Digital Transformation in Energy

The pandemic and the global push to cleaner energy solutions have accelerated digital innovation in the oil and gas industry as performance and cost optimisation, employee safety, and emissions reduction have become even more prominent drivers of efficiency and reliability.

The energy sector had already started to recognise the value of investing in digitalisation even before the COVID-induced slump in the industry last year. As companies and their supply chain partners exit the crisis, they are increasingly focused on optimising existing businesses and creating new avenues of business lines for diversification into cleaner energy sources.

From oil and gas supermajors to start-up tech firms and oilfield services providers, all companies active in the energy sector acknowledge that the digitalisation trend is accelerating and technology will play an increasingly important role in the future of energy supply and distribution.

Digital innovation is a top trend in Oil & Gas

This year, as companies in the industry emerge from the pandemic slump with higher cash flows and stronger balance sheets, digital innovation is accelerating and chief investment officers (CIOs) in the sector expect an increase in digital platforms and investments, technology research and consulting company Gartner said in a report in August.

According to the Gartner 2021 CIO Survey, a total of 87% of CIOs expect their digital programs to increase or stay the same in 2021. The commitment to digital innovation is a relatively new priority for oil and gas companies. In 2019, it was ranked the third-highest priority for CIOs, and in 2014, there was no specific funding allocated to it.

85% of CIOs in the oil and gas industry have assumed responsibility for creating a change-enabling technical platform and 79% say they are working to build a stronger change leadership culture in IT, the survey found.

Digital twin technology is also among the top ten trends in the industry, as digital twins have the capacity to improve operational efficiency, prevent downtime, reduce maintenance and maintenance costs, and allow for more effective collaboration between experts and operators, Gartner said.

Artificial intelligence (AI), advanced analytics, machine learning, automation, the Industrial Internet of Things (IIoT), and cloud-based data aggregation platforms have also become popular in the oil and gas sector which is creating intelligent assets to boost uptime and efficiency. The Gartner survey found that 50% of oil and gas companies plan to increase investments in AI-related and cloud systems.

The use of augmented reality and machine vision has jumped amid now well-established remote operations, which accelerated during the pandemic.

“The unique stresses of 2020 have elevated three business imperatives for 2021: optimising business performance, creating new capabilities and strengthening technology foundations,” Simon Cushing, Senior Director Analyst at Gartner, said, commenting on the report.

Intelligent automation, advanced analytics, AI, and IIoT will be key enablers for greater adoption of digitalisation in the oil and gas industry, which is pressured to remain competitive in the energy transition and reduce costs while boosting efficiencies, EY said earlier this year.

“The current situation will accelerate strategic and operational reviews of companies, with digitalisation at the heart of this process. The convergence of digital, cloud computing and the new normal in oil prices has positioned the oil and gas industry for a massive transformation,” Sanjeev Gupta, EY Asean Energy Leader, and Juang-Wei Mok, EY Asean Consulting Markets Leader, wrote in May 2021.

“Given the scale of oil and gas operations, incremental improvements can have a tremendous impact,” the EY executives noted.

Oil & Gas firms embrace digital transformation

A growing number of major companies in the sector are embracing technology, which is changing the way industry professionals interpret seismic data, improve the operational efficiency of upstream, midstream and downstream assets, monitor emissions, and protect critical assets from cyber threats.

At the beginning of this year, the Abu Dhabi National Oil Company (ADNOC) was awarded the Offshore Technology Conference (OTC) 2021 Distinguished Achievement Award for Companies, Organisations and Institutions for its Panorama Digital Command Center (Panorama).

The centre, launched in 2017, has already generated more than over $1 billion (AED3.67 billion) in business value for ADNOC and uses AI, big data, and other advance technology to increase efficiency, optimise performance, and unlock additional value, the company says. The facility at ADNOC’s headquarters displays 250,000 real-time data points from all operational sites and provides complete integration of data between offshore and onshore facilities.

“Through sustained investments in technology and innovation, ADNOC has become a champion in artificial intelligence and digitisation, and we will continue to use cutting-edge and advanced technology to generate value, drive efficiencies and optimise our operations as we deliver on our 2030 strategy,” said Abdulmunim Saif Al Kindy, ADNOC Executive Director for People, Technology and Corporate Support.

Another example of technology helping oil and gas companies to innovate is U.S. supermajor ExxonMobil field testing last year new methane monitoring technologies, including satellite and aerial surveillance monitoring, at nearly 1,000 sites in Texas and New Mexico to further reduce methane emissions. The field tests were evaluating effectiveness and scalability of a range of next-generation detection technologies that in addition to satellites use drones, planes, helicopters, ground-based mobile and fixed-position sensors.

Technology company ABB launched in April 2021 a Mobile Gas Leak Detection System, HoverGuard, an Unmanned Aerial Vehicle (UAV)-based system that detects, quantifies, and maps leaks up to 300 ft from natural gas distribution and transmission pipelines, gathering lines, storage facilities, and other potential sources. The system automatically generates comprehensive digital reports that summarise results and can be shared in minutes after a survey.

Shell and technology solutions provider Kongsberg Digital entered this year into a strategic agreement to collaborate and accelerate digital solutions and transformation for well delivery and performance. Shell has been utilising Kongsberg Digital’s real-time data products in its global wells portfolio for several years.

“Advances in cloud technology, ML delivery and visualisation techniques open up opportunities to improve operational safety and decision making. This will position both companies at the forefront of drilling and wells digital journey,” says Jon Crane, Vice President of Wells Digital at Shell International.

Shell, together with Baker Hughes, Microsoft, and C3 AI, launched early this year the Open AI Energy Initiative™ (OAI), a first-of-its-kind open ecosystem of AI-based solutions for the energy and process industries.

The OAI provides a framework for energy operators, service providers, equipment providers, and independent software vendors for energy services to offer interoperable solutions, including AI and physics-based models, monitoring, diagnostics, prescriptive actions, and services, powered by the BHC3™ AI Suite and Microsoft Azure, said Baker Hughes, one of the world’s largest oilfield service and technology providers.

“Taking energy forward requires new approaches to technology that leverage collaboration, open data standards, and cutting-edge AI capabilities,” said Uwem Ukpong, Executive Vice President, Regions, Alliances & Enterprise Sales for Baker Hughes.

The other two major oilfield services providers, Schlumberger and Halliburton, are also expanding their digital portfolios as E&P companies and downstream operators are increasingly looking for digitalisation of operations.

At the end of September, Schlumberger and AVEVA announced an agreement to integrate edge, AI, and cloud digital solutions to help operators optimise oil and gas production. Schlumberger and AVEVA will work together to streamline how energy operators acquire, process and action field data for enhanced wellsite efficiency and performance.

“Digital transformation of critical infrastructure requires a strategic vision that transcends technology to drive efficiency, achieve profitable business outcomes and deliver sustainability,” Andrew McCloskey, Chief Technology Officer at AVEVA, said.

“Recent macroeconomic events have highlighted the need for agility throughout all industries,” McCloskey added.

Halliburton, the top fracking services provider in the world, said in August it had successfully launched its SmartFlee intelligent fracturing system with a major operator in the Permian Basin.

Halliburton says that its SmartFleet technology integrates intelligent automation and visualisation with subsurface measurements across multiple wells simultaneously to dynamically respond to reservoir behaviour.

“We view the SmartFleet system as a tool that provides valuable insights into subsurface fracture placement,” Aaron Hunter, vice president of the Midland Basin for ConocoPhillips, says. “These insights lead to informed decisions that improve fracture performance.”

Read the latest issue of the OGV Energy magazine HERE.