Lower oil prices and declining revenues continue to make headlines, but a lack of production efficiency may be the underlying issue for profitability in the oil and gas industry. A study by McKinsey and Company in 2014 concluded that automation is key to improving the efficiency of production operations, and even minor improvements can deliver material benefits to the bottom line.
The study’s benchmark analysis of North Sea fields shows, however, that production efficiencies declined rather than improved in the past decade, and that the performance gap between industry leaders and other companies almost doubled in the same period. In other words, most oil and gas companies have some catching up to do. So if automation can drive production efficiency, why is much of the industry lagging behind?
Offshore oil rigs and wellhead platforms are located in environments far from IT infrastructure and support, adding new layers of complexity to automation and the communications networks needed to enable it. The network challenges associated with incorporating streams of data from sensor-equipped machines in these areas often prove greater than the IT resources available, so data remains unseen and unused. Human error is an ever-present risk, and the data is often out of date before it even enters the IT systems. Traditional wired networks are difficult to maintain and often connect only a fraction of equipment, and the challenges of the future - such as the Industrial Internet of Things - look to bring a quantum leap in complexity and cost.
As offshore operations demand smarter and more cost-effective application solutions, the traditional practices for physical equipment are changing, and many companies are looking at wireless kinetic mesh networks, which are capable of using smart sensors and data transfer techniques to handle condition surveillance and machine-to-machine communications.
Wireless kinetic mesh networks were born from military and mining applications and the communications infrastructure failures that occurred on Sept. 11, 2001. Now, energy and natural resource companies are beginning to use them to support critical operations at the offshore wellhead. This type of network has no single point of failure and overcomes many of the challenges associated with communicating across rugged or difficult terrain. Kinetic mesh radios are intelligent, leveraging multiple channels and frequencies to ensure workers can access applications and data more quickly.
The current economic realities mean that the oil and gas industry is ripe for solutions that raise the bar on global operational efficiencies and enable the transformation of certain facets of offshore production operations. For example, the ability to add production equipment to a kinetic mesh network enables condition-based maintenance to be carried out - that is, equipment can be serviced when parts and components issue pre-failure warnings (i.e., that they are in danger of failing), rather than waiting for the machines to stop functioning and incur downtime.
The detection of a leak on a surface choke might have involved the well going idle for two days while personnel were scheduled and dispatched to replace the failed choke; today, the real-time monitoring of H2S sensors via kinetic mesh enables the company to remotely sense minute quantities of escaping gas and schedule a fix long before the situation becomes critical. This allows the operator of the well to proactively identify wellhead conditions likely to lead to equipment failures, take preemptive action to avoid outages, and schedule repairs during time windows when critical processes are not impacted.
The benefits of mesh-based solutions are not limited to the avoidance of unnecessary downtime and expensive maintenance; in fact, these pale in comparison with the penalties associated with spills, explosions and other incidents, which lead to loss of life or environmental damage that could be avoided by being able to remotely open or close a valve, speed up a pump, or reduce pressure when conditions suddenly demand. Catastrophic events are a real possibility when decision makers are unaware of what is happening on an offshore oil rig or wellhead platform, and risks posed to oil and gas producers includes not just heavy fines, but also bankruptcy and jail.
As global telecom leaders partner with kinetic mesh network providers, like Rajant, the oil and gas industry has the opportunity to deploy kinetic mesh across offshore oil rigs and wellhead platforms with a single provider. Oil and gas producers requiring a positive shift in their production efficiency can look to kinetic mesh technology and network providers for mobile solutions and next-generation collaboration tools worldwide.
Gerard O’Neill
Global Services Energy & Resources Practice
BT (British Telecom)
