The oil and gas industry is made of some of the wealthiest companies and individuals in America. Even though it has incurred huge losses in the previous year due to significant decreases in oil prices, brought about by the pandemic-caused dive in demand, these oil companies, still, have the most abundant reserves of cash in the American economy. But ,most of them are yet to embrace the global trend towards digital business transformation.
Adopting the latest technological innovations can have a huge positive impact on the operational efficiency of oil companies. If you’re looking for ways to implement technology, you can check out precision machining services and similar companies offering technological solutions.
Stuck In Crude Ways
One of the biggest problems being faced by the oil and gas industry is that I’s been relatively quite slow to adapt to technology, as compared to other capital-intensive industries. Aside from adopting more advanced industrial machines and rig equipment, oil and gas companies have been lukewarm to the idea of investing in digital technology.
In recent years, most players in the industry have been affected by sweeping changes in manufacturing technology and innovation. But, unlike other industries, it took quite a while before most of the players in the oil and gas industry embraced the need to adopt technological innovations in the use of software for their operations. These include adopting cybersecurity for its operations
Analysts say that the reason why the industry has lagged in technological innovation is that the capital powering the industry is, still, stuck in its traditional mindset and old ways. According to them, oil companies haven’t had the need or incentive to change their ways.
High oil prices in recent years have given them the profit cushion to ignore the inefficiencies in their operations. In short, those who call the shots in the oil industry don’t see how technological innovation can further drive up their business value.
Leveraging Technology To Grease Profits
Some industry analysts have said that the time has come to bring the oil and gas industry into the digital age. The oil and gas industry is a multi-billion-dollar industry. Having the money to finance digital transformation and technological innovation projects isn’t a concern.
Indeed, if these oil and gas companies wanted to do anything with their companies, there’s very little that can stop or limit them from doing that. Both upstream and downstream oil companies will certainly benefit from technological innovations.
Here are some of the technological innovations that can drive up their efficiency and business value:
1. Automation And Robotics
Prior to 2014, most of the players in the oil and gas industry weren’t paying attention to robotics. There were some efforts to bring onboard automation technology projects, but these were mostly limited to rig operations technology and equipment. And, most of these projects weren’t integrated with the other systems in the other company departments. They’re trying to ‘modernize’ the monitoring equipment used for rig operations, but the other aspects of company operations and management were left untouched.
However, things are starting to pick up, and many oil and gas companies are embracing technological changes as they try to rise out of the collapse. For example, there’s a technological innovation developed by an oil company that promises to have a significant impact in improving efficiency in oil rig operations. This kind of technology was able to develop automated processes for dangerous and repetitive tasks. One such automated process is that of connecting drill pipes to oil rigs.
The drawback with this technology, however, is that oil rig workers now fear that they might lose their jobs to automation. Before, workers on the rig had to place and put drill pipes into oil rigs, but, now, those tasks are being taken over by automated robotic equipment. This task used to take several workers to complete, with the ever-constant presence of risk that someone might get hurt while the drill pipes are being put in their places. With this drill pipe installation robot, oil companies can achieve greater efficiency and accuracy.
2. Systems Integration
As oil and gas companies embrace technological changes and innovation, they’ll start to invest their money in various technological packages offered by various research and development companies. Sometimes, however, these software and industrial equipment packages aren’t compatible with each other or with the rest of the existing equipment and software applications of the company. The result is that company systems exist in autonomous ‘silos,’ which are completely separate and divorced from the rest of the company’s systems.
Such changes will eventually result in other kinds of inefficiencies. Since some or most of the company systems and equipment don’t have direct or smooth coordination and interoperability, workflows and processes are hampered. For example, data produced in one aspect of operations might not be easily or conveniently transferred to another department if its work systems are incompatible. It’s going to take them the additional effort and task of transforming files into formats that their systems can understand.
3. Artificial Intelligence
Another technological innovation that oil and gas companies can leverage to further improve their operational efficiency is the use of artificial intelligence (AI). The potential applications of AI in the oil and gas industry are enormous.
Given the constant need for accuracy and efficiency in oil rig operations, AI can certainly be employed to vastly improve the management, processing, and analysis of data from oil rig operations. This data can prove very helpful in identifying problem areas in oil rig operations, as well as areas of opportunity for further improvement.
The use of AI will enable companies to discover erstwhile undetected patterns and trends in their operations. This will help oil companies in terms of being able to pinpoint, and even predict, the causes and patterns of inefficiency in their business operations.
For instance, AI can gather data about the workflow in oil rigs, as well as in refineries, storage depots, and distribution hubs. Based on the data it gathered, AI can, then, identify bottlenecks and other causes of inefficiency, and make its recommendations on how to improve the existing workflows and systems.
With AI, companies can improve operational performance and efficiency from the level of field workers, up to management and executives. AI would be very useful in automating processes, streamlining operations, and interconnecting devices in an Internet of Things (IoT) network. Oil companies would certainly benefit from the business intelligence that AI and IoT can produce. The end result is better operational excellence and significantly higher efficiency.
Oil And Technology
Industry observers said that the oil and gas industry as a whole has lagged in adopting technological innovation. It lags behind other industries. They also said that other large-scale enterprises in capital-intensive industries have done a better job at embracing technological changes and incorporating these into their digital transformation journeys. This article discussed the various ways the oil and gas industry can leverage technological solutions.
Oil and gas operations are commonly found in remote locations far from company headquarters. Now, it's possible to monitor pump operations, collate and analyze seismic data, and track employees around the world from almost anywhere. Whether employees are in the office or in the field, the internet and related applications enable a greater multidirectional flow of information – and control – than ever before.