5 benefits of automation – how oil and gas firms can increase competitive advantage with technology

According to Erik Brynjolfsson and Andrew Mcafee, we are approaching a “Fourth Industrial Revolution” as digitalisation transforms the way we work, live and communicate.

The benefits of automation within oil & gas are numerous. If you are interested in implementing some productivity gains then read on…

1. Automation Benefits 101 – Improving Consistency and Productivity

Harvard Business Review suggest peak demand for major commodities may occur as soon as 2025. As reserves reduce and the prices fluctuate, it is vital that resource companies manage this uncertainty with agility. For example, automation of repetitive processes can improve consistency, accuracy and speed. Industries that require a high level of concentration or physical strength, such as energy, can utilise this to their advantage.

Digitalisation will have a significant impact on productivity in three ways

• Reduced variation will benefit organisations utilising quality methodologies such as Lean Six Sigma. This will release their top talent to focus on innovation, product development and operational excellence.
• Talent with intuition, logic and analytic skills will be vital for organisations looking to thrive in the digital competitive environment.
• Future skills needs will include machine learning, software development, robotics and data science. Existing roles will be redefined as high-level engineers are freed up from routine tasks to focus on complex analyses

2. Leveraging Data to Secure Competitive Advantage

Digitalisation is transforming the way we work, live and communicate, but only 1% of all data from an oil rig is currently used for decision making. Better access to data empowers senior leaders to view entire organisational performance in a holistic manner. Digitally focused companies can stay once step ahead of their competition by leveraging big data to produce more, at lower operating cost, and track compliance data autonomously.

Making better use of data could be leveraged through the “Digital Twin” – virtual versions of physical equipment, providing data to prevent downtime, reduce maintenance costs and streamline operations. The Internet of Things (IoT) and wearable technology will create data points throughout the business as trillions of sensors can generate and share real-time data quickly and effectively.

Interrogating and communicating this data will be the factor that creates competitive advantage. This is demonstrated by the rapidly growing demand for data scientists and machine learning engineers. Workforce needs are changing and McKinsey claim that oil & gas companies will employ a higher proportion of PhD level data scientists than geologists by 2027.

3. Reducing Costs

The GETI report highlights that compensation expectations are rising among workers. To meet this demand, companies can utilise digitalisation to reduce costs and attract the best talent. Automation enables streamlining and speedy, accurate repetition of processes. This empowers businesses to do more with fewer resources and reduce overheads while minimising risk.

McKinsey propose that “digital technologies may improve total cash flows by $11 per barrel across the offshore oil & gas value chain, adding $300 billion a year by 2025”. Better use of data can reduce costs at an early stage in production. One super-major firm utilised advanced data analytics to reduce productions by $700,000 per well – potentially saving $910m from producing 1,300 future wells.

4. Mitigating Risk

Digitalisation can increase security and inform safe, efficient and accurate decision making. Some potential innovations include

• 3D printed models of rigs produced cheaply and quickly to assess locations before building begins
• Underwater robots to fix gas pipelines off the coast
• Augmented reality (AR) and drone technology to assess and inspect offshore oil rigs

An innovative suggestion by Harvard Business Review proposes using AR and eye-motion sensors to ensure machinery is switched off correctly and record the exact time and location when this occurred. This reduces the risk to human life and equipment maintenance by eliminating the potential for error.

Risk can be further mitigated using technology in training simulations to replicate scenario conditions. For example, BP overlays AR training procedures on virtual reality (VR) simulations that replicate specific drilling conditions, including temperature, pressure, topography, and ocean currents. These simulated conditions can help coordinate and practice emergency responses to disasters without high costs or risk.

As the cost of these innovations reduce, new skill sets are rising to meet them. For instance, drillers will become remote drilling experts in anticipation of offshore jobs moving to onshore support centres.

5. Improving Employee Attraction and Retention

Demographic shifts heighten potential skills shortages within oil & gas as highlighted by both The Financial Times and Harvard Business Review. Hiring lulls during downturns have seen the average worker age over the past few decades. As older workers retire, they take years of specialist skills and institutional knowledge with them. Results from the GETI report suggest that younger generations are more attracted to developing industries such as renewable energy and only 33% of workers in the Oil & Gas industry felt happier than the previous year. Demographic shifts require changing business models. Flexible working and digitalisation can attract and retain untapped and diverse talent, especially women and millennials.

Potentially dangerous and unsocial working patterns reduce attractiveness compared to technology sectors. However, companies that utilise technology to enhance working can prove attractive. Some examples of technological innovation within human resources include

• Robotic safety monitoring using artificial intelligence and drones can reduce a dangerous and unattractive element of frontline work
• Cloud based employee management systems improve engagement across remote workforces and provide enhanced data for business decision making.
• Individually tailored learning programmes can ensure you have the right skills at the right time while engaging staff, unlocking potential and improving productivity at reduced cost.

Read more about workforce trends by downloading the Global Energy Talent Index at https://www.airswift.com/geti/

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Ford Garrard is the Managing Director for Europe, Middle East and Africa at Airswift

Airswift are an international workforce solutions provider and strategic partner to the energy, process and infrastructure industries

If you are a company looking to develop a partnership and would like to discuss further, please contact us

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