• 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 13 minutes Could Venezuela become a net oil importer?
  • 18 minutes Oil prices going Up? NO!
  • 2 hours The Tony Seba report
  • 4 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 2 hours Could Venezuela become a net oil importer?
  • 2 hours Harley-Davidson "Made in EU"
  • 4 hours Erdogan After Erdogan: New Presidential Mandate After Yesterday's Elections
  • 1 hour Time Of Recession - China and Europe Are Warning That A Trade War Could Trigger A Global Recession
  • 8 hours LNG Shortage on the Way
  • 3 hours The U.S. Will Soon Give North Korea a Timeline of 'Specific Asks
  • 14 hours Kenya Eyes 200+ Oil Wells
  • 13 hours Are Electric Vehicles Really Better For The Environment?
  • 6 hours Sell out now or hold on?
  • 14 hours OPEC soap opera daily update
  • 23 hours Saudi Arabia turns to solar
  • 18 hours Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 5 hours No LNG Pipelines? Let the Trucks Roll In
  • 1 hour Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
Alt Text

Global Energy Consumption Soars To New Heights

The new BP Statistical Review…

Alt Text

OPEC Edges Closer To Production Agreement

A successful OPEC agreement in…

Alt Text

EIA: Gulf Of Mexico Oil And Gas Production Remains Strong

Though the EIA predictions continuous…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Can Tech Really Transform The Oil Industry?

Tech

If there is ever a poll for the most annoying, most abused word or phrase in the technology field, “innovation” will be up there in the top 10 along with “IoT” and, quite possibly, “digital technology” itself. But there’s a reason these words are being used so often, and it’s not just their clickbait potential. As the oil industry will be eager to tell you, innovation in digital tech just works. It works so well, in fact, that it has already begun to transform a notoriously conservative industry such as oil and gas.

Oilprice wrote about digital tech’s “Amazon effect” on the oil industry last year when the first signs of this effect were beginning to be felt. Technology services providers flocked to the oil field to offer its owners and operators solutions that would bring their costs down and profits up by boosting “operational efficiency”—another candidate for the top 10 most annoying tech phrases.

Overused labels aside, it is working. U.S. oil production is at an all-time high and that’s thanks to some degree to the adoption of all these various digital technology solutions. What are they? Here’s a quick roundup from Emerson’s chief executive, David Farr.

Modern sensors in the oil field or the pipeline can measure many more variables than before, including corrosion, vibration and leaks. But they don’t stop at the measuring. Today’s sensors have the capability to communicate the data over the Internet of Things and store it in the cloud. Then this big data can be crunched up into small, digestible—that is usable—bits of information. What oil companies do with this information is find ways to further lower costs and boost returns.

Digital products for the oil and gas industry are growing in number, for everything from exploration to refining, and they likely will continue to grow. The word “disruption” may make you wince from hearing it too often but it seems to be a fact of life that digital tech is disrupting the oil and gas industry. Just how much it will disrupt it, however, is a topic on which there is no consensus.

The prevailing opinion, which Emerson’s Farr shares with the International Energy Agency, is that U.S. oil is changing the world markets, and in no small way. Just yesterday the IEA said in its latest five-year oil forecast that additional supply from the U.S. will cover some 80 percent of global crude oil demand growth over the next five years. The rest will be covered by higher production in Canada, Brazil, and Norway. Related: The Truth About U.S. Energy Dominance

Yet not everyone shares the enthusiasm. EOG Resources’ former CEO, Mark Papa, for instance, is a lot more skeptical than the average analyst. He notes that many of the most productive parts of the shale patch have already been tapped, and depletion in the shale patch is quick. Also, producers must cope with shortage of, for example, frac sand, because they are using so much more of it to improve recovery rates.

Analysts from Wood Mackenzie are also guarded when it comes to the marriage of oil and technology. Technology, they said in a recent report, could certainly improve exploration results and production rates, but it does have its drawbacks. There are limits to what technology can help accomplish in the oil field simply because it must deal with geology—and at some point, at least eventually, geology wins. Wood Mac forecasts that shale oil production in the United States will peak in the mid-2020s; no amount of technology can help prevent that.

Yes, digital tech is having a transformative effect on oil and gas, and not just in the United States. It will continue to play an increasingly important role in the industry in decades to come. It will even likely make the possible transition from oil and gas into renewables smoother at some point in the distant future.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News