Oil, Gas Companies Laying Groundwork for the Internet of Things

At this stage, companies are building programs internally to address how they will adopt Internet of Things technologies and how to get the most benefits in terms of managing risks, reducing costs and bringing in new revenues, said Serhii Konovalov, who leads Cisco’s O&G Global Industry Solutions Practice and O&G Innovations, in an interview with Rigzone.

Officials with Software AG are also seeing oil and gas companies starting to lay the framework and mapping their business processes to prepare their organizations for Internet of Things monitoring solutions. Software AG, which focuses on helping companies, including oil and gas companies, become digital enterprises, is seeing oil and gas companies pursue Internet of Things solutions to enhance their cash flow, while others are focused on ways to use sensor technology to achieve greater safety records.

To prepare for the Internet of Things, companies are first seeking to map their business processes to understand how work is done as a way to foster change in their corporate culture. Many firms believe that if they first focus on change management, the tools they use to facilitate operations, including technology, will fall into place.

This strategy of change includes using technology to enable processes as simple as attaching a document that outlines the methodology for a specific process. For example, a document that specifies the requirements for the type of conduit or drilling pipe a company needs can greatly enhance a buyer’s ability to procure the right supply.

“This is a long way from the Internet of Things, but is the top layer of the process automation piece that allows for sensor data to be fed into processes that will give a company enhanced visibility over its operations,” said Donald Fisher, senior director of Software AG Energy Solutions, in an interview with Rigzone.

“Rising CAPEX [capital expenditures] are increasing dramatically in the industry, so firms are very interested in controlling capital costs and being able to prioritize how they spend money,” said Fisher.

Another driver that Software AG officials are seeing in the move towards Internet of Things technology includes operational efficiency, such as being able to secure operational permits for exploration.


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Cullen  |  September 07, 2014
+++ Kurt +++ Excellent assessment, it was a pleasure to read your thoughts about the role of computers in a dynamic drilling environment and how they can create diversions and be distracting to the overall goal of production.
Shivanand Biradar  |  September 03, 2014
To map the existing process, you could use bpm products available as SaaS on several cloud market places. One such tool I use is IBM Blueworks live which is fantastic ! You could speed up the process of mapping the process, share it with others to contribute while still work is in progress. I have enjoyed building process maps using it, and others who have contributed to it were excited to see how we achieved tremendous speed.
Kurt  |  September 02, 2014
I agree that embracing technology is a goal we should seek, at least to some extent. Still, as we "oldsters" retire, we cannot be replaced by newer hires, except through experience and the teaching/training of the logical thinking pathways we use. So far, in other words, you cannot Google your way through drilling and completion. Further, where technology should free those of us charged with detecting problems and maintaining efficiencies, quite the opposite is becoming true. Longer, more detailed reports draw us away from our downhole duties, nearly constant emails draw us away from our oversight, and some how we must find time to sleep in a more time intense atmosphere which is task saturated and clerically heavy. Management is also unwittingly and negatively affected by the increased use of technology on the wellsite. Instead of focusing on plans and keeping ahead of the drill bit with technology, management is often mired in the pile of reports and data generated, trying to make some sense of it. Reactivity results when proactivity should be the goal. We have also become too accustomed and accepting of the unreliability of technology. From sporadic and slow internet in the field, intermittent communications, faulty equipment, to user unfriendly (and time consuming) applications; if my horse were as unreliable as our systems of technology he would be dog food. Those of us in the field have much better things to do than receive near-constant walk-through patches and fixes for system deficiencies and installations of the "program of the week". Using technology is not a replacement for the human mind (at least some minds); it should be a useful supplement to it. So far, no computer has been able to double check that circulating swedges will fit, crossover subs are on location, and the water tanks are adequate for the weekend. The computer is not a defining tool for ascertaining whether a prospective employee is a good fit for a team. Interpersonal skills and good communication skills are paramount for a successful drilling program as well as retention. I cite at least a half dozen genius-level folks whose data positively glowed, but who were square pegs trying to be fit into round holes. Conversely, many competent people who are definitely not genius quality fill many useful roles in the team simply due to their hard work. Any battery of tests would dump these individuals in the "recycle bin", yet here we are--contributing to the team in valuable ways. Perhaps technology will drive this industry in the future, but for me and many others, it is only a tool, and one which must be kicked to the curb if it doesnt perform, add meaningful insight efficiently and simply, or fills our ranks with people who lack the basic skills of just working as a team toward a well-defined goal; find oil and gas, drill efficient and deliverable wellbores, hook those up to sales, and do it all safely and securely.
Ron Gifford  |  September 02, 2014
Interesting comment. Crystal ball looking has its perils thats for sure. Risks are enormous, do you ride the tech wave and invest significantly in IT watch "me too" costs drop like a rock and you are stuck with the high priced IT? The frac revolution has left the majors in the dust but they have the deep pockets to ride the change wave. So then the majors invest in the changes and wait for the independents to go obsolete and then pick up the pieces at garage sale prices? As always can the little guy out quick the elephant and grab the cheese without getting stepped on.
CISSP_CRISC_CISM12969  |  September 02, 2014
This industry is setting itself up for huge failure through vulnerabilities and malicious penetration. The attack surface on IOT is huge. Shame on Cisco for the pushing of the money generation scheme in search of a platform. Look at the hack just performed on the Apple I-Cloud and Home Depot reported yet today. The cost benefit / tradeoff analysis for ease of use by newer workers versus safety and security is absurd. If new workers do not have the skills, train, train, train. This is a complete vacuum of proper engineering. The O&G industry knows better than this. This also has huge implications to National Security to critical infrastructure. When will these people learn? Connect to the Internet? Sorry your vulnerable and can be penetrated. Period!