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Oil and gas industry set to accelerate move to digital in 2019

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Ron Beck -


Digital transformation continues to be the keynote of the coming year for operators across the oil and gas sectors. Digitalisation is nothing new to the sector, of course. Refineries have, for example, been pursuing it for more than thirty years, with technologies like advanced process control (APC) well-established as part of the operational mix of many operators.


What is different today is how quickly the migration is accelerating. The trend is being led by the Asian refining industry. Organisations in India, Malaysia, Thailand, Indonesia and China are pushing digital transformation aggressively because they understand this can be a competitive and economic advantage for them against slower-moving, traditional rivals in other regions. Refineries in Europe must ensure they are not left trailing in the wake of their Asian peers.


Beyond the regional tailwinds though, the rate of technological change is already driving digital transformation the world over. The volume of connected data available to operators continues to grow quickly. Much of this is being driven by the ongoing expansion of the Industrial Internet of Things (IIOT) market, which according to research firm, Markets and Markets, is expected to grow from $64 billion in 2018 to $91.4 billion by 2023, at a CAGR of 7.39 per cent during that forecast period.


Coupled with this, we are seeing rapid growth in machine learning, making insights about plant and equipment available faster to senior decision-makers; and in mobility, visualisation and analytics, providing simple interfaces and insight to data and models.


The ability to examine and model data and trends rapidly helps operators make optimal economic tradeoffs, maximising sustainability and profit. Digitalisation also helps them build in the flexibility to utilise assets close to design capacities in the face of uncertain and changing product demands and economics. But perhaps the most urgent driver is around asset reliability and the way it can be improved through predictive and prescriptive maintenance techniques.


This is key because these technologies have huge potential across the sector, offering a better alternative to the traditional calendar-based approach to asset maintenance.


With this approach, the focus is analysing issues known to cause a problem such as vibration in a pump or compressor. Sonic monitors can be added to the device and when vibration exceeds a certain level, alerts can be sent to advise operators that remedial action is needed.


Prescriptive analytics adds a new layer of sophistication to the methodology, moving it from a product-based to a broader process-based approach. In delivering prescriptive analytics, there has to be a recognition that processes, activities and systems used in the plant are interconnected. Prescriptive analytics looks at data streams across these, and pinpoints sophisticated signatures and patterns of data that are happening in advance of an event.


Critically too, the approach also tells the operator the root cause of the problem. It can inform them not only that the compressor is going to fail but also that its impending failure is directly linked to the leakage of liquid into the gas lines at a certain concentration or even just a slow change in the pressure recorded. That effectively is the prescriptive element of the approach. It not only highlights the impending problem, it also highlights actions that can be taken to avoid it. It is still in its infancy today but over the course of 2019 we expect to see the level of interest and excitement around it gathering pace all the time.


Ultimately though, prescriptive analytics is just one example, albeit an important one, of the drive to digital across the oil and gas sector. In terms of outcomes, we see three key trends playing out across the sector as the march to digital gathers pace. First, the nature of work will change. As refinery and asset tasks become more autonomous and AI-assisted, significant productivity gain can be expected. Individuals and the businesses they work for need to understand that the requirement for workers will evolve. Organisations and people will need to retrain themselves.


We also expect to see 2019 witness the continuing roll-out of a new trend which we term here: “networks of industry co-opetition”. The opportunity to seamlessly connect elements of the value chain will give competitive advantage to companies who recognise that and can take advantage of the opportunity to build business alliances across the value chain. Much as Amazon has done with consumer goods shipping and delivery supply chains, process manufacturers will do to react to market opportunity and manufacturing and pricing challenges.


The final key trend across this sector will be around organisational change. Knowledge-automating and powerful provision of data and models across refining organisations will democratise the decision-making process. The people who embrace this will make themselves more employable while the organisations who embrace it will be most able to achieve digital transformation in a meaningful way and compete in 2019 and beyond.


[Ron Beck is Energy Industry Marketing Director at AspenTech]


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