CEO Summit – Digital Disruption in Oil & Gas Industry
Published on : Tuesday 10-12-2019
G Ganapathiraman, the moderator of the panel discussion at the CEO Summit at Automation Expo 2019, sums up the proceedings succinctly.
The theme of this year’s Automation Expo hosted in Mumbai was digitalisation and Industry 4.0. The event had around 625 exhibitors and 50,000 visitors. It was inaugurated by Dr Naushad Forbes, Co-Chairman Forbes Marshall Group and other dignitaries. The event saw the convergence of entrepreneurs, technocrats, government officials, business leaders, etc. Fund managers and venture capitalists had one-to-one meetings with technology providers seeking investment opportunities and exploring possibilities of mergers and acquisitions to create sustainable business models for the future.
Digital transformation is emerging as a driver of sweeping change in the world around us. Connectivity has shown the potential to empower millions of people, while providing businesses with unparalleled opportunities for value creation and capture. Speakers highlighted the digital disruptions across industries: digital twins, edge, blockchain, AI-driven development, etc. The show had concurrent events, such as the CEO Summit, Industrial Internet of Things Conference, Factory Automation Conclave and a presentation by Foundation Fieldbus. Together, they brought expert insights for the benefit of delegates. The focus of this article will be on the CEO Summit, which had about 250 delegates.
The topic for discussion at the CEO Summit was the Digital Disruption in the Oil & Gas Industry. Speakers: Dr BR Mehta, Consultant Reliance Industries; Anil Bhatia, Managing Director, Emerson Process Management; Ashish Gharpure, Vice President, Aker Solutions; CJ Iyer, Executive Director, BPCL; and Rajat Kishore, Managing Director, Schneider Electric Systems India. Moderator: G Ganapathiraman, Vice President and General Manager, ARC Advisory Group, India.
Redefining Boundaries through Digitalisation
In his keynote address, Mr Mehta said that since the Industrial Revolution, the oil and gas industry has played a pivotal role in the transformation of the global economy, fuelling the world’s demand for heat, light and mobility. Today, the oil and gas sector has the opportunity to redefine its boundaries through digitalisation. After a period of falling crude prices, frequent budget and schedule overruns, greater demands of climate change accountability, and difficulties in attracting talent, oil and gas companies can now provide practical solutions. In the short term, digitalisation can act as an enabler to tackle these challenges and, in the long term, provide value to all of the industry’s stakeholders.
Developments in technologies such as cloud, social media, big data and analytics are driving the oil and gas sector, he said. His presentation highlighted the following:
New Era of Automation: Automation, robotics and the development of remote operating capabilities will transform how oil and gas companies operate. Leveraging Industrial IoT could connect end-to-end operations across the lifecycle of an oil well and ensure that all systems are communicating across the industry.
Advanced Analytics and Modelling: This initiative enables companies to quickly and automatically produce analytical models (e.g., reservoir models, drilling plans and production profiles) that can analyse bigger, more complex data, and deliver faster, more accurate results, even at a very large scale.
Connected Worker: Providing workers with on demand real-time push and pull information through mobility apps and wearable technology can give them access to the right information at the right time, so they can make more proactive decisions, enhancing productivity and reducing costs.
Real time Supply/ Demand Balancing through 3D Printing: 3D printing could transform today’s supply chain into a globally connected, yet still local supply chain, creating a close relationship between design, engineering, marketing and manufacturing. For example, for upstream operators, 3D printing could revolutionise the supply of replacement parts.
Digital Information Sharing and Operational Transparency
Blockchain and Smart Contracts: Blockchain offers an easy way to transfer information and automatically tracks each transaction. It enables some accounting, finance and compliance tasks to be automated, reducing operating expenses and the frequency of transactional errors. Blockchain also lends itself easily to the cross-border transactions that are common in the highly globalised oil and gas industry.
Consumer Energy Choices: Oil and gas companies can position themselves at the leading edge of digital transformation by partnering with their B2B customers to develop digital platforms and by engaging with the end consumers “beyond the meter.” Companies can start developing innovative digital consumer platforms which gives them the freedom to choose their energy source.
Sustainable Change through Digital Transformation
Anil Bhatia said that digital transformation has driven increased attention and spend – many have a digital leader or digital organisation, and many have incremental funding. In this context he spoke about the company’s Plantweb digital ecosystem that enables top quartile performance with an integrated portfolio of digital transformation solutions. Each customer’s roadmap is unique, depending on business, goals and starting point, explained Mr Bhatia. Starting with the intended business outcome, if you were to progress toward the “digital future” in reliability your goals are to minimise downtime and maintenance costs, but the most effective path to these desired results is a scalable approach.
