are you prepared to realise the value of the digital dollar?

The fourth industrial revolution is upon us, the Industrial Internet of Things (IIoT) is changing the oil and gas industry but are we fully leveraging value of the digital dollar? Companies are starting from an operations perspective and using the digital revolution to solve known problems. They are moving from reactive and preventive maintenance regimes to predictive maintenance; they are using sensors and the big data collected to improve operational efficiencies; and they are using automation to improve the safety of operations. Many are extolling the potential of digital twins to revolutionise operations and others are considering the benefits of virtual and augmented reality[1].

However, no one is starting projects with digitalisation as a core component of the concept development, and no one is considering the holistic approach to developing the digital oil field from the outset. At io one of our core beliefs is to start with the end in mind, we believe that in order to maximise the value of the digital dollar in projects we need to consider digitalisation at the earliest possible stage and establish a digital thread which can be weaved through the entire lifecycle.

One of the advantages offered by the IIoT is the ability of machines to communicate with each other, and to learn from each other, to optimise the collective system of operation. By considering the entire field, subsurface, subsea and facilities as a system, io’s unique systems approach allows us to establish the key interactions of components and subsystems, and the holistic view allows us to establish emergent properties of the system. In doing so, we start with a clear visualisation of the most efficient artificial neural network of machines. io can also develop a dynamic systems model of this artificial neural network, allowing a real time view of how project changes affect the digital strategy and ensuring it can flex as the project matures.

When we have the dynamic systems model representing the interactions of a field, the next step to developing a digital twin is to start to populate it with actual data. Another key advantage of establishing a digital thread at the earliest stage of a project is it allows for a common data model to be established and matured through the life of the project. io has previously written about the success of the multi-dimensional Building Information Model (BIM) approach used by the construction industry[2][3], which is paving the way for smart buildings and smart cities. The BIM approach involves each contractor adding up to seven dimensions of data (3D plus time, cost, time energy consumption, and operations and maintenance data) through the life of the project. In doing so, the construction industry has not only realised cost and schedule benefits throughout the construction phase, they are now using the models to develop more efficient and sustainable buildings. io believes the oil and gas industry can learn from this success and use a similar approach to establish a model consolidating reservoir, GIS, cost and schedule, efficiency, and even component reliability data with the traditional models used by the industry. This approach will allow a digital twin to be a natural output of the project, and it will also, if we repeat the success of the construction industry, offer greater cost and schedule certainty through the construction phase.

There are obstacles to this approach, as there were in the construction industry, such as the lack of compatibility of the software used to generate each of the dimensions of data[4]. This was addressed in the construction industry in the UK through government legislation requiring require collaborative 3D BIM on its projects by 2016. Rather than wait or lobby for government legislation to help the oil and gas industry, we believe industry itself needs to show leadership. To develop the common data model to bring digital transformation to the oil and gas industry, io aims to work collaboratively with operators, contractors, suppliers and non-industry experts to develop a multi-faceted road map to deliver the optimised data model required realise this aspect of digitalisation.

Another obstacle the industry faces is the reluctance to share data. There is a prevalent view that data equates to knowledge and knowledge is still believed to be power, or competitive advantage. This can be disputed in the changing world in which we now live, where knowledge is less valuable than knowledge flows, and the value of open source is becoming ever more apparent[5].

However, it is more appealing to the more traditional elements of the industry to talk in terms of protection of data. With the advances in blockchain technology, it will possible to establish a common model where the constituent data packages are encrypted such that they are secure between two parties, such as the client and contractor. This is where we need to focus on the end goal, a common data model, and use the digital revolution to get us there, rather than focus on the reasons why the existing approach prevents change.

Without a coherent data strategy, targeted on the collection and analysis of data that can add value, there is a risk of adopting an approach of collecting as much data as possible in a data lake, without thought for how it will be used. This lack of strategy can lead to the data lake becoming a data swamp, where the lack of meaningful metadata makes it impossible to ascertain the quality of the data. This greatly erodes the value of data: the uncertain quality of the data leads to uncertainty in the analysis, and the inability to track insights from prior analysis means the data analysts must approach each new use of the data from the beginning. By working with the end in mind, io can establish a data strategy that ensures the most effective collection, storage, management and recording to support the value obtained from analysis.

While the current operational lens applied to the digitalisation of the oil and gas industry is delivering value and facilitating laudable safety improvements, it is working within the existing paradigm and the value proposition is constrained by this paradigm. To break out and deliver the transformational potential of the fourth industrial revolution, it is essential to start with the end in mind. We need to consider how we maximise the digital dollar as a key value driver at the outset of a project and move forward with digitalisation as a core principle.

Talk to io about how we can help your company and projects undertake a digital transformation and realise the full potential of the digital dollar: