Digital Transformation in Oil & Gas: Transforming the Experience

By Crystal Kline, energy writer

The oil & gas industry is experiencing a rapid paradigm shift in regards to digital transformation, entering into a new era of “smart” technology during a time when price cuts on crude oil cause  companies to decommission rigs and cut investment in exploration and production.

“It’s all about completely transforming the way that you think.” ~ Vasuki Upadhya

It is nearly impossible to listen to public radio or read the news without running into a story that highlights how quickly technology is outpacing humanity. While many of us are still getting used to the Internet, technology has moved past us to digital transformation, nextgen customer experiences, smart technologies, asset management, artificial intelligence (AI), the Internet of Things (IoT), and even further to the Industrial Internet of Things (IIoT).

Businesses today have the opportunity to transform and change its existing models, structures, policies and organizational patterns. It’s digital transformation that makes this possible. Whether a business is just beginning to digitize by managing its assets to monetizing on a deeper digital level, it is a fact that digital solutions are rapidly redefining the way business operates.

The oil & gas industry is experiencing a rapid paradigm shift in regards to digital transformation. We have entered into a new era of “smart” technology during a time when price cuts on crude oil cause oil & gas companies to decommission rigs and cut investment in exploration and production.

Like any other industry that needs to stay on top of current technology in order to survive, the energy industry cannot simply rely on consumption to sustain and influence profit margins, according to Vasuki Upadhya, Technology Architecture practice head for Oil and Gas, E&C, Mining Industry at Wipro Limited. The days of depending on society’s constant craving for oil and gas and cutting costs when prices descend are over.

“Many leading oil and gas companies are becoming more competitive by utilizing greater asset management practices; yet more still needs to be done,” says Upadhya.

The same digitalization that allows companies to more quickly see the need to repair and replace current equipment before it breaks down, thereby avoiding costly downtime, is a two-edged sword, he points out. To be able to take the greatest advantage of that technology, a company must be able to receive the massive flow of data that is a product of IIoT. Indeed, in and of itself, this new abundance of information is an entirely new asset, but can also be viewed as a liability if a company is not set up to deal with it effectively. This, says Upadhya, is one of the major challenges of digital transformation. An avalanche of data can disrupt the business when you are trying to use that very data to make the business operate more smoothly and efficiently.

Another challenge is to transform in the area of convergence of data, people, and machines. “Live collaboration is going to be very important,” he says.

Wipro have realized the need to have an end-to-end value proposition for clients who are leading this journey for its customers. Upadhya’s team has established a proven model to enable customers through a 5-step digital ideation process.

Integration of communications, remote sensors, and data analytics is already here.  This technology is swiftly evolving at a dizzying pace, enabling oil and gas companies that operate at technology’s edge a decided edge in business, not only improving asset management, but also improving management of supply chains and client relationships. Digitizing a company creates new wellsprings of information that augment and enhance operations, improve efficiency and dependability, and add value at each segment of the oil and gas business, helping them deal with their own specific sets of challenges.

Digitizing upstream operations: The lower oil prices are moving the upstream segment to not only improve their vulnerabilities in exploration and production, but to enhance operational capabilities. Comparatively sluggish data processing and data management capabilities are impeding their progress in performance.

Transforming the midstream: While conventionally functioning as the link between demand and supply segments, midstream companies are now operating in a more complex role as a result of significant changes in supply and demand. In response to this fluctuation in the industry, midstream companies have reprioritized their focus to network maintenance and operation.

The digital downstream: Those in the downstream sector face decreased demand and greater global competition, digitization can help.

Digital transformation manages the massive influx of new data, enabling the information to add value to each business segment as it opens the information pipeline to create a smoother and rapid flow of information gathering, dissemination, and analysis.

Some examples of digital adoption in the oil & gas space include automation of digitization of unstructured paper based/scanned documents for engineering drawings, documents, well repots and schematics. Transforming digitally with the help of assistive conversational cognitive mobile apps and AI-based automation is also a major trend in the industry.

Here are some additional examples of digital transformation:

  • AI based Automation of Anomaly Fraud detection in Financial and Procurement domain
  • AI based Automation for claims processing, invoice/BoL processing, develop knowledge based cognitive Apps
  • Self-help chatbots for cross discipline employee collaboration
  • Digital enabling of end to end proactive IT service Management, extending it to client/supplier interactions as well
  • Business events prediction in the operations domain to enable proactive actions or to defer the avoidable events
  • Smart enabling the Field operations in early detection of operational events and notifying them using Edge Analytics solutions
  • Automation of customer or supplier onboarding process.
  • Digital platforms for automating supplier/partner collaboration & building new insights from the data
  • “Insights as a service” delivered on outcome based model
  • Automation of well/reservoir review process with dynamic online E-Books for wells and reservoirs
  • Automated workflows management for unrecognized workflows, which has been done manually today. Ex: Data management workflow to manage data acquisition lifecycle management in subsurface which helps in reduce the cycle time and cost.
  • Geospatial based Smart search solution for subsurface to quickly identify and tag the data set of user choice and provide the feedback on the search results that are not meeting users expectation so that the subsequent searches will be improved based on that feedback.
  • Knowledge driven case based advisory apps for decision making at the field operations.

While there are challenges to digital transformation in the oil and gas industry, the payoff in terms of increased efficiency and added value are enormous. And although automation will assuredly be replacing people in some positions, it will be creating the need for more and more data analysts, skilled engineers, and other digitally-literate personnel. In this ever-evolving digital era, the term “human resources” takes on new import. More rapid problem-solving, better and faster decision-making, greater improvements to operational efficiency, with resulting increased profits are all benefits of digital transformation.

While enjoyed by the oil & gas industry, the benefits of digital transformation are not restricted to the industry alone. Increased profits translate to more jobs. Higher employment translates to greater spending and an increase to a community’s tax base. Communities thrive when oil & gas thrives.

Digital transformation transforms businesses — and the client and customer experience. Digitally evolving with the needs of service providers and customers will take a company into a new era of service.

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