Katie Cook, Sr. Vice Pres­i­dent - In­dus­trial, En­ergy & Nat­u­ral Re­sources BU – Cyient, ex­plains how emerg­ing tech­nolo­gies like VR & AR are rev­o­lu­tion­is­ing the oil and gas in­dus­try

Oil and Gas - - CONTENT -

Katie Cook, Sr. Vice Pres­i­dent - In­dus­trial, En­ergy & Nat­u­ral Re­sources BU – Cyient

The oil price col­lapse in June 2014 trig­gered a wave of cost re­duc­tions across the in­dus­try. Global oil and gas (O&G) com­pa­nies slashed CapEx spend­ing by 40% be­tween 2014 and 2016. Be­cause of the down­turn, projects worth a to­tal of $620 bil­lion are es­ti­mated to have been de­ferred or can­celled through 2020. But there is rea­son to be pos­i­tive for the fu­ture. Prices are slowly re­cov­er­ing with Brent crude up by around 90% in 2016 to just over $50 per bar­rel. Although this is still way short of the post-re­ces­sion highs in 2011 ($115 per bar­rel), it is ev­i­dence of a slow but steady re­cov­ery.

The past three years have driven O&G com­pa­nies to adopt new op­er­at­ing mod­els to com­bat low oil prices, which have been cen­tered on re­duced work­forces and less cap­i­tal ex­pen­di­ture. They have turned to new tech­nolo­gies to un­lock ef­fi­cien­cies like this and as eco­nomic prospects start to look up, this will be­come cen­tral to stay­ing com­pet­i­tive. Vir­tual and aug­mented Re­al­ity (VR/AR) is be­ing used to up­skill the ex­ist­ing work­force, while the fourth in­dus­trial rev­o­lu­tion could hold the key to mak­ing reser­voirs work harder with less re­source.


The tal­ent short­age was one of the big­gest chal­lenges fac­ing the O&G in­dus­try be­fore the 2014 price crash. It was seen as a bar­rier to the full po­ten­tial of ‘the shale rev­o­lu­tion’ and driv­ing growth in deep-wa­ter ex­plo­ration. How­ever, the in­dus­try­wide cost-cut­ting cam­paign from 2014-2016 saw around 400,000 work­ers let go which has led to a far more pro­nounced tal­ent cri­sis today. With oil prices ris­ing, com­pa­nies are once again look­ing to ex­pand their op­er­a­tions, and thus the tal­ent bar­rier could be­come a ma­jor con­cern again.

To com­pound this chal­lenge for skilled la­bor fur­ther, half of the in­dus­try’s cur­rent work­force will be el­i­gi­ble to re­tire in the next 10 years. They will take a sig­nif­i­cant amount of tech­ni­cal and in­sti­tu­tional knowl­edge with them un­less some­thing rad­i­cal is done. The of­ten-iso­lated na­ture of the oil and gas busi­ness, with off­shore and on­shore drilling sites in re­mote lo­ca­tions across the world, makes the ef­fec­tive dis­sem­i­na­tion of this knowl­edge very dif­fi­cult. This be­comes even more of a chal­lenge for or­ga­ni­za­tions with stretched work­forces, who are un­able to spare em­ploy­ees to con­tin­u­ous train­ing cour­ses.

In re­sponse, the O&G in­dus­try it start­ing to adopt emerg­ing tech­nolo­gies such as VR/AR to help com­bat the cur­rent and fu­ture skills chal­lenge. Us­ing tools like smart glasses, O&G com­pa­nies can train em­ploy­ees on the job re­motely, while en­sur­ing pro­ce­dures are car­ried out cor­rectly. This also sig­nif­i­cantly re­duces the risk of hu­man er­ror, as em­ploy­ees will be able to use VR to pre­pare them­selves for real-life sit­u­a­tions. Once they have been trained and knowl­edge has been as­sim­i­lated, AR will en­able them to put their knowl­edge into prac­tice, pro­vid­ing ac­cess to ad­di­tional in­for­ma­tion, anal­y­sis and even vir­tual as­sis­tance. AR means that no op­er­a­tive is alone in the field. Both these emerg­ing tech­nolo­gies en­sure the ef­fec­tive trans­fer of tech­ni­cal knowl­edge from more ex­pe­ri­enced mem­bers of the work­force to new en­trants into the team, both through VR train­ing and AR on-the-job sup­port and su­per­vi­sion. This will not only dra­mat­i­cally re­duce the risk of ac­ci­dent, it will also en­able com­pa­nies to make sig­nif­i­cant prof­its by re­duc­ing the costs as­so­ci­ated with these er­rors.


