Although the current market situation has caused key oil and gas industry players to initiate significant cost-cutting measures, global consulting firms have warned against short-term cost-cutting measures, advising the industry instead to invest in enabling digital technologies.
As Gartner points out, in its report How Forward-Thinking Oil and Gas CIOs Should Approach Price Declines, “The current low-price scenario is unlike prior ones because digital technologies are enabling optimisation of business performance, which is increasing ability of firms to compete at lower price levels. In this downturn, the ability of an upstream company to continue making strategic investments that improve its ability to compete may be an essential survival skill.”
Some of the areas in the oil and gas industry where technology can help to generate better returns from the same cost include improving the operational efficiency of existing projects, maintenance of assets and infrastructure, data analytics for faster and better decision-making, faster problem resolution, improved production efficiency, breakdown of departmental silos, and integration of operational and digital technology platforms. However, to achieve these results, the level of automation across business processes needs to be enhanced. By leveraging digital technology, global oil and gas companies can improve rig uptime and oil recovery rates, reduce oil spillage, boost employee productivity, and shrink costs. The reduction in turnover of global sales can be offset by becoming more efficient in all areas of the upstream and downstream value chain.
The key to success
The oil and gas industry typically has its upstream sites located in hostile and inaccessible terrains – usually deep offshore seas, deserts and arctic regions that are constantly exposed to extreme weather conditions. Some upstream sites are even exposed to geopolitical acts of war. Faced with these operational challenges, terrestrial network connectivity solutions often fail to provide the required reliability and durability, causing most organisations to rely on satellite-based communication solutions instead.
An example of how reliable communication solutions can boost productivity is through high-definition video and web conferencing through a low-latency satellite link. This has helped improve collaboration among internal team members at remote sites, facilitated better and faster access to subject matter experts, improved the troubleshooting of service and support issues, ensured isolated employees get continuous on-the-job training, and kept remote employees connected to their families. The gains from such applications include better role productivity, reduced travel costs, improved employee morale, and the capture and transfer of intellectual services.
The greatest challenge facing the industry is managing the high costs of exploration and operations. Companies are increasingly using data analytics to support business decision-making about exploration and drilling, to help streamline processes, and to lower worker risk. Performing analytics through cloud-based applications, or through a remote enterprise datacentre, requires reliable connectivity, usually provided by satellite communication link. Monitoring remote pipelines and perimetre fences for security breaches requires video analytics also supported through reliable satellite communication.
Innovations in satellite communications
The oil and gas industry requires communication solutions across its lifecycle, from exploration to production, refinery, storage, and cross-border transportation. Typical applications transported on a satellite communication backbone include internet, real-time data transmission from sensors and other control systems, data analysis and feedback, and intelligent network management. This growing requirement in terms of bandwidth, reduced latency, and quality of transmission make it necessary for oil and gas companies to engage with forward-thinking satellite communication providers.
Leaders in the field are responding by adopting innovative measures to reduce costs and provide better service for the oil and gas industry. Switching to the Ka band in high-throughput satellites, in addition to the Ku and C band transmission, has brought in more bandwidth at lower cost. The deployment of medium earth orbit satellite constellations has brought in more competitive options and reduced latency, along with better voice and video quality. Also driving down the cost of satellite communication is the trend towards smaller antenna sizes, and the development of micro-satellite constellations in the lower orbit band.
By utilising technologies from best-in-class satellite communication providers and other ICT vendors, oil and gas organisations can transform their operations by leveraging the Internet of Things (IoT), data and analytics, and improved connectivity and collaboration, in order to drive better productivity from the same costs, thereby enabling them to ride out this market correction.
