The fact that the design of offshore oil and gas platforms has remained largely unchanged for the past 40 years indicates the oil and gas industry’s slow progress in adopting not only new technology, but new design and business models.
Industry will need to put aside this reluctance and embrace digital technology to ensure its future success, according to industry executives during yesterday’s panel discussion “Disrupting and Digitizing Our Industry: Harnessing Technologies to Shape and Transform All Aspects of Our Business.”
While industry has not been the forefront of digital technology, it has been forced by the prolonged oil price downturn to become more efficient in its work, said Colette Cohen, CEO of The Oil & Gas Technology Centre. To make these changes not only sustainable but allow industry to flourish and tap the prize or remaining oil and gas resources, oil and gas companies will need to embrace digital technology, including the full remote operation of platforms thousands of kilometers away. This will allow industry to recruit the workers it needs, while allowing those workers to live where they want to live.
While digital technology is critical for industry’s future success, the oil and gas sector also is critical to the fourth industrial revolution because it powered the previous industrial revolutions, said Cohen.
“The oil and gas industry will have to be part of the low-carbon economy,” she said. To do so, the industry will have to reinvent itself and gain green credit. But the oil and gas industry will remain important, as forecast growth in electricity demand cannot be met by renewables alone.
The first three revolutions brought about the creation of mechanical tools. The fourth industrial revolution is providing data, said Thomas Sparks, VP O&G strategy and technology for Siemens. Digitalization will allow the oil and gas industry to capture data and gain insight from operations, so learnings are not lost when people leave industry, said Sparks.
Oil and gas companies have continued to rely on old technologies; Sparks noted that many onshore and offshore fields are still produced via mechanical production solutions. The industry will need to walk before it can run. But the important thing is that oil and gas companies start down the digital path, preferably in a collaborative fashion.
Oil and gas could learn lessons from health care, manufacturing and other industries. Even the mining industry, which typically has lagged about a decade behind the oil and gas industry, can offer oil and gas lessons in automated drilling, said Alastair Mathias, general manager of mining automation and analytics at Rio Tinto. In 2008, the firm started in Mine of the Future plan to meet challenges similar to those faced in oil and gas, including harder to find resources, geographic challenges, increasing environmental regulations, and skills shortage. As part of its Mine of the Future Strategy, the company has tuned to autonomous mining truck fleets and autonomous blast hole drilling rigs, driverless operations to transport mined ore.
The company’s eight years of work towards autonomous drilling resulted in zero injuries, a 40% increase in productivity, a penetration rate of more than 29%, reduced water use and machine wear and tear, and better data for downstream utilization.
Mathias noted that technology innovation is fleeting; what is critical to keeping ahead of competitors is gaining the operational experience to do things differently from competitors. That’s the benefit of being the first company investing in a new technology, which oil and gas companies have been reluctant to do.
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