It’s no secret that there’s a huge amount of hype surrounding new and emerging technologies, specifically in relation to Augmented (AR) and Virtual (VR) Reality. Within the oil and gas sector, emerging technologies are already being designed and developed to enhance real-time decision making capabilities and reduce operational costs. Emerging technologies are already disrupting multiple industry sectors and ignoring the tide of transformational change is no longer a realistic option. To put this into perspective, in terms of the scale of disruption over the last decade: more than half of the companies that comprised the Fortune 500 in the year 2000 are no longer part of the list. There is already a perception that the oil and gas sector has been slow when it comes to the adoption and roll-out of emerging technologies, but that perception is now being challenged as oil and gas operators seek to explore the benefits of emerging technologies such as blockchain, artificial intelligence, machine learning and AR/VR.
Whilst the rate of technological change and innovation is starting to accelerate within the oil and gas sector, there is still a considerable way to go. Innovation is primarily being driven within the oil and gas sector by a select number of companies who are delivering emerging technology initiatives to drive commercial value. The purpose of these initiatives is to understand how the deployment of emerging technologies can drive efficiency across the entire value chain, and where pilot projects and POC’s (proof of concept) are delivering value and process efficiency gains, these projects are beginning to stimulate widespread interest and attention.
These initiatives span across all areas of emerging technology within oil and gas, from AR and VR to machine learning and blockchain and beyond. Whilst each initiative will differ slightly from the next, the core commercial themes remain consistent throughout the industry, with heavy emphasis on improving safety standards and driving process efficiency gains. More specifically, these pilot projects may focus on discrete areas such as asset management and identification, worker mobility and the digital oilfield. However, whilst successful pilots and POC’s have the potential to become fully realised elements of the overall value chain, there is still a considerable amount of work needs to be done for the oil and gas sector to reach its true potential when it comes to emerging technology. In Scotland, the existence of the Oil & Gas Technology Centre symbolises that the industry is rapidly shifting towards a more progressive outlook with a heavy emphasis on technical innovation.
Technology challenges within Oil & Gas
Over the past decade, technological innovation within the oil and gas sector has been relatively slow due to the impact that low prices and demand have had on energy companies. Lower prices have led to cost reduction initiatives, and whilst energy prices have recovered substantially, energy companies have to balance new technological innovations in R&D against operational costs. The ability to drive digital transformation within the energy sector has become an increasingly complex proposition given that all new R&D investments need to be weighed up against increased competition within the market from producers of renewable energy, combined with less stable commodity prices and shifting patterns of consumer behaviour. As the market has shifted into a more stable position, many energy companies are now starting to realise that the cost of inaction is greater than the cost of developing an initiative, and firms are now exploring new technologies such as AR and VR as a means of generating new streams of revenue and cutting operational costs.
There is a widespread acknowledgement within the oil and gas sector that new and emerging technologies such as mixed reality, blockchain and AI will have a seismic impact on the way new products and services are delivered across the entire industry ecosystem. One of the key challenges in terms of addressing these risk factors are the availability of digital transformation knowledge and expertise – as change can only be driven by people rather than the technology itself. In order to harness the capabilities of technology to bring about disruption, innovation and transformation, energy companies will require buy-in from key stakeholders and upper management. This is a particularly challenging process for some companies within the oil and gas sector, as developing new and disruptive software applications requires the right capability and approach. As such, one of the key trends being witnessed is the emergence of new positions such as ‘innovations manager’ and ‘head of digital transformation’. These new roles are emerging as an antidote to accelerate the pace of technological activity and change within the sector, and to ensure that leadership teams understand how to design and execute new initiatives associated with emerging technology opportunities.
In order to effectively harness the far reaching commercial potential of augmented and virtual reality across the industry, leadership teams must first calculate the ROI of any proposed initiative. Once oil and gas companies have established a commercial basis for kick-starting an emerging technology initiative, the next stage of the process is to understand how new applications can be realised and deployed to market in the shortest possible timescale. But before any of this can occur, energy companies must have a clear vision of the future and an implicit understanding of how AR and VR can be leveraged to drive improvements in process efficiency and widespread cost reduction.
