IIoT Front and Center at OTC 2017

ARC colleagues and I recently returned from the Offshore Technology Conference (OTC) in Houston last week and was impressed by not just the amount of discussions centered around IIoT-enabled solutions developed or being developed and the number of VR and wearable solutions on display at many booths, but by the revelation from Havard Devold, Group Vice President, Digital Lead – Global BU Oil, Gas & Chemical at ABB, that a majority of the IOCs and many of the NOCs now have C-level executives that are focused on developing their own digital strategies and initiatives. I could sense the palpable increase in the number (and intensity) of discussions and companies pushing their Digital solutions as a sign that the IIoT root was taking hold, but what really got my attention was that the IOCs and NOCs are finally starting to “get it” when it comes to the necessity for digital transformation and IIoT-enabled solutions to both survive and thrive in this new norm of “lower for longer (or forever?)” oil price environment.

ABS Wearable Solution

At almost every major supplier’s booth one could see that the traditional “heavy metal” booth fixtures were being replaced by streamlined digital monitors showing each respective supplier’s portfolio of solutions and, in several cases, an emphasis on those offering digital transformational solutions. All the major automation suppliers in attendance including ABB, Emerson Automation Solutions, GE Oil & Gas, Honeywell, Rockwell Automation, Schneider Electric, and Siemens were all highlighting their oil & gas specific solutions as well as their own digital transformation and IIoT solutions such as remote monitoring, analytics and more. Meetings and booth visits with companies such as Bentley Systems and IFS show that they are leading very much leveraging IIoT-enable solutions to add value to their customers.

It was clear that the influence of the pending merger with GE Oil & Gas was being seen at the Baker Hughes booth with a focus on a more digital feel and even the other major oilfield service providers in Schlumberger, Halliburton, and Weatherford were showing signs of digital transformation and advanced technology and service capabilities designed to lower costs, improve production and recovery rates and improve collaboration to enable operational visibility, flexibility and agility.

Perhaps it was also a sign of the tough times and need for streamlined optics which forced most companies to leave home the “big metal “ or physical renditions of products such as subsea control modules, multiphase flow meters, and the like; but my sense was the third attendance decline in three years (down 3,000 from 2016) and the layoffs now in excess of 400,000 caused by almost 3 years now of depressed pricing has forced most oil & gas companies to fully realize the need to embrace new technologies, new work processes and, most importantly, changes in corporate cultures such that people embrace change and the power of digital transformation.

ARC will continue to shout from the rooftops that oil & gas companies can no longer repeat the same insanity over again in expecting that by doing the same thing (retrenchment, layoffs and cutbacks, then rinse and repeat) they will get different results. I think this new normal of “lower for longer” oil price environment and market dynamics is forcing digital transformation and that may very well be the best long-term solution that the oil & gas industry has received in a long time.

Comments

  1. I personally agree oil & gas producers have deferred investment for some time but to address long-term business needs they can no longer defer modernization and now invest for cost reduction. New technology such as wireless sensor networks, analytics software, and cloud computing makes condition monitoring for a broader scope of process equipment practical with minimal CapEx, including from an engineering center, and enable new IIoT-based connected service business models requiring no capital outlay. Digital transformation include solutions for extended life of production equipment, reduced maintenance spend, reduced energy cost and losses, improved productivity, and increased production.

    Sites improve in these areas through digital transformation of work practices enabled by digital technology to reduce cost. Workers at site are digitally enabled with software for production equipment condition monitoring indicating which equipment need maintenance and which ones do not. Part of the personnel can work from a central office downtown instead of at site; in oil fields, offshore platforms, or on floaters. Such a center of excellence can support upstream onshore and offshore, and downstream. Equipment monitoring can also be done by the equipment manufacturer or a third-party service provider.

    As these solutions and underlying technologies are already proven, oil & gas producers can simply replicate what other operating companies have already implemented to enable digital transformation of operations and maintenance work practices. Note that sites need not rip and replace their existing automation solutions. It is a second layer of automation compatible with the existing infrastructure including historians.

    These solutions are easy to adopt. They apply upstream and downstream. The value is not only on cost reduction but also in increased revenue from production gain. Start with the basics like equipment condition monitoring. Then you can think of new ways to display it, such as through AR. Learn more from this essay: https://www.linkedin.com/pulse/iiot-dont-bite-off-more-than-you-can-chew-jonas-berge

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