THE IMPACTS OF INFORMATION TECHNOLOGY ON OIL AND GAS MANAGEMENT

THE IMPACTS OF INFORMATION TECHNOLOGY ON OIL AND GAS MANAGEMENT 2

THEIMPACTS OF INFORMATION TECHNOLOGY ON OIL AND GAS MANAGEMENT

Inthe recent past, information technology is widely used in vibrantbusiness settings to connect to connect systems as well as theindividuals in charge. Application of the technology in the oil andgas management is critical as it provides a convenient platform tocollect and analyze data from operations centers scattered across theglobe. According to Manyika, Chui, Bughin, Dobbs, Bisson and Marrs(2013), the latest information technology advancement in oil and gasmanagement will potentially redefine the industry. The mostessential change anticipated is reduction of operation costs. Theobjective of this essay is to prove that diverse IT approaches arecritical to the oil and gas management course because they equipstudents with ideas for enhancing fossil fuel extraction output whiledecreasing the cost of exploration, production and distribution.

Mobileinternet

Manyikaet al. (2015), claim that smartphones phones and tablets are nowindispensable gadgets in the management of fossil fuel industry sincethey facilitate creation of an internet of things. A smart phone canaccomplish several communication tasks that were previously dedicatedto physical computers. As such, a manager can collect data from theindustry using automated programs controlled from the hand-helddevices. Besides, a company with various operations spread across ageographical zone can interconnect the stations through wirelesstechnology. Furthermore, several functions in the oil industry areautomatic therefore, no human beings are involved in the qualitycontrol of the final products. The innovation in informationtechnology has facilitated development of machine learning,artificial intelligence as well as application of the innate userinterfaces such as voice recognition software. Engineers looking forinformation concerning a certain function in the industry can easilyacquire the knowledge from the database of an organization instead ofconsulting a live person. The clients, or even employees, withoutpractical knowledge of the oil and gas industry can also use theautomated information to learn about an organization (Manyika et al.,2015). Despite the promising functions of the wireless technology inoil and gas industry management, the knowledge on the strategies usedto entrench the sensors and actuators on physical objects, such asmachines, is scarcely available. Moreover, Ravindranath (2014) notesthat the management will need to monitor the data their systemsproduce constantly as well as guard it from malicious people. Forexample, the managers need to protect their financial information orother confidential information such as management policies. Thearticle also notes that the IoT chances of failure are high just likeother complex systems. Luckily, the information transferred on theIoT systems is encrypted with the Secure Sockets Layer (SSL) thatprevents third parties from reading the data being transferred. Theinterconnection of the systems also saves an organization time andmoney since the communication is autonomous (Ravindranath, 2014).

Therobotics

Thestate of the art robotics is another costs saving informationtechnology in the oil and gas management. The devices conduct thedirty, physically difficult or risky jobs to the human beings. Forexample, an automated robot is used to investigate leakages in oilpipelines as well as conduct the filthy tasks such as painting. Although robots existed over three decades ago, the devices oftenfeatured crude technology (Chen, Stavinoha, Walker, Zhang,Fuhlbrigge, 2014). However, new inventions have created intelligentrobots that can work alongside human beings. The workers can programthe robots to conduct specific tasks with no human control. As aresult, industries used the devices in regions where they were fencedoff from human workers. For example, automated machines can easilydetect contaminated natural gas compared to human beings. Themachines can also work for many hours consequently unlike humanworkers who work in shift (Chen et al., 2014). Unfortunately,autonomous robots are still on the infant development stage so theirprices are prohibitive to upcoming oil and gas companies. Inaddition, some robots are unable to work in some environments. Forexample, the offshore robots might fail to work on onshoreenvironments. This means industries that have both onshore andoffshore oil and gas operations will need to buy two sets of uniquesystems. Despite the challenges, Wethe (2012) argues that robots arethe future of the oil industry management since the investors arelooking for systems that will prevent humans from working in highzones. The article notes that robots were hard to sell technologyprior to 2010 since the several organizations relied on humaningenuity. However, the BP’s disaster in the Gulf of Mexico thatclaimed eleven lives after an under-water horizon rig caught fire andsubmerged. Likewise, Statoil foresees the future of robotics in oiland gas industry management as the systems will substitute 50% of thecurrent workforce (Wethe, 2012). Besides, they will complete the jobs25% faster than the humans can. The devices such as the “MarsRover” come with high-end technology that enables the device tocollect and analyze data independently. Although the initial cost ofthe robots is high, the machines are cost saving on the long run. Furthermore, they can work in extreme zones such as deserts anddeep-sea oilrigs unlike human labor that demands better compensationpackages when working in harsh environment (Chen et al., 2014).

