It’s not easy to pick out positives from an energy sector turned upside down by the coronavirus pandemic. With staff confined to home and global energy demand stalling due to lockdown restrictions, oil and gas companies have been forced to abandon carefully made plans and projections.
But there is a bright side.
While the adoption of technologies like cloud computing and the Internet of Things (IoT) had been growing in the industry, recent events have introduced a new imperative.
Virtually overnight, oil and gas companies were forced to switch to remote working. In the process, resistance to change gave way to the fast-tracking of many digital innovations from the research, testing, or trial stage to become a part of daily operations. In a few months, the digitalization ripples that have been forming over time have turned into a torrent of digital adoption.
The oil and gas industry spend on advanced analytics looks set to almost triple in the coming decade. Meanwhile, take-up of cloud computing is forecast to increase exponentially, from $1.3 billion in 2019 to $12.5 billion by 2030, according to a recent BloombergNEF report.
Greater reliance on digital solutions is helping boost efficiency and accelerate the drive towards a more sustainable oil and gas sector.
Trust in digital technologies is growing as a new wave of remote workers relies on digital platforms to interact with colleagues, help customers, and conduct business as close to normal as possible.
Cloud-based systems and IoT connectivity have opened up a sensor-loaded world of new possibilities, harvesting unprecedented volumes of data to streamline and automate operations. Add artificial intelligence (AI) and machine learning into the mix, and the results range from digital supply chains capable of predicting shortages before they become a problem, to integrated systems that survey, monitor, and optimize different areas of performance in real-time.
One technology highlighted by Boston Consulting Group as key in these challenging times is the use of Digital Twins in the industry. Creating a virtual replica of oil and gas infrastructure, or individual components, allows real-time tests and analysis to be conducted using operational data; this, in turn, optimizes the efficiency of processes and reduces costs without disrupting real-world processes.
Robotics and Remote Working
The digitalization of oil and gas is part of a wider energy transition where digital systems are being adopted to drive efficiency and flexibility that can help lower carbon emissions. For example, in many countries AI is now being used to monitor energy demand and weather forecasts; this data is then used to predict the required and likely power output from renewable energy sources, making it easier to balance the grid. AI is also being used in traditional power plants, increasingly switching them away from being baseload generators to perform a balancing role.
Amid the current oil price volatility, intelligent systems can help reduce oil and gas operating costs by utilizing infrastructure and resources more efficiently. In the offshore sector, oil and gas platforms can operate remotely, allowing one control center in a single location to monitor multiple sites. Eliminating the need to fly operations or maintenance crew to distant rigs boosts safety, cuts operations, and transit budgets − plus fewer flights add to sustainability efforts.
Unmanned rigs or isolated oil and gas installations can be patrolled by rechargeable, explosion-resistant, remotely-operated robots, capable of conducting routine inspections and performing some maintenance tasks.
Mitsubishi Heavy Industries (MHI) Group, for example, is developing a range of robotic recruits capable of detecting oil or gas leaks and system malfunctions on rigs or industrial sites. The range includes a fire-fighting robot to tackle extremely hazardous blazes and another that can carry, drill, and open and close valves to assist in dangerous clean-up operations. Entering hazardous places, like flammable gas environments, means the robots’ human counterparts are not put at risk.
From drones being used to inspect dangerously inaccessible places on oil and gas infrastructure, to virtual or augmented reality headsets helping to train engineers remotely, the applications of digital technologies are too numerous to list. Suffice to say that accelerated digital adoption creates a more agile, efficient, integrated, and – importantly − more sustainable, oil and gas sector.
While adopting digitalization comes with considerable capital outlay, the benefits far outweigh the costs. And as the pace of adoption increases in the wake of the pandemic, companies that don’t go digital could find themselves left behind.
Amid calls by the United Nations to Build Back Better, digital solutions have the potential to help oil and gas companies speed up their progress towards net-zero emissions.
Johnny Wood has been a journalist for over 15 years working in different parts of the world – Asia, Europe, and the Middle East. As well as an accomplished features writer he has edited several prestigious lifestyle magazines and corporate publications.