Digital technologies to lead oil and gas into the next era
With oil prices steadily climbing, Oil and Gas (O&G) operators are looking to increase profit margins after several lean years. Uncertain commodity prices in recent years have become the “new normal” while maximising productivity and containing costs are top priorities for operators, service sectors of the oil and gas industry and investors.
In an industry where costs could spiral out of control dangerously because of a single spark, adherence to safety standards is vital. Annual deaths attributed to work environment hazards globally was a staggering 2.4 million last year according to the International Labor Organisation; non-compliance to Environment, Health and Safety standards also means cost in terms of fines , that is 65 percent more than being compliant.
As Malaysia embarks on Industry 4.0 to transform its industries and enable accelerated economic growth, oil and gas companies looking to adopt technology to grow their profits and their businesses should examine technologies that can support their operational and safety compliance needs.
Research from McKinsey found that the effective use of digital technologies in the oil and gas sector could reduce capital expenditure by up to 20 percent; operating costs could be cut in upstream by 3 to 5 percent and by about half that in downstream. Other research from Honeywell finds that a worker equipped with digital communications solutions , can reduce accidents by 20 percent.
The oil and gas scenario in Malaysia
The recent mid-term review of the Eleventh Malaysia Plan (11th MP) set targets for domestic oil refining capacity to beyond 900,000 barrels by 2019 from 2018’s production levels of 675,000 barrels. Some efforts to help incumbent national oil and gas supplier, achieve this, has been to construct two additional pipelines. The RAPID, or Refinery and Petrochemical Integrated Development, will supply 900,000 barrel and even the Pengerang Integrated Petroleum Complex that is expected to increase storage capacity from 1.3 million cubic metres to 3.2 million by 2020.
All of these petroleum assets located in multiple locations across the country help to ensure Malaysia’s energy security. O&G operators are looking for technologies to scale production and enhance efficiency.
The O&G industry become more complex as operators adopt more technologies to enhance oil discovery and refining. Communications with and within these often-remote locations is critical, to ensure the operations run smoothly and safely.
While it is clear that two-way radio communication is essential for safety exposed sectors like O&G which require the highest levels of safety and , there are broader benefits to the technology that go beyond voice communication alone. For example, digital technology can connect refinery workers and their radio devices with back-office workers who use mobile devices – enabling seamless communications between radio and broadband devices. This capability brings critical value to mobile workforces in high-risk industries such as O&G.
In high-risk industries, fires are common and operations demand greater urgency and responsiveness from their critical communications. When a fire breaks out, every second counts because delays can damage assets and the environment with operators facing huge fines for safety non-compliance.
Always on, always connected
O&G companies must manage spills, emergencies and regulatory issues throughout their remote field operations. Today, global operators are leveraging predictive maintenance, using sensors to respond to potential issues.
The added benefit of digital radio communications is the use of various apps such as job ticketing, GPS tracking, “man down” functions. When these apps are integrated with sensors in an Industrial Internet of Things (IIoT) network, they bring even greater situational awareness to O&G control rooms and contribute to increased levels of safety and efficiency.
In the event of an accident, informed decisions can be made about the nearest resource and equipment to mobilise to the scene of the accident.
The O&G industry have been combining IIoT, machine learning and cloud to manage remote facilities so that operators can address issues in real-time. Supervisory control and data acquisition (SCADA) software is becoming more popular in O&G to increase productivity and efficiency.
“A challenge of many O&G operators is connecting their heavy-duty operational facilities to the command and control room. Increasingly, O&G operators are moving to application-driven trunked digital radio solutions,” says Oka Putra, Energy and Natural Resources Vertical Solutions Head, Motorola Solutions.
SCADA is a platform technology used to control and supervise many types of industrial processes. It can optimise complex coordination of operations in O&G operations spread over large geographical regions. Traditionally, the long range and low data-rate communications that SCADA systems require have been established via leased lines and this can be expensive and difficult to install in geographically isolated regions.
As O&G operators move to digital voice communications systems, it has become possible to use their data communication services to connect remote units of a SCADA system to its supervision centre.
“Integrated voice and data networks provide the advantage of wireless pipeline monitoring with efficient transmission for proactive monitoring and control. These networks also transform operations from being reactive to using data to proactively monitor potential issues such as leakage detection and changes in gas valve pressure. All of this can be done via the SCADA control centre without the expense of laying costly data network cables,” Putra said.
According to the Malaysian Oil and Gas Services Council, the O&G industry is finally recovering from a few challenging years and operators are reviewing technologies that can give them a competitive edge. Safety practices are under review In Malaysia to ensure forced cost-cutting over the past several years did not compromise safety standards.
Fail-safe, reliable and seamless communications are core to O&G safety. “By going digital, O&G operators are future-proofing their business with mission-critical radio communications systems which also gives them the advantage of data communications,” Putra concluded.