What Does Cloud-Powered Oil Production Look Like?

To the uneducated observer, oil fields may look much the same as they did several decades ago. But things couldn’t be more different when it comes to the way these production sites are run. 

Running constantly behind the expensive machinery and the rugged workforce is a network of technologies that many enterprises would be jealous of.

Oil and gas have always been on the cutting-edge when it comes to the use of technology, says IHS Markit Vice Chairman Daniel Yergin. Today is no different. Oil companies are using the Internet of Things, data and the cloud to power their production and ensure their businesses remain profitable in an increasingly difficult climate. 

Here’s how they are doing it.

Predictive Maintenance With Cloud-Based Analytics

Few machines on the planet are put under as much stress as oil drills. At the same time, oil companies can’t afford to have drills out of action for long periods. That’s why oil companies rely on big data and predictive analytics to ensure machines continue to work effectively — and to pinpoint any piece of infrastructure at risk of failure, says journalist Deena Zaidi

“Machines are fitted with sensors that collect data about its performance,” Zaidi writes. “This data is then compared to the aggregated data ensuring that parts are replaced in an efficient manner and downtime is minimized, further reducing additional expenses.”

The cloud lies at the heart of this predictive analytics capability, notes the editorial team at Equinix. Data is typically gathered from on-site IoT devices, then it must be transferred and stored on the cloud for analysis.

The use of cloud infrastructures for predictive maintenance and connected oil fields will only become more important over time, writes Shiva Rajagopalan, president and CEO of Seven Lakes Technologies. As oilfields become even more connected, the amount of data will increase significantly, and the storage needs of oil companies must be able to scale rapidly. Only cloud computing offers the scalable storage that connected oilfields require. 

Industry oil barrels or chemical drums stacked up. Fillter image processed.

A Cheaper, More Effective Way to Identify New Sources

There is huge competition to find new oil reserves. But it’s not an army of geologists whom oil companies are employing to help them find these sites. It’s big data and cloud computing. 

The amount of data collected by these organizations is vast. From topographical and geological information to weather and environmental conditions, data is often unstructured and impossible for a human alone to get their head around, says Meeta Ramnani, Managing Editor at Smart Market News. Cloud computing is essential to store this vast amount of data and to synthesize it into a structured form that can be used by experts to identify the reserves with the best potential.

Cloud computing has already proven to be incredibly effective for oil companies looking to prospect new sites, writes energy consultant Geoffrey Cann. In a test run by an unnamed global oil producer between geologists and data scientists, the data scientists were able to match the company’s own staff when it came to predicting and identifying locations with the biggest production potential. 

This could have a significant impact in the long run, Cann points out. The ability to identify these prospective sites is meant to be the preserve of oil and gas geologists. They are paid significant sums of money to do this job — money that can be saved if cloud computing is able to handle this task at near-zero cost on an ongoing basis. 

Some of the world’s leading oil companies, like ExxonMobil and Shell, are already beginning to partner with tech giants to this effect, writes Associated Press reporter Matt O’Brien. Microsoft, Google and Amazon provide their cloud services to store the data, but they also offer the artificial intelligence tools that can analyze that data and help oil companies identify opportunities to increase their production. 

Business Team Meeting Brainstorming Togetherness Concept

Better Business Planning and Operations

Cloud computing promises to bring staggering operational efficiency to the oil industry, writes entrepreneur Andrew Medal: “The sheer amount of data companies can harness and further analyze through automation, will reduce operational expenses, down well times, and lessen risk. As more oil and gas companies integrate cloud computing, this will empower field workers to optimize production.”

When it comes to day-to-day and big-picture operations, the cloud has a multitude of use cases. From a business planning perspective, it allows these oil companies to expand to even more remote locations while retaining centralized operations, writes David Farr, chairman and CEO of Emerson. When everything is stored and analyzed in the cloud, there’s no need to spend time and money setting up operations in far-flung, inhospitable locations when a rig and a few sensors is all that is needed. 

Strategic Planning

Cloud computing can also be used to help oil companies get a clearer picture of their assets. The team at Offshore Technology point out that BP already uses the technology in this way in the form of a cloud-based geoscience platform that lets them clearly see and run simulations on the infrastructure and land they own. 

Looking more granularly, the cloud can also be used at plant-level, Aspen Technology’s Ron Beck writes. “A refinery, for instance, might want to run 1,000 scenarios to identify the optimum crude oil slate for processing by taking advantage of the computing power available in the cloud. However, planning personnel can’t possibly sift through all these in the time they need to decide and capture their position in the marketplace.”

Administrative Work

The cloud can even help oil companies with back-office operations. Take the accounting department, for instance, writes Vince Dawkins, president and CEO of Enertia Software. It won’t come as a surprise to hear that energy is one of the most regulated industries in the world and, as such, has very complex accounting requirements. Experienced and knowledgeable accountants will always be necessary. 

“The cloud meets the complex accounting needs of most oil and gas enterprises at a reasonable cost and with a high level of reliability,” Dawkins writes.

Human Resources

HR is another area where the cloud is playing a larger and more important role, Geonetix’s Rodd Seifarth and Carlton Boush write. As with accounting, there are extensive requirements that oil companies need to abide by when it comes to HR. This is made even more difficult by the large, fractured nature of the workforce and the seasonal nature of the job.  

The cloud has become essential for HR staff to do their job effectively. “Cloud-based HR SaaS solutions maintain an extensive library of reporting requirements and forms as well as supporting documentation,” Seifarth and Boush writes. 

“Integrated alerts and notifications within the system can assist an employer with reporting and compliance. As regulations are updated, many providers update the underlying software to reflect the most recent changes.”

The Cloud Is Better Than On-Premise Storage

The computing processes discussed above don’t have to happen exclusively in the cloud. With the right infrastructure and server farms, oil companies could complete them on-site. In reality, however, an on-site solution is far impractical and often much less effective than a cloud-based alternative. 

For one, the scalable nature of cloud computing goes hand-in-hand with the cyclical nature of the oil industry. This is the opinion of Bill Vass, vice president of engineering at Amazon Web Services, who believes a combination of public and private cloud software provides a way for oil corporations to dramatically decrease IT costs while also improving business operations. 

Both access to and the security of oil company data improves with the cloud, writes Chris Walcot, CEO of Progressive TSL. With the offices of multinational oil corporations located around the world, the cloud provides employees with the easiest and quickest way to access data. It’s also much more secure to store the data in the cloud rather than on local servers, which are more at risk of attack or physical damage. 

Cloud computing can also help increasingly environmentally conscious energy firms lessen their impact on the climate. When it comes to running server farms in-house or using the cloud, there’s really no competition. The virtualization of cloud computing is up to 80 percent more efficient, says the team at MCA Connect

So, not only does cloud computing offer oil companies the opportunity to create dramatic efficiencies, but it can help to make operations greener, too. 

Images by: Zbynek Burival, Tanawat Pontchour/©123RF.com, raxpixel/©123RF.com

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