What was deemed impossible yesterday is an option today, and will be a must and routine practice tomorrow, comment Stefan Chapman and Ekaterina Kalinenko of Euro Petroleum Consultants.
How has the oil and gas industry changed over the years in terms of process automation and enhanced control systems? Looking back, it all started very simply and gradually; but, the last ten years or so have seen a tremendous boost to overall plant automation systems, use of data and interest in digital technologies.
In different regions and industries, there is much talk about this new incoming era whilst others say that it is already here. The latest trends seen in the hydrocarbon sector are very promising – in terms of using interesting state-of-the-art developments related to process automation.
Since 2015, terms such as digitalisation, innovation, sustainability, Big Data and Industry 4.0 are attracting real interest from leading national and international oil companies and technology/solution providers, alike. The reason is the understanding that in order to remain competitive it will be important to apply state-of-the-art systems in the business processes and as a result securing the right place in the market.
Many industry experts admit that downstream companies were not the first to buy into the idea of digital transformation and are now jumping on a bandwagon of existing technologies and solutions. However, in comparison to other industries, the oil and gas sector has already come a long way and the pace of change is really significant.
We note that the leading companies with regard to growth margin and operational efficiency (pacesetters) are doing things differently. In addition to using the latest process automation systems, these organisations have built state-of-the-art complexes, and created joint ventures with different partners, sharing knowhow and experience.
It should also be highlighted that they are not only using ‘ready-made’ solutions that are available in the market, but looking to develop custom-made solutions, and further stimulating R&D in this area. Proceeding in this manner has helped many interesting solutions see the daylight in the past few years.
The topics that have been ‘hot’ in the areas where automation is concerned are: (i) Drones and Robots; (ii) Artificial Intelligence and Machine Learning; (iii) Smart and Digital (From a well to a method: We are now talking about Smart Refineries and Smart Corporate Systems.); (iv) Cloud, Big Data and E-mobility; (v) 3D-printing (For any type of purpose, starting from a building to equipment manufacturing: This technology makes the process cost-effective by up to 75% and up to 90% faster, compared to traditional methods.); (vi) Industry 4.0, Advanced Process Control and IIoT; (vii) Agile/Lean Principles; (viii) Modelling, Visualisation, and Simulation (For example, for safety and operator training, tools like Operator Training Simulators, etc.) – models become more precise and accurate, which help understand process flows and construction issues better, which has a positive impact on many indices that are used to measure efficiency.
The most modern designs in the above-mentioned areas share several common features. These are generally quite expensive, sophisticated, complex, highly selective, flexible and adaptive. The latter characteristics are becoming key for any solution to ‘win the favour’ of a client. Since the requirements and limits today become more stringent, clients are more demanding, and competition between providers is fiercer than ever before.
What can digital solutions be used for?
Well, essentially speaking, practically for everything – there is almost not a single work process in production today that cannot benefit from digital solutions and applications, and there is a whole network of developments that can take the process to the next level. These include: measurement (online); analysis, evaluation and prediction (multi-parameter); HSE management; engineering; manufacturing; benchmarking and troubleshooting; risk/change management; quality management; process control; data: collection, transfer, management, reporting, etc.; optimisation, including energy efficiency; and setting and monitoring key performance indicators, planning.
Today, we are familiar with different types of automation in processes in relation to exploration and production, downstream process units, and more recently, in relation to equipment, maintenance, and inspection programmes, and now it is possible to use advanced solutions in areas such as petrochemicals, pipelines, shipping, tanks, terminals, etc.
With these numerous opportunities, a whole array of subsequent challenges have emerged related to data management, i.e., how and where to store enormous amounts of data, how to ensure access in a timely manner, make it reliable and safe, choose the useful information, and most importantly, use it in the right way. Cyber security is another trend that companies must focus on. It is not the data itself that matters; knowledge, understanding and correct interpretation are the most critical elements.
As some experienced industry professionals say, “You can cover a column/unit with sensors that cost huge amounts of money; but in case you do not know what those sensors measure and what to do with those readings, those are absolutely useless and will never increase the level of safety, operational readiness, product quality, or any other important parameter.”
Importance of human capital
In reality, if not maintained properly, these advanced technologies can show wrong numbers and this ‘fake data’ can lead to potential incidents or accidents. We remember at least a couple of incidents that were the result of human factors coupled with automation failure. Another issue is that some operators learn to work in an automated mode, meaning that they only follow and monitor the data on their screens, but will forget to double-check, or question the rationale of everyday routine.
This particular issue is the one that many workers have against further digitalisation. What if we are unable to keep it under control? Will it leave us unemployed? Top managers with one voice state that this evolution (or rather a revolution) should not be looked upon as a threat. Yes, some job positions will eventually be replaced with others. But, haven’t we seen the same story in the past when previous industrial revolutions took place in every economy?
The result will be that fewer people may be needed for certain tasks, but these specialists will need to be experienced, highly qualified and motivated. This can be achieved in the future by combining the best features of the millennial generation who are soon to step in the industry and feel comfortable in this quasi-digital reality and experts with 20-30+ years of industry experience who have worked their way through the process and know exactly how every machine works and core principles of facilities that younger specialists lack.
Corporations shall pay greater attention to their human capital (and every industry worker shall take care of his/her own as well), with continuous training, stimulation of a mind-set open to changes, and modern organisational structure.
Building a different business model
Reluctance to change is to be expected, but these global trends and evolution cannot be stopped. In this highly volatile and almost unpredictable world, any missed beat or step-back can cost a share of market, result in critical losses and, in some cases, company closures, if companies are not ready to change.
The problem is that now many are afraid to be outperformed by others and these trends have transformed from hype to a kind of hysteria. Quite often, decision makers do not understand (and to be honest, few of non-specialists in this area do) the whole concept under IIoT, or Industry 4.0. But, they feel that it is better to try it rather than wait a little longer to see how it develops. Today, some state-run companies are starting to implement blockchain models, not always being 100% sure whether they need it or not.
Change and evolution may come more slowly than wanted, but the right approach here is to assess all options carefully and thoroughly, choose the ones that are right for this moment and develop those that have high potential for the future, and then build a different business model that incorporates essential interfaces within the company using available resources – both technical and intellectual.
Stefan Chapman is vice president and Ekaterina Kalinenko is project director at Euro Petroleum Consultants (EPC), which is a leading independent consulting company in the oil, gas and petrochemical sectors, as well as a producer of specialised annual international conferences and training seminars, focusing on market trends, technological advances and business strategies for the petroleum industry. EPC has offices in Dubai, London, Moscow, Sofia and Kuala Lumpur. For more information, please visit www.europetro.com