Different functions within an Oil & Gas company operate independently, thus making standardization and optimization programs extremely complex to implement and run. Elimination of these silos and wasteful operational procedures by integrating systems and reducing digital debt through standardization of operations is one of the critical priorities of the O&G CIOs today.
As per Gartner’s CIO Review 2021, 85% of CIOs want to accelerate digital transformation in oil and gas industry using platforms, and 79% want to transform their IT culture. This outlook bodes well for the industry and lays the foundation for Cloud Computing adoption to ensure seamless operations, visibility, and technology integration.
Why Is Cloud Gaining Attention?
If there is one commonality throughout the value chain of the Oil & Gas industry – Upstream, midstream, and downstream, it is the existence of unstructured operations, disparate eco-systems, disconnected processes, and disjointed efforts, and massive wastage of resources. How does one control this chaos? Technology can play the role of the enabler in streamlining and managing this incoherence, and Cloud Computing is the first step towards that direction.
Cloud computing provides either a mitigation approach or a point solution to almost all the key pain areas of the industry, including managing the data swell, data and analytics, connected operations, focused utilization of resources, speed, agility, efficiency, departmental collaboration (Engineering, contractors, sub-contractors, vendors, suppliers, procurement, finance), remote operations, and environmental impact.
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Cloud in Oil & Gas Industry – Benefits
#1 Cost Savings
While the Oil & Gas industry has been a tad slow in adopting digitalization initiatives, it was one of the first and foremost industries to adopt IT for data collection and review. Exploratory services are heavily dependent on data crunching and calculations. On average, there are 80000 sensors on a modern offshore drilling platform generating data amounting to 10 TB/day. To store and manage this data on-premise requires data infrastructure translating into capital investment - both in procuring, maintaining and upgrading the hardware and hiring IT teams to ensure that the operations run flawlessly and securely.
Cloud technology helps to reduce this cost significantly as the companies pay for the data storage space they occupy instead of raising an infrastructure to accommodate future needs. Virtual storage capabilities are much more cost-efficient, scalable, and flexible. Moving the data to the cloud also helps the Oil and Gas companies to reduce latency, downtime and gain real-time access to the consolidated and coherent data for performing analytics and drawing insights for faster decision making.
#2 Backbone for Digital Oilfield – IoT, AI, and Data Management
According to Gartner’s CIO Review 2021, most O&G companies are investing in digital technologies such as IoT, AI, ML, and automation to improve their performance, uptime, and yield. Oil & Gas companies are consciously investing their efforts towards creating digital oilfields to integrate processes with digital technologies to interpret production-related findings in real-time to optimize field production.
A cloud-based eco-system provides scalability and flexibility to collect data from these digital oilfields. It also helps in connecting the processes and equipment through IoT and, at the same time, provides an agile environment for data management. Cloud Computing in Oil and Gas industry facilitates the adoption of other valuable time, money, and energy-saving technologies such as artificial intelligence and machine learning.
A compelling example of cloud-enabling a base for Digital Oilfield is that Total and Google have signed an agreement to use artificial intelligence in oil and gas industry and build a solution that can be applied to subsurface data analysis and automate the analysis of technical documents using NLP.
#3 Connected Operations
Inefficiencies are a by-product of complex processes and siloed operations. In O&G companies, several stakeholders and functions execute capital projects, right from suppliers, vendors, contractors, sub-contractors, and internal functions such as finance, procurement, and engineering. A cloud-based eco-system enables seamless collaboration between these functions and stakeholders and provides transparency, speed, and efficiency in communication.
It offers a central database to analyze, review, and approve the processes and procedures, provides visibility into the asset inventory & supply chain, provides data for predictive maintenance, and delivers insights for faster decision-making, thereby reducing the overall capital expenditure while creating an eco-system for truly connected operations.