The adoption of information technology (IT) and operational technology (OT) solutions has been a trend in the oil and gas sector for the past four to five years. New and innovative technologies, and digital solutions are being deployed across all segments of the oil and gas value chain.
From digital oilfields to advanced analytics (such as big data), a wide range of solutions are being favoured by oil and gas companies to reap efficiency gains. For the exploration and production (E&P) segment in particular, significant focus is being given to data management with advanced solutions tailored to each player’s needs. Pipeline network management too is getting more digitalised. The increasing deployment of advanced IT-OT convergence solutions such as enterprise resource planning (ERP), supervisory control and data acquisition (SCADA), terminal automation systems, smart metering, customer relationship management (CRM), geographic information systems (GIS) and satellite surveillance solutions is helping companies monitor their assets with greater precision and in real time. Further, the pandemic, which calls for working remotely, has strengthened the case for the uptake of such technologies.
Noteworthy technology deployments
To understand the range of solutions being deployed by marquee players in the industry (in both the upstream and downstream segments), it is important to track their progress.
- Oil and Natural Gas Corporation (ONGC): The largest producer of crude oil and natural gas in the country ONGC, is a key user of the latest IT-OT solutions available for the sector. The public sector company has deployed ERP for optimising and standardising business processes and SCADA systems for real-time monitoring of pipelines and rigs, amongst other similar applications that have aided quick decision-making besides ensuring cost optimisation. ERP has been deployed as part of the Information Consolidation for Efficiency Project for enabling standardisation of business processes. Under this project, a complete ERP package comprising 23 modules such as mySAP Oil and Gas Upstream (for joint venture accounting and for the management of production sharing agreements and offshore logistics), mySAP Strategic Enterprise Management and mySAP Product Lifecycle Management have been installed in over 500 offices. Other modules for corporate financial management, business intelligence, supplier relationship management and enterprise portals (workplace) have also been incorporated. These IT-based systems ensure availability of information on a real-time basis and eliminate the duplication of activities across various business processes. This, in turn, aids in quick decision-making, better operations control and efficient cost management. The contract for the project was awarded to SAP AG. ONGC has also deployed SCADA systems to remotely monitor, control and manage its geographically dispersed production and drilling facilities, oil basins, processing plants, forward bases and other assets.
The SCADA system links these assets to the corporate data centre through terminal units and sensors. The sensors transmit the generated data on a real-time basis and enable faster decision-making by reducing response time. Apart from these solutions, the company has taken initiatives such as computing systems for seismic data, an invoice monitoring system, and a grievance management and vigilance portal. An advanced well monitoring system equipped with satellite data transmission and communication features has also been deployed for real-time monitoring of progress on drilling works.
ONGC has set up 3D virtual reality centres called Third Eye for real-time supervision of oil and gas fields. It recently revealed plans of foraying into new technology streams such as artificial intelligence (AI) by setting up a venture funding corpus.
- Oil India Limited (OIL): OIL, the country’s second largest national upstream company, has deployed several IT-OT solutions for both core and non-core activities. The company is using the ERP system to increase productivity and achieve effectiveness in all business processes. Various SAP modules for human resource management, material management, financial accounting and controlling, product planning, plant maintenance and supplier relationship management have been implemented. The company is using SCADA for real-time monitoring of crude oil and gas transportation and marketing processes. Further, seismic data acquisition and well logging services have been fully digitalised. It has also deployed an E&P databank system to store and process E&P data in the organisation. OIL has set up virtual reality centres at two locations. These centres allow multidisciplinary teams to visualise and interact with the subsurface data in a realistic 3D work frame and analyse the hydrocarbon aspects in a particular area. They help in reducing exploration and development downtime in addition to mitigating risks. The company has launched a project for digital transformation to leverage recent advances in technologies and analytics for improving efficiency, increasing safety, reducing wastage and enhancing customer value. As part of the project, OIL aims to integrate its IT and OT processes to reduce silos and gain greater data visibility. The use of technologies such as AI, augmented reality and GIS-based satellite imaging is also being explored. It is planning to use drones to increase the quality and effectiveness of surveillance processes.
- Cairn India (Vedanta Limited): The oil and gas company has been successfully overcoming challenges related to analysing significant amounts of seismic data, managing data related to corporate functions, and keeping track of dynamic reservoir behaviour to carve out business strategies. Cairn is leveraging AI and machine learning (ML) algorithms to take data-backed decisions. For its subsurface operations, Cairn has deployed ML solutions to automate the well log splicing process. For field development works, it uses data analytics to predict anomalies in hydraulic fracturing activities. Another set of key initiatives by Cairn is the adoption of cloud-driven solutions. It has established a multi-cloud environment to aid process innovation. Cairn has recently deployed an integrated GeoCloud approach for its new exploration attempts. The approach utilises the cloud to store, process and manage seismic data to reduce the time taken for the entire exploration workflow cycle.
