Interview regarding the Industrial Internet of Things (IIoT) and digital transformation in the oil and gas industry with four industry experts.
The oil and gas industry comes with very specific digitization and digital transformation challenges, among others depending on the process and operation. In the digitalization initiatives of the industry, the Industrial Internet of Things plays a major role.
Yet, the Internet of Things is just one part of the evolutions and opportunities. In this interview, four industry experts share their views on the industrial digital revolution taking place in the oil and gas industry. All four interviewees also speak at IIoT and Digital Solutions in Oil & Gas (Amsterdam, The Netherlands, 07 – 08 June), an event by GBC, supported by i-SCOOP.
IIoT, digital technologies and digital transformation in oil and gas with Sharul A Rashid (Principal Engineer, Instrument and Control at Petronas), Satyam Priyadarshy (Technology Fellow & Chief Data Scientist at Halliburton), Sergio Zazzera (Vice President IT Technical Scientific Data and Systems at ENI) and Ricki Koinig (Global Head of IT Strategy and business integration at OMV).
Digital evolutions and revolutions in oil and gas: industry impact
Digital transformation is about more than disruption or technologies. From your experience, how should oil and gas companies see the current digital (r)evolution and how will business models in the oil and gas industry be impacted and changed?
Satyam Priyadarshy (Halliburton): The oil and gas industry started its digital revolution a decade or so ago. This first revolution is now known as digital oilfields or some variant of it. To a large degree, it entailed digitization and some effort towards digitalization.
The benefits gained from digitization and digitalization have not been significant though. An example: the industry is implementing integrated reservoir management but if you look under the hood, the integration is still narrowly focused in a siloed environment and tightly controlled.
When we talk about digital transformation, one needs to remember it is about the breakdown of silos, both cultural and technical, so we can transform the way we do business in day to day life.
Oil and gas industries need to leverage digital technologies at a much faster pace, with an agile and adaptable mindset. The business strategy around digital transformation should include a component of innovation, talent and real transformation of the industry. The sector can certainly learn from the Smart Transform SM approach that we have developed at Halliburton.
Sharul A Rashid (Petronas): In my view, a digital revolution should benefit the company in terms of improved plant operations, which lead to cost savings and Earnings (EBITDA).
Sergio Zazzera (ENI): The digital evolution we see now is a great opportunity for oil and gas companies because it enables a deep transformation of the legacy operations, hardly challenged by the recent crisis.
I am thinking not only about the possibility of further automatization of the processes but also about approaching the activities of the sector in entirely new ways (exploration, drilling, operations handling, etc.).
Ricki Koinig (OMV): Over the years there has been much talk about how Business and IT must work together to move digital transformation forward, and much has been accomplished in terms of bridging functions, cross-divisional innovation budgets and a cooperative shift of skills and capabilities from Business to IT and vice-versa.
In the coming years we will make the next evolutionary step towards integrated digitalization roles, and no longer feel a difference between resources coming from either an IT or a Business background.
This mindset change will uncover benefits of fully integrated departmental, financial and operative business and thus accelerate efficiency levels across the organizational model.
The Industrial Internet of Things in upstream and downstream operations: benefits and opportunities
How do you see the role of the Industrial Internet of Things in oil and gas? What are the key benefits and opportunities of using IIoT solutions in the upstream and downstream operations?
Ricki Koinig (OMV): Some specific examples include the main benefits from reduced downtimes of equipment in both upstream production and downstream refining, using predictive maintenance.
Remote operations of assets in hazardous areas and Smart Textiles/Wearables will also contribute to enhancing workers’ safety.
Satyam Priyadarshy (Halliburton): Industrial Internet of Things (IIoT) solutions are going to surpass the consumer Internet of Things in the next five years. The main advantages of IIoT solutions in upstream operations are the low cost of supply, increased production and higher safety scores.
Among the main advantages in downstream operations are personalized service at the retail points, increased share of wallet and increased loyalty to the brand.
The opportunities in upstream are plenty, but I believe the major opportunity is in real-time resource optimization across the full upstream lifecycle.
Sergio Zazzera (ENI): The IIoT solutions are key components of the future technology recipes but they can even offer an effective and viable answer for old plants retrofitting, decreasing the gap between brown fields and green fields.
Main areas of technological investments in oil and gas
What are the key technologies which your company would like to implement in the next 5 years?
Sharul A Rashid (Petronas): For us it’s mainly wireless technologies, fieldbus technologies, open system, yet secured technologies.
Sergio Zazzera (ENI): We are looking at edge gateways and smart sensors, machine learning and analytics, image recognition, wearable technology, augmented reality and additive printing.
Satyam Priyadarshy (Halliburton): The key technologies that the oil and gas industry overall needs to implement in the next five years are IoT sensors with a sensor-to-sensor communications network, wearable devices, smart analytics at the edge, based on Big Data and data science, cloud solutions, and augmented and virtual reality solutions.
