The biggest news for oil and gas producers besides declining prices and increasing pressures to operate efficiently?
Their industry is beginning to take full advantage of digital technology that can enable them to better understand and quickly respond to production issues in real time. As a result, the Internet of Things (IoT) will touch nearly every area of operations, with production rates improved by as much as 15 percent.
That’s the short version of the presentation by SAP and AT Kearney at this year’s SAPPHIRE NOW conference, highlighting what’s powering the next economic revolution for the oil and gas industry. The connected oilfield was one of five key takeaways from the conference. The other top industry topics were:
- How to Maintain Operational Integrity
- Priority on production management
- Focus on Operational Excellence
- S/4HANA Simplifies the IT Landscape
Read more about these key industry issues here.
Connecting Your World
Speaking to oil and gas producers, Stephane Lauzon, director, oil and gas industry, SAP, and
Brian Forbes, partner, AT Kearney, showed how the Internet of Things — machines embedded with electronics, sensors and software – is changing oil and gas Upstream operations. Each “thing” is uniquely identifiable in a computer network and shares information with other devices.
In an increasingly connected world, it’s now possible for companies to reach down into the operational layer at fields and wells to manage operations:
- Asset managers and production engineers can work remotely to check on the status of scheduled production and identify events and issues that can delay or halt production or drive costs over budget.
- Digital sensors on pumps, valves, tanks, and pipelines provide real-time tracking of activities in ways that empower oil and gas producers to understand which events need their attention.
- Data collected from hundreds or thousands of wells and fields can be analyzed and displayed on one computer screen to provide a concise overview of just what decision makers need. Then they can click on their screens to drill deeper into the information to learn about the history and forecasts for fields, wells, and even individual pumps or other equipment.
“We have seen very significant production uplift simply by using bits and parts of this capability as they have become available in the last five and six years,” Forbes said.
Declining Oil Prices Prompt Search for Efficiency
The convergence of changing economics in the oil and gas industry and technology trends is fueling adoption of the Internet of Things, Lauzon said.
Among the forces reshaping how oil and gas producers operate are declining oil prices — expected to remain at low levels into 2016. As a result, companies must find efficient new production methods. For many producers, that means operating with fewer and less-experienced employees. Keeping track of what these employees are doing in an industry as data intensive as oil and gas production is challenging without robust software for business intelligence and advanced analytics. The software becomes even more powerful as cloud computing grows rapidly. This enables mobile and simple access to complex information.
Networked Solutions for Better Informed Employees
The oil and gas industry has long relied on a large contingent workforce in remote locations. As declining oil prices force producers to rethink operations to find efficiencies throughout their operations, digital technology collecting, analyzing, and reporting on what’s happening empowers asset managers and production engineers in central locations and operators in the field. They can respond not just faster, but with a deeper understanding.
When a dashboard indicates that water is coming out of a well, one click on a computer screen takes a production engineer to additional information about the how to resolve the problem. In this case, the next step is to swab the well. The dashboard can display resource availability and costs. This enables the engineer to decide whether to proceed. The engineer can use the dashboard to submit the work for approval and place an order with a supplier to get the job done.
As swabbing the well progresses, the production engineer and operators in the field can see updates. Budgets are rebalanced automatically to account for costs for the work, even before they are invoiced.
“There are ways in which we need to be better connected and better work together, and that brings us into this networked world we’re seeing today,” Lauzon said.
Watch the full Internet of Things presentation, along with other SAPPHIRE NOW sessions, now.