4DSeismic Technology

Petroleumgeophysicists and geologists use the 4D Seismic Technology when theyare exploring oil and hydrocarbons in deep waters. In addition, theyuse the communication method to analyze the fossil fuels worth inexisting oil fields. Within the last twenty-five years, thetechnology has drastically improved in capacity and efficiency justlike the computer industry has grown. Prior to the development of the4D technology, the professionals were using 3D technology(Krahenbuhl, Li and Davis, 2011). However, the present approach ismore efficient compared to the previous technology. According toCross (2014), 3D technology functions as if the oil particles havedefinite shapes that contain height, depth and width. On thecontrary, 4D also adds time factor that helps to demonstrate the wayoil reservoir will transform in due course. The increased applicationand embracement of the 4D seismic strategies in both investigationand production of oil substances shows that the outdated 3Dexploration methods and reservoir examination methods have fullydeveloped as alternatives to lower the drilling hazards (Krahenbuhl,Li and Davis, 2011). On the same note, the technologies increase thereturn on investment since it is cheaper to prospect oil using theapproach than drilling a well as a way to test the presence of crudeoil in a given region. The most significant drawback associated withthe 4D seismic approach is the advanced knowledge needed to collectand analyze the data. Moreover, the technology can send false alarmsof the presence of oil and gas in a region (Krahenbuhl, Li and Davis,2011). In spite of the weaknesses, Krahenbuhl, Li and Davis (2011)claims that the technology is crucial in the oil and gas managementindustry because it offers the cheap, accurate and reliable approachfor determining potential oil reserves. Besides, it helps thegeologist to understand the future of a potential oil reserve.

Digitaloilfield

Cross(2014) also identifies the digital oilfield as another criticalinformation and technology field that oil and gas management shouldstrive to develop. The technique creates an oilfield with the entirecommunication of the components interconnected such that they canshare data through a platform that the management can monitor,measure and control the information flow of the statistics gatheredfrom various oilfields in a region. One of the main benefits of thetechnology is that it acquires regular data from mechanical,wellheads and pipeline systems. Second, automated computers analyzethe data, and then transfer the diagnostics to a synchronizedoperation center where live humans moderate oil flows to maximizeproduction while at the same time decreasing malfunctions. The mainbenefit of the approach is that it will decrease the cost ofoperation by 25% while at the same time it will augment theproductivity by 5%. The IT technology support costs approximately$0.25 for each barrel of oil, which is cheaper than the cost ofhiring full human support. On the contrary, Ravindranath (2014)criticizes the digital oilfield technique as insecure since hackersmay access the information flow illegally. Similarly, systems arevulnerable to downtimes associated with complex technologies.Golledge (2004) argues back that the management can secure their dataflow through using encrypted communication lines. In addition, thesupport systems should be on the lookout for potential intruders aswell as loopholes that can expose confidential to third parties.Finally, the systems need backup systems that can take over theoperations in case the primary operation structure experiencesdowntime.

Theinformation technology expertise is valuable to the oil and gasmanagement course because it equips students with ideas for enhancingfossil fuel extraction output while decreasing the cost ofexploration, production and distribution. Some of the common methodsthat are applied include mobile internet, robotics, 4D seismictechnology and digital oilfield. Several companies prefer using thetechnology to live human labor because it decreases death risks ofemployees in case of accidents. In addition, it increases theproduction output while decreasing the inputs, therefore, boosts thereturn on investment.

References

ManyikaJ., Chui M, Bughin J., Dobbs R., Bisson P. &amp Marrs A. 2013.Disruptive technologies: Advances that will transform life, business,and the global economy. McKinseyGlobal Institute.

Wethe,D. (2012, Aug. 30). Robots: The future of the oil industry. TheBloomberg. Retrieved fromhttp://www.bloomberg.com/bw/articles/2012-08-30/robots-the-future-of-the-oil-industry

ChenH., Stavinoha S., Walker M., Zhang B., Fuhlbrigge T. (2014).Opportunities and challenges of robotics and automation in offshoreoil &amp gas industry. IntelligentControl and Automation, 5,136-145. http://dx.doi.org/10.4236/ica.2014.53016

Ravindranath,M. (2014, May 25). Some see possible drawbacks in ‘Internet ofThings’. TheWashington Post. Retrieved fromhttp://www.washingtonpost.com/business/on-it/some-see-possible-drawbacks-in-internet-of-things/2014/05/24/30d79b30-df6c-11e3-9743-bb9b59cde7b9_story.html

KrahenbuhlA.R., Li y. and Davis T. (2011). Understanding the applications andthe limitations of time-lapse gravity for reservoir monitoring. TheLeading Edge,1060-1068. Retrieved fromhttp://geophysics.mines.edu/cgem/pdf%20files/4D_GravityTLE.pdf

Golledge,N. (2004). Digital field survey technology: The future of BGSmapping? British Geological Survey, 20. Retrieved fromhttp://www.geos.ed.ac.uk/homes/s0350775/Golledge2004.pdf

Cross,L.R. (2014). Trendsand challenges for the oil and gas industry. StoutRisius Ross Journal.