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Oil and the Smart Pipe – Article on The Network, Cisco, by Scott Gurvey

Scott Gurvey (the famous New York bureau chief and senior correspondent of the PBS broadcast Nightly Business Report for more than 20 years) has written a thought-provoking piece on “The Network” (Cisco’s Technology News Site).

Safety is the key in the Oil and Gas industry. Whether it’s people, infrastructure, or the environment, the industry is grappling with sometimes controversial issues.

Scott talks about the Keystone XL Oil Pipeline, new technology and the relative safety of different oil transport methods. He quotes James Stafford, the editor of Oilprice.com, as saying that even though moving oil through pipelines is generally considered safer than the alternatives of rail or truck transport, the number of pipeline accidents reported each year remains “unacceptable”

That’s where the new technologies of the Internet of Things comes in. The Operational Technologies (OT) requirements have been different to the IT needs in the past. In my view that’s because of several reasons. The different technologies used for each area gave rise to concern that folks have had about security between networks is one.

Read the latest Thought Leadership for Oil and Gas

Read the latest Thought Leadership for Oil and Gas

Another is that there was also a lack of visibility, and it was difficult for parts of an organization to collaborate with another to sense problems in real time and deliver the right resources to solve them. That’s changing as IT and OT converge. Probably not fast enough for most people’s liking, but that’s owing to the cultural changes needed.

Back to Scott’s article. I’m not going to steal his thunder on ‘Pigs’ (well, Smart Pigs, but still not the kind in your hot dog!), drones (the peaceful kind), or the Analytics challenge the industry faces today. You’ll have to read his article for that.

But I do want to give a plug for the recent thought leadership in the oil industry that Cisco recently conducted (A New Reality for Oil & Gas: Complex Market Dynamics Create Urgent Need for Digital Transformation), which I was proud to contribute to. In it the analytics issue comes to the forefront and IT/OT convergence and Collaboration are seen as essential catalysts for change, with an overarching emphasis on ensuring end-to-end cybersecurity. Read it to see the details. Some might surprise you.

As always, you can learn more about Cisco in Oil and gas here: www.cisco.com/go/oilandgas, and read the latest Secure Industrial Networks with Cisco White Paper (don’t worry, it’s only 3 pages!), by clicking on this link: Secure Industrial Networks with Cisco.

And I almost forgot – if you’re interested in Cisco’s relevance to oil pipelines and that part of the industry, here’s something to whet your appetite: Cisco Connected Pipelines At-a-Glance.

Happy reading! And remember, stay safe out there!

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IoE-Powered Business Transformation Boosts Agility and Efficiency for Oil and Gas Companies

This week I’m attending CERAWeek, the premier international gathering of energy industry leaders, experts, government officials, policymakers, and innovators. While this is the 34th annual CERAWeek conference, the mood is definitely not “business as usual.” The disruption and uncertainty created by plunging oil prices and shifting market dynamics has created the urgency throughout the industry to rethink strategies and adopt connected technologies to spur operational efficiencies.

But disruption can also create opportunity. Forward-thinking oil and gas (O&G) firms see today’s turbulent market as an opportunity to gain competitive advantage by harnessing new technologies. For example, in the Eagle Ford region in North America, improved drilling technologies are now enabling oil rigs to produce 18 times more efficiently than in 2008, and 65 percent more efficiently than in 2013.

A new study by Cisco highlights the opportunity to achieve even greater efficiencies through transformed business models and digital technologies powered by the Internet of Everything (IoE)—the networked connection of people process, data, and things.

With IoE, oil and gas firms have the opportunity to make IT services a commodity in the business, creating the potential for dramatic cost reduction and improved operational efficiency. The illustration below shows several ways O&G operations can benefit from connected technologies. To achieve these benefits, however, they will need to bring together both the IT and the operational technology (OT) sides of the business. Our survey indicates that oil and gas firms have a long way to go in breaking down the barriers between IT and OT. In fact, only 41 percent of respondents “completely” or “somewhat” agreed that their firms’ IT and OT strategies are aligned.