Visualising the future of Oil and Gas through Augmented Reality
Augmented Reality technology has the potential to radically transform the oil and gas sector both in terms of cost reduction and operational efficiency. New AR based innovations enable engineers to control assets in real-time from an onshore locale, either through a HUD (heads up display) such as the Microsoft HoloLens or a ruggedised smartphone or tablet. The recent launches of Apple ARKit and Google ARCore mean it’s never been easier for oil and gas companies to develop lightweight AR prototypes and full production applications for use in an offshore environment. This approach to remote working enables operators to de-skill maintenance workers on the operational front-line and reduces cost by minimising the level of involvement required from highly skilled engineers, and the number of trips to and from the offshore environment. Enabling maintenance workers and engineers to minimise trips back and forth to an offshore site can bring about huge cost savings and is one obvious area where AR is having a significant and transformative impact on existing operations. If you’re interested in learning more about the wider market trends associated with AR, check out our recent blog on the top AR industry trends for 2018.
Another area where technology can have a transformative impact on cost reduction and operational efficiency is through superimposing real-time information using AR on top of real-world assets. New mobile AR applications that enable maintenance workers to view real-time data offshore on the operational frontline can have a hugely positive impact on the time it takes to perform simple tasks and also be used to manage workflow and complex audit trails. These new innovations are providing oil and gas companies with increased transparency across the entire technological ecosystem and new innovations in AI provide the capability to harness new insight from existing data sets.
Leveraging AR to facilitate remote working and offshore data visualisation are just two of the ways in which emerging technologies can be deployed to drive commercial gains. Another area within oil and gas where AR is having a significant impact, is the ability to engineer new spillage detection products and services. In fact, detecting spillages is one of the key areas where AR technology can have the most widespread commercial ramifications. Machine learning algorithms can be used to detect leaks and spillage anomalies, as well as monitoring the performance of sensor data and integrated systems. Processing hardware and sensors can be combined with new AR software applications to monitor pipeline infrastructure and detect leaks before they occur.
Leveraging Augmented Reality to enhance oil and gas decision making
There has been a widespread mainstream misconception that AR technology is a gimmick and does little to impact commercial ROI, not just in oil and gas, but across all industry sectors. The key to rolling out a successful AR initiative is to start with the end in mind and work backwards from perceived commercial KPI’s. When executed correctly, new AR initiatives enable workers at every level within each organisation to establish increased control over existing processes and business operations. AR technology enables senior management to visualise data in an entirely new way and provides access to data sources in real-time that were never previously available. The ability to visualise data via AR enables key decision makers to pinpoint potential problems before they occur and creates a culture of empowerment in terms of decision making. Whilst the term ‘big data’ has led to the availability of new information, AR technology helps management to make proper sense of data and act accordingly.
One example of how AR technology is impacting oil and gas, is the mobile AR application that Mozenix is currently developing for Return To Scene Ltd, an Aberdeen based visual asset management company with clients including BP and ExxonMobil. The mobile AR application uses the camera on a smartphone or tablet to recognise oil and gas structures and then bring up identification tags and information about them on screen. Return To Scene’s head of product development and support Martin Macrae, explained: “Offshore oil and gas assets are complex, adaptive structures with a constant flow of actions being undertaken by international teams.
“The systems which enable these actions are underpinned by asset registers which are represented by physical tags attached to equipment. “The location of these tags and the ability to visualise data in a certain way, is crucially important. “This is where AR technology, and specifically Mozenix unique software delivery capability, can solve a myriad of challenges.” The project has been widely featured throughout the oil and gas industry in publications such as Energy Voice, ImmerseUK, AREA (Augmented Reality Enterprise Alliance), Oil and Gas Technology and EPMag.
When it comes to technological innovation, the oil and gas industry has a strong future. There is significant scope at present for emerging technologies such as AR, VR, Blockchain, artificial intelligence and machine learning to impact cost reduction and process efficiency. It’s estimated that digital transformation could add more than $1 trillion to the value of oil and gas companies across the globe in the next ten years. New AR applications are already being brought to market that enable oil and gas companies to transform large data sets into meaningful information, that help to empower better commercial decision making. New technological innovations will create a platform for energy companies to be technologically competitive, reducing costs and enhancing existing processes, for the next several decades and beyond. If you’re an oil and gas operator interested in the capabilities of AR, we’d love to hear from you. If you’re thinking about kick-starting your first AR project, or seeking assistance with an ongoing initiative, contact Mozenix today to get the conversation started. With offices across the UK in London, Glasgow, Edinburgh and Dundee, we’re ideally situated to help take your AR plans to the next level. Alternatively, if you’re still unsure about the capabilities of AR and how best to leverage them to facilitate your commercial goals, it’s worth taking two minutes to explore our AR readiness test to help refine your thinking around a potential AR project.