Cognite CEO: Three signs that oil and gas isn’t standing still as the world transforms

The oil and gas industry is reinventing itself as a truly digital player, and we’re seeing signs of its transformation everywhere.

It was just a year ago that Deloitte classified the oil and gas industry ‘digitally immature’, scoring it at the lowest end of their ranking spectrum. A marriage between Big Oil and Big Data was deemed by many pundits as simply too costly a wedding; and Big Oil was sentenced to be a life-long bachelor living out its final days amongst its clunky and costly hardware.

I don’t know about you, but that’s not the reality I’m living in.

Change is happening in the oil and gas industry. It may be slow, incremental and frankly, easy to miss when you’re in it. But if you take the time to reflect on the past few years, you’ll realize that the wedding not only happened, but we’re now reaping the benefits of a healthy marriage. Oil and gas is an industry that needed to transform for its own survival, and it simply couldn’t do it without data.

I believe that we are in the midst of a historical turning point for the industry. And no, not just because of COVID-19. This is something that started well before the pandemic hit. New business models are emerging, decision-making is becoming more data-driven, and ways of work are being upended, due to tangible digital solutions that have been implemented in the operations. This is happening now. It’s time to open our eyes to the signs of transformation in the oil and gas industry. Here are three big ones:

1. Digital twins are meeting their digital match

A strong sign of change in the industry is when digital transformation spreads across the entire value chain. The oil operators are investing significant time and resources in the digital twins of their operations, ensuring the connectivity and data capture of their own equipment and assets. But this begs the question as to when the other elements within this industry’s life cycle will digitalize as well? A solid first step is digitalizing areas such as the pump systems, like Framo, and Alfa Laval company have done for Aker BP, and integrating those with the digital twin of the oil rig.

But you can take it so much further, expanding across verticals and creating digital twins at all stages – from subsurface exploration and production to topside and distribution. Digital twins are not just applicable for platforms or vessels, as media images would have you believe, but are a technology that can be applied to multiple functions across the oil and gas value chain. Imagine the insight that can be extracted when you expand digital twin thinking vertically – not just horizontally.

2. Data-driven maintenance is reducing risk and saving time

The ability to gain access to not only sensor data, but events and alerts and other relevant data, through a single platform from which you can extract insights, has changed maintenance as we know it for the oil and gas industry. This is best explained with an example: MHWirth is the company that maintains the drilling equipment for Transocean, under a performance-based contract. To meet their end of the deal, MHWirth needed to adopt data-driven maintenance programs. So, they used an open API to access the right data to continually monitor all of Transocean’s equipment. This meant continuous monitoring, leading to continuous classing to get the necessary safety approvals from the certifiers, and it reduced the number of needed inspections. This is time and money saved, and much less risk, currently being enjoyed by the Transocean team.

3. Working from home just got real

It’s universally acknowledged in the oil and gas industry that it is simply safer to do things onshore. Bringing more and more tasks from offshore to onshore improves the safety of those who are required on the rig, and lowers cost. However, with many operators still doing things manually, onshore wasn’t an option for most tasks a few short years ago. Lundin Energy is one example of a company who understands this early on. When they designed their Edvard Grieg platform in 2012, they set a goal to install the sensors offshore, to be able to get all the data from the platform when onshore. They knew this was useful, but not to its full extent until COVID-19 hit. From the comfort of home, the Lundin Energy team is currently gathering insights into their North Sea operation, analyzing the data and doing the condition monitoring. Safely and securely, on land.

These are three signs of many companies proving that digital transformation is happening in front of our eyes.

The same Deloitte report I referenced earlier also conveyed a slightly ominous message to its readers, stating that if oil and gas failed to embrace digital, they risked losing trillions of dollars. While I believe that this holds some water, I should add that the operators we are working with didn’t need a report to tell them that. This is an industry that is fully aware and knows what needs to be done to survive. They are not standing still. It’s time to open our eyes to the signs of change, because they’re only growing.