Oil And Gas Industry Accelerates Technological Innovations During Downturn

Even as the oil and gas investment cycle reaches its bottom, the strategic imperative to improve productivity through innovation has never been clearer as the industry prepares for a slow, drawn-out recovery. Despite the high-tech nature of oil and gas, historically, energy firms have been hesitant to embrace new technology. Yet as the market recovers in coming years, the industry can expect to see a bifurcation between firms that merely survived the crash versus those that used the crisis as an opportunity to drive productivity throughout their business model. As a result, the energy ecosystem is seeing a thought shift in approaches to adopting new technology as firms challenging their old models will be best positioned during the inevitable rebound. Communication service providers play an important role by assimilating new solutions across the industry to enable the gradual shift to the digital oilfield where connectivity will allow secure real-time collaboration and enable data analytics. The future of oil and gas will be centered on information technology and software. Firms failing to make these investments today will be left behind.

Technological shift

Like the shale revolution that has dramatically upended the oil and gas industry, the satellite value chain is undergoing its most significant changes in generations. Revolutions in how firms design and launch satellites will enable a dramatic increase in connectivity in the coming years, enabling firms like Harris CapRock to build networks utilizing a combination of Geostationary Satellite Orbit (GEO), Medium Earth Orbit (MEO) and Low Earth Orbit (LEO) high throughput satellites. This is supported by continued investment in terminals and operating models to shift from a “best efforts” to an “always on” offering that delivers a level of reliability and security that would have been unthinkable just a few years ago. This unrelated technological shift appeals to oil and gas thought leaders seeking to leverage connectivity in their digital strategy to build a differentiated, sustainable operating model. These changes will shift the conversation from availability percentages and committed information rates to application-level performance.

As oil and gas companies position themselves for the delayed upturn, they are being forced to reassess their asset portfolios to match the opportunities likely to arise over the next few years. As sub-premium assets are increasingly placed into storage or scrapped, communications investments continue with the remaining fleets that will create a digital roadmap for assets returning to service in the coming years. As connectivity and reliability improve, firms are adjusting their operating models to leverage this in remote regions to pull multiple levers that will reduce costs. This includes reducing staffing in remote locations, enabling onshore subject matter experts’ insight across multiple assets, growing automation, and aggregating big data to improve the timeliness and accuracy of critical decisions.

The growing use of data and the increased accessibility of this data play to the strength of companies like Harris CapRock and to the innovations we are seeing in the satellite sector. Big data has arrived; today’s hydrocarbon abundance is driven as much by information technology as new equipment. Firms can now utilize imaging, sensors, and analytics while collaborating across multiple locations in real time, optimizing both drilling and production.

One way Harris CapRock is facilitating these innovations is Harris CapRock® One. This is an intelligent communications service that gives users the ability to access multiple satellite feeds and other transport layers through a single terminal while intelligently switching between beams or networks to provide the highest performing network connectivity for each application. While there is no way to predict all of the innovations that may arise over the next several years, Harris CapRock has designed this system to work with new technologies that may surface, including flat panel phased arrays.

As Harris CapRock builds multitransport networks supported by the industry’s most dynamic terminals and software, they can focus on customers’ individual application performance. More bandwidth and high availability will be meaningless if these networks cannot optimize data flow. As they work with customers to better understand their current and future connectivity needs, Harris CapRock can ensure each application will run across a network best suited to its individual performance parameters with redundant networks for additional reliability.

What are the barriers to the adoption of new technology?

Advanced sensing, enhanced data collection, analytics, and automation are a few of the technology-focused upgrades being reviewed and adopted across the industry. These types of improvements translate to a higher rate of data consumption moving forward. The ultimate goal of this shift is to use these advancements to create a safer, more reliable and efficient working environment. Unfortunately, it’s not that simple. While technology-dedicated spending will come back over time as oil prices recover, the biggest adoption barrier currently stems from the inertia of large oil organizations and how they make decisions.

Traditionally, leadership of these companies has been reluctant to alter the way they leverage technology, but as margins are squeezed, a new generation of tech-savvy leaders who embrace technology are making their mark and helping accelerate innovation that previously could have taken decades to achieve. This can be seen in the assets currently running. Projects are coming through faster, and operating costs are decreasing. Innovation is no longer being seen as a cost and more as an investment. Companies are looking at IT as a facilitator for growth and advancement instead of just a cost center.

The other significant barrier to the realization of the digital oilfield is cybersecurity. Multiple examples of malicious software unintentionally downloaded by offshore oil workers has incapacitated computer networks on some rigs and platforms, exposing gaps in security that could pose serious risks to people and the environment. Harris CapRock is addressing emerging cybersecurity needs in two separate, but related ways. First, Harris CapRock has worked to ensure its networks are the most secure in the industry, utilizing Global VSAT Forum (GVF) guidelines as the minimum standard. Second, they continue to introduce new customer offerings to defend and monitor networks while preventing attacks before they occur. As firms ramp-up cybersecurity spending to defend their systems, Harris CapRock can deliver the secure connections that firms need.

Implications for firms and their employees

As companies are turning to these innovations and improvements in technology, they are beginning to look at ways to operate their facilities remotely and reduce the need for on-site personnel. This effort is a transformative cost decelerator in the offshore environment due to the reduction in expense of having individuals on worksites. There is a trend to embrace a minimum headcount asset manning operating philosophy as both the efficacy and reliability of communications technology improves.

Automation tools remain a rare growth product line in the offshore oil and gas industry as firms seek to reduce offshore personnel for millions of dollars in savings. At the same time, these providers are seeking to collect growing amounts of data to aggregate into proprietary algorithms to leverage big data into providing preventive maintenance, Service Level Agreements (SLAs), and other applications the industry is just beginning to uncover. Growing connectivity and security is allowing oilfield service providers and operators to place more subject matter experts onshore, in a lower-cost and safer environment, where their skills can be leveraged across multiple assets. While many companies reduced their workforce to manage costs in the recession, the innovations in the industry are giving companies the ability to intelligently automate tasks and reduce the need to endanger personnel on remote assets.

As oil and gas companies decrease the number of people working offshore, they’ll increasingly rely on companies like Harris CapRock to supplement inhouse operations. Rather than becoming an expert in collecting data, building and managing networks, companies will shift their focus to extracting valuable insights from the data they are bringing in to enable sound decision making. Organizations that don’t make this shift during the downturn may be left behind by competitors.

As the industry returns to profitability, the focus will be on higher instrumentation, higher bandwidth, and technologically advanced assets. The real strategy behind implementing this model is going to be utilizing increased connectivity and digital enhancements to institute operational changes that are required to keep costs down while utilizing technology to better empower the industry’s most important assets—its personnel and data.

As vice president of marketing and technology, Matt Broida is responsible for leading the communications, commercial, and technology teams. These teams align emerging customer requirements into a commercial and technology strategy to enable a strategic growth plan across energy, maritime, and other emerging verticals. Broida has more than 10 years of international experience leading commercial and strategy engagements in a wide range of markets, including offshore oil exploration and production, technology, and private equity.

Broida earned a Bachelor of Science degree in finance from Ohio State University and a master’s degree in business administration from Kellogg at Northwestern.