How digital technology is transforming the oil industry

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The tide is going out on accessible, low cost oil production. Multinationals need new ways to maximise yield and tackle heavier oil in more unconventional situations. Could digital oilfield technologies hold the answer?

Vodafone Global Enterprise, in conjunction with Huawei Technologies, recently worked with more than 100 oil and gas leaders to find out their opinions and perceptions about how digital technologies can help propel the industry forward. The following article looks at industry adoption, investment and expectation.

Rapid advancements in digital technologies are having a direct impact on the way oilfields function. Wireless communications, which are already used by 75 per cent of companies are enabling a better connected workforce, while increasing the security of isolated workers through location-enabled mobile devices. The potential benefits and efficiencies of managing connectivity and communications even in the most remote and hostile environments creates a clear business case for digital oilfield adoption. Organisations that have already transitioned are experiencing good cost reductions, better process management and faster information flow – while projections indicate the industry will see some $360m of further investment into digital oilfield technologies and solutions over the coming year.

The measure of digital oilfield success

Of the 66 per cent of industry leaders that have already operated some kind of trial or pilot scheme involving digital oilfield solutions, success has been closely aligned with effective strategic planning, smooth integration into existing systems and processes; and support from high-level leadership. Sufficient evidence of success is also the reason why a quarter (25 per cent) of individual leaders will be committing substantial investment of more than $30m into digital oilfields over the next 12 months, with more than half (52 per cent) forecasting spends in excess of $10m.

For these organisations physical and virtual security is the most important area for digital oilfield investment, followed by data collection and sharing, maintenance and control processes, data modelling and software solutions, and knowledge sharing.

Rising to the challenge

Most oil and gas multinationals have a reasonable understanding of the significance and potential benefits of the digital oilfield and value technology highly, a significant proportion – largely those yet to trial the technology – still remain uncertain over the practical benefits.

While some recognise the opportunity to harness better business agility by working in a more streamlined, better connected and data-centric way, for others uncertainty surrounding solution robustness and risk are creating bottlenecks to adoption.

The most significant barrier to digital oilfield adoption cited by firms is the challenge of maintaining data security and regulatory compliance within an open, shared systems model. Equally high on the agenda is the need to keep teams and lone workers safe. Concerns that, while valid, are not without their solutions. Fully encrypted wireless networks can deliver universal coverage while logically separating data between private access point names (APN) for complete data integrity, while end-to-end remote tracking, monitoring and support can ensure employee are safe, no matter where they are.

Businesses cannot support device flexibility and more flexible working practices without the right mobility strategies in place. While these vary from the traditional corporate provisioned device and service, through to the Bring Your Own Device (BYOD) model, having the right policies and processes in place is critical in managing any business’ mobility environment.

Future-proofing the oil and gas industry

Preparing for the changing and uncertain nature of the industry is critical. With 66 per cent of companies already seeing the benefits of digital oilfield pilots, the promise of enhanced performance and reduced cost benefits, and the impact across operational areas including the security of people, data, premises and physical assets is clearly already being realised. But if digital oilfield technologies are to truly future-proof the oil and gas industries, effective high-level leadership, the right business culture and the adoption of appropriate technologies, such as wireless and cloud, to assure success and mitigate the risks of managing complex big data will be incremental to the tidal wave of change.