, customers, contractors and employees. Cloud computing makes it easy by providing global access to information, secured information sharing and enhanced flexibility of collaboration. Cloud computing has the ability to achieve higher operational performance, operational agility and most importantly, cost reduction.

Ensuring workers safety is of highest priority for O&G companies, and their work is not done until it achieves zero injury rate in the workplace. Digital technologies will help increase workers’ safety. With advancements in wireless communication technology and availability of more compact and rugged hardware, there is a growing trend in the energy organizations to provide anywhere, any device access to critical business applications.

Connected workers make use of mobility, where the worker is given a smart wearable. It provides real-time information about live gauge readings, inspection and safety checklists, inventory checks, and worker performance to the management. This helps in optimizing the process by helping a worker to work efficiently and safely. Mobile technology also provides an easy way to view underground pipeline maps, blueprints, configuration drawing, instruction, and other advanced content. Mobile salesforce automation solution that link CRM and inventory application, can help O&G companies increase revenue, get paid faster, and reduce losses in the consignment inventory.

With increasing alliance among industry players, the role of enterprise-wide information management system, has become even more crucial. For example, in a typical upstream exploration and production project, many vendors participate and supply their products and services. This generates isolated flow of information within databases creating multiple versions of single truth, which will ultimately reduce operational efficiency and increase the cost. Therefore, Oil & Gas companies need an enterprise-wide Information management system and business intelligence platform capable of managing all structured and unstructured content associated with planning, operating, and maintaining oil wells. That should include the design/construction of well facilities, major modifications, refurbishments, and eventual decommissioning. The same goes for midstream and downstream activities.

Some of the other technologies, which are creating a buzz in this industry are, 4D seismic to track reservoir pressure and temperature and saturation, which can cause change in the physical properties of the reservoir rocks themselves. The interpretation of 4D seismic data helps ensure optimum and responsible oil and gas recovery from our existing fields. SCADA is an industrial software application which is used in upstream, midstream and downstream. It has the ability to collect data at remote sites, reducing personnel visits. SCADA is a platform technology used to control and supervise many types of industrial processes, but also to optimize complex coordination of operations among multiple business partners. ERP system is widely used in many industries, but the O&G industry being the early adaptor, has found its application in the entire supply chain. This industry is dependent on precise workflow management and market analysis, where ERP system is helpful in increasing efficiency.

Blockchain in O&G
A blockchain technology helps in recording the peer-to-peer transactions called block, which are linked and secured using cryptography. It is decentralized online ledger, which is anonymous protecting the identities of the user. This is the same technology behind crypto currency called – Bitcoin. While the blockchain technology has found its application in finance, it is not limited to it. It is exploring wide variety of applications in other industries, and the O&G industry is not far behind.

This technology can help in providing better transparency by automating the transaction, and also establish transactional relationship between business via smart contract, certification and digital compliance. The size and volume of contracts could cause tracking issues among various stakeholders like suppliers and contractors, and this distributed ledger strategy is a game changer. It helps in keeping track of who gets paid, who owns the money, and who is following the agreement explicitly. The amalgamation of IoT and Blockchain can be of greater help in this industry, as the smart sensors can be very helpful in tracking the field and the owner. But IoT has been found vulnerable to hackers, and that’s where blockchain will be helpful in providing security with its encrypted technology.