On June 20, 2014, the price of a barrel of West Texas Intermediate crude oil hit $107.95. By Feb. 9, 2015, a bit more than seven months later, that plummeted to an astonishing $27.94. Drilling programs were cut, rigs taken offline willy-nilly, and companies slashed costs while they struggled to stay afloat.
Layoffs in the industry were a daily occurrence and made headlines. Boom towns went bust, and by the end of 2016, 440,131 jobs had disappeared from the oil and gas industry.
But those still producing faced additional challenges amidst the mayhem.
Real-time Data, Real Decisions, Really Quick
Oil and gas companies need immediate access to real-time information from oil fields and drilling platforms so workers can collaborate and analyze the data to make informed, quick production decisions. And it’s not unusual for a company to generate a few terabytes or even a few petabytes of data each day. But it can take a very long time to transmit all that data — and even longer to put it to use.
At the same time, information about the company’s exploration, development, and production is highly sensitive and classified, so security is a giant concern.
Challenges those in the industry face include:
- Critical need to improve operational efficiency to stay afloat
- Communicating with a worldwide or region-wide workforce
- A plethora of data, that’s often siloed and in different locations
- Legacy software
- The need to do more with less
IBM lays out the needs of this highly specialized industry:
- Highly automated, dynamic alternatives for the acquisition and delivery of IT services
- Collaboration capabilities that work not just within their organization but across partner ecosystems
- Ability to quickly deploy new services
- Ability to easily scale up and down
To accomplish all this used to mean a super-hefty investment in IT Infrastructure. And since the downturn, many companies find such a massive investment beyond their means as they keep their focus on reducing production costs and staying competitive.
Enter Cloud Computing in Oil and Gas Industry
The oil and gas industry historically has gone through volatile periods and is quite likely to continue to do so.
“Because the price of oil will continue to change, one determinant of success is a company’s ability to adapt and develop new ways of working that are well suited to current conditions. In today’s low-price environment, the thoughtful implementation of technology-enabled, highly efficient processes will distinguish those companies best fitted to survive.”
So — technology and efficiency are key. And both are provided by the cloud. However, cloud computing in the oil and gas industry was initially spurned because of security fears, even though companies wanted the powerful processing capabilities it offered.
But, as cloud computing has evolved, it can now enhance “the security of sensitive information by storing it in a virtual hub rather than on local servers,” according to Chris Walcot of the UK-based Oil and Gas Council. And the number of companies in the industry now making use of the cloud suggests others agree.
Today, “62% of businesses [in the oil and gas industry] are employing cloud-based managed security services to help integrate, manage and improve cybersecurity and privacy,” according to PwC’s Global State of Information Security® Survey 2017. And most use it for “data loss prevention, monitoring and analytics, and authentication.”
Once in the cloud, those in a company can:
- Collaborate in real time, across the globe, on any device
- Adjust to larger workloads as the firm grows by scaling up additional resources
- Accommodate downturns when fewer resources are needed thanks to elasticity
- Pay just for the resources used
And, those advantages give the company the ability to put greater focus on their core competencies while at the same time transferring some capital expenditures to operational expenses, freeing up resources.
Cloud Computing Comes to GE Oil & Gas
Over 2.5 years, GE Oil & Gas moved 350 of its applications to AWS. It started by moving the least critical, and as confidence in the cloud grew, it moved more — including mission critical ones. It’s in the process of uploading 750 TBs of highly-sensitive data to the cloud, in 50 TB encrypted pieces — a process that initially took 100 days per 50 TBs and is now down to two weeks.
What has the company found? Better and quicker analysis of data. In addition, it has found that the total cost of ownership of running enterprise applications in the cloud is cut by an average of 52%.
But savings and operational efficiencies that stem from cloud computing in the oil and gas industry aren’t limited to the big guys.
By partnering with Data Resolution, Affirm Oilfield Services dramatically enhanced technical productivity and lowered IT costs. Benefiting from Data Resolution’s hosting services as well as its FlexIT program for managed services, Affirm experiences the same returns from its relationship with Data Resolution than it would were it to hire “six to eight full-time IT employees”.
So, if you’re ready to experience the benefits of partnering with a virtual network provider or discover the advantages of managed services, get in contact with Data Resolution today.