Oil and gas companies can either drown in or ride the digital tsunami; however, technology experts say that opting for the latter could lead to better operational efficiency, more production and more money.

As low oil prices continue wiping out items in budgets, industry leaders are focusing on getting more out of what they already have. Technology experts speaking during a webcast on April 15 pointed to the Internet of Everything (IoE), which focuses on and connects devices, data, people and processes, as the source of massive amounts of data. But simply having the data is not enough to drive change.

“It’s really the data analytics that is going to give you the outcome,” said Nicolaas Smit, director, Global Energy Vertical, Cisco. Highlights of a survey on the topic were released along with a Cisco report that detailed how oil and gas companies can effectively use data from IoE and operational technology (OT) to address challenges.

Data is often generated remotely at the well site, and that is typically far away from the servers collecting the data, Smit said. Having high bandwidth connections to drill sites would be ideal, but that is not always possible. Integrating data from multiple sources adds to the challenge.

But “data virtualization makes a heterogeneous set of data sources look like one logical database to users and applications,” the report said. “These data sources do not have to be stored locally—they can be anywhere. This is particularly valuable for an IoE application that relies on data from many distributed sources, such as embedded sensors, video cameras, and third-party data sources.”

Another advantage, according to the report, is that data virtualization provides instantaneous access for all users who want the information. This, Smit said, enables automated data collection “at the edge,” essentially putting data closer to where it is generated so it can be analyzed quicker. The report stated that a typical offshore oil platform generates up to 2 TB of data per day, mostly time-sensitive information about production or drilling safety. However, it takes the most common communication link about 12 days to move one day’s worth of oil platform data to a central repository via satellite.

Edge, or fog, computing creates a platform with computing, storage and networking services between end devices and cloud computing data centers, the report said. It is also positioned for real-time data analytics.

“The biggest problem is the lack of bandwidth, and that it is so expensive. That’s incredibly important,” Chris Niven, research director for IDC Energy Insights, said in the report. “And you’ve got real-time data that is coming from SCADA [supervisory control and data acquisition] about production that you want to tap into. If you are able to process data and turn it into information and knowledge on-site, that alleviates having to use the bandwidth.”

This real-time data allows oil and gas workers to access operations and make adjustments accordingly. Benefits run the gamut.

  • Predictive maintenance and improved decision-making using real-time analytics can increase personnel safety and improve asset integrity;
  • Predictive intrusion, leakage and deformation detection can be used to improve security and environmental protection;
  • Reduce downtime and hasten the decision-making process with real-time analytics and video collaboration; and
  • Real-time sensor and video analytics can be used to improve logistics.

“With analytics we can increase production and recovery by being more precise the first time,” Smit added. “And with data analytics, in combination with process changes and collaboration between people, we can actually reduce the number of inefficiencies in major capital projects.”

Adding automation to the process could further boost potential benefits—improving efficiency, safety and accuracy while reducing risk by removing the human factor, according to the report. Survey respondents said up to 50% of the manual processes could be automated, mainly in the areas of production and maintenance, Smit said.

However, data in different systems creates another problem. Aligning operational technology and information technology (IT) is crucial to the oil and gas industry’s digital transformation. However, the survey showed that 59% of the respondents don’t believe their firms’ IT and OT strategies are aligned. The report pointed out the need to break the silos and embrace collaboration and security, particularly cybersecurity.

“Connecting IT and OT is perceived to lead to additional cybersecurity threats and vulnerabilities. At the moment we consider cybersecurity to be an inhibitor to the digital transformation of the industry,” Smit said. “The biggest concern [of the 50 industry professionals surveyed] in cybersecurity is company intellectual property,” not industrial control systems.

Still, bringing IT and OT together is needed to fully benefit from available data.

“Cybersecurity is an enabler and needs to be put on the agenda more prominently. We need to move from ‘we cannot do it because of the risk’ to ‘we need to do it because of the benefits. How do we mitigate the risks?’ Smit said.

Status quo could mean not surviving in today’s market, said Kent MacDonald, vice president of converged infrastructure for Long View. Companies must leverage innovation and valuable data collected and processed on site to make better decisions during production, getting quicker outcomes and gaining market competitiveness.

“Connecting people to people, people to data, and data to data is driving more conversations,” MacDonald said, adding that companies are turning to their IT departments to help increase production and ultimately profits.

What can oil and gas companies do now? Cisco’s study offered suggestions.

  • Build on the company’s digital foundation: Fund data management and analytics and emphasize performance measurement capabilities;
  • Develop and attract the future workforce: Consider automation to reduce overhead on repetitive tasks while bringing in critical thinkers with analytical skills such as data scientists;
  • Align and integrate IT and OT: Encourage communication, collaboration and coordination between the company’s IT and OT operations;
  • Ensure end-to-end cybersecurity: Inventory assets and design defenses, implement security measures for IT, industrial automation and control systems and regularly test and update defenses, and
  • Innovate for growth: Use predictive and prescriptive analytics to predict future behavior or estimate unknown outcomes. Use autonomous field vehicles at remote locations for monitoring and use smart robots, which are capable of working alongside humans or solo. The robots, as described in the report, can sense conditions in their environments and solve basic problems.

Contact the author, Velda Addison, at vaddison@hartenergy.com.