Oil and gas supply chain operations are transforming, and Industry 4.0 is making it happen. The path oil and gas travels from extraction to end consumer is in flux, and operations are changing at every link in the supply chain as a result of emerging technologies.
Industry 4.0 -- commonly referred to as the Fourth Industrial Revolution and borne out of a confluence of technology disruptions -- ultimately hinges on the ability to integrate data with physical processes.
The rampant growth of U.S. shale is a prime example of technology revitalizing production, and U.S. shale producers have been credited for effectively leveraging technology to dramatically boost production.
While horizontal drilling is by no means a new technique, enhanced data collection -- driven by advances in seismic imaging -- and data analysis are leading to greater precision once drilling begins. Oil and gas companies' ability to replicate and sustain early, successful digitization initiatives will be key for cutting costs and maximizing output.
Across the supply chain
Industry 4.0 is changing the traditional oil and gas supply chain. Boasting a true eagleeye view, drones are improving maintenance and safety by eclipsing existing inspection methods and facilitating early detection of leaks in difficult-to-access locations. Increased connectivity through data integration and information sharing upstream and downstream could allow companies to adjust production levels in real time, based on inventory data from storage facilities, rate of distribution and forecasted demand.
Exploration: A core part of exploration, seismic imaging is a process already rooted in data analytics and 3-D visualization models. E&P companies moving into the next generation of seismic imaging are experimenting with 4-D models that integrate production data to map changes in reserves' oil and gas levels. These advances aim to more precisely pinpoint the quantity of resources and the lifespan of each well.
Production: The digitization of drilling processes is a potential goldmine for oilfield services firms. Applications are gaining ground among E&P companies, and a few of their benefits include:
- Leveraging data from software sensors to determine which drilling methods combine the right mixture of sand, water and chemicals to maximize a well's output.
- Automated drillers to increase production and reduce costs.
- Drilling equipment embedded with smart sensors to collect data.
The X factor here is integrating data collected from disparate drilling tools, often housed by different oilfield services vendors, to analyze the full picture of a company's production.
Storage: Key areas of transformation include improvements in data management to track inventory levels and monitoring systems to automate temperature control.
Transportation: Equipping railcars and tracks with smart sensors and thermal detectors can provide real-time geolocation data and monitor key safety features to minimize the risk of derailments. Pipelines with smart sensors can detect leaks early and monitor variables such as pressure, temperature and any deformations in the pipeline's infrastructure.
Refining: Smart sensors enhance monitoring of safety and functionality in all processes.
Distribution: Predictive analytics equip companies to forecast demand with greater accuracy, seamlessly communicate data throughout the supply chain, and automate production levels.
What's next?
Examined individually, the deployment of new technology at each level of the supply chain can improve a single process and increase profits for a single company. But combined, the innovations could transform an industry. The true power of digitization and the heart of Industry 4.0 is the way that siloed technological advances connect and communicate to create a shared data ecosystem.
While the Fourth Industrial Revolution in oil and gas is still in its infancy, the way that energy companies integrate their data, communicate and work together will continue to converge, evolve and transform.
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