There’s no doubt about it, oil prices have dropped over the past couple of years. Even if you don’t follow the news or the markets, you can tell by prices at the pump. Now averaging below $50 per barrel, the price of oil is a far cry from its heady climb to $140 per barrel in 2008, or even the $80 – $100 prices from 2010 to 2014.
As good as this news is to anyone who drives a car or takes the occasional flight, as helpful as it might be to ease pressure on the economy as a whole, oil and gas companies have had to scramble to cut costs. That’s OK for the short term, according to Craig Resnick at the ARC Advisory Group, but medium to long term they need to find a new and different way of working. And this, he says, means embracing the Industrial IoT.
In a recent blog, The Oil and Gas Industry “New Normal” Pricing Justifies Greater IIoT Investment, Resnick said, “To increase capital efficiency and profitability; reduce marginal costs; minimize downtime; improve health, safety and environmental conditions; and capture the knowledge of the retiring workforce and productivity gains hidden in data and workflow silos; the oil & gas industry must embrace IIoT and digital transformation fully, from assets to the oil field; and from design to process and operations.”
Whew! That’s quite a list of benefits. And look how deeply it needs to penetrate the industry. To achieve that level of integration, as Resnick points out later in the article, success in IIoT is impossible without a corresponding convergence of IT and OT. Done well, this combination results in a complete end-to-end solution that connects the sophisticated data processing and analytical experience of IT to the hard data coming from production machinery—be it legacy equipment that has been hammering away for decades or newly installed systems with the latest digital technologies.
Resnick’s vision of a full embrace of IIoT may seem far-fetched to old-timers, indeed to anyone who was responsible for designing industrial automation systems 20 or even 10 years ago. But “new normal” pricing in the oil & gas sector has set the bar to a point where people have to pull themselves out of their old mindsets. The rewards are tempting—the benefits of IIoT may bring the industry into a new era of prosperity. Who knows? Five or ten years from now people may wonder how anyone was able to turn a profit without it.
At Skkynet, the shift to IIoT has been fast-paced, and yet still somehow evolutionary. Sure, there are technical challenges, and security is a real issue. But whenever we step back from our work and take a look at what we are creating, we realize that it really can, in the words of Resnick, “support end-to-end process excellence, with enterprise integration and visibility that leverages existing systems and the strengths of industrial products.”