Digitalisation in Oil and Gas Projects

There are enough possibilities in the digital world now to change the way that we have done oil and gas projects over decades. The software tools are available to take up just about any physical task you would like to digitalise. Obviously, there is ample availability of storage space locally, or in the cloud, as well as ever-faster internet speeds.

With low oil prices and with fierce competition in this mature sector of business what is the need for digitalisation in oil and gas projects? Numbers for the potential annual savings in the upstream sector are in the order of some $ 75 Bn according to this WoodMackenzie publication.

The oil and gas industry is typically organized around unique one-off projects. A project is profitable according to industry standards, or it is not. Digitalisation in oil and gas projects in the project phase is often seen as a cost. Its benefits to project execution followed by cost savings over the operational life span are often not consumed. In this blog, we are concentrating on 3D Building Information Management (BIM) in relation to digitalisation in oil and gas projects. And the potential of BIM to assist the business.

Why digitalisation in oil and gas projects?

The reduction of costs in a mature business environment is the obvious reason here. Above all, failure costs in projects can also be expensive. Typically these can be as high as ten per cent or more of the overall project cost in the best case, and up to 100% is not uncommon.

The design process of a project can run faster and transit time between phases in projects can be shorter in an industry where handovers between different project phases and technical disciplines are often the causes for errors.

Another aspect is the handling of data. The oil and gas industry produces lots of data as part of pre-project work, or in its operations. However, if one operates in the traditional manner without a change in working processes loss of data is often the result.

The third aspect of digitalisation is the potential to connect to other core processes in the organization. Other core processes in projects mean all activities ranging from the design data and design basis down to construction and finally asset and data management. Because one, if not the main reason to go digital, is asset management. The operational phase of the asset is the deciding factor whether a project is successful or not, especially for mature and marginal projects. All data and digitalisation in oil and gas projects should be supportive over the operational lifetime of the asset. This has not been the case it seems from this article by McKinsey.

Building Information Management

Although the software technology dates from typically the nineties other industries than the oil and gas industry progressed well recently. Pushed by the financial crisis of 2008 the construction business is now really into digitalisation. This digitalisation process is often called building information management (BIM) with its use of full 3D capabilities and the different contractor designs integrated into one digital model.

Public institutions recognize the potential of BIM, and increasingly demand “open data standards” in order to increase transparency. Here is more on this development.

How does the oil and gas industry compare here? Often, a form of maturity index is used for comparison between organisations and businesses. We use here the typical standard from BuildingSmart, also in use for BIM levels in the Netherlands. These have their origin in the UK BIM Taskforce. A comprehensive overview of Maturity Index aspects by ValVestris is outlined in the table below.  The representation is a typical growth model. Organizations may operate with digital tools, however in rudimentary form, or e.g. in a non-integrated way. This is obviously different from a Level 3 maturity in which digital tools and data are used in an integrated way over the full lifecycle of the facilities. Integration means that far-reaching digital cooperation between all project parties is mandatory.

The evolution of digitalization can be thought of in a number of (invariably overlapping) stages of maturity:

→ increasing automation →
modelling(simple) data models for main aspects of business(comprehensive) data models for all aspects (incl financial and planning) of the business and relationships between main aspects of the businessoffline high fidelity digital twinreal-time high fidelity digital twin
sensingpredominantly manually gathered and recordedsome automatic gathering and recordingand some robotic process automationall model parameters automatically gathered and recorded
administeringmanual curation

some process flows automated

blockchain-enabled, self-correcting
integratingall manual

no material exchange of data

online collaborationstandardisation of data facilitating



seamless distribution and re-integration across space, time and agents
diagnosingKPI’s manually reported, fragmented, analyses of simple problemsautomated pattern recognition considering all model parameters
predictingsingle scenario, deterministic and staticmultiple scenarios,

deterministic and static

probabilistic and staticprobabilistic and dynamic
planningsome data downloaded, scheduling manually doneautomatically derived from the models

Maturity studies for the oil and gas sector are available. The magazine Oil and Gas cites a comparative Deloitte study and comes to a general level of 1,3. This would indicate that the oil sector is working on a level with object-based 2D-3D coordination models. The average number of 1.3 compares to the level of  3 in our table cited for Telecom Industries and other Service Providers.

Adapt and Digitalise

BIM is rapidly expanding because vast amounts of software and IT-related technology and data become available. For example, you can think of robotics, lasering for point clouds, data-based simulation, connecting 3D data to manufacturing, and so forth. However, Building Information Management is not just “installing software on a PC”. BIM and digitalisation requires a well-planned and executed intervention of technology, processes and personnel in an organisation or project. Often, successes with digitalisation depend very much on how to cross the weak social connections across the internal company communities.

What may be a particular aspect of BIM for the sector are the infrastructural aspects. A structure or building can be easily modelled in all aspects in 3D. Couple the model with infrastructures, like pipelines, remote area locations and you may have some challenges. Yet, BIM and GIS integration of buildings, structures in their environment is possible with today’s technology. You find examples referred to as Digital Twins, or 3D Urban Data Models and Environment. See for example the city of Rotterdam in 3D. Note that a lot of other data types can be incorporated into a Digital Twin. Examples are planning, cost analysis, sustainability data and material passports, and asset management.

Finally on digitalisation in oil and gas projects

Reaping all benefits from IT technology and digitalisation in oil and gas projects touches upon most if not all aspects of an organisation. Besides the availability of the necessary tools and technology,  all processes in the organisation are to be reconsidered. Furthermore, the necessary personnel has to cross the water before the increased quality of the working environment and increased working motivation will be obvious. ValVestris has the experience to look at business processes including the IT aspects in an integral way. Advice is available through this contact email address.

Courtesy: Daniel Fobelets

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