Five Emerging Technologies Transforming Oil and Gas

We are living in uncertain times for the oil and gas industry. Prices have, over the last two decades, been subject to unprecedented volatility. Regulations in many jurisdictions have grown more tight, environmental concerns are becoming more prescient, and geopolitical issues leave companies with little ability to make long-term business predictions. 

More than ever before, companies in oil and gas — and in the petrochemical industry in general — need to be ready to implement solutions that might bring value in unique ways. As a result, these firms have become interested of late in several emerging technologies.  

Today, we would like to explore just a few of these technologies and discover how they are being adopted in the oil and gas industry.

Big data, AI, and Machine Learning
In business, big data analytics is the process in which analytical models and techniques are applied against large data sets in order to uncover new insights and opportunities for better value creation. Artificial intelligence and machine learning, which automate big data analytics, have become go-to tools in this sphere over the last decade. 

Use cases for big data and machine learning in the petrochemical industry span all phases of oil and gas field development. According to an article in the journal Petroleum, big data analytics is used from the very start of the exploration phase to assess seismic data and improve reservoir characterisation and simulation. Later, during the production phase, the technology helps to reduce drilling time and increase safety for workers, while predictive algorithms help engineers to optimise the performance of production pumps and managing assets. Downstream, data analytics enhances transportation efficiency through smart routing and the management of strategic delivery channels.  

The Internet of Things
As can be understood from the above, the introduction of big data analytics has already begun to play a huge role in unlocking value for businesses in the oil and gas industry. Given its ability to supercharge the data collection process, the implementation of IoT technology goes hand in hand with these data-driven strategies. 

The Internet of Things (or IoT for short) refers to the growing network of physical objects ('things') that are embedded with computational devices, sensors, and software, and which communicate over the internet. The purpose of the IoT is to empower individuals, companies, and other organisations to have access to a steady stream of data, delivered in real time from the source. 

In oil and gas, the IoT is primarily used in monitoring. During the exploration phase, smart sensors are deployed to collect information about the geology of the reservoir. In later phases, sensors are used to monitor for safety. Today, storage tanks come equipped with these sensors as a default, and they are likewise installed along pipelines and in transportation vehicles. 

IoT is increasingly being implemented to address supply chain inefficiencies. For example, sensors are frequently installed in the storage facilities of customers. The replenishment of these facilities can be streamlined with automated orders sent to the supplier when volumes fall to a certain level. 

Cloud Computing
The effective implementation of big data analytics and the IoT into a business leads to one obvious complication — a very large amount of data that companies must somehow manage. Cloud computing is how the vast majority of businesses deal with this issue. 

In simple terms, cloud computing is a means by which data and programs can be stored and accessed on the internet instead of on local hardware. In addition to data storage, backups, and analytics utilities, a large portion of the applications used by businesses exist 'on the cloud,'including email, virtual desktops, customer-facing websites, and collaboration tools. 

Cloud technologies are leveraged by companies in the oil and gas industry to increase accessibility to data. With the proper development of cloud-based systems, processes throughout petrochem can be streamlined, labor costs can be reduced, and safeguards can be introduced into all phases of production.

Robotics and Automation 
In the oil and gas industry, a very large percentage of a company's budget must be devoted to safety, whether it be in regard to working conditions for employees, or to setting up safeguards against environmental catastrophe. Moreover, anticipation of potential liability drastically inflates insurance costs. To remove the 'human factor,' bypass safety issues — and ultimately to reduce company expenses — robots and other automated technologies are increasingly being adopted by major industry players 

Applications of automated technology in oil and gas are numerous, and range from simple software bots that monitor pipelines and storage to advanced underwater robots which apply the same technology used in the Mars rover to deep-sea exploration. It's not all science fiction, however: As outlined in a report from Deloitte, robotic process automation (RPA) can already seamlessly be integrated into most petrochemical companies using existing system infrastructure. With use cases ranging from accounting to automated monitoring and alerts, Deloitte estimates that RPA can reduce back-office labor costs by as much as 25-30%. 

Two things are virtually always true about oil and gas companies: First, they operate across borders, and second, their business processes are highly dependent on reliable security infrastructure.  Given the proven track record of blockchain (the technology behind cryptocurrencies) in streamlining and securing international supply chains, its adoption in oil and gas is worth consideration.  

In simple terms, a blockchain is a distributed ledger (or list) of transactions that is maintained by a network of internet users. Unlike the regular web, the information on blockchain networks is immutable (cannot be changed or deleted) because of special protocols which require that all information on the network be verified against previous lists whenever new transactions are carried out. 

There are several potential use cases for blockchain in petrochem. To begin, employee and equipment records can be stored on blockchains in order to improve trust between companies, governments, and other organisations, including environmental protection advocacy groups. In such a system, governments would be able to verify that health and safety regulations are being followed in the form of completed inspections and employee training. External parties would have access to this information openly on the web, fostering a greater degree of transparency for the industry as a whole. 

Next, oil and other petroleum products can themselves be tokenised. In other words, tokens could be issued with values that are equivalent to some unit, such as a barrel of oil. This allows for easier, cross-border, commodities trading and removes many barriers to export. 

Overall, blockchain may be most useful for oil and gas companies by providing an ultra-secure infrastructure that brings all the above technologies together. In the coming years, we will begin to see the development of private blockchains that connect all the various IoT sensors, robotic devices and software as an extra safeguard, in addition to redundancies stored on the cloud. 

Strategising Tech Adoption
The implementation of emerging technologies into any business is never a linear process. Just like other kinds of digital transformation, company decision makers need to be ready to find unique ways of implementing massive changes, while at the same time managing to keep regular business operations going without interruption. To achieve this, it is usually helpful to bring on impartial, third-party, experts that can make sure the company's strategy can be successfully implemented.  

We at Buxill IT LTD provide our clients with a unique perspective, and bring to the table decades of experience in implementing change into the petrochemical industry. Oil and gas is all we do, and IT consulting and development services are unparalleled in terms of sector specialisation. Contact us to learn more.