4 minute read 29 Aug 2018
Engineer notebook oil field

How to accelerate the oil and gas IIoT journey

By

Adi Karev

EY Global Oil & Gas Leader

Experienced leader in the energy and resource industry. Cyclist competing in races all over the world.

4 minute read 29 Aug 2018
Related topics Oil and gas

Better asset utilization can help companies stay viable regardless of market conditions. Here’s how you can move up the adoption curve.

The industry will be forced to make significant operational changes if it is to remain economically viable in this low-price environment.

Increasing asset utilization is a critical area for the sector’s transformation. Improving utilization rates offers significant opportunities to lower costs and drive efficiency. Whether the aim is to increase production in the oil field or boost throughput in the refinery, improved asset utilization is a key goal for any technology investment in oil and gas.

Industrial internet of things (IIoT): informing impactful decisions with real-time information

What types of digital investment make the most sense for oil and gas companies, and where should these investments be focused? Just as asset utilization and uptime are critical drivers of profitability, maintenance and unplanned downtime are serious drains to a company’s bottom line.

Optimizing asset uptime while streamlining maintenance activities requires having access to accurate, detailed and timely information — the kind that comes from the promise of the “industrial internet”.

Using IIoT to connect assets, people and processes

While the oil and gas industry connects every continent and time zone around the world, many oil and gas companies still conduct their major operational processes in unconnected islands of activity. A company’s demand-and-supply planning activities often take place with limited forecasting accuracy, limited integration with process improvements, and lack of insight into market structure and positioning.

To achieve the full benefits of digital transformation, companies will have to build their capabilities along a maturity curve that begins with connecting operations, moves to connecting the value chain and, finally, builds a fully connected enterprise.

Three steps on the adoption curve

What will the digital oil field of the future look like, and how will today’s oil and gas companies get there? We believe that technology adoption will follow three major phases or stages, each building on the previous one and patterned after the well-known maturity curve approach.

  1. Connecting assets and operations
    The initial two phases focus on connecting field assets and equipment to the industrial internet through the use of sensors that provide automated monitoring and diagnostics. Through the creation of a cloud and IT environment (that can store and analyze incoming data from critical assets), the company begins to build real-time and predictive insights on the operation of individual assets and whole processes comprising multiple pieces of equipment.
  2. Connecting the value chain
    The next phase of creating a digitally connected oil and gas enterprise centers on connecting operations to both the internal and the extended value chain, which includes transportation, terminals and warehouses. Such interconnectivity must include automated ordering and logistics functions enabled by real-time tracking and predictive analytics of asset performance in the field.
  3. Connecting across the entire enterprise
    The final phase of digital adoption is achieved when a company connects all of its assets and processes across an integrated value chain. The IIoT and cloud architecture will allow companies to connect their operations on a global rather than local scale, whether it is connecting all subsea wells to optimize production from multiple offshore platforms or connecting all of a company’s refineries located across the US Gulf Coast.

Using IIoT to connect assets, people and processes

We live in an age of innovation and digital transformation. Digital changes what is possible, and its impact is affecting every individual, organization, business and government.

We believe a better working world means developing better, digitally-enabled approaches for our people, our clients and the communities, and wider world we all serve.

We also believe that digital should be infused in everything we do. So we don’t start with a digital issue — we start with a business issue and then build a plan fit for a digital world. This means being able to look at digital from every angle to help build, grow and protect organizations.

We believe the connectivity gains promised by the IIoT can help streamline and simplify today’s fragmented and globally distributed oil and gas supply chain, just as it has done for other industries that are further along the adoption curve.

Summary

For the asset-intensive oil and gas industry, the time is right to actively invest in the promise and potential of leveraging digital technology throughout the value chain. What is the end game? It is a more operationally efficient, cost-effective and adaptive industry designed to deliver value regardless of market conditions.

About this article

By

Adi Karev

EY Global Oil & Gas Leader

Experienced leader in the energy and resource industry. Cyclist competing in races all over the world.

Related topics Oil and gas