Analysis: The era of the digital oilfield
Nabil Ben Soussia, managing director, IEC Telecom Middle East makes the case for oil and gas companies to modernise and embrace digitisation
Oil and gas companies face daunting communications challenges, particularly when it comes to ever-increasing data requirements. Offshore communications are managed differently from one oil company to another, and from one region to another. However, in the period of high oil prices, companies are not keen to risk modernisation.
Most oil and gas multinationals have a reasonable understanding of the significance and potential benefits of the digital oilfield; however, a significant proportion – largely those yet to trial the technology – still remain uncertain over the practical benefits. Although some companies recognise the opportunity to harness better business agility by working in a more streamlined, better connected and data-centric way, for others, the uncertainty surrounding solution robustness and risks are some of the bottlenecks to adoption.
For decades, oil companies have attempted to change their entire value chain, harnessing technological advances in IT, communications and engineering. The manual practice of logging offshore operational data has evolved into the digitisation of data and transmission via satellite. Companies today are facing increasing pressures to embark on a sophisticated and more ambitious programme to integrate and increasingly automate every stage of the overall operation.
Future-proofing the oil and gas industry
Preparing for the changing and uncertain nature of the industry is critical. With more than half of the Middle Eastern oil and gas companies already seeing the benefits of digital oilfield pilots, the promise of enhanced performance and reduced cost benefits, and the impact across operational areas including the security of people, data, premises and physical assets is clearly already being realised.
The tools used in a digital oilfield allow the use of advanced software and data analysis techniques to improve the profitability of oil and gas production operations. As field equipment intelligence increases, so does the potential to fully automate operations. The potential rewards from modernisation are immense, but the complexity of industry processes and the diversity of technology options demand careful analysis before a company can identify the optimal solution. An essential first step is to get a better understanding of the communications requirements and possibilities.
With energy consumption continuing to increase, pressures are tightening on the oil and gas industry as the demand for hydrocarbon fuels continually rises despite extraction becoming more challenging. While the high cost of energy has enabled the commercial exploitation of shale gas, traditional oil and gas companies need to go farther and deeper to locate new fields. However, operational realities require this to be done with more transparency, greater investment in safety and with larger consideration for the environment and the bottom line. Technology offers a lifeline to oil companies facing shrinking margins and rising costs by shortening project schedules and reducing manpower requirements.
The most important areas to consider when digitising an oilfield include corporate centres, onshore and offshore facilities, nearby oil terminals and port/rail facilities. With the baseline cost of leasing a single deep water rig approaching approximately $600,000 each day, minimising project times alone can substantially bring down costs. Better communications and workflow automation can dramatically improve safety and avoid expensive disasters.
Going digital, or not, is no more a decision for oil operators alone, but one that needs to be made across the board. While on the face of it, the data communication requirements of oil and gas companies resemble the challenges other industries face, these are amplified by the scale of their global reach, complexity of operations and the immense commercial, human and environmental risk. Oil and gas companies have to move fast to control cost.
With the introduction of reliable internet access to the oil rig, companies can save approximately 17% of the overall operational costs by doing the same duties faster. The introduction of high throughput satellites can extend the automation to all operations from supply to live data processing and remote maintenance and decision making. It can also be extended to the welfare of staff and enhancement of health and safety policies.
Despite the benefits seen by the oil and gas industry for the development and deployment of digital oilfield technologies, and the belief most are at near technological maturity, industry adoption is slow. This is largely due to budget constraints, the existence of organisational obstacles and concerns about cybersecurity. With opportunities on the horizon, it is important that companies evaluate their overall return on investment and productivity gain when moving towards a digital oilfield.