The Way We See It: the Digital Oilfield

A recent global study by MIT found that the oil and gas industry is one of the last to arrive at what it called “digital maturity.” In our our view there are two primary reasons for this: power and communication.

The majority of well sites are not close to major metropolitan areas—they are remote operations. And when your site is out in West Texas or the in mountains of Colorado, it’s no small task to get electrical power to that equipment. And of course electricity is needed to allow your field equipment to communicate with your systems back at the office.

That said, it’s becoming increasingly clear that wide connectivity—even in West Texas—is coming rapidly, and we foresee a tipping point where digital becomes scalable.

There is also a generational dynamic at work. Many of our grandparents worked in oil. But with the downturn of the seventies, oil work was not a viable option for most of our parents, so they found jobs in other industries, leaving innovation and product development in our industry relatively static.

In the last couple of decades oil has once again become a profitable industry to get into, and many millennials have gotten their start. The young men and women now moving up into decision-making positions are increasingly digital natives who see the benefits of connectivity and the Internet of Things, and they are looking to bring those assets to bear to increase productivity and profitability for their companies. That said, because of the generation gap, the transition is going to be bumpy and will feel like a significant a leap forward for many companies that haven’t changed much in decades.

So what does the “digital oildifeld” look like? Well it’s certainly a buzzword in the industry. There are a variety of opinions on what the phrase actually means, but this much is clear: It will be different than what we have known. Some form of modernization and connectivity is coming. We believe companies are going to have to define it for themselves and adapt their services and products around their definition and vision of the future.

We are researching and discussing the various ways Kimray has been and will be involved in this change. So far our electric products with digital communication capability—specifically theTritex IIand the R2L—have been well received. We are seeing growing interest in these capabilities among producers, and we plan to continue trialing new technologies both in products and supply chain management systems as we work to shape and harness our new digital tools.

There is a large and undeniable shift taking place with the developments in oilfield technology, and the entire energy supply chain is rippling with this change. In the next few years, as the market recovers and investment in technologies picks up, products will continue to become more intelligent as will the delivery systems for those products.

While most companies are focused on making it through this challenging season, and rightly so, it’s also crucial for business owners to keep one eye on the future. For those who who are able to look ahead, there is opportunity for significant gains on the horizon.