We are head­ing to­wards the fourth in­dus­trial rev­o­lu­tion – of­ten re­ferred to as In­dus­try 4.0 – that is be­ing driven by the In­ter­net of Things (IoT). In the wake of lower oil prices and tighter OpEx bud­gets, or­ga­ni­za­tions have been forced to look closer at how their as­sets and reser­voirs per­form. For ex­am­ple, in­dus­try bench­marks es­ti­mate that the typ­i­cal off­shore plat­form runs at only 77% of its pro­duc­tion po­ten­tial. That short­fall trans­lates to 10m bar­rels per day - $200bn in an­nual rev­enue. O&G com­pa­nies are look­ing at so­lu­tions for this, im­prov­ing op­er­a­tional ef­fi­cien­cies us­ing data an­a­lyt­ics.

For O&G com­pa­nies look­ing to solve this chal­lenge, they must take a three­p­ronged ap­proach. First, they need to em­bed in­tel­li­gence by in­te­grat­ing sen­sors into their as­sets. Se­cond, they must con­nect that in­tel­li­gence by pulling data from thou­sands of those sen­sors into a cen­tral cloud plat­form. And fi­nally, they can cre­ate ac­tion­able in­tel­li­gence by an­a­lyz­ing that data.

This is where the In­ter­net of Things comes into play. More than just al­low­ing com­pa­nies to man­age their ex­ist­ing as­sets, IoT en­ables the cre­ation of a new as­set in the form of in­for­ma­tion about sep­a­rate ar­eas of their busi­ness. In­creased data cap­ture and anal­y­sis, ac­cord­ing to Deloitte, could help Oil & Gas com­pa­nies save mil­lions of dol­lars by cut­ting down un­planned well ou­tages. It could also help them in­crease their out­put by as much as 10% over a two-year pe­riod.

This prin­ci­ple can be ap­plied to any as­set, whether it’s an ocean rig, land-based ex­plo­ration or down­stream pro­cess­ing plant. In­sight from a con­nected ap­proach like this can lead to mod­i­fy­ing op­er­at­ing pro­ce­dures to get max­i­mum ef­fi­ciency. In turn, po­ten­tial fail­ures could be iden­ti­fied and pre­vented be­fore they even oc­cur, mean­ing op­er­a­tors could more ac­cu­rately pre­dict when main­te­nance would be re­quired for as­sets. This ap­proach comes down to re­duc­ing costly and un­planned down­time, while ex­tend­ing the life of valu­able as­sets by not re­plac­ing them too early.

By fo­cus­ing on ef­fi­ciency in this way, O&G or­ga­ni­za­tions will also min­i­mize the ex­pense of main­tain­ing costly in­ven­tory for spares. Us­ing IoT ef­fec­tively can also help firms to solve the im­pend­ing skills short­age. Sen­sors re­duce la­bor re­quire­ments, tak­ing the bur­den of man­ual test­ing and in­spec­tions away.

Pres­sures since the June 2014 crash have forced O&G com­pa­nies to look more closely at their op­er­a­tions and as­sets to find ef­fi­cien­cies. Though this has been a chal­leng­ing time, it has laid the foun­da­tions for a pros­per­ous fu­ture. Oil prices are show­ing signs of re­cov­ery and the in­dus­try needs to ex­am­ine the ben­e­fits

We are head­ing to­wards the fourth in­dus­trial rev­o­lu­tion – of­ten re­ferred to as In­dus­try 4.0 – that is be­ing driven by the In­ter­net of Things (IoT). In the wake of lower oil prices and tighter OpEx bud­gets, or­ga­ni­za­tions have been forced to look closer at how their as­sets and reser­voirs per­form

that tech­nol­ogy can bring to im­prov­ing per­for­mance across or­ga­ni­za­tions. In this way, tap­ping into data an­a­lyt­ics and IOT is the fu­ture for oil and gas.


Katie Cook joined Cyient in 2010 and cur­rently heads the In­dus­trial and ENR busi­ness unit. Prior to this, she led the North Amer­i­can sales and ac­count man­age­ment. In her pre­vi­ous role, she was re­spon­si­ble for rev­enue, profit, and cus­tomer sat­is­fac­tion ob­jec­tives for Cyient’s North Amer­i­can op­er­a­tions. Prior to Cyient, Katie spent 16 years at IBM, where she guided clients in im­prov­ing sup­ply chain ef­fi­ciency and cus­tomer ex­pe­ri­ence. Katie worked closely with C-suite ex­ec­u­tives to de­velop strate­gic tech­nol­ogy so­lu­tions for key IBM ac­counts. Katie re­ceived a bach­e­lor’s de­gree in both math­e­mat­ics and ed­u­ca­tion from the Univer­sity of Idaho (USA).

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