The oil and gas industry has always been a pacesetter for other industries to follow, or to develop even further advancements. There is so much talk about digitisation — or digitalisation — not only in industry but also in almost every aspect of life. Yet the oil industry has been quietly using the earlier forms of the concept over decades.

Digitisation is the process of converting analogue information into a digital, computer-readable, numerical format, making it more durable on transmission as many times as necessary without degradation.

The International Energy Agency (IEA) recently issued its Digitisation and Energy report where it says “over the coming decades, digital technologies are set to make energy systems around the world more connected, intelligent, efficient, reliable and sustainable”. Although the report is encompassing all forms of energy, I will limit it here to the hydrocarbons industry.

The report says that “oil and gas companies have long used digital technologies to model exploration and production assets”.

The simple plants of the past were easy to supervise as capacities were small and controls were localised and operators easy to train. As oilfields became many, oil and gas wells multiplied, processing plants and refineries became larger and more sophisticated, pipelines and loading terminals expanded and so on, the industry needed a more elaborate system to capture and integrate all parameters of operations.

Therefore, the control system became all encompassing to optimise costs and prevent a fault in one section from being transmitted to others. The wide use of computers and the internet has made this increasingly possible as it is no longer satisfactory to accept local control and supervision of individual assets or activities.

Companies that adopted such an approach may have improved safety, productivity, quality control, economy, prevention of system or machine failure and reduction of risks brought on by human error.

The IEA tells us that oil and gas exploration and production are the most profitable parts of the industry and that their costs could decrease by 10-20 per cent. And that “technically recoverable oil and gas resources could be boosted by around 5 per cent globally” by the proper application of digital technologies that can handle and process “extremely large data sets generated by seismic surveys”.

The 5 per cent is not to be underestimated as the IEA tells us it is about 75 billion tonnes of oil equivalent that could cover 10 years of oil and gas current consumption, not only by finding more resources but also by improving their recovery factor. The same can be said about drilling control and wells’ location in addition to pipeline surveys, leak detection and unattended remote areas operations.

In the downstream sector, “operations could also benefit from more widespread use of digital technologies”. Commercially, profit margins in this sector are low and cost reduction and efficiency improvements could go a long way to raise them.

Technically, in a refinery, petrochemical or gas processing plant, we know there are thousands of control points in a large number of processing units and associated utilities that need to be connected to improve operations and reduce risk of any spillover of problems or failure in one section of the plant.

The hardware of these plants may last decades in operation while digital technology changes fast. Therefore, at least in new plants, consideration must be made for flexibility and acceptance of changes in software of digital applications. The report calls this “digital preservation”.

We are now in the age of the “Industrial internet of Things” (IIoT) where thousands of machines and equipment control points can be integrated and connected in one system to exchange data to garner all the advantages cited above.

The trend now is for hydrocarbon production and processing companies to team with companies specialised in digital technology to develop specific solutions. Recently, Saudi Aramco teamed up with Emerson “to collaborate on digital transformation” to bring advanced digitisation and automation technology to all Aramco assets.

The IEA report tells us that “while digitalisation can bring many positive benefits, it can also make energy systems more vulnerable to cyber-attacks”. These have increased significantly since 2000 forcing companies to adopt sophisticated countermeasures and governments to introduced regulations to strengthen cyber security standards.

Qatar, the UAE and Saudi Arabia have introduced strong anti-cybercrime laws after Middle East companies became main targets for cyber-attacks. The IEA report has equally important sections regarding other sectors of the energy industry. I hope digitisation will receive the attention of companies and governments across the board in our region.

— The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.