As a member of the and gas industry, you’ve probably heard of the many advancements that have been going on in the sector. Truthfully, the sector has been experiencing huge changes all thanks to the digital innovations of today. Unlike other industries that have been open to the sector has been lagging for several years now.
The potential brought forth by the information revolution has been duly noted and in some industries actualized. This potential feeds into the oil and gas sector, addressing issues such as environmental pollution and global warming. Any petroleum & energy business in the sector that effectively draws on the power of the digital revolution will achieve a major competitive advantage over rivals, and you are not an exemption from this.
This article details the challenges and technological advances in the oil and gas sector while defining how these elements have helped in digitizing the industry. Enjoy!
Understanding the Oil and Gas Supply Chain
There is a long process that crude oil undergoes as it is processed into the various products it gladly represents. The oil and gas supply chain is divided into five parts;
- Exploration; this is where a team of professionals goes out drilling in search of the most lucrative spot for oil extraction.
- Production; after the location has been found and the well has been struck, the next logical step is to extract the oil from the other.
- Refining; Consumer energy materials are refined from crude oil.
- Marketing; The products are then advertised for sale.On successful a
- Product sale; On the successful advertisement, the product is then sold to the consumer.
Challenges in the Oil and Gas Sector
Due to the unique nature of the oil and gas sector, the challenges that arise within operating such a business are vast and unique, as we’re sure you can attest to. In fact, it would be an understatement to conclude that the oil and gas industry is unlike any other. A slew of unique problems and concerns emerge, including:
- Large infrastructural capacity: The infrastructure necessary at each stage of the supply chain is enormous. Every part of the infrastructure, from drilling equipment to pipelines, distribution networks, compression and metering stations, and storage facilities, is massive in terms of cost and scale.
- Remote area access: currently, every portion of the globe is being examined for potential energy production. Underwater, in the Arctic, or other hostile environments may well be suitable locations for the same.
- Safety concerns and compliance challenges: Oil and gas companies, featuring in one of the most heavily regulated sectors on the planet, have to be more concerned with safety and enforcement concerns than the average company. There would be consequences from authorities and consumers if an accident occurs and proper procedures and protocols were not followed.
Robotics and other digital systems have advanced to the point that they can perform high-risk tasks more effectively than humans. Automated drilling, for example, would lower overhead, improve employee safety, and make drilling on smaller sites economically viable.
The automated factory also plays a big role in the safety and compliance concerns. To keep production efficient all you have to do is buy and install pressure vessels, fired heaters, storage tanks, the trunnion ball valve, pumps, compressors, among other top-quality equipment for your automated refinery. After which, the automated system will do the less safe work for you.
There are inefficiencies in any aspect of the supply chain that can be fixed. One company has created a platform that uses an automated injection system to prevent the formation of hydrates, making extraction more effective. Other research indicates that using metal-organic frameworks in oil and gas transportation could fundamentally change the industry by removing the need to vent hazardous materials during the journey.
Fleet Management Technology
It’s never been easier to monitor employees and equipment. Important data can now be captured and accessed almost instantly, including in the most remote areas, thanks to GPS monitoring. An organization will still know where all of its costly equipment is and will be notified if anything is missing.
IoT(Internet of Things)
Machines that are always connected have the most up-to-date details. This will help oil and gas companies in predicting equipment failure and minimizing downtime.
Since a single pump failure can cost hundreds of thousands of dollars for a company, knowing the state of pumps in real-time allows for replacements to be ready for those that are considered vulnerable to failure. Real-time data like this would help the management team in making smarter, more informed decisions.
For both onshore and offshore teams, effective communication plays a key role in the productivity of a company. With the introduction of online communication platforms for video conferencing, work and equipment tracking, audio communication, etc. there has been an increase in productivity. This has made it possible to keep only the necessary employees at a single location.
Cloud Computing Solutions
The internet cloud’s capacity has been touted for years for data-driven companies, but the oil and gas industry is just now catching up. The following are some of the potential advantages of cloud computing in the industry:
- Data analysis in real-time.
- Increased marketing and advertising efficiency
- Cloud computing provides opportunities for environmental preservation. This is reflected in the energy efficiency of cloud computer networks.
It’s no wonder that technology has become more prevalent over the last decade. According to the World Economic Forum, a digital revolution in the oil and gas sector could unlock $1.6 trillion in value for the industry and its customers. So, whether you have been a long-term player in the oil and gas industry, or are just starting, technology guarantees improved efficiency on a large scale.