It’s Official, Digitization Will Reduce Offshore Operating Costs

A recent report, timed to coincide with Offshore Europe 2017 in Aberdeen UK, has confirmed what many companies in the digitalization and data collection technology industries have known for a long time.

The offshore energy industry is, by its own admission, behind in embracing digitalization due to the industry’s risk averse culture, misconceptions and a reluctance to invest due to the notable reduction in crude oil prices since 2014.

According to the new report from AVEVA and Westwood Global Energy Group, more needs to be done to increase the use of digitalization within the offshore oil and gas industry, to reduce and sustain lower operating expenditure, increasing profitability in the face of long term reduced oil prices.

A joint study by the two companies, interviewed a variety of decision makers both within the E&P and oilfield services companies, to better understand their views on digitalization. It was found that while the benefits of digitalization, using tools such as data collection and storage and laser scanning are generally recognized, the industry’s risk averse culture coupled with reduced budgets, amidst the oil price downturn and common misconceptions, is preventing its full potential from being realized.

The majority of interviewees said they believed digitalization would deliver benefits including reduced opex, better quality and sharing of data, and more efficient projects. Those interviewed also said they felt the industry had been slow to embrace the technology because of the current downturn, as well as misconceptions such as high-up front costs, and long lead times to realizing a return on investment.

The report has called for a concerted effort to promote the benefits of increased digitalization.

It states: “An important next step is to promote digitalisation considerably, including an industry wide concerted effort towards engineering data standardisation, overcoming cultural inertia, and addressing misconceptions. Looking ahead, participants expected the emphasis to be on innovative and intelligent solutions. 3D models that integrate the complete data framework of enabling real-time access to data. The Digital Twin was highlighted as allowing E&P operators to plan for the future and reduce unexpected downtime.”

A perfect example of an industry poised to embrace digitialization, is the industrial bolting industry and the revolutionary Commander XT range of products available from Torq-Comm. The industry has relied upon manual data collection and storage for decades, the unreliability of which has undoubtedly resulted in countless leaks and the related costs that go with them.

The Torq-Comm Commander XT range of data collection devices and cloud based software allow real time data collection, monitoring and storage of the actual data with no opportunity for manual entry or data modification at any stage however senior the personnel. This ensures contractors and operators are guaranteed to have correctly tightened joints and zero leaks.

As the offshore oil and gas industry adjusts to a lower-for-longer oil price mindset, production optimization (to maintain cash
flows) and sustainable cost rationalization via supply chain pricing compression, enhanced operational efficiencies, and standardization 
have become increasingly important.