Despite fluctuations in oil and gas prices over the last five years and alternative sources of energy becoming mainstream, oil demand continues to grow with consumption expected to increase by about 750,000 barrels a day each year to reach 103.2 million a day in 2030. With the question of how to secure the oil and gas sector’s future production on many peoples minds, digitalisation of this industry – or oil and gas 4.0 as it is also known – may provide answers to the sectors’ biggest challenges such as profitability, operational efficiency and safety.
Accelerated by shifting trends in supply and demand, technologies such as cloud computing, the Internet of Things (IoT), 5G, Artificial Intelligence (AI) and big data allow oil and gas companies to respond swiftly to changes in the market and offer the greatest potential for impact across the value chain.
In the Middle East and Africa, in particular, digitalisation will continue to play a significant role in transforming the industry, potentially unlocking up to US$2.6 trillion by 2025, according to a white paper by DHL Global Forwarding. The paper highlights that drones and autonomous robots, for example, can potentially reduce drilling and completion costs by 20 per cent in deep-water areas and 25 per cent in inspection and maintenance of assets.
1. Cloud Computing
According to data and analytics company GlobalData, cloud computing allows oil and gas companies to scale their data management and storage, driving greater flexibility in infrastructure costs. The high computing power delivered via cloud platforms is inexpensive and supports adopting other technologies such as AI, big data and IoT technology.
With demand for cloud services in Saudi Arabia forecast to reach up to US$10 billion by 2030, the state-owned oil giant Saudi Aramco has teamed with Google Cloud to offer cloud services in the Kingdom. Aramco said the agreement with Google would deliver “high performance, low-latency cloud services to enterprise customers in Saudi Arabia”.
IoT is a system of interrelated computing devices, machines, and people, where data and equipment communicate. In the oil and gas industry, IoT sensors can gather data from an oil well, such as continuously measuring oil composition and flow rates.
According to Deloitte, today’s oil and gas companies are increasingly focusing their IoT initiatives less on underlying sensors, devices, and “smart” things and more on developing bold approaches for managing data, leveraging “brownfield” IoT infrastructure and developing new business models.
Recently, Kuwait Oil Company (KOC) announced that it has teamed up with Halliburton Company to collaborate on their digital transformation journey through the maintenance and expansion of digital solutions for their North Kuwait asset. By using cloud computing, IoT and real-time technologies to drive new ways of working, the collaboration aims to improve production planning, scheduling and enable virtual and autonomous reservoir optimisation.
A study by GSMA has estimated that there will be more than 50 million 5G connections across the Middle East and North Africa (MENA) region by 2025, covering around 30 per cent of the region’s population. The oil and gas industry can significantly benefit from the 5G network’s high availability, reliability and quality of service and will have the opportunity to transform its communication and application technology fully.
Earlier this year, Saudi Aramco, STC and Huawei signed a Memorandum of Understanding (MoU) to launch a joint innovation programme to study the application of 5G technology in the oil and gas industry and to eventually develop relevant innovative solutions.
Within the oil and gas industry, AI can be used in two main applications: machine learning to study the potential risks of new projects and data science to get a comprehensive picture of the project. According to EY, the application of AI goes beyond “better” or “faster” processes, and it is inspiring new ways to approaching exploration, development, production, transportation, refining and sales.
Last year, the Abu Dhabi National Oil Company (ADNOC) announced the launch of AIQ, its AI joint venture company with Group 42, an Abu Dhabi-based AI and cloud computing company that will focus on developing and commercialising AI products and applications for the oil and gas industry. Similarly, Qatar Petroleum (QP) has entered into a partnership with Baker Hughes (BHGE) to introduce the latest AI technologies to support the local market.
5. Big Data
Big data analytics assists in streamlining critical oil and gas operations, such as exploration, drilling, production and delivery, in the upstream, midstream and downstream sectors, by
providing complex and real-time insights to improve asset management.
At Saudi Aramco, big data is used to improve CO₂ sequestration, carry out data modelling for reservoir management and forecast production performance. Big data also plays a significant role at ADNOC’s Panorama Digital Command Centre where real-time information is aggregated across the energy company’s many business units, including 65 operating sites. It uses analytics, AI, and big data to generate operational insights and recommendations.