A 2019 look into the oil and gas industry
Earlier this week Company Connecting published an infographic which looks at 289 IT and telecoms companies providing services and products to the Oil & Gas sector. More than half of these companies are in the Aberdeen City and Aberdeenshireshire council areas. The industry is of huge importance to the North East of Scotland. In conjunction with the infographic we are publishing several articles and interviews offering further insights into technology in the Oil & Gas sector. For years, the oil and gas sector has provided thousands of jobs and constant revenue for the UK. From 2008, the price per barrel of oil was over a $100. Prices started to fall at the end of 2014 and in January 2016 dropped below $40 per barrel.
Such a dramatic reduction had a considerable impact on the industry and resulted in huge job losses – at least 100,000 jobs were lost in the UK alone. Many of these in the North East of Scotland. Despite the downturn in the industry, production increased 4% from 2017 to 2018, and up 40% since 2014, and gas production is expected to increase in 2019. According to the industry trade body (Oil & Gas UK), the UK gas and oil industry employed over 150,000 people directly or indirectly in 2018 with revenues of over £1.2 billion. The UK Oil & Gas sector is an important industry that provided 27% of the UK’s total energy in 2018 and has had a global impact.
The industry has had to adapt to the drop in the oil price – it’s not been easy. They say that diversity is the mother of invention, and the industry has certainly had to think differently and look at ways of innovating to continue to operate safely, effectively and efficiently. This has led to the set up of bodies like the Oil and Gas Technology Centre (OGTC) which focus' on the industries challenges and the potential positive impact of technology.
Technology and the Oil and Gas Industry
TechX, is part of OGTC and is an Aberdeen based startup accelerator focused on the oil and gas sector. It has been launched to promote innovation and the use of new technology in a traditionally risk averse industry. Technological improvements are having a significant impact on the industry. For example: the industry has always had to manage large amounts of data, advances in computer power, analytics, the internet of things (IoT) and cloud storage options are leading to unocking the power of current and historic data. It can be processed faster, and more effectively and efficiently than ever before. Digital Transformation has also had a large impact on the oil and gas industry, helping reduce costs and increase efficiency.
Although the industry is risk averse, it is taking advantage of technological advances. It is predicted artificial Intelligence, blockchain and the use of smart drilling will all be used extensively in the future.
The Impact UK Technology Worldwide – pioneers and innovators
In recent years, the UK has become an importer of oil and gas rather than an exporter. While the size of the UK oil and gas industry and levels of production are limited on a global scale, it is through the UK’s ability to innovate and pioneer new technologies that it is a key player in oil and gas discussions.
The Oil and Gas Technology Centre (OGTC) and Its Challenges
The Oil and Gas Technology Centre was established in 2016. It’s funding was part of the Aberdeen City Region Deal to “help maximise economic recovery from the UK continental shelf, anchor the supply chain in the North-East of Scotland, and create a culture of innovation in the region”. OGTC helps fund initiatives to integrate digital data-driven technologies and processes in the oil and gas industry, with an expectation that these innovations will improve performance, optimise production and accelerate growth. OGTC works with companies on a variety of truly exciting projects e.g. smart facilities, analytics, digitally enabled supply chains, artificially enabled sub-surfaces, as well as digital and data architecture. One of the biggest challenges for the OGTC is to manage and pioneer this digital transformation of the industry to improve efficiency and safety and reduce costs further.
New technologies are a necessary but challenging step for the oil and gas industry. Expect to see, carbon capture and storage, hydrogen utilisation and electricity storage become more commercially viable. This in combination with the use of AI and blockchain, becoming common practice will certainly help in extracting the estimated 15-20 billion barrels left in the UK.
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"Oil and Gas, A look into the industry" First published on Company Connecting April 2019