Like every other business operating in the digital economy, organizations in the oil and gas industry need to leverage innovation to remain relevant and competitive. As other sectors slowly wean themselves off fossil fuels, and alternative renewable energy sources continue to gain momentum, oil and gas companies can harness the power of technology to transform their organizations, improve their productivity, and increase their profitability. However, with wave after wave of digital transformation sweeping across the economy, which technologies should oil and gas companies consider, and what impact will they have on their business and the industry as a whole?
Even though blockchain is synonymous with cryptocurrencies, this technology is set to remodel multiple industries, including oil and gas. Data is the lifeblood of any digital business, but the amount of data processed by organizations today has transformed it from an asset into a burden. Organizations need a framework to control and authenticate the large volume of data they handle on a daily basis.
The operating mechanisms that exist within blockchain have the potential to reduce the risk of fraud and error. In addition to reducing risk, blockchain technology can also increase productivity by making financial transactions more efficient, facilitating regulatory compliance requirements, and enabling operations to improve their effectiveness.
According to the Deloitte report on 2018 Tech Trends for the oil and gas industry, key blockchain opportunities exist in land administration, supply chain, finance, inventory operations, and marketing. The report states that some oil and gas companies have even started piloting blockchain-powered smart contracts. These contracts are essentially autonomous agreements that are self-verifying and self-executing. They engage with vendors and engineering, procurement, and construction companies without the need for human intervention.
Blockchain has the potential to revolutionize both the upstream and downstream operations of oil and gas companies. It can introduce the necessary rigor, automation, and efficiency in tasks ranging from scheduling equipment maintenance to managing exploration acreage records. Effectively, oil and gas companies can leverage blockchain’s ability to provide a single, consistent history of transactions between parties that is irrefutable.
Internet of Things
The Internet of Things (IoT) is another technological wave that promises to revolutionize technology in the oil and gas industry. IoT in oil and gas provides organizations with the potential to see improvements in operational efficiency, increases in the collection of real-time data, decreases in safety risks, and a reduction in their environmental footprint.
In business, every decision made is based on the validity of the information at hand, and IoT has not only increased the quality of the data but the time taken to deliver it to the decision maker. Smart IoT sensors strategically placed on equipment in the field can provide oil and gas companies with real-time data that can help them make informed decisions.
Using IoT, oil and gas companies can harness the benefits of creating new ways to increase safety and provide relevant real-time information to the people who can use it most. For example, IoT can streamline operations and increase productivity by improving predictive and reactive maintenance on equipment in the field. Using IoT telemetry data, field devices can provide real-time information to operators on their current performance. Should field operations detect any anomalies, they can then dispatch the necessary repair crews to resolve the issue before the plant experiences any downtime or a safety incident occurs.
Since their commercialization, cloud services that range from fully-managed virtual machines to artificial intelligence platforms, have disrupted business models across a variety of industries. Enabling a new generation of technical innovation, they have transformed the way both businesses and consumers interact with and leverage technology to achieve their objectives. Oil and gas companies can take advantage of the innovative services the cloud has to offer that can help them improve both their speed and flexibility in a competitive market.
Leveraging the cloud and enhancing operations with automation can help oil and gas companies transform their back-office systems and processes. It also has the ability to improve their product and platform offerings. For example, an organization in the oil and gas industry realized savings of 52% by moving 350 of its applications to the cloud over the course of two and half years. Over and above the direct cost savings, the speed and efficiency of having access to real-time information in the field also increased operational efficiencies. By enabling field workers with accurate, up to the minute information, they were able to make better decisions on chemical resupply as they had access to planned versus actual usage and historical information.
In a competitive market, keeping costs down and increasing efficiencies are vital. Cloud computing can help oil and gas companies achieve both these objectives as they take the hassle out of managing their I.T. infrastructure. By moving their services to the cloud, they can focus on running their business instead of maintaining networks, servers, devices, and applications. Not only does this lower their direct I.T. costs, but it also helps them repurpose their I.T. resources to focus on initiatives that add value to their business.
Leverage Technology to Stay Relevant and Ensure Long-Term Growth
The oil crash of 2014 had a significant impact on companies operating in the oil and gas industry. It forced organizations to change their operational models, seek efficiencies, and cut costs. It also transformed the way oil and gas companies approached new projects. They started looking for smaller opportunities that maximized and accelerated investment returns with some organizations even venturing into renewables to ensure long-term growth. Organizations achieved many of these business objectives by taking advantage of the opportunities technology has to offer. Radically transforming their businesses by leveraging automation to enhance efficiencies and making informed decisions using accurate, real-time information, both large and small organizations were able to reduce their costs when revenues plummeted.
There is no doubt that technology in the oil and gas industry can radically transform operational and strategic I.T. models. Innovative new solutions leveraging blockchain and IoT can have a significant impact on traditional operations. By automating administrative tasks and providing decision-makers with accurate, real-time information, they can improve productivity and efficiency. Oil and gas companies leveraging cloud computing services can also significantly reduce costs and increase the mobility of their workforce. When the industry suffers a setback as it did in 2014, having the right technology in place can help oil and gas companies remain efficient and profitable ensuring they can weather any downturn in the economy.
JMARK has been helping oil and gas companies increase their success with the help of innovative I.T. solutions for thirty years. With an office in Tulsa, oil and gas have been fundamental to our success. The driving force behind everything we do is to help our clients leverage technology to save money and achieve their goals. To learn more about how we can provide your business with leading technology solutions for the modern oil and gas industry, contact us today.