Energy Forming Around Smarter Edge Solutions in the Oil and Gas Industry

November 22, 2021

oil well image

We have never lived in a world of faster and more wide-reaching technology innovations. Our jobs, businesses, and how we operate as societies are being transformed by technology, as 5G, AI, IoT and edge computing revolutionize companies of all industries. One industry that is adopting technology and leveraging it for the many obvious benefits is oil and gas.

When compared with other industries in which companies have openly embraced the technology and information revolution, oil and gas has lagged a bit. However, thanks to digital innovations, the sector is undergoing a huge change.

With oil and gas still expected to supply 50 percent of the world’s energy, and the complexity of supply chains ever increasing, the need for technology has increased in the industry. With this in mind, data from the World Economic Forum found that $2.5 trillion of value could be derived from the digitization of the oil and gas sector.

Many in the oil and gas industry are starting to adopt innovative technology such as IoT and edge computing to improve their ability to make rapid decisions, protect their workforce, secure their operations and reduce costs. These benefits, and more, are too enticing for organizations in the industry not to leverage new technologies, with many now looking for what choices best suit their needs.

The topic of the digital transformation of the oil and gas industry was discussed in detail during the ZEDEDA Transform 2021, an event earlier this year which brought together experts from across the edge computing and IoT landscape.

Titled “Evolution in Oil and Gas,” the panel talked about macro trends in the oil and gas space and the benefits of utilizing IoT and edge computing solutions to enhance operations. Moderated by Martin Ernst of ZEDEDA, the panelists included David Holmes, CTO Energy, Dell Technologies, Benoit Foubert, VP Technology Digital Operations Solutions, Schlumberger, and Mark Tomasovic, Associate, Energize Ventures.

Ernst started the discussion with a general question, asking the panelists about the main opportunities and challenges that lie ahead for oil and gas providers.

“The challenge facing industry today is this transition towards a low carbon energy environment, but it’s one that’s going to take decades to play out. We see a couple of different trends in industry. Some oil and gas companies are focusing on de-carbonization strategy and how they can use their existing expertise in geothermal energy generation in carbon capture and sequestration,” said Holmes. “We see other companies, maybe more European focused, that are looking at diversifying their portfolio and embracing renewable and sustainable energy generation as a balanced part of their portfolio and using their capital expertise in order to drive growth in their marketplace.”

“I would say greener oil and gas is very important and will stay very important, for I would say the foreseeable future. We will have to balance an industry investment in greener sources of energy and continued investment and continuing improving traditional oil and gas,” added Foubert. “And if I assume a little bit on technology there, what it means for technology is technology will have to adapt to this changing landscape.

Ernst then asked the panelists how the edge can help create a greener, more eco-friendly future for the oil and gas industry.

“One way is the volume of data we’re generating at the edge of the network is increasing by orders of magnitude and our ability to process and generate actionable insights on that data at the edge of the network is a new capability that we haven’t had before,” said Holmes. “The other thing that’s incredibly important, though, is that whereas before we’ve looked at edge computing as being a kind of a set of bespoke often unconnected systems from particular vendors. Now we’re seeing companies want to move to a multi-client edge computing approach where they can build a common infrastructure at the edge of their network for running all of their different edge workloads on a single platform.”

“When you think about the economics that go into some of these plants and that produce everyday goods, a lot of the economics are dependent upon the power usage of things like pumps and compressors and various heavy machinery at these plants,” explained Tomasovic. “I just think it’s a really unique use case where now we’re using Edge not only to reduce bandwidth or improve latency, but you’re actually decreasing the power consumption of your plant and therefore improving the economics of your plant.”

Ernst then pivoted, staying on the topic of edge benefits, but asking how it can impact oil and gas cybersecurity.

“We’ve been approaching edge security benefits from two ways. One way is looking at the OT security itself. The technology that monitors threats to things like your SCADA system, there are various control systems, and that’s a combination of hardware and software,” said Tomasovic. “And then we’ve been looking at it from the IoT device firmware lens. When these devices are manufactured by some of these well-known device OEMs that do your pressure sensors, your temperature sensors, a lot of your controls – the supply chains that go into those devices come from all throughout the world.”

“There are hundreds of vendors, each of which are producing point solutions that have some level of ROI justification for their implementation. But it’s looking pretty terrifying for organizations that want to deploy a broad set of capabilities,” said Holmes. “What I see is the industry is really coming together around several different community initiatives, especially in oil and gas. I do see this kind of community collaboration on the building of a common set of infrastructure and platforms as oil and gas digitizes.”

Ernst continued about the provider side of the edge expansion, asking the panelists about the strain of digital transformation for companies in the oil and gas industry.

“When you want to transform something, there is always some resistance, so you need to row the boat a little bit. You are sometimes talking to organizations where the IT organization and the OT organization never talked and are not really prepared to talk,” said Foubert. “I think every organization wants to transform and leverage digital technologies, but there are a lot of things sometimes to embrace and adopt. It’s very important for us as technology providers to really help our customers and help ourselves through this journey.”

Ernst then asked his final scripted question of the discussion, wanting to hear what the panelists thought about the importance of open source software for the edge.

“Open source was regarded as an enormous business risk to oil and gas companies, and it’s hard to almost remember those days,” said Holmes. “But now I see a transformation almost in the other direction, which is companies are starting to demand open source technology as a key aspect of the underlying software solutions that they’re looking for.”

During a lively Q&A session, one attendee asked the panelists about the “killer” edge application for those in oil and gas.

“There’s so much low hanging fruit, but one application I continue to hear about is just rerouting operators, which has saved millions,” said Tomasovic. “By utilizing Edge technologies or various IoT devices out in the field, you shorten that feedback loop.”

“Remote site inspection is a great use case,” said Holmes. “I don’t think there is a kind of silver bullet application, but I do think there’s a silver bullet infrastructure. It’s the edge IoT infrastructure that provides a multi-tenant platform, which allows operators to run multiple applications on a common infrastructure that operates in a hybrid multi-cloud environment. This makes it easier to integrate with whatever public cloud or whatever core infrastructure an enterprise has in place and provides them with the kind of the data protection and cybersecurity protection they need.”

To watch the full presentation on demand click here.


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