He provided a simple example to illustrate this. At the bottom of the ladder is the conventional approach, augmenting existing preventative work and optimising those existing processes as much as you can with improved sensing technology and tools. As you progress up the levels to digital nirvana you may then decide to automate some of those either manual data collection or data analysis processes. Then proceed to more complex assets or units building off the basic layers of sensors and analytics and layering on some machine learning techniques to further optimise performance that in turn reduces the cycling of units that stresses equipment. Finally, you reach the stage of “full enlightenment” or in this case automated management of change throughout your operations. Once a modification is made in the field it is automatically reflected in the plant’s digital twin and reliability strategies are adjusted accordingly.
The goal of digital transformation is safety, reliability, optimised production, and reduced energy consumption. The five essential competencies of digital transformation are:
- Automated workflow
- Decision support analytics
- Change Management, and
- Workforce upskilling.
Industry is Ripe for Disruptive Innovation
Presenting his thoughts on the topic, Ashish Gharpure said that the industry is ripe for disruptive innovation to meet the twin goals of efficiency and lowered costs. He opined that there is a need to think beyond the box of the existing business structure, focus on creating a new business paradigm, and re-evaluate methods of working. Technology is improving by leaps and bound and rapidly becoming more accessible. As a result of these technology developments, increasing amounts of data are becoming available – and data is the new raw material of business. This raw material must be processed into contextualised information to provide valuable information and insight. The two focus areas of digitalisation in the engineering space are: unlock experience and increase efficiency.
In the energy industry, digitalisation can:
- Reduce time to first oil by agile concept selection and accelerated engineering
- Improve design quality by incorporating operational experience
- Increase speed and quality of execution by collaborative engineering and fabrication
- Optimise performance by condition monitoring and predictive analytics, and
- Create consistency across assets, data sources and lifecycle.
Mr Gharpure explained that at Aker Solutions, they have established an information model based on industry standards and years of experience. The company has created Integral – a digital twin platform. This links engineering, manufacturing and test data with live streamed operational data on their secure platform, creating a digital twin to monitor, assess, maintain and optimise energy assets from concept to decommissioning.
To ride the wave of digital disruption organisations must:
- Think outside the normal frame of reference
- Look beyond current issues to potential baseline shifts, and
- Anticipate and prepare for innovation,
Digitalisation is Transforming our World
Speaking about how digitalisation is transforming our lives, Rajat Kishore said that our world is becoming:
More Electric: Almost everything we interact with today is either already electric or becoming electric. From the time you start your day in the morning to the time you finish your day – your home, your car, your work, your devices, your entertainment – almost everything is electric. Electricity demand will double in the next 30 years.
More Connected: Our lives are also becoming more connected. The Internet has already transformed the way we live, work and play. Now the Connected Things is going to take this to a brand new level – 50 billion things connected in the next 5 years.
More Distributed: With such widespread electrification and connectivity, the generation of power needs to be closer to users. Distributed Energy is rapidly evolving globally. This is positive energy – renewable.
More Efficient: When our world is more electric, more connected and more distributed, new opportunities emerge to tap into even more efficiency – in industrial processes, in the energy value chain, in buildings, in transportation, in the global supply chain and even in the comfort of our homes.
This disruption is being fuelled by technology and innovation, said Mr Kishore. The major technology enablers are: mobility, cloud, sensing, analytics, and cybersecurity.
Four key points to make a successful digital transformation:
- Having the domain expertise to apply the technology, coupled with a solid interoperable architecture and a successful platform to pull it together
- Making it easy to get started and scale cost effectively in areas that make sense for your business, using expertise in digital
- Integration of industrial and engineering software more tightly to facilitate a closed loop digital view of the plant enabling improving efficiency throughout the complete lifecycle and reducing risk, and
- Leveraging an ecosystem and open approach – as industrial customers generally have assets from a variety of vendors, they are heterogeneous and customised environments.
The benefits of digitalisation are well known – lower costs, better quality, improved productivity, and shorter time to market. The digital transformation of the oil and gas sector is a tangible reality. New technologies, such as digital twins, autonomous robotic drilling, pipeline scheduling, leak detection, drones, etc., have improved efficiency and productivity levels. Today, oil and gas companies have greater agility to expand or change their business models and deploy innovative strategies to meet fluctuating market expectations.
G Ganapathiraman, Vice President and General Manager, ARC Advisory Group, India. His responsibilities include supporting the global offices in preparation of market research reports, organising ARC India forums, and sales/technical promotion in the areas of automation and enterprise.