To meet the goals of greater productivity and enhanced sustainability in an environment characterised by a high degree of uncertainty and volatility, the oil and gas industry will need to surmount a number of challenges:
- Coping with low oil prices without jeopardising future performance. For oil and gas companies, the adjustment will require targeted investments to greatly increase efficiency and productivity.
- Increasing technical complexity of the asset mix that oil and gas companies are developing and operating. This has evolved to include far more complex facilities – e.g. unconventional fields, LNG and FLNG – that demand higher levels of engineering and operations expertise. Upstream fields have different resource types, different reservoir characteristics, different operating environments, and were developed at different time periods over the last 100 years. As a result, every field is unique and presents distinct technical and operational challenges. Even the midstream and downstream industries, which generally enjoy more homogenous conditions than upstream industries, have a great equipment diversity with specific operational challenges – the result of costly Capex investments made at different points in time.
- The ageing and turnover of the industry’s workforce, and the attendant difficulty in securing technical talent and preserving accumulated experience and knowledge. By some estimates, as much as 50% of the workforce will have retired by 2025, taking decades of domain knowledge and experience with them.
- Industry concerns around health, safety and the environment, as well as the regulatory environment. All present the industry with challenges of significant complexity and cost, which are set to be a permanent feature of the operating environment.
- Global environment characterised by much higher uncertainty and volatility. Trends in geopolitics, economics, and technology suggest that this heightened volatility and uncertainty are here to stay. The industry will need to achieve a greater degree flexibility and adaptability to cope.
The digital future of oil and gas
Breakthroughs in oil and gas digital technologies are part of this broader, far-reaching transformation in global industry: the rise of the Industrial Internet. Enabled by the convergence of powerful, advanced computing, analytics, low-cost sensing, and new levels of connectivity, it holds the promise of delivering economic value to all industries by driving productivity and efficiency across operations.
The following three observations support the conclusion that the Industrial Internet will have profound impact on industry as a whole:
- The last several years have seen a sharp reduction in the cost of sensors, and in the cost of collecting, storing and processing data, thanks to cloud-based technologies. The instrumentation of existing infrastructure has therefore become more cost effective, and data-driven insights can be obtained at lower cost.
- A first generation of Industrial Internet solutions has already demonstrated the ability to deliver substantial efficiency gains with important economic impact. It is estimated that the industrial solutions already delivered and deployed across a number of industries are yielding an average 20% performance improvement for companies.
- The birth of an 'industrial-apps economy.' GE has developed PredixTM, the operating system for the Industrial Internet. This cloud-based, secure and industrial-strength platform will be open to third parties to develop apps for industrial use. GE estimates that, by 2020, more than 100 000 software developers will be building apps on Predix, and generating some US$225 billion in economic value.
Digital delivers value
Industrial Internet solutions deliver benefits to the oil and gas industry in three tiers of value:
- Asset performance management: minimise cost, increase reliability, and optimize performance for an individual piece of equipment; can substantially reduce equipment downtime, through preventive, condition-based maintenance.
- Operations optimisation: system-wide improvements (e.g. across a production facility, LNG plant, offshore vessel, or oil field), and optimised life cycle management with increased production, reduced operating costs, and reduced risk.
- Enterprise optimisation: connection of demand and supply operations to optimise portfolio of cash-generating assets.
Adapted from a press release by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/24022016/highlights-from-ge-report-digital-future-of-oilgasenergy/