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For most of us, it’s not too difficult to imagine a world where autonomous robots work independently to complete complex tasks as a part of smart networks and connected ecosystems. So it should not come as a shock that even the heaviest of industries are beginning to follow suit. Although some people probably think of Tesla’s impact on the auto industry as a prime example of true disruption, the roots of this concept begin at the assembly line and rise of autonomous manufacturing.
Over the last two decades, it’s been easy to get caught up in the momentum surrounding budding startups and their technology. But for Big Oil that time didn’t come until 2014. Coming off the heels of record-high crude oil prices, the notion of innovation was seen as a matter of “if,” not “when.” That mentality changed when simply pumping more no longer compensated for losses. Entrepreneurs with cost-efficient models, like Seven Lakes CEO & Founder Shiva Rajagopalan, were ready.
Rajagopalan wasn’t the first, though, to see upstream oil as an opportunity for innovation. To highlight a few:
In 2014, Ground Metrics, a startup out of San Diego, raised $2.73 million. The company’s product was initially created to detect improvised explosive devices for the military. Its electromagnetic technology is now used to help pinpoint oil, gas and mineral deposits below the earth.
In 2015, Seven Lakes Technologies raised $20 million. Its technology collects data from within wells to measure tank capacity, pressure readings, choke sizes and more, according to Rajagopalan. For workers in the fields, this translates to instant, actionable data that directly results in reduced downtime and production loss for large oil companies.
In 2016, General Electric acquired Bit Stew Systems and Wise.io to further enrich its Industrial Internet of Things (IIoT) applications through artificial intelligence.
Other notable startups include DarkVision Technologies Inc., Tachyus and Raptor Rig.
Startups vs. Traditional R&D?
It’s no secret that drilling is a labor intensive, monumentally complex and environmentally damaging process. So why not focus solely on alternative energy? Simply put, it’s still more cost efficient to drill and pump for oil, especially when it can be done more efficiently and in a more environmentally friendly manner. For technology startups and large oil companies, this creates a mutually beneficialenvironment where interests are aligned.
Unlike traditional R&D teams who patch problems with duct tape-like solutions for dinosaur-aged processes and control systems, today’s entrepreneurs bring more than bolt-on software and/or hardware; they’re bringing fresh business models. The differentiator is their position in the venture ecosystem. These startups were founded externally, not in a corporate incubator inadvertently blinded by industry standards or bound by corporate bureaucracy.
Building The Oil Field Of The Future
So how can you build the oil field of the future? The answer is through collaboration.
According to Accenture, “To realize the benefits that digital can create over the long term, oil and gas companies need to quickly improve their capabilities, including maturity in analytics. To address this, they need to work to rapidly develop in-house capabilities and leverage external market skills and platforms.”
For today’s large oil companies, profitability and margins are the driving force behind innovation. In the near term, this will resemble a well-orchestrated, cyborg-like synchronization where state-of-the-art technology—from IIoT to artificial intelligence to wearables—will reduce operating costs, increase workforce performance and improve asset management.
As for the future, the venture ecosystem is limitless, and the sandbox of next-generation technology is constantly evolving.