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Published:Wednesday, September 11, 2019 7:01 PM

Role of Digitization in Indian Oil & gas Sector

Role of Digitization in Indian Oil & gas Sector

Current Scenario of Oil and Gas Industry in India: Currently, India as a country is the seventh largest, economy in the world and witnessing high growth in the energy sector since the last five years. The role of the Oil and Gas industry is very important for the overall development of the energy infrastructure of the country. The petroleum industry has been listed among the eight core industries and contributes over 15% of the total GDP of the country.
India's vision to increase share of natural gas in energy mix from 6.2% in 2018 to 15% by 2030 and transform India to a Gas based economy can be comprehended”. Another side, India ‘s import dependence on oil rose to 82.59% in 2018-19 from 81.2% in 2017-18. The government is also planning to cut down crude oil imports to 67% by 2022. The government of India has taken several initiatives and launched various schemes in the oil and gas industry. Aiming to reduce the import dependency, enhance transparency and reduce the administrative discretion, the government has introduced various policies such as OALP (Open Acreage Licensing Policy), HELP (Hydrocarbon licensing Policy), and CBM (Coal Bed Methane), Discovered Small Field (DSF), gas pricing reforms with premium for difficult areas, grant of marketing freedom for gas produced from difficult areas to encourage investments and increase crude oil and gas production in the country.
The government has allowed 100% Foreign Direct Investment (FDI) in exploration and production and proposed uniform licensing policy to explore all types of hydrocarbons including conventional and non-conventional resources. The government has changed the policy from NELP to HELP under adopted Revenue-Sharing Model and increased the fiscal incentives for enhanced recovery and improved recovery projects for entire commercial production. The refinery capacity expansion has increased to 247.56 MMTPA in 2018-19 from 215.06 MMTPA in 2014-15, the government has reduced the custom dusty on LNG from 5% to 2.5% in 2017 and is still applicable. Apart from above schemes and initiatives, the government of India has also launched Pradhan Mantri Ujawala Yojana, Give it up, Pradhan Mantri Urja Ganga Pipeline Project, and City Gas Distribution Network.
Current Trends of Digitalization in Oil & Gas Sector: Most opportunity of growth in the Indian Oil & Gas ecosystem are the following:
 Internet of Things (IoT), Big Data Analytics, Seismic Imaging, Artificial Intelligence (AI) & Machine Learning (ML), Digital Reality, Mobile based solutions, and Unmanned Aerial Vehicle (UAV/Drones). Some sectors in Oil & gas business are ahead of other in adopting digitization technologies. Realization of the importance of early adaptation of digitization technologies is the key to transform the core of business operations. The approach helps achieve a broader view of operations and faster decision making, resulting in risk minimization, reduced OPEX, and improved throughput.
  • IoT & Big Data Analytics: Most of the oil and gas industry leaders believes that IoT and Big data analytics would play a pivotal role in transforming the face of oil and gas industry all over the globe. IoT and Big Data enables connected intelligence in various levels of operations and thereby resulting in improved decision making and process optimization. Big data analytics is the name used to describe the theory and practice of examining and applying computer analysis to large chunks of raw and unstructured data to gain some actionable insights and reveal trends, patterns etc. Big data analytics enables efficient processing of real time data which can reveal numerous underlying issues that generally goes unnoticed until a major breakdown.
  •  Seismic Imaging: Growing demand for crude oil in the country has pushed the need for extensive seismic data acquisition from unexplored and known terrains of the country. Oil India is the first E&P company that has conducted cable-less seismic data acquisition technology to meet the exploration and logistics challenges of the remote areas
  • Artificial Intelligence and Machine Learning: AI and ML technologies provides ability to learn and make predictions based on probability. Machine learning, also helps in quick identification of patterns and trends that, otherwise are difficult and time-consuming to detect. Use of AI has been impacting some of the major areas in the upstream sector like location of new reserves, real-time drilling optimization and exploration & production lifecycle.
  • Mobile Solutions: Mobile technology integration with oil and gas sector in India would contribute in improved employee safety, increased production, reduced costs, lower environmental risks, and transforming conventional processes into a true digital business. Mobile technology keeps the user connected with real time data inputs on the go. Moreover, it also helps in proactive detection of anomalies and producing quick solutions in reduced times.
  • UAV/Drones: Unmanned Aerial Vehicles (UAV) and drones are proving to be extremely useful in detecting any anomaly, unauthorized activity or reporting any mishaps (fires, intrusion, etc.) from inaccessible places/challenging terrains. Nowadays, drones are proving to be helpful in carrying out inspections along the pipelines and providing real time images to the concerned authorities without any human intervention.
Adoption of Digitization Technologies by Indian Hydrocarbon Sector: Indian Oil Corporation Limited has started the automation and modernization of fuel stations and enhance customer services through digital transformation. Ithas also started a special program as I-DRIVE, to enhance the organization’s productivity and market share, which will result in potential value creation of $ 1-2 billion.
ONGC, one of the dominant players in the upstream sector contributing 61% of the total crude oil production, is planning to tap into big data analysis to raise the output and increase efficiency. Big data, along with sensors would help analyze data in ways that have not been possible in the past. Insights, backed up by facts and numbers, would help in a better understanding of the assets and operations, thus reducing unplanned downtime and optimizing production. ONGC has also implemented an enterprise-wide paperless office solution. This Paperless Office Project aims to eliminate the age-old process of paper bureaucracy within ONGC at all levels. While, a notable progress towards a digital footprint, change management can be considered as the biggest challenge as it involves training more than 34000 employees across the organization.
HPCL has implemented IoT in its retail outlet automation systems, tank farm automation systems, terminal automation systems, vehicle tracking systems, surveillance and access control systems and even the SCADA systems used in operating facilities such as cross-country pipelines and refineries.
As a first in India, Cairn conducted Time Lapse (4D) seismic technology using an Ocean Bottom Cable (OBC) seismic survey at Ravva. An infill drilling campaign planned to use 4D seismic successfully arrested production decline and extended the life of the field by identifying areas of un-drained and by-passed oil.
Shell launched an AI customer assistant system (Shell LubeChat) which would assist customers navigate through the large database. ExxonMobil, with partnership with MIT aims at developing intelligent bots for exploration of hydrocarbons. The use of such AI-driven virtual assistants is already common among other sectors both for customer facing applications and internal enterprise applications and the use of such advance technique to simplify finding information can be expected to grow in Oil & Gas as well.
GAIL has been one of the technology leader in India with respect to mobile digital solutions, as they developed a mobile application that implies space technology for its pipeline safety application. A report generation system integrated with the Bhuvan-GAIL portal sends instant alerts to relevant personnel via SMS and email and notes the changes along the pipeline on a real time basis.
GAIL is also one of the leading midstream companies which has implemented drones for tracking its vast network of pipelines. It did a pilot project on satellite surveying its 610 km Dahej-Vijaipur pipeline and plans on extending it to 15000 km based on recorded results. RIL also wants to use drones to undertake inspection of chimney stacks, which are essential but inaccessible areas of petrochemical complexes to diagnose and mitigate complex problems.
Challenges in Indian Oil & Gas Sector with respect to Digitization:
  • High initial capital investment
  •  Slow decision making
  •  Lack of knowledge
  •  Lack of required talent and advanced training in the industry
  • Lack of adaptability within conventional existing system in the industry

 The Way Ahead:

  • Technology adoption and providing training to existing workforce.
  • Employing integrated digital platforms within different units of operations to enable harmonize data flow for effective decision making
  • Designing a planned system to create talent to boost innovation and collaboration.
  • Need to have a long-term vision focusing on benefits of being digital for achieving business objectives


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