Global oil and gas sector is operating in an environment of unparalleled opportunity coupled with dynamism and volatility. In today’s world companies are looking for ways to create a sustainable cost-efficient model of operation. This model should be targeted to meet the challenges of the oil and gas industry, which includes margin pressure, cost competition, supply-chain issues, manpower shortage, global competition, technological advancements, and asset reliability. The good news here is, there is a solution within our reach that has immense untapped potential. Let us understand how Information technology can be leveraged in the oil and gas industry for greater benefit and sustainability.
What Is trending in Information Technology?
There are numerous technological advancements that are governing the oil and gas industry and are referred to as the drivers of the sector, these include:
Big data management - The use of automation and information technology resulting in the creation of volumes of data. This is then categorized and analyzed to create insightful information that helps in better decision-making.
Cloud computing - Cloud computing enables the oil companies to store and access a large volume of data. It allows seamless data management and computing across the organization.
IoT and SCADA (Supervisory Control and Data Acquisition) architecture - Industrial Internet of Things and SCADA help the operational process of oil and gas industry by merging it with information technology. The IT interface provides broad operational insights that help in optimizing the operational process. It can also enhance the cost efficiency and productivity.
Digital Oil-field- The sensors in pumps and well-heads create numerous data, both internally and externally. With the advent of information technology, this data is monitored and analyzed to create a digitally integrated oil value chain.
However, it is important that the oil and gas sector should adopt new IT practices to make them future-ready. The focus should not be just on data analysis via sensors but rather it should start addressing the entire E&P value chain and foray into complete automation. Until now the data collected and analyzed has been used to detect anomalies but now the time is right to optimize the resources and predict the future course.
How and where can IT be used in the oil and gas industry?
The important IT concepts like Big Data and analytics, IoT and SCADA can be used effectively in various areas of oil and gas industry, here are some of the applications:
Preventive maintenance of critical components
The real-time operational data derived from various critical components can help in setting a benchmark of quality parameters. The IT system will detect any deviation from the expected baseline and will alert the operational division to take prompt action. This system can be centralized such that the information available is real-time and accurate to plan preventive maintenance on time. This will help in reducing the maintenance cost and will avoid any hindrance in productivity.
By analyzing the historical data and real-time data from the well site, the drilling managers can discover the best performing wells. The current site location and its characteristics will be matched to the existing well site information to diagnose the right location for drilling, the rate of penetration and the expected issues that the team might encounter. This will help in better planning and execution.
With the integration of digital application, the oil companies have significantly increased the limit of the reservoir. Which resulted in a decrease in upstream and downstream capital expenditure along with additional ancillary benefits. Some oil and gas companies are using 4-D seismic imaging to add a time-lapse dimension to traditional 3-D imaging which enables them to measure and forecast fluid changes in reservoirs. This enhanced view of reservoirs typically increases the recovery rate by boosting upstream revenue.
Intuitive marketing and distribution
Retailers and marketers in other industries have successfully implemented digital technologies to understand consumer psychology for better positioning and marketing of their products and services. They also use this data to optimize pricing strategies, supply chain management, and product improvement. Oil companies have successfully replicated the result in the industry. With the help of geospatial analytics, the logistics department of the oil and gas company can efficiently manage the supply and distribution networks through location planning and route optimization.
Informed decision making
The availability of a large amount of detailed real-time data categorized into various formats can help the management and stakeholders to understand the performance and problems with each segment. It enables them to make informed decisions to maximize productivity and performance.
Recruitment and talent management
Technology has completely transformed the talent acquisition, management, and retention process. The oil companies can use digital platforms like NrgEdge.com to advertise their job openings and reach out to potential candidates. They can conduct screening tests, background checks, telephonic or video interviews for hiring suitable candidates. Additionally, they can also manage and monitor the performance of the employees via dedicated platforms. Even the on-job training can be conducted to upskill the existing employees through audio/video interface and via augmented or virtual reality like simulators. Oil and gas companies require highly skilled professionals, Information technology allows them to fix the skill, talent and knowledge gap efficiently.
It’s time for the oil and gas companies to reinvent themselves by investing in digital technologies. With the right application of big data and analytics, the oil and gas industry can be immensely benefitted. It can help optimize performance, predict breakdowns, streamline maintenance work, and help in better and informed decision making. This will result in higher productivity, enhanced operational activity, reduction in downtime and wastage which means higher profitability and sustainability.
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Pioneering technology expert tells ADIPEC Energy Dialogue up to 80 per cent of plant shutdowns could be mitigated through combination of advanced electrification, automation and digitalisation technologies
Greater use of renewables in power management processes offers oil and gas companies opportunities to create efficiencies, sustainability and affordability when modernising equipment, or planning new CAPEX projects
Abu Dhabi, UAE – XX August 2020 – Leveraging the synergies created by the convergence of electrification, automation and digitalisation, can create significant cost savings for oil and gas companies when making both operational and capital investment decisions, according to Dr Peter Terwiesch, President of Industrial Automation at ABB, a Swiss-Swedish multinational company, operating mainly in robotics, power, heavy electrical equipment, and automation technology areas.
