Thriving and Surviving in Oil & Gas

It’s been happening all our lives. Oil & Gas prices fluctuate, and with the ups and downs, the industry adapts and looks to thrive—and more recently, to survive. In 2015, when oil fell to its lowest price in seven years, more than 100,000 jobs were shed and organizations looked to slash billions in spending.  It’s a cycle. It always has been, and always will be. Despite this fact, there is technology on the horizon that can help organizations make right-size investments during the survival phase.

A novel approach to survival in a volatile market with thinning margins is to do more with less. Automation, monitoring, and control are not new concepts, nor are predictive maintenance and resolving high-frequency maintenance issues. While many objectives remain constant, one major change introduced in the past few years is the ability to flexibly store and mine increasing large volumes of field data. Data is expanding at an exponential rate due to the advancing horde of intelligent, Internet-connected devices that are ready to serve up their data for analysis.

This trend will only continue as the Internet of Things (IoT) grows from concept to implementation. For background, the IoT is essentially the network of Internet-enabled devices and the communication that occurs between these objects and other devices and systems. At Kepware, we are already seeing the IoT become a reality right before our eyes—particularly for customers in the Manufacturing, Building Automation, and Energy Management verticals. According to Cisco, the number of Internet-connected things will reach 50 billion by 2020, with $19 trillion in profits and cost savings recognized from the IoT over the next decade.

More and more organizations are realizing the value of the IoT through monitoring, control, optimization, and analysis. New vendors and technology entering the industrial market are driving down the cost of automation, data flow, and handling, which in turn provides savings to end users and enables system improvements. This is where doing more with less becomes important and we are able to become more efficient—squeezing every bit out of every asset at our disposal.

While the up-front cost of an IoT solution is something to consider, the investment is small compared to the process improvements made possible by the ability to make good, data-driven decisions. Furthermore, in an industry where buying and selling assets is as common place as drilling, fracking, or filling your car at the pump, maintaining servers and licenses throughout the lifetime cost of a solution becomes a moot point.

While the data systems may not be the largest investment an organization will face, it is an optimizable one that can be maximized with highly flexible and expandable Cloud platforms. For example, it’s not uncommon to double the size of your assets during a growth period. If you have a fully functioning system, it rarely—if ever—is sold in the sale alongside the field assets. After the sale, you have less assets, but still hold a full-size automation and monitoring solution with licenses that need to be updated, annual service contracts that must be paid, and out-of-date server hardware that will eventually need to be replaced. Now imagine instead that the cost of data and information flow could be adjusted based on the size required by the current asset owner. That’s the value the Cloud brings to O&G.

As we continue to navigate the natural ebbs and flows of O&G, the organizations that can master and harmonize the cacophony of the most data, will win in all aspects of the industry. Companies that find ways to do more and produce more with less will do well no matter what phase of the cycle we are in. Less cost handling and more automation mean more production—and ultimately more product flow to the customer.