How can oil and gas leaders leverage the Industrial Internet of Things (IIoT) to show measurable business impacts around technology? The industry is finding unique ways to use the IIoT to its true advantage, but many companies have doubts about the process. E&P recently visited with Peter Zornio, chief strategic officer at Emerson Automation Solutions, to discuss IIoT trends in the oil and gas industry.
E&P: What do you see taking place in the industry?
Zornio: I think that maybe we have a little different perspective than a lot of other people when we talk about the IIoT. We view it as more of an evolution. A lot of people talk about it like some wonderful thing that was just discovered two or three years ago, whereas for us it is a digital transformation that’s been occurring in the industry for quite some time now. It might be dramatically hastened by the increased emphasis on decreasing operating costs that the big drop in price has brought over the last three or four years, but in general we’ve always used the term, and a lot of the majors have been doing what we call internal IoT [Internet of Things] for a long time.
When you talk about IIoT, there are two broad categories that people think of. One is Big Data and analytics. The other one is this idea of outsourced service or centralizing domain expertise and functions and supporting multiple sites, whether it’s platforms or fields.
Customers have been doing it internally. They’re doing it with the ‘intranet of things’ inside of their own fleets, fields or facilities. They’ve centralized their own domain expertise, built up monitoring centers, built up reliability centers and pulled people out of the field to do cost reduction. It’s an ongoing trend digitalization and automation of field facilities that results in fewer guys driving around in pickup trucks.
The biggest trend I see with IIoT is that now we’re talking about this business model of a turnkey service, where instead of operators doing it themselves, they might hire a third party to go do it. If you’re a smaller player and you don’t have that expertise, there’s an advantage to get a turnkey service from someone like ourselves where we monitor a particular piece of equipment or take care of a certain function that is normally thought of as being something that an operator would do in-house.
We see the big guys continuing to do more of the internal IoT, where they are going to have their own integrated operation centers and their own highly capable teams with domain expertise in a lot of areas that are more centralized to support decreasing field staff. We will continue to be a technology supplier to them in terms of sensors that enable those applications to operate and software that contains embedded domain expertise to support a particular application. This software is many times a workflow that automates what might be a manual workflow into a digital workflow. So for those guys we would continue to be more of a technology provider.
The change for us is that for folks that don’t have those skillsets, we actually go to them and offer a turnkey service where we deliver results for them. The biggest challenge is probably around reliability and the monitoring of equipment so that they can eliminate routine checks. They can eliminate having as many people on a platform that they would have had before, and instead it’s turned over to being a service that you pay us for.
E&P: What about Big Data?
Zornio: On the Big Data analytics side, a lot of the discussion there is about analyzing the data and determining where the next well should go. Should I change the chokes on this field? Should I adjust them in different places so that I’m actually getting the optimum performance out of this reservoir?
There we’re working on the analytics side with something we call the Big Loop, trying to tie things together to make sure that the predicted performance of a reservoir and a set of wells matches the actual performance of that reservoir and set of wells. We’re feeding those data back using analytics so that we’ll get better at predicting what’s actually going to happen inside the reservoir and so that we can guide our customers on where to put wells and how much production to get out of each well to get that maximum reservoir recovery.
Those are related but different kinds of applications.
E&P: It seems there’s still a lot of either lack of information or pushback from some of these smaller companies that have always done this a certain way, even though there are all of these incredible solutions for them. Are you finding it hard to get to the smaller companies and say, ‘Seriously, we can help you if you’d just let us?’
Zornio: There are two things. First of all there’s, ‘OK, prove to me that this works. Show me why it’s going to be better. Show me the return on investment [ROI].’ We feel pretty comfortable that we can show immediate returns, especially when the technology is going to be deployed in a connected service model where the customer doesn’t have to deploy any capital.
We have a program that we call Operational Certainty, and with that program we’ve tried to show them in specific operating areas how we can actually show real ROI quickly with some of these IIoT-based applications. That gets them over the first hurdle. Then we’ve got to get them over the second hurdle, which is fear of the unknown, and a lot of times things like security come up as a barrier. ‘Well, I’ve got to send you my data. How do I know if I open up a hole to send you data that that hole won’t be used for bad things to come in?’ You’ve got to prove out a lot of the technology hurdles to make sure that people believe it works.
E&P: What about newer technologies like virtual and augmented reality?
Zornio: Augmented reality is an interesting technology that’s a little more out there. You could have a remote expert interacting with somebody in the field. That guy in the field can be getting beamed in real-time overlays on equipment with arrows pointing at things or being walked through some maintenance procedure before he’s about to do it for the first time or hasn’t done it in a while and needs a refresher. We can see it being yet another technology combined with IIoT and support from remote centers with remote third-party expertise that can help things happen and fundamentally get to where we have higher availability with fewer people.
E&P: What are the main messages you’d like to get across?
Zornio: Our Project Certainty program offers a number of technologies and work practices that we think help in both cost savings and making sure projects get done on schedule. And the whole Operational Certainty program revolves around how we have tools and technology for companies that want a do-it-yourself IIoT or intranet of things. We also have a set of offerings around connected services and other ways where we’ll happily be an outsource provider in specific applications to offer a turnkey method.
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