Oil and Gas Space Aligns Itself to Today's Technology Disruption

John Boden, Vice President of Information and Member Services, Society of Petroleum Engineers
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John Boden, Vice President of Information and Member Services, Society of Petroleum Engineers

The low price of crude oil has been the key factor in the oil and gas market since late 2014. That translates to a need for improved efficiency and innovation.

The Technology Roadmap for the Oil and Gas sector

At our SPE CIO Round Table earlier this month, we discussed the common business challenges that organizations are solving across the upstream and midstream segments of the industry.

Not surprisingly, everyone is working on improving efficiency of their IT systems and reducing costs. That is necessary and expected in any downturn.

What was both interesting and good to hear was that everyone around the table was also heavily involved in helping the operations side of the business find ways to work more efficiently and in a way that prepares their organization for the future.

Like IT organizations in any industry, cyber security was top of mind.

  ​Analytics and the big data systems behind them have become very important in the industry because of the need for efficiency improvements   

Consolidation in the industry, as well as the sale and exchange of assets, has many folks looking at natural language processing again to help them sift materials they get through the acquisitions and provide the information their engineers need in a relatively consistent fashion.

Analytics, big data and the Internet of Things were all hot topics. We all agreed that we are just at the start of our journey in these areas, but at least in the oil and gas sector, they are often intertwined.

Business Decisions Driven by Cloud and Big Data

Let’s start with cloud. These days the view of cloud in the industry has become very pragmatic. Everybody seems to have some things they use SaaS for and other things they run in house. The decision criteria on which way to go in a particular situation now seems based on well-understood advantages and disadvantages. “Cloud” has moved along the maturity curve quickly and has become another tool in IT’s arsenal to deliver services cost effectively and in the fashion they are needed.

Analytics and the big data systems behind them have become very important in the industry because of the need for efficiency improvements. Although they are also prevalent in other areas of the business, the place those technologies will become most transformative will be in handling the data which comes back from the field to analyze it and make the results available to the right people at the right time.

When you look at the sensor data already available today and then think about the potential growth in that data as the Internet of Things adds sensors to everything else in the oilfield, on pipelines, in trucks, on equipment and generally to things we can’t even dream of today, it is no wonder people are planning their strategy and infrastructure to scale.

Leveraging Virtualization

I came out of the telecom industry a few years ago, and the new technologies that were emerging there was called Network Function Virtualization (NFV) and Software Defined Networks (SDN). At a high level, think of NFV as virtualization of networking gear. SDN allows your switching gear to direct or drop packets based on applications. For example, rather than having a dedicated firewall, an application could monitor your network for suspicious traffic and simply drop it at the edge or at the source based on instructions to the appropriate SDN switch. Though a carrier network, such as a cellular network, has much more complex equipment than the average enterprise, the concepts, once they become available on enterprise grade gear, will simplify managing our networks as much as virtualization has simplified managing our severs and applications.

SPE’s systems are almost completely virtualized. When you automate the deployments of both the virtual machines and the applications running on them, it provides an incredible speed and flexibility which allows you to solve redundancy, capacity, deployment and interoperability issues in ways that were never possible before.

In many ways virtualization allows a more real-time reactive approach to things such as scaling which, in the past, took much more precise planning and testing, usually resulting in stranded resources if you wanted to sleep at night. Now you can add resources or redeploy them as needed real time.

For me, the transformation brought about by mobile and then smartphones is a great analogy. Mobile phones in general and especially smart phones allow you to plan just enough in advance to start on a journey then adjust as you go along. You can make general plans to meet people, and then call them to lock the plans down as you get closer to them while using GPS to find and travel to your destination. Virtualization allows you to take a similar approach to deploying a new application. You can plan enough to get you started then adjust the environment as you gain more knowledge from real-world deployments.

Technology Disruption at Brisk Pace

The oil and gas industry already uses many technologies, but the speed of transformation over the next few years will be breathtaking. Devices and sensors have dropped to price points where they are practical in most situations. Big data systems, while still maturing, have become reliable enough to handle the data generated by those sensors. That combination will fundamentally transform how we do things.

Amidst this, one of the biggest challenge is on the cyber risk management front, especially with the emergence of the Internet of Things. We must not only secure the increasing number of connected devices but also ensure that the information flowing to and from those devices doesn’t get tampered with in transit.

My advice to budding technologists would be to fasten their seat belts (safety first in this industry) and get ready for a fun but fast-paced ride.

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