OandG_Digital_Tranform_01

Source: Cisco, 2015

Here are some examples of how IT-OT convergence can impact the areas of data, collaboration, and cybersecurity: Read More »

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Summary: A New Reality for Oil & Gas

An excellent post from Mike Riegel talks about how things have changed between the Tech industry and the Oil and Gas Industry over the past 20 years. The conversations he once had with his father-in-law who was at Mobil Oil have changed dramatically since the nineties. Oil companies are now  ‘Digitizing':

  • The Digital Age has come to the Oil industry, and despite the current downturn, the most visionary companies  will have the opportunity to transform their business models for future growth.
  • The recently released report: “A New Reality for Oil & Gas – Complex Market Dynamics Create Urgent Need for Digital Transformation” makes it clear that the move to a Digital Business and the adoption of Internet of Everything is the way forward for the industry and for the global economy.
  • IT and OT (Operational Technologies, sometimes called Automation Control Systems/ACS or Industrial Control Systems/ICS) need to become more aligned out of their silos.
  • Biggest issue the industry faces is the ‘data-deluge’ – there’s a need to do deal with sensor and other data both in real-time at the source (usually the edge of the network) and that stored away in huge historians. Analysis of historical and real-time data is an imperative.
  • The US is well positioned to be the ‘swing-producer’ in the market as a result of their agile adoption of IoE, and the successful companies will take advantage of the market dynamics to invest, whilst others will cut costs, investments and retrench, falling behind. This week at CERAWeek we’ll here from Marcel Cappetti about that (Wednesday at 11:20 AM).

Check out the full post from the IoE Blog channel here:

20 Years Hence – What Do Oil, Dating, Digital, and Analytics Have In Common?

Mike will no doubt get feed back from his father-in-law this weekend and hopefully we’ll get a report back!

As always, let us know what you think!

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A Turning Point for Oil and Gas: Managing Through Turbulence to Digital Transformation

This is a big week for the global energy industry, as thousands of energy leaders, experts, technologists, and policymakers gather in Houston, Texas, for the 34th annual CERAWeek conference, the premier international event for the industry. As a corporate sponsor of the event, it’s also a big week for Cisco.

Just last week, Cisco released a new report focused on the need for digital transformation in the oil and gas industry. Based on a survey of oil and gas executives, analysts, and consultants in 14 countries, the paper validates CERAWeek’s “oil day” theme, “Turning Point for the Oil Industry.” For forward-thinking oil and gas companies, the price volatility and turbulence in the market could represent a turning point toward true digital transformation. Read More »

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New Oil & Gas Study Reveals a Disrupted Industry Primed for Digital Transformation, Fueled by the Internet of Everything

If ever there was an industry and a time that epitomize “disruption,” it is the oil and gas industry today. Price declines of more than 50 percent since June 2014 have upended the sector, and dominate the agendas of industry executives. In fact, a new Cisco study identified “energy price volatility” as the external market force causing greatest concern for the industry today. The study, “A New Reality for Oil & Gas: Complex Market Dynamics Create Urgent Need for Digital Transformation,” shows an industry ripe for transformation by the Internet of Everything (IoE).

In the past, oil and gas (O&G) companies have attempted to address oil-price declines by resorting to short-term cost-cutting measures to see them through the slump. But this time is different. For one thing, it does not appear that prices will recover any time soon—if at all. Demand is down, and new production technologies are driving efficiencies that will increase production and keep prices low for the long term. This time, O&G firms will need to do more than cut costs – they’ll need to change their operating models through digital transformation.

For the study, we interviewed oil and gas executives, consultants, and analysts in 14 countries about the industry’s challenges, opportunities, and priorities. These experts identified intelligence from data as the key area needed to improve operational efficiency, and data analytics as the No. 1 driver of faster, better decision-making.

Additionally, the survey named faster problem resolution, better process control, and improved worker safety as the top three business benefits of IoE-powered technologies. The top three IoE-driven operational benefits were improved production efficiency, reduced downtime, and equipment performance optimization.

As an industry, oil and gas has been “digitized” for some time. True digital transformation, however, now requires adoption of the Internet of Everything — the networked connection of people, process, data, and things — throughout the value chain. Innovative firms are using today’s turbulent market landscape as an opportunity to grab competitive advantage by harnessing new IoE technologies. Read More »

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