Digital transformation in the oil and gas industry is already fully included. Currently, the interest is not limited to volume, but rather for value. Oil and gas companies are in need of making money in a new price scheme. The traditional oil and gas business model is no longer applicable to the modern economy. It cannot sustain an inflated and inefficient value chain to search and deliver hydrocarbons worldwide.
Digital transformation is a predominant trend impacting today’s businesses around the globe. Digital transformation largely affects society, but for business it goes beyond the tactical application of technology. An example would be the strategic incorporation of digital technology as a competitive advantage. It is transforming business models by speeding innovation and making ongoing practical gains in operational efficiencies, product design, development and delivery, safety and customer relationships. It’s changing the mindsets of organisations entering a new market.
Effect on the market
Many of the innovations supported by digital transformation and Big Data have found new approaches to transform consumer and media markets. As a consequence, environmental and societal changes are increasingly affected by the power of the new ways of sourcing and analysing information. Utilising data to improve performance is not a new concept, but what is different is the pace of change in identifying the effects of automation and process know-how. This became a global race to be “the digital winner”, to be on the top of digital development. These innovations combined with the new generations that grew up with in a digital world—always connected and tuned into the digital economy— the result is a strong digital innovation in all fields.
Driving the Transformation
The technologies of social media, mobile computing, cloud computing, analytics, and the Internet of Things (IoT) are the principal drivers of digital transformation. All of these technologies together define a platform which has interdependence among its parts. Enabling to transform the way people and businesses relate to technology.
Particularly key to the oil and gas sector has been the development of Internet of Things. The IoT is one of a handful of technology areas that are set to power growth and innovation in the future decades. It both enables and is fuels digital transformation; it allows companies to digitalise, optimise, and automate processes which were not previously connected to any IT systems.
Data and Software implementation
As the number of connected endpoints grows exponentially, massive amounts of data will be produced by all industries including Oil and Gas. The installed base of IoT endpoints will continue to grow by more than 30 billion by the end of the decade from just less than 13 billion units in 2015.
Consequently, machine-generated data will comprise an increasing share of stored data: by 2020, 10% of the 44-zettabyte digital universe will be created by IoT devices. This means that in five years, there will be seven times more IoT data than there is today.
This massive growth will motivate the need for more enterprise systems to deploy, manage, and make use of IoT, as well as the necessity to establish standards for interoperability and connectivity. From an infrastructure perspective, traffic will shift from the centre of the network outward to inward from the edge, as increasingly more data flows from the connected devices of IoT into the data centre. As so, this will affect computing and communications architectures.
Edge Data Processing and Technology Convergence
Two mentioned developments are the heart of technologies and edge data processing. As operational technologies increasingly include software and sensors, operational technologies and IT cooperate in systems. They comprise smart machines, storage systems, and facilities capable of autonomously exchanging information, triggering actions, and controlling each other independently. While Internet of Things data can be processed at the data centre or at the edge of the network, the amount of content that will be generated at the edge will require that process queries be delivered to the data instead of bringing the data to the enterprise data centre. Indeed, edge processing will drive innovation in analytics, systems, and operational management.
This is particularly crucial in oil and gas, where companies can now take advantage of real-time data analytics and new IoT applications that require low, predictable latency. Considering a typical offshore oil platform, it generates between 1TB and 2TB of data daily. Most of this data is time-sensitive, relating to platform production and safety issues. Using a satellite connection – being the most common communications link for offshore oil platform – it would usually take 12 days to move one day’s worth of oil platform data to a central repository. But with edge processing, companies can assess this data locally to determine whether it needs to be moved to the cloud, datacentre or analysed where it is, at the edge of the network.