Adoption of information technology (IT) and operational technology (OT) solutions has been a trend in the oil and gas sector for the past four-five years now. New and innovative technologies and digital solutions are being deployed across all segments of the oil and gas value chain.
From digital oilfields to advanced analytics (such as big data), a wide range of solutions are being favoured by oil and gas companies to book efficiency gains. For the exploration and production segment in particular, significant focus is being given to data management with advanced solutions tailored to each player’s needs. Pipeline network management too is getting more digitalised. Increasing deployment of advanced IT-OT convergence solutions such as enterprise resource planning (ERP), supervisory control and data acquisition (SCADA), terminal automation systems, smart metering, customer relationship management (CRM), geographical information systems (GIS) and satellite surveillance solutions are finding an increasing number of takers looking to monitor their assets with greater precision and in real time. Besides, the ongoing pandemic, which calls for working remotely, has further strengthened the case for the adoption of such technologies.
Noteworthy technology deployments
To understand the range of solutions being deployed by marquee players in the industry (in both the upstream and downstream segments), it is important to track their progress in this regard.
- Oil and Natural Gas Corporation (ONGC): The largest producer of crude oil and natural gas in the country, ONGC is a key user of the latest IT-OT solutions available for the sector. The public sector company has deployed ERP for optimising and standardising business processes, and SCADA systems for real-time monitoring of pipelines and rigs, amongst other similar applications that have aided in quick decision-making besides ensuring cost optimisation. ERP has been deployed as part of the Information Consolidation for Efficiency Project for enabling standardisation of business processes. Under this project, a complete ERP package comprising 23 modules such as mySAP Oil and Gas Upstream (for joint venture accounting and for the management of production sharing agreements and offshore logistics), mySAP Strategic Enterprise Management and mySAP Product Lifecycle Management have been installed in over 500 offices. Other modules for corporate financial management, business intelligence, supplier relationship management and enterprise portals (workplace) have also been incorporated. These IT-based systems ensure availability of information on a real-time basis and eliminate duplication of activities across various business processes. This, in turn, aids in quick decision-making, better operation control and efficient cost management. The contract for the project was awarded to SAP AG. ONGC has also deployed SCADA systems to remotely monitor, control and manage its geographically dispersed production and drilling facilities, oil basins, processing plants, forward bases and other assets. The SCADA system links these assets to the corporate data centre through terminal units and sensors. The sensors transmit the generated data on a real-time basis and enable faster decision-making by reducing response time.
- Apart from these solutions, the company has also taken initiatives such as computing systems for seismic data, an invoice monitoring system, and a grievance management and vigilance portal. An advanced well monitoring system equipped with satellite data transmission and communication features has also been deployed for real-time monitoring of progress on drilling works. ONGC has also set up 3D virtual reality centres called Third Eye for real-time supervision of oil and gas fields. Recently, it has revealed plans for foraying into new technology streams such as artificial intelligence by setting up a venture funding corpus.
- Cairn India (Vedanta Limited): The oil and gas company has been successfully meeting challenges related to analysing significant amounts of seismic data, managing data related to corporate functions, and keeping track of dynamic reservoir behaviour to carve out business strategies. Cairn is leveraging artificial intelligence and machine learning algorithms to take data-backed decisions. For its subsurface operations, Cairn has deployed machine learning solutions to automate the well log splicing process. For field development works, it uses data analytics to predict anomalies in hydraulic fracturing activities. Another set of key initiatives by Cairn is the adoption of cloud-driven solutions. It has established a multi-cloud environment to aid process innovation. Cairn has recently deployed an integrated geocloud approach for its new exploration attempts. The approach utilises the cloud to store, process and manage seismic data to reduce the time taken for the entire exploration workflow cycle.
- Indraprastha Gas Limited (IGL): One of the key players in the downstream segment (city gas distribution business, in particular), IGL is one of the early adopters of IT-OT-backed solutions. The firm has deployed SCADA systems to process, monitor and control parameters such as gas pressure, temperature and flow rate at its compressed natural gas stations. For piped natural gas supply, sectionalising valves are monitored from the central control room (to maintain flow pressure) and this is carried out through an integrated SCADA system. IGL has also deployed video analytics to ensure integrated surveillance and security across its pipeline and station network. It is also implementing automatic meter reading (AMR) systems for its industrial and commercial customers that have a consumption level over 10 standard cubic metres per day as well as prepaid metering systems for industrial and commercial customers. IGL is also retrofitting existing domestic meters with AMR systems in a phased manner.
Up next: IT-OT convergence and key challenges
While various entities across the upstream and downstream segments are taking steps to apply IT- and OT-backed solutions in their business processes, the integration of the two sets of solutions is a must to achieve comprehensive efficiency gains. Convergence of IT and OT solutions essentially involves connecting physical assets with the IT infrastructure and also with other assets. For the oil and gas industry, effective IT-OT convergence can yield noteworthy results such as enhanced extraction efficiency, predictive maintenance of equipment, real-time asset monitoring and tracking, as well as optimal use of the workforce. Companies such as ONGC and Oil India Limited (OIL) are taking steps in this direction. OIL is currently working on Industry 3.0 and has deployed field devices, transmitters and sensors on one layer besides deploying control electronics.
Moreover, IT-OT convergence is required to overcome the cybersecurity threat, which still looms large. For complex value chains such as those in the oil and gas sector, the threat of a cyberattack on an integrated IT-OT system of a company has serious ramifications. The risk is high as there are multiple entry points into the system that make it easier for ransomware or malware to corrupt it. Consequently, managing the security of the integrated system through regular upgrades is a major challenge for the industry, and that too with the constantly evolving technology. Thus, many players strive to build a hack-proof system which is easier to maintain and operate than one which warrants regular updates. Besides, risks are not only restricted to the IT architecture but could also be from third-party suppliers.
Another area of concern is the already existing legacy systems that are required to be dovetailed, if necessary, with the new solutions being adopted. The digital divide is large, and the task becomes more challenging when the workforce is not fully skilled in this regard.
While the technology options are many, each player in the oil and gas sector must carefully consider its requirements with regard to IT- and OT-backed products and processes. For one, these entail sizeable investments and a one-size fits all approach does not hold. For the major players that have already taken the leap towards adoption of these solutions, convergence is vital to optimise operations. However, given the various challenges that may arise, the right measures need to be put in place. For instance, the formulation of dynamic policies with the provision of making amendments as and when required, and clearly defining the data handling process are some of the key steps. The data needs to be continuously evaluated to understand any deviation in the protocols. All this would require a pool of technically sound professionals who can help the company navigate the adoption of specific solutions. In a post-COVID scenario, this will perhaps prove to be one of the most rewarding investments.