Over the past two years, the oil and gas sector has faced immense challenges. The collapse in demand and price thanks to the Covid-19 pandemic and the growing imperative for environmental and climate sustainability in particular have underlined how much the sector needs to change if it is to survive and thrive going forward.
That was among the key takeaways from Huawei Connect’s Intelligent Oil and Gas Summit, which took place virtually last week.
“Global organisations are facing systemic challenges,” says David Sun, vice-president of Huawei Enterprise BG and president of the global energy business unit at Huawei.
These challenges, he add, include extreme weather, inequality, and cybersecurity.
He points to the power outages faced by Texas earlier this year, the cyberattack which took down the US’s Colonial oil pipeline, and the floods which wreaked havoc across parts of Europe as examples of the kind of crisis that will become more common in the energy sector over the next few years.
“To cope with these complications, the industry urgently needs new methodologies,” he says, adding that those methodologies should help the sector to “transform from information-based to digital and intelligent.”
According to Lu Gongxun, senior consultant at Huawei and former GM of China National Corporation for Exploration and Development of Oil and Gas (CNODC), the oil and gas industry will have to come to terms with the fact that its share of the global energy mix is set to shrink even as production volumes remain stable.
This, he says, is related to four challenges that the sector faces. These include producing more energy at lower costs and carbon emissions, complex oil and gas exploration targets with insufficient proven resources, the difficulty in exploiting existing oil and gas reserves, and the fact that sufficient global oil and gas supply means a stable median price.
“To deal with these challenges, digital transformation is inevitable. The oil and gas industry needs to further integrate digital technologies to realise digital transformation.”
By adopting these technologies, Gongxun points out, the industry can build smart oil and gas fields to increase reserves and production, improve quality and efficiency, and reduce carbon emissions.
An example of this in action can be seen in the Daqing Oil Field, which uses the high performance computing of Huawei Cloud to integrate technologies such as high resolution seismic imaging, seismic inversion, and reservoir prediction, supporting prospect study and real time drilling tracking for shale oil exploration.
He also points out that artificial intelligence (AI) logging can help revive old wells, increasing their lifetimes and viability.
Of course, as Lai Nenghe, chief professor of the Geophysical Research Institute, BGP, CNPC, points out, “new technologies also pose new challenges in terms of computing and storage”.
Huawei, he says, is particularly adept at rising to these challenges thanks to things like its high-performance NAS storage solution for full-stack mass data processing.
Edwin Diender, CIO of the global energy business unit at Huawei, explains that digital transformation won’t just improve productivity in the oil and gas sector, but make it safer too.
As an example, he cites the example of drones, which reduce the need for lengthy safety inspections and also means that inspectors don’t have to get into unsafe and awkward positions to be completely thorough.
Li Yangming, chief representative: oil and gas industry of the global energy business unit at Huawei EBG, backs this up: “By using intelligent meters we can avoid unsafe factors.”
These meters can, for example, help with the supervision of major hazard facilities and hazardous chemicals.
But, as Ahtasham Rabbani, solution architect of Huawei Cloud, says: “Digital transformation is a journey without an end and digital resilience has no end either.”
That means that legacy and new systems have to coexist to ensure business continuity, he adds.
Looking forward, he says, the oil and gas industry will have to, “use digital transformation to cope better with uncertainty. We call this digital resilience.”
It’s also clear that the oil and gas space will have to stay up to date with digital transformation to remain competitive.
“More than 50 countries around the world have adopted digital development as a national strategy,” says Alex Sun, vice-president: data communication product line at Huawei. “That will impact every industry. In the process of digital transformation, we believe that cloudification is the only way to go.”
According to Thomas (Liang Yanming), campus network solution director of the campus network domain at Huawei, taking such an approach has multiple benefits including fewer complaints, operational savings, lower interconnection costs, and higher productivity.
“Energy is vital to people’s livelihoods and national security,” David Sun concludes. “Huawei is therefore dedicated to becoming the partner of choice for digital transformation in the energy sector.”