Does anyone else remember when Digital Transformation (DT) was the buzzword in the Oil and Gas sector? In short, the access to latest software, AI, data analysis and Cloud-based systems, was going to thrust the Hydrocarbon sector into the 21st century.
The energy sector has lagged behind almost all other industries with the adoption of digitalisation.
Part of this was to do with the ample availability of the knowledge pool within the industry throughout the 2000s. Most companies had, or had access to, the subject matter expertise needed to run processes and systems well, spot the problems quickly and apply well-proven remedies. Alas, with scheduled retirements, and a few unscheduled retrenchment programmes in 2008, and 2014, meant that the pool of "been here before" was slowly draining out.
And Digitalisation was cool, as an idea. Complex data at your fingerprints, computer systems adjusting between process units or plants at the speed of light, rather than a control room operator getting on the phone to his buddy down the road. And the control room was going to get a face lift too. Imagine it like a scene out of “Minority Report”, with Cruise-esque operators swinging tabs open on a giant screen, to get to the "pre-crime" of an future valve failure, or an unforeseen process swing.
Image via alternativemovieposters.com
It was very cool, very hip!
I get it. The stock market got it too, and it started to garner momentum.
And there was the promise of some sausage, not just sizzle.
The premise is that you could ‘digitally twin’ the plant, so the operations group could try out endless scenarios of "what ifs" and plot the resultant outcomes, without risking the "real world".
It was going to cut down on extensive physical inspections, and just "walking the plant to see how it looks" was going to be a thing of the past. Truly remote operational management was possible, with the additional kicker that all of this will lead to process improvements, energy reduction and streamline production. Adding the failure prediction modelling into it, so that all future non-schedule shutdown events (even catastrophic ones) could be seen a long way off and averted.
Thanks, Tom. Shake his hand and jump on the jet black VTOL back to base!
The reality however, has been somewhat less satisfying. No doubt there have been success stories.
A major FPSO operator highlighted a case whereby the 2.5 Million instrument data inputs off one of their Production ships identified a small vibration noise that was coming from a SeaWater Reinjection pump. Turns out that the acoustic showed wearing on gears that had not been picked up otherwise. It meant that the pump could be fixed before it had a major failure, causing significant loss of reservoir pressure and therefore oil recovery yields.
In another, a North American integrated complex lined up the various sub-plants that shared vital feedstocks and derivatives production, and steam and inert gas use. It meant that when one production ramped up or slowed, the other plants would react instantly. This saved losses in rejected feed, return loops and steam production. The company claimed that this would save between 0.2 – 0.5% of production costs in any given year.
Another pat on the back, Tom. Although it’s not as much money as we hoped...
so maybe take an Uber this time...
Digital Transformation does provide benefits, and some of them can be realized through plant staffing levels savings, improved production and risk management.
However, due to various factors, the level of improved or increased profitability has been low, and in some cases negligible.
But as a plus, DT doesn’t require the owner to invest in major capital investments or new assets. Simply put, it’s a digital umbrella over the existing production assets that allows the existing data from the plant to be assessed by powerful computer software to create robust efficiency and predictability models. So the cost-of-entry is relatively low, and the "promise" and dollar-value of benefits is something that the industry is beginning to assess.
OK Tom, sounds interesting. Let’s give it a shot.
But while the Oil and Gas industry rebounds from the COVID-19 pandemic, asset owners owe it to themselves to look for other forms of business transformation that follows the similar DNA of DT. That is, when similar DNA make-up is recognized as:
- Low capital expenditure or entry
- Process, energy and plant improvement
- The reduction of risk to assets over the long term, without a huge amount of intensive monitoring
And oddly, the material science of Advanced Insulation, such as Aspen Aerogels, fits snugly into that three point template of Digital Transformation-esque DNA.
In fact, it does it even better.
Firstly, external insulation doesn’t ask you to build new plants or equipment. It acts as your umbrella to ensure process conditions remain stabilized against the variable of environment (cold, hot, rain, snow), and reduces your overall energy demand. And the Aspen material essentially suspends the ability for CUI (Corrosion Under Insulation) to take place, and being so thin and re-usable, makes equipment inspection events a matter of hours, not days. And if the plant won’t age or corrode as a result, the asset integrity or life extension profile of the plant is expanded significantly.
In short, it doesn’t cost much. Will get you percentage points of improvement in labour, energy, process and uptime. Avoid a catastrophic containment event or fire through corrosion breach. And add years of useful life onto the asset.
Sounds good, doesn’t it?
But it ain't cool and it ain't sexy. No-one zip-lines out of the chopper with a roll of Insulation tucked under the arm and saves the day. But maybe they should? Forget to mention how easy it is to install.
Any Tom, Liam or Ryan can do it.
Fundamentally, as the Oil and Gas industry continues to evolve, to remain relevant, socially connected and importantly profitable, it owes it to itself to consider the ‘dull’ things, sometimes right under our noses. In fact, it would be a "Pre-crime" not to do it.
About the Author
Tony Purcell, Vice President , Asia (Sales)
Before joining Aspen Aerogels in 2019, Tony held a variety of Asia Pacific roles with WR Grace, UOP-Honeywell, and Cameron-Schlumberger. He has 30 years of experience in the oil and gas Industry, working in global companies supporting the Asian Midstream and Downstream sectors through the times of the 1996 Asian Economic Crisis, Global Financial Crisis 2009, OPEC glut production in 2010 and the excess supply of today through oil production and COVID demand reduction. In every instance, the judicious use of value-added technologies have led the recovery of the sector, resulting in a more efficient 'new normal' as demand returns. Join Tony as he explores how the effective use of innovation, ensures a stronger outcome for agile companies.