A recent report by ExxonMobil projected that global energy demand will be about 30 percent higher in the year 2040 than it was in 2010. Another report places this figure at 17 billion tons of oil equivalents by 2035. Developing economies of India and China alone are expected to account for half of this growth.
The global Oil and Gas (O&G) industry is struggling to meet this demand in the face of many challenges like shortage of expert manpower, graying workforce, stringent HSE regulations, harder access to natural resources, high costs of exploration, and geopolitical influence on oil prices. There is also the need to reduce operating expenses and increasing finding and recovery rates.
To remain profitable upstream organizations have been forced to redefine their existing business models. There has been an increased emphasis on integrating information technology to the petroleum business to improve operational safety, optimizing hydrocarbon production and discovering reserves to maintain a competitive edge.
Digital Oil Fields (also called intelligent oil fields or IOF) have been gaining prominence as a means to optimize the operations of an oil or gas field. According to predictions the industry is poised to spend in excess of US$1 billion over the next five years on digital oil field investments.
I refer to a recent report by Wipro and Frost & Sullivan on the O&G industry in India, which lists Digital oil fields to be one of the key megatrends that will impact the industry in the coming years. According to the study, the move towards Digital oil fields is driven by:
- Increased emphasis on information management by O&G companies to ensure process optimization, and
- Emergence of cross functional disciplines enabling data transparency in order to establish an efficient energy enterprise
Though primarily data driven Digital oil fields need people, processes, and technology to work in close collaboration. I believe a true decision making framework can be implemented only when there is a seamless flow of production, financial, operational information across functions.
Even though a shift towards a Digital oil field may mean a complete change in the way they run operations, O&G companies have realized that they cannot ignore this technology for the sheer number of benefits they provide. These benefits range from cost benefits arising out of better resource deployment, drastic reduction in the number of personnel needed offshore, reduction in hazardous activity resulting in better compliance, and increased efficiency due to faster decision making based on accurate real time data. Analysis of this data can also result in overall efficiency increase in reservoir management making oil fields economically viable.
However, be it BP's Field of the Future, Shell's Smart Fields or Chevron's iFields there is no one-size-fits-all solution. O&G companies are increasingly looking for partners who can deploy technology to help them realize the true potential of the future oil fields.