Why the Canadian Oil and Gas Industry Must Embrace New Technologies

Although often perceived as a sunset industry by outsiders, the truth is the oil & gas industry is very high tech. Over the past 20 years the industry has transformed itself by developing technologies that have unleashed vast new reserves, previously uneconomic to develop. Canada now has the third largest reserves in the world, and none of it would have been possible without technology.

Construction

The Situation Today: Layered Systems, No Integration

During this renaissance in the Canadian oil and gas industry new companies emerged, creating new and special technologies that would allow development of our previously untapped resources like oil-sands and shale gas. These reserves have been known since the earliest oil and gas development in Canada, but conventional extraction technologies could not release the hydrocarbons. As conventional resources began to decline, the industry began to develop technologies to produce this vast, unconventional resource. For example, steam-assisted gravity drainage (SAGD) and directional drilling technologies specifically designed to produce low viscosity bitumen have unleashed more the 1.7 trillion barrels of new reserves.

To support these technologies Operational Technology (OT) has historically deployed very proprietary solutions meant to solve specific problems. Unfortunately, these purpose-built systems have little or no economies of scale and the infrastructure requires significant support and cost to maintain.

Conversely over the same period, traditional or corporate IT has standardized, commoditized, consolidated and integrated solutions to support all applications on a shared infrastructure. This has resulted in dramatic economies of scale for the corporate side of the business.

The main reason for this movement to leveraged architectures? IT had to find ways to do more with less. From 2004–2010 Canadian operators have grown their business on average 32%, but IT budgets have averaged 1-3% annual growth. Now is the time for IT to bring economies of scale to the field.

Why now? Because the proprietary models of OT are inhibiting cost savings and limiting adoption of new horizontal technologies. With forecasted growth of 35% in the next 10 years we can’t spend more building and maintaining proprietary systems. It’s not sustainable.

New Opportunities To Transform

Beyond the opportunity to drive down operational IT costs and leverage one architecture for many solutions, horizontal architectures are becoming the backbone of the future technical innovation within oil and gas development. Companies are embracing IP-based architectures for their solutions and are embedding Cisco technologies directly into their systems. New trends like the Internet of Everything, M2M and sensor technologies will dramatically change how we manage digital oil fields of the future in Canada.

A recent study on oilfield sensor uptake predicts that oil and gas M2M devices will grow at a compound annual growth rate of 61.1% to 635,000 units by 2016. The top growth areas will be onshore brown fields and pipelines. These technologies are predominantly IP-based and will require infrastructure not currently mainstream in Canadian oilfields. New digital pipelines will transform how we manage and monitor pipelines while bringing the opportunity to connect remote communities. All within a single, IP-based fibre architecture.

In order for this transformation to become a reality, OT will need to embrace horizontal architectures and IT will need to get in the field to a much greater degree.

Do you agree that IT in the oil and gas industry needs to change? Leave a comment below.

About Brad Bechtold

As Director of Cisco Canada's Oil and Gas vertical business, Brad Bechtold is responsible for developing and leading Cisco's go to market strategy for Oil and Gas. In his role Brad is working with industry partners, education institutions, and Oil and Gas organizations to align Cisco's technology solutions to the critical challenges facing the industry today. With more then 25 years in Oil and Gas experience Brad Bechtold brings industry relevant knowledge to Cisco Canada's Industry Transformation Team. Prior to joining Cisco, Brad spent 18 years with Halliburton. A global leader in the energy services sector. During his tenure with Halliburton, Brad spent 13 years in a global capacity. As Director for Halliburton's GeoGraphix product line, Brad was responsible for global Operations, R&D, Sales and Marketing. Brad spent 4 years as Director for Mergers and Acquisitions for the Landmark Graphics business unit, resulting is several strategic acquisitions. Brad brings more then a decade of sales and management leadership in the Canadian oil and Gas industry including Regional General Manager for Halliburton's Landmark Graphics business unit. Brad Bechtold resides In Calgary Alberta and holds a Diploma in Business Management for the SAIT Polytechnic in Calgary. À titre de directeur des affaires du marché vertical du secteur pétrolier et gazier de Cisco Canada, M. Bechtold est responsable de l'élaboration et de la gestion de la stratégie de mise en marché à l'intention des entreprises du secteur pétrolier et gazier. Dans ce rôle, il travaille avec des partenaires de l'industrie, des établissements d'enseignement et des entreprises gazières et pétrolières pour faire en sorte que les solutions technologiques de Cisco relèvent les défis auxquels est confronté le secteur aujourd'hui. Possédant plus de 25 années d'expérience du secteur pétrolier et gazier, M. Bechtold vient enrichir l'équipe responsable de la transformation industrielle de Cisco Canada grâce à ses connaissances pertinentes du secteur. Avant d'entrer au service de Cisco, M. Bechtold a travaillé pendant 18 ans chez Halliburton, leader mondial du secteur des services énergétique. Durant sa carrière au sein de cette société, il a passé 13 années à jouer un rôle sur la scène internationale. En tant que directeur de la gamme de produits GeoGraphix d'Halliburton, il était responsable des activités mondiales, de la recherche et du développement et de la mercatique. M. Bechtold a également joué le rôle de directeur des fusions et acquisitions de l'unité commerciale Landmark Graphics pendant quatre années durant lesquelles il a réalisé plusieurs acquisitions stratégiques. Il possède plus d'une décennie d'expérience de leadership en vente et en gestion dans le secteur pétrolier et gazier canadien, y compris à titre de directeur général régional de Landmark Graphics. M. Bechtold vit à Calgary, Alberta et est titulaire d'un diplôme en gestion des affaires de la SAIT Polytechnic de Calgary.
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One Response to Why the Canadian Oil and Gas Industry Must Embrace New Technologies

  1. Pingback: The Oil & Gas industry needs to embrace new IP-based infrastructure for its fields | textor.ca

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