Participating in the latest ADIPEC Energy Dialogue, Dr Terwiesch said up to 80 per cent of energy industry plant shutdowns, caused by human error, or rotating machinery or power outages, could be mitigated through a combination of electrification, automation and digitalisation.
“Savings are clearly possible not only on the operation side but also, using the same synergies between dimensions, you can bring down the cost schedule and risk of capital investment, especially in a time when making projects work economically is harder,” explained Dr Terwiesch.
A pioneering technology leader, who works closely with utility, industry, transportation and infrastructure customers, Dr Terwiesch said despite the increasing investment by oil and gas companies in renewables and the growing use of renewables to generate electricity, both for individual and industrial uses, hydrocarbons will continue to have an important role in creating energy, in the short to medium term.
“If you look at the energy density constraints, clearly electricity is gaining share but electricity is not the source of energy; it is a conduit of energy. The energy has to come from somewhere and that can be hydrocarbons, or nuclear, or renewables.” he said.
Nevertheless, he added, the greater use of renewables to generate electricity offers oil and gas companies the option of integrating a higher share of renewables into power management processes to create efficiencies, sustainability and affordability when modernising equipment, or planning new CAPEX projects.
The ADIPEC Energy Dialogue is a series of online thought leadership events created by dmg events, organisers of the annual Abu Dhabi International Exhibition and Conference. Featuring key stakeholders and decision-makers in the oil and gas industry, the dialogues focus on how the industry is evolving and transforming in response to the rapidly changing energy market.
With this year’s in person ADIPEC exhibition and conference postponed to November 2021, the ADIPEC Energy Dialogue, along with insightful webinars, podcasts and on line panels continue to connect the oil and gas industry, with the challenges and opportunities shaping energy markets in the run up to, and following, a planned three-day live stream virtual ADIPEC conference taking place from November 9-11.
An industry first of its kind, the online conference will bring together energy leaders, ministers and global oil and gas CEOs to assess the collective measures the industry needs to put in place to fast-track recovery, post COVID-19.
To watch the full ADIPEC Energy Dialogue series go to: https://www.youtube.com/watch?v=QZzUd32n3_s&t=6s
Utility-scale battery storage systems are increasingly being installed in the United States. In 2010, the United States had seven operational battery storage systems, which accounted for 59 megawatts (MW) of power capacity (the maximum amount of power output a battery can provide in any instant) and 21 megawatthours (MWh) of energy capacity (the total amount of energy that can be stored or discharged by a battery). By the end of 2018, the United States had 125 operational battery storage systems, providing a total of 869 MW of installed power capacity and 1,236 MWh of energy capacity.
Battery storage systems store electricity produced by generators or pulled directly from the electrical grid, and they redistribute the power later as needed. These systems have a wide variety of applications, including integrating renewables into the grid, peak shaving, frequency regulation, and providing backup power.
Most utility-scale battery storage capacity is installed in regions covered by independent system operators (ISOs) or regional transmission organizations (RTOs). Historically, most battery systems are in the PJM Interconnection (PJM), which manages the power grid in 13 eastern and Midwestern states as well as the District of Columbia, and in the California Independent System Operator (CAISO). Together, PJM and CAISO accounted for 55% of the total battery storage power capacity built between 2010 and 2018. However, in 2018, more than 58% (130 MW) of new storage power capacity additions, representing 69% (337 MWh) of energy capacity additions, were installed in states outside of those areas.
In 2018, many regions outside of CAISO and PJM began adding greater amounts of battery storage capacity to their power grids, including Alaska and Hawaii, the Electric Reliability Council of Texas (ERCOT), and the Midcontinent Independent System Operator (MISO). Many of the additions were the result of procurement requirements, financial incentives, and long-term planning mechanisms that promote the use of energy storage in the respective states. Alaska and Hawaii, which have isolated power grids, are expanding battery storage capacity to increase grid reliability and reduce dependence on expensive fossil fuel imports.
Source: U.S. Energy Information Administration, Form EIA-860, Annual Electric Generator Report
Note: The cost range represents cost data elements from the 25th to 75th percentiles for each year of reported cost data.
Average costs per unit of energy capacity decreased 61% between 2015 and 2017, dropping from $2,153 per kilowatthour (kWh) to $834 per kWh. The large decrease in cost makes battery storage more economical, helping accelerate capacity growth. Affordable battery storage also plays an important role in the continued integration of storage with intermittent renewable electricity sources such as wind and solar.
Additional information on these topics is available in the U.S. Energy Information Administration’s (EIA) recently updated Battery Storage in the United States: An Update on Market Trends. This report explores trends in battery storage capacity additions and describes the current state of the market, including information on applications, cost, market and policy drivers, and future project developments.