The oil and gas sector is among the biggest IT spenders in the region, with economies heavily reliant on hydrocarbon exports. Energy firms leverage IT across all core functions, but the most significant innovations are now in exploration and production.
Mark Walker, Research Director, Insights and Vertical Industry Practice with IDC MEA spoke to AMEinfo.com about the digital oilfield concept and the need for innovation:
“I think the key thing at the moment in oil and gas is the concept of a digital oilfield. Adoption is very good. The challenge is that the oil and gas sector is very complex, right from the procurement and purchasing side of things, from a business perspective, right through to the actual extraction, exploration, refining and distribution.”
“If you look at places like Dubai Petroleum or Saudi Aramco, especially in this region, there’s not a lot of ‘new, new’ oilfields being found. So the existing reservoirs have to be mapped and tapped that much more effectively.
As technology improves, more oil wells are being revisited with new, more sophisticated extraction and mapping techniques. The technology used 30 years ago couldn’t see well enough – they couldn’t get enough detail and now this enables it.”
Drilling software can make sure extraction is done in the most reliable and efficient way possible. “You can’t just stick a drill in the ground and let it gush,” says Walker. “As the resource becomes less then we have to find more efficient ways to extract what is there. You also maximize what you don’t leave behind.”
BP poll reveals Digital Oilfield concept will create greater value
A recent BP poll indicated that digital oilfield concepts will prove valuable in delivering higher levels of automation and integration, The Maritime Executive has reported. 100% of the 2,000 or so industry experts at the SPE Intelligent Energy International 2012 (IE2012) were confident of greater value and efficiency.
BP cited its options for the next phase of digital oilfield development at IE2012, drawing on experience from its Field of the Future programme, established 10 years ago. Steve Roberts, VP of the programme, claimed at the event: “BP has a clear vision of how we see the concept of the digital oilfield developing in years to come, and the significant role it will play in enhancing value.”
This key advancement in oil and gas right now is actually more of an umbrella technology. The concept of a digital oilfield is quite broad as it essentially consolidates upstream, downstream and midstream oil and gas environments; computerises them and processes information. There are many elements, but previously updating tech in one area, led to disconnects between the various facets within the industry.
ICT integration crucial as oil and gas sector sees loss of staff experience
Technology is replacing experienced labour by necessity and not design, as ageing employees retire with valuable engineering skills, according to IDC experts. Staffing remains a big issue for CIOs as the ‘digital oilfield’ model is adopted by national oil companies (NOCs).
IT use ranges from the use of seismic sensors, digital oilfield mapping and analytics for critical decision making. The industry is poised to enter the next stage of IT adoption, but with new opportunities come new challenges, says Walker:
“Staffing remains a key issue, which is heightened in the oil and gas sector because of the ageing expert population. The petroleum engineers are all getting older but not replaced, so as they retire their knowledge is lost. Technology has a role to play in harnessing that information, keeping it and reapplying it through the automation of processes, databases and so on.”
New technologies automise processes, so while the user may require a less in-depth understanding of the engineering, they do require an up-to-date working knowledge of the frequently updated apparatus.
“The fact of the matter is the industry has too few people. That’s in the petroleum side, as well as the IT side. Good IT people are hard to find generally and are difficult to retain, but the training can become obsolete very quickly. It’s an endemic problem,” explains Walker.
The call for standardisation of existing technologies, ensuring that expensive training is more sticky, is delicately balance with the need to innovate and push for efficiency.
Digital Oilfield a viable solution, but offers inherent challenges
Digital oilfield services are expected to exceed $200bn by 2015 – over 40% growth from the current market size, according to information from The Digital Oilfields World Summit. This shift over to this model is expected to lead to an additional 125 billion bbl, which equals Iraq’s current estimated reserves, based on studies by Cambridge Energy Research Associates (Cera).
Such growth over just a few years would mean huge investment, but the rewards are worthwhile and the need for mapping and re-tapping is only mounting. With the loss of valuable engineering experience, technology adoption is critical to automate processes – and the issues involving education and re-training are a relative non-issue with relentless, growing energy demand.