As oil prices collapse, can the industry still soar? By Knut Møystad
With oil prices plummeting below $27 for a second time this year, industry participants can look to reduce their dependence on the volatile commodity by streamlining their operations and realising efficiency and productivity gains. Below we’ve outlined some of the key trends in the sector that organisations should be aware of:
The oil and gas industry will jump on the opportunity that big data presents: machine-learning strategies will become ubiquitous as oil and gas companies start rolling out conditionbased maintenance; meanwhile equipment suppliers will increasingly move to a services-based business model.
Equipment manufacturers have begun to embed machinelearning technologies into equipment for condition-based maintenance, to help customers extract maximum value and efficiency from their infrastructure. These suppliers are looking to provide support services such as data monitoring, which will help customers optimise equipment utilisation and maintenance strategies, and will also provide data that can be used in the design phase of new products; for example, with enhanced user data you can improve the precision of your design parameters, thereby optimising both product cost and value relationship.
This marks a turning point in the business strategy of suppliers. Oil and gas companies have been hesitant to rely on equipment suppliers to run maintenance programmes as they fear vendor lock-in, which would push up costs. However, they see a benefit in gathering data from their installations to improve operations. Hence, oil and gas companies are increasingly looking for ways to own the data they generate and will be looking to explore technology to manage the condition-based maintenance programmes.
This trend is gathering pace as more oil and gas companies take steps to capture and learn from big data to make their operations smarter and reduce costs. The businesses that will be successful are those that develop a strategy to underpin this. To benefit from data, they need to understand what data they are collecting, how to categorise it, what kind of insights they are looking to gain and how to turn them into tangible benefits e.g. cost and time savings.
With this in mind, the more advanced businesses will have automated learning up-and-running in their machines so that they can replicate the best results their businesses are seeing across their operations and increase their productivity and performance.
3D printing emerges as an innovative alternative for companies in the oil and gas industry, as they scrutinise their supply chains and engineering practices.
A small but increasing number of businesses are already deploying 3D printing technology and using 3D printing in two different ways:
Firstly they are using it to create models for training purposes. Innovation in training methods has been driven by the need to move away from on-site apprenticeships as both safety issues and new technology requirements in the field have rendered a large part of content currently taught obsolete. Hence 3D printing is becoming particularly valuable in teaching onsite equipment repair and maintenance, particularly for offshore and subsea equipment.
Secondly, businesses are using 3D-printed tools and parts as a replacement for traditional tools and parts, which helps to access and maintain equipment in remote areas. These parts and equipment that could be printed include almost anything that can be drawn in 2D, e.g. drill bit moulds, actual fix cutter drill bit bodies, and other downhole tools. Although oil and gas is traditionally thought of as a conservative industry, technological developments that enable businesses to cut costs and improve performance and asset integrity are being rolled out in maintenance and operations due to necessity.
The driver behind this trend is the drop in the price of oil. Previously oil prices were high, so businesses were able to continue using technologies and techniques that had served them well over an extended period of time. As the price of oil has now dropped, oil and gas companies should be looking to streamline costs and increase efficiencies where they can. They are looking for smart ways to cut costs, and 3D printing is proving an enabler for this right across the supply chain from inventory to transportation.
Knut Møysta is Industry Director for Oil and Gas at IFS, a globally recognised leader in developing and delivering business software for enterprise resource planning (ERP), enterprise asset management (EAM) and enterprise service management (ESM). IFS brings customers in targeted sectors closer to their business, helps them be more agile and enables them to profit from change. IFS is a public company founded in 1983 and currently has over 2700 employees.
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