- Indian Oil Corporation Limited (IOCL): IOCL has been proactively embracing new technologies to digitalise its huge scale of operations and to improve productivity and efficiency. The company’s digital journey started 20 years back with the implementation of an ERP system to standardise its business process. The company has now migrated to SAP-HANA technology, becoming the first public sector company in India to do so. The technology will allow the company to explore new areas such as AI, virtual reality (VR) and predictive maintenance. It has also launched a project to implement a dealer management and CRM system to increase customer satisfaction. The CRM project, called e-PIC, has been designed to integrate and customise marketing efforts across product lines, ensure a swifter response to customer service requests, including grievances, and present a unified customer experience across various access devices such as mobile phones, tablets and desktops. The company has deployed a chatbot for internal stakeholders to increase accessibility and improve employee satisfaction. The company plans to deploy chatbots for customers as well. It has completed the automation of countrywide fuel stations network to enhance customer services. Further, it has identified 80 new initiatives across ten themes to bridge the technology gap including drone-based pipeline monitoring, VR-based e-learning solution and a blockchain-based supply chain tool to reduce costs, enhance productivity and increase reliability and safety of operations. A Digital Centre of Excellence is also being set up to enable technology transformation.
- GAIL (India) Limited: GAIL, the country’s largest state-owned natural gas processing and distribution company, has been a forerunner in the adoption of new technologies. It has deployed several IT-OT technologies to improve efficiency, increase safety and reduce costs. The company operates a state-of-the-art centralised SCADA system for real-time monitoring and controlling of cross-country natural gas and liquefied petroleum gas pipelines. Considering the importance of SCADA for its operations, GAIL has implemented an additional firewall in SCADA-IT (Enterprise) interface to strengthen the security of the system. Besides, GIS mapping of all pipelines has been conducted. It is also using drones and satellite surveillance to detect pipeline security breaches. For improving customer relationships, the company uses an online SAP-based survey for obtaining customer feedback. The feedback is used to generate a stakeholder satisfaction index, which helps in understanding customer perspectives on GAIL’s products and services. Gas billing to customers has been automated by integrating the field sensors in gas metering devices to the ERP system for invoicing. The company has deployed an electronic document management system for storing documents in a structured manner. In order to safeguard the vast IT network, the company has established a security operation centre along with an advanced persistent threat mitigation system to disarm any new kinds of cybersecurity risks. A latest private cloud infrastructure has also been put in place to enhance network connectivity and information security. In the coming years, GAIL aims to adopt emerging technologies such as blockchain, AI, digital twin and design thinking.
- Indraprastha Gas Limited (IGL): One of the key players in the downstream segment (city gas distribution business, in particular), IGL is one of the early adopters of IT-OT-backed solutions. The firm has deployed SCADA systems to process, monitor and control parameters such as gas pressure, temperature and flow rate at its compressed natural gas stations. For piped natural gas supply, sectionalising valves are monitored from the central control room (to maintain flow pressure) and this is done through an integrated SCADA system. IGL has also deployed video analytics to ensure integrated surveillance and security across its pipeline and station network. It is implementing automatic meter reading (AMR) systems for its industrial and commercial customers that have a consumption level over 10 standard cubic metres per day. It is also offering them prepaid metering systems. IGL is retrofitting the existing domestic meters with AMR systems in a phased manner.
Up next: IT-OT convergence and key challenges
While various entities across the upstream and downstream segments are taking steps to apply IT- and OT-backed solutions in their business processes, the integration of the two sets of solutions is a must to achieve comprehensive efficiency gains. The convergence of IT and OT solutions essentially involves connecting physical assets with the IT infrastructure and also with other assets. For the oil and gas industry, effective IT-OT convergence can yield noteworthy results such as enhanced extraction efficiency, predictive maintenance of equipment, real-time asset monitoring and tracking, as well as optimal use of the workforce. Companies such as ONGC and OIL are taking steps in this direction. Moreover, IT-OT convergence is required to overcome the cybersecurity threat, which still looms large. For complex value chains such as those in the oil and gas sector, the threat of a cyberattack on an integrated IT-OT system of a company has serious ramifications. The risk is high as there are multiple entry points into the system that make it easier for ransomware or malware to corrupt it. Consequently, managing the security of the integrated system through regular upgrades is a major challenge for the industry, and that too with the constantly evolving technology. Thus, many players strive to build a hack-proof system which is easier to maintain and operate than one which warrants regular updates. Besides, risks are not only restricted to the IT architecture but could also be from third-party suppliers. Another area of concern is the already existing legacy systems that are required to be dovetailed, if necessary, with the new solutions being adopted. The digital divide is large, and the task becomes more challenging when the workforce is not fully skilled in this regard.
While the technology options are many, each player in the oil and gas sector must carefully consider its requirements with regard to IT- and OT-backed products and processes. For one, these entail sizeable investments and a one-size-fits-all approach does not hold. For major players that have already taken the leap towards the adoption of these solutions, convergence is vital to optimise operations. However, given the various challenges that may arise, the right measures need to be put in place. For instance, the formulation of dynamic policies with the provision of making amendments as and when required, and clearly defining data handling processes are some of the key steps. The data needs to be continuously evaluated to understand any deviation in the protocols. All this would require a pool of technically sound professionals who can help the company navigate the adoption of specific solutions. In the post-Covid scenario, this would perhaps prove to be one of the most rewarding investments.