In the past couple of years, the oil and gas sector has taken big steps towards information technology (IT) deployment. IT is increasingly being identified as a strategic tool for improving operational efficiency and minimising financial losses. Meanwhile, new operational technology (OT) solutions are rapidly gaining traction. There is a high penetration of IT and OT solutions across the upstream, midstream and downstream segments. In order to automate business processes, oil and gas companies are employing applications such as enterprise resource planning, terminal automation system, smart metering and customer relationship management. They are moving further up the IT-OT ladder by deploying advanced solutions like supervisory control and data acquisition, geographical information system, satellite surveillance and remote sensors for monitoring gas transmission pipelines. Further, customised IT-OT solutions are being designed by vendors for meeting the specific requirements of these companies.
The existing oil and gas infrastructure is also being modified and upgraded to ensure compatibility with the newly deployed IT-OT applications. Thus, IT-OT convergence is emerging as the next big thing that can potentially transform the dynamics of the sector.
Setting the context
IT refers to technology infrastructure, which helps in generating, storing, processing and exchanging electronic data. It includes supply chain systems, order management systems and financial customer service systems. OT refers to process control and maintenance systems, which handle mission-critical data. These systems help in transaction processing and decision-making.
Data exchange between OT and IT systems is critical for decision-making. This is known as IT and OT convergence. Several internet of things (IoT) and industrial internet of things (IIoT) applications emerge from this data exchange. IoT and IIoT assist in making the data available from equipment and communicating it back to the workforce. They connect three crucial dimensions of a business – people, assets and processes. IT-OT convergence helps in making the physical world smarter, efficient and sustainable, thereby improving the business processes and decreasing costs.
IT-OT convergence is driven by real-time business scenarios. These scenarios can be wide-ranging depending on the nature of the problem. There are several issues facing oil and gas companies. These could be environment-related concerns and macroeconomic pressures, which affect their recovery from the upstream side and revenue from the downstream segment. In addition, there are regulatory challenges involving environmental protection agencies. There are geopolitical risks in terms of crude oil and natural gas procurement, and sale and export of the finished product. In addition, the maintenance of ageing assets of various refineries poses a challenge. Other issues pertain to price and market volatility, and computing infrastructure advancement (CIA). CIA involves the upgradation of existing processes in order to become more efficient and agile.
Such scenarios lead to the convergence of IT and OT as the data emerging from the interaction of these two applications can be applied to resolve various issues and challenges.
For IT-OT convergence, foresight in terms of enterprise visibility, integration and optimisation is required across the business value chain. Various issues and concerns emerge at different stages of the business value chain. The solutions to these challenges can be devised with the help of IT-OT convergence. In the exploration phase, IT-OT integration provides companies in the upstream industry with information about their reservoir, well state, rig state, basins, exploration and drilling strategy, geophysical conditions, sensor calibration, the earth crust and production. This information helps them improve their drilling efficiency, and monitor their production on a real-time basis. In the midstream segment, oil and gas transportation, import of crude oil and natural gas, efficiency in crude oil and gas trading, supply optimisation, pipeline maintenance, ship arrival time, and monitoring and containing losses are some of the key areas of concern.
Meanwhile, players in the downstream segment face challenges pertaining to the environmental footprint, flare losses, asset gas slippages, optimisation of crude blends, energy efficiency and optimisation of the crude basket to generate more revenue. On the retail side, IT-OT convergence can help in making decisions regarding cross-selling CNG, PNG and household supplies. It can also help monitor customer sentiment, the buying behaviour of customers, product quality, and fuel requirement under normal and special conditions in order to plan fuel supply for the future.
Under IT-OT convergence, the data generated from the equipment is collected through sensors deployed at the equipment side. Following this, standard routines are followed to normalise and correct the data. This data is then stored in standardised platforms. Data analytics and business intelligence tools are employed to draw useful insights from this database. Several products and solutions are available to undertake data exploration, management and modelling. The insights generated from data analysis can help in devising appropriate solutions to resolve the aforementioned issues.
IT-OT convergence has a number of benefits. These include supply chain optimisation, vehicle optimisation and vessel optimisation. IT-OT interaction also helps in predictive modelling. It is possible to predict the qualities and the yield of the finished products. Demand and supply forecasting and root cause analysis can further help improve the efficiency of businesses.
The growing deployment of IT and OT solutions is creating challenges of its own. While IT-OT convergence holds immense potential for transforming the oil and gas sector, a wide spectrum of issues need to be addressed for its implementation. These include data quality, data security, network speed, interoperability and data integration issues. Another key concern is cybersecurity. In a sophisticated cyberattack, the weakness in the system is identified in order to gain access to networks and devices. The malware duplicates the known service accounts to avoid host-based detection and active network investigation. The anomalies can occur either at the IT end or at the OT end. Applications interacting with the external world such as payment gateways and sensors are generally the most vulnerable areas. These anomalies can emerge from any investigation activity, domain activity, user activity, or data transfer activity, leading to a cyberattack.
Cyberattacks on OT and IT systems can result in significant losses for oil and gas companies as their credentials, machines and gateways are compromised. The solution to this problem lies in the detection of anomalies that cause the attack in the first place.
IT-OT convergence can prove to be a game changer for players in the oil and gas sector. The large amount of data generated from this convergence can help automate a number of business processes and monitor all aspects of the business on a real-time basis. The oil and gas industry is moving towards automation and digitalisation. Both public and private companies in the sector are well equipped to leverage the new IT and OT solutions. However, there is need for a comprehensive technology integration plan in order to maximise the benefits of convergence. Also, companies need to hone their in-house expertise, empower end users, develop enterprise-wide strategies and enable data sharing across multiple platforms. In addition, the cybersecurity concerns need to be addressed. If these challenges are resolved, the benefits associated with IT-OT convergence can be maximised.