{"id":20245,"date":"2016-11-18T17:57:55","date_gmt":"2016-11-18T22:57:55","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/oilfield-services-industry-downturn-to-digital-transformation\/"},"modified":"2016-11-18T17:57:55","modified_gmt":"2016-11-18T22:57:55","slug":"oilfield-services-industry-downturn-to-digital-transformation","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/oilfield-services-industry-downturn-to-digital-transformation\/","title":{"rendered":"Oilfield Services Industry: Downturn to Digital Transformation"},"content":{"rendered":"

\u201cTo quickly respond to market changes, oil and gas companies need to reinvent themselves. They need to be the next disruptors.\u201d \u2013 Julia King<\/p>\n

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There\u2019s a huge emphasis on being more efficient. When oil was $100 a barrel, oil and gas companies didn\u2019t worry about efficiency and costs because they were making so much money. But now, it\u2019s a huge issue. The oil and gas industry is again at a crossroads. Reduced demand for crude oil and increasing supply requires companies to optimize current production and extend well life — to do more with less; to be more efficient and more innovative. While waiting for commodity prices to rise, operating costs are being cut, capital projects are being deferred or cancelled and suppliers are under pressure to lower prices. By automating some manual processes, oil and gas firms can improve efficiency, safety, and accuracy, while reducing risk. This means that companies should automate many routine analysis and decision-support processes.<\/p>\n

For example, Schlumberger \u2013 the world\u2019s largest oilfield services company is transforming its business and operating model by trying to optimize its cost base, so it can provide superior technology that can enable higher production rates, at less cost to the client. Schlumberger\u2019s business model is diversified across geography and product lines of the entire oil and gas exploration and production job cycle. The business model is dependent on delivering innovative technological solutions to customers — Oil Majors such as BP, Shell ExxonMobil etc.; National Oil Companies such as Saudi Aramco, ADNOC etc. — that would help improve upstream companies\u2019 reservoir performance. A critical aspect is to provide these solutions in a cost-effective manner.<\/p>\n

Schlumberger\u2019s competitors such as Halliburton, Baker Hughes and Weatherford can provide almost all the services that Schlumberger can provide, but the latter is differentiating itself by being able to improve its asset and people utilization. A reduced cost base is helping Schlumberger to secure projects in the current somber market — by providing discounts — and generate an operating profit.<\/p>\n

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Technology improving people productivity<\/u><\/strong><\/p>\n

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For improvement in people productivity, technology is playing a vital role. A single engineer can operate and monitor multiple sites by connecting remotely to the distant field sites via secure desktop connection over the internet. Another aspect of improving people productivity is via automation of key work processes using wearable technology. But can wearables improve operational efficiencies; lead to significant cost savings; and\/or make the dangerous, messy, and exceedingly complicated jobs in this sector safer and easier?<\/p>\n

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Wearables transforming operations in oilfields<\/u><\/strong><\/p>\n

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When we talk about wearable technology in oil & gas, we are referring to wearable devices that can both collect and deliver data in the field, including Google Glass but especially more rugged smart glasses, such as those by Vuzix and Epson, and also VR (virtual reality) headsets like the Oculus Rift. Other devices include smartwatches and other smart wrist- and armbands, smart helmets, and sensors embedded in clothing designed to detect such things as radiation and\/or chemicals. Most promising, however, is the smart glasses + AR (augmented reality) combo, along with the data analytics afforded by this new wave of mobile technology.<\/p>\n

So how can wearable tech be applied at, say, a drilling site? Wearables can cut down on response time and total working hours by:<\/p>\n