The recession has hit the oil and
petrochemicals industry hard. Demand for chemicals, plastics and
fuel has fallen sharply, and the cost of a barrel of oil has
plummeted, hitting the industry’s profits and growth
prospects.
Ian Miller is director of application services,
consulting and integration at Hewlett-Packard, a big IT supplier to
the oil and petrochemicals sector.
Oil companies are
cutting their IT budgets to save money in the downturn, he
said. But nevertheless, they are also keeping an eye on longer-term
projects where IT will play a critical role.
The oil and gas industry is a big user of
computational grids. The grids run complex calculations which
generate three-dimensional seismic data that enables the oil
companies to determine the location of oil reserves accurately.
Low-cost commodity PCs, which can be configured as
grids of Linux machines, have made it more economical to run
three-dimensional seismic analysis and build complex models of oil
rigs.
HP is working with Nvidia, the graphics card maker,
to combine its high-end graphics processors with HP dual processors
on a blade architecture. The company claims this offers high levels
of performance in a box that offers low power consumption and takes
up little space.
IT as an enabler
Joe Hill, EDS fellow and chief technology officer
at HP’s EDS Global Energy practice, says IT has made it possible to
undertake deep sea drilling on high-yield rigs within the Gulf of
Mexico, something that would have been impossible before.
Developments in computer telemetry and the ability to communicate
quickly across the entire oil and gas supply chain allows the rigs
to cope with hurricane season, he says.
“[On a rig], hurricanes cannot be treated as
atypical events. When one strikes, the well must be taken offline
and returned to production as quickly as possible.
“If it wasn’t for IT, we would have run out of oil
a long time ago, or at least it would not be economical to drill,”
he says.
Douglas Hason, director of global energy industries
at HP, says, “IT used to be a back-office function, now it is
centre and front office. We used to talk to CIOs. Now we talk to
CEOs.”
Collaboration advances
But there is still further to go.
A study out last week from Microsoft and Accenture
shows that oil and gas firms are also moving into the 21st century
by adopting web 2.0 technologies. Of the 272 oil and gas industry
engineers, project managers, business unit heads and geoscientists
surveyed, 70% believe that collaboration and knowledge-sharing are
important for driving revenue and cutting costs, and contribute to
the health and safety of workers.
“In the oil and gas industry, collaboration is a
key strategy to reduce costs, improve efficiencies and promote
collaborative working relationships among oilfield asset teams
located in remote locations around the globe,” says Jill Feblowitz,
practice director at Energy Insights, an IDC company.
Building on basics
However, Dan Miklovic, Gartner vice-president for
natural resources manufacturing, says the oil and gas industry
still has to get the basics right.
“Many large oil companies have tried to drive their
entire business applications portfolio into a single platform
supplied by a single [ERP] supplier. In other industries there is a
greater propensity to adopt a best-of-breed approach to
applications resulting in enthusiastic users that are engaged and
more readily use IT to enhance performance,” he says.
While he says it is cheaper to run a single IT
system, integrating multiple IT systems allows decision-makers to
gain access to more information, which in turn leads to more
informed decision-making.
So it looks like good old-fashioned IT integration is the best
bet for ailing oil and gas firms.