Ricki Koinig (OMV): A main focus lies in predictive maintenance solutions utilizing sensor streaming data in conjunction with machine learning and artificial intelligence. Predictive analytics will also help forecast demand in the downstream area.
The need for a digitalization and transformation roadmap in oil and gas
Nothing works without a plan and if we look at the longer term roadmaps are needed. Do you think it is important for oil and gas companies to have their strategic digitalization roadmap?
Sergio Zazzera (ENI): Nowadays the presence of a clear and defined roadmap for digitalization is mandatory for disclosing, unlocking and leveraging the potentialities that are inherent to the new digital wave in EACH company.
Ricki Koinig (OMV): A clear, simple, aligned and consistently visited roadmap tool is essential for common understanding and direction between all stakeholders – that includes business lines, finance, procurement, IT strategy and operations.
At OMV AG, we have redesigned and developed a method to analyze and map market trends and our business needs. Collaborative discussions on these mappings across the organization create a basis for agreed and aligned content in the digitalization roadmaps.
The subsequent roadmaps allow us to determine what technological, organizational and capability steps we need to take now as well as into the future. Our common roadmaps also allow us to see possible synergies across the organization and thus best coordinate planning and activities towards digitalization objectives.
Sharul A Rashid (Petronas): A definite YES.
Satyam Priyadarshy (Halliburton): I believe that a roadmap for digital transformation is critical for oil and gas companies. More importantly, the roadmap needs to match the pace of technological evolutions, rather than being a five to ten years roadmap as in current practice.
The deployment of the Internet of Things in oil and gas: the challenges
Going back to the Industrial Internet of Things, a key theme at the IIoT and Digital Solutions in Oil & Gas event. What are the current challenges and hurdles that affect the spread and deployment of the Internet of Things in an oil and gas organization?
Sharul A Rashid (Petronas): Cyber security threats and the maturity of some of the technologies are certainly two of them.
Sergio Zazzera (ENI): As mentioned before, IoT solutions are key technologies enabling completely new business models by interconnecting things and people and gathering huge quantities of data. Of course new menaces are rising and spreading: security has to be not only physical, since you have to protect the ‘soft’ side of plants, yards, equipment, etch from cyberattack threats.
Satyam Priyadarshy (Halliburton): There are many challenges regarding the adoption of IoT inside an oil and gas organization.
The top five challenges, according to me, are:
- readiness of IoT devices for the oil and gas environment which can range from rather friendly to extremely hard environments;
- the lack of standardization in how these IoT devices generate and share data;
- the lack of mature integrated data and information management platforms like the DecisionSpace™ platform;
- the lack of skilled talent; and
- leadership with regards to the adoption and deployment of IIoTs.
Ricki Koinig (OMV): Technological constraints (e.g. availability and usability of explosion protected devices and sensors in hazardous areas) are clearly a health and safety priority.
Lack of data integration technologies and slow adoption of Big Data technologies to store and analyze collected data can also slow information potential down.
Organizational constraints such as restrictions on handling of personalized data, or general lack of trust in predictive models, and even missing capabilities in the areas of analytics, modelling and statistics are all current or potential challenge areas we are taking seriously.
IIoT and Digital Solutions in Oil & Gas: expectations and info
A final question. You speak at the the IIoT and Digital Solutions in Oil & Gas event in Amsterdam as mentioned. What do you expect from the conference?
Satyam Priyadarshy (Halliburton): IIoT and digital solutions are major forces to transform the oil and gas industry. I am expecting that the conference attendees discuss challenges and solutions in an open environment suitable for digital transformation that is happening in other industries and life. Solutions that derive the economic value for oil and gas industry by using IIoT and digital transformation can be enhanced by knowledge sharing at the conference.
Ricki Koinig (OMV): I expect very interesting impulses from the sessions and exchanges with colleagues regarding their scope and definition of IIoT and digitalization. It will be particularly interesting to discuss in detail what we differentiate as realistic steps forward as well as management methods of subsequent challenges IIoT delivery may bring. Although we are often competitors in our oil and gas field, we are in the IIoT boat together. The successes and (sometimes necessary) speedbumps that one organization has, are a vital asset of experience to the next. I am very much looking forward to this open, honest and supportive exchange from all participating.
Sergio Zazzera (ENI): Being updated on feasible technology solutions which are now applicable in the field and having the opportunity of sharing how to deal with the specific issues of the oil industry are without any doubt main topics for me in meeting the expectations.
Sharul A Rashid (Petronas): I look forward to network with others and benchmark against their practices.
That is clear! More about the event on the IIoT and Digital Solutions for Oil & Gas event homepage.
The theme: optimizing operational efficiency through digitalization. And on top of our four interviewees, connect with speakers from organizations such as the Industrial Internet Consortium, Accenture, IHS Markit, McKinsey & Company, Maersk Drilling, Statoil, Bentley Systems, Baker Hughes, Gazprom Neft, Stork, Air Liquide, Shell and many more at the event.
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