O&G Culture and Digital Oilfield

For Dashboard and our various stakeholders, digital oilfield is a topic close to our hearts. For us, it is nearly impossible to imagine a modern industrial organisation operating blissfully without any digital assistance in the vein of analytics, monitoring, IoT or a combination of these.

However, despite Shell attributing savings of over $5b over five years to its “Smart Fields” and IHS Cera calculating digital oilfields can offer operational cost reductions of 25% within the first year of deployment, these figures are not being reflected though investment as many organisations remain reluctant to embrace the change of landscape and join the culture of digitisation.

A joint study conducted by AVEVA, an information technology giant, and Westwood Global Energy Group, a British consultancy firm, aims to shed light as to the reasoning behind this disconnect between results and adoption. The study revealed that even with substantial recognisable benefit to adopting digital oilfields, the risk-averse strategy employed by SME’s, combined with inadequate or delayed funding and common misconceptions surrounding barriers to entry helps discourage further investment into such ventures. While declining oil prices undoubtedly underpin many of the difficulties relating to investment, the ‘people side’ of operations face numerous additional challenges that are often harder to pinpoint and overcome. Steep learning curves await organisations seeking to digitise their operations; effective skill development in new areas; management of change and communication of value, to name a few.

In some industries it is often the SME’s who’re most eager to embrace innovative means of improving operational efficiency; their agility being a battle-learned survival mechanism through their exposure to threats. However, in O&G it is the supermajors who are undoubtedly the frontrunners in digital investment and exploration of new technologies; perhaps a result of the uncertain future awaiting fossil fuels. AVEVA’s marketing solutions director Michail Tzouvelekis comments: “While the downturn has helped to make the case for digitalization, parts of the industry have been more open to change than others. We are finding that some companies, particularly supermajors, are typically further ahead with digitalization projects than others such as independent operators, where there is less focus.”

Perhaps it would be fair to suggest that historically the demand for oil has granted the industry a certain degree of immunity, however, Dashboard firmly believes it’s vital for the industry as-a-whole to analyse its biggest challenges facing the standardisation of digital oilfield, and employing means of overcoming them. This would serve to better prepare both providers and user companies for the future, while empowering them to more effectively align their approach to more widespread and inevitable digitisation.

http://discover.aveva.com/hub/aveva-westwood-research/digitalisation-offshore-report