The oil and gas sector has long been a world leader in the use of IT, and this trend continues to the present day, as oil and gas businesses own two of the world’s leading supercomputers. Although the industry has gathered and assessed ever-growing quantities of data for some time, much of this information has gone unused.
However, the accessibility of on-demand computer system resources, such as data storage and computing power, known as cloud computing, allows oil and gas companies to benefit from data analytics.
Through cloud solutions, oil and gas companies can employ a system of remote servers hosted on the internet to store, administer, and process their information. This tactic permits the companies to analyze large amounts of data in real-time in a cost-efficient manner.
All information about a company’s efforts in exploration, development, and production is highly sensitive and confidential. This fact has caused concern about security with cloud platforms and reduced acceptance of cloud services by oil and gas producers.
Nowadays, oil and gas corporations can store data on a virtual network that allows for connectivity from other resources instead of on local servers. These virtual networks apply more extraordinary security measures to cloud computing than was possible in the past.
New Applications for Cloud Computing
The shale oil industry in North America has been among the quickest members to implement data-led advances made possible through cloud computing.
Each year, thousands of wells are drilled. Corporations use information obtained from the well sites to create unique industry innovations that lead to longer horizontal well drilling procedures than were previously used.
A further significant advantage of cloud computing is that it produces improved operational efficiency in various areas. For instance, a new software system called Delfi uses cloud technology to store, manage, and coordinate data acquired from its oil wells.
By analyzing how the wells are designed, drilled, and entered into production, the software can optimize the output of a whole oilfield. Experts expect this approach to significantly reduce costs in US shale oilfield operations over the next ten years.
Data for the Oil and Gas Industry
By enhancing their data analysis techniques through cloud computing, oil and gas companies can upgrade their strategies for managing processes such as gas flaring. At oil drilling sites worldwide, natural gas flaring is the most commonly used method of disposal.
Although safety issues related to flaring exist, oil and gas companies commonly use the process, emitting considerable amounts of carbon dioxide (CO2) into Earth’s atmosphere. These emissions are contributing significantly to atmospheric warming.
Employing remote automated data-streaming techniques through cloud computing will hasten the shift from measuring to managing greenhouse gasses as the oil and gas industry moves toward addressing the critical topic of CO2 emissions.
Information derived from flare gas meters will help identify the processes resulting in the most outstanding flaring amounts. Figures obtained from various well sites can be placed side by side to more efficiently assess and direct these processes, leading to constant upgrading of procedures.
Cloud Applications at the Retail Level
In recent years, major oil and gas companies have been investing less in the retail fuel business, handing the retailing function over to branded wholesalers (BWs). The significant effects of this move involve managing inventory, the supply chain, and logistics.
However, many BWs still depend on inefficient, labor-intensive methods, which lead to inadequate planning, unforeseen depletions of stock, and an adverse impact on customer satisfaction.
The US is home to more than one hundred BWs that manage thousands of retail outlets. This model may soon be adopted globally, as BWs become channel partners who own and operate retail locations distributed across huge geographical areas.
Thus, BWs, chiefly those in high volume markets, have a pressing need for procedures and technologies that (1) manage inventories in all of their retail locations, (2) help recognize changeability in demand, (3) establish the most favorable scheduling practices, and (4) assist them in scaling up or down while preserving their quality of service.
A System in Need of Renovation
The present methods of BWs depend primarily on manual procedures and emails and phone calls made among numerous geographically discrete locations and headquarters to assess demand, discuss pricing, submit orders, and guarantee prompt delivery.
This outdated system needs to be changed to a more cost-efficient and adaptable means to address immediate demand and a more effective method of managing inventory and orders.
Until recently, the supply chain was relatively straightforward. Oil producers had full knowledge and control of the whole chain, and the flow of data went from retailers to a back-office system. This information was used by various enterprise resource planning (ERP) modules to produce important information that the company’s refinery then utilized for several functions.
The new business model transfers the responsibility for administering the supply chain from the oil company to the BWs, which lack the resources to own, operate, and control huge ERP systems.
This leads to inadequate planning, increased inventory costs, lack of visibility among the various sites, poor analytical decision-making ability, and decreased quality of service.
Cloud-Based Web Applications Can Be the Solution
To rectify this situation, BWs can use a sophisticated, cost-efficient, shared, and adaptable collection of cloud-based web applications. These applications can subdivide sites according to local demand and competition, supply dashboards with inventory-related data, and use analytics to predict demand levels.
For example, with this assistance, BWs will know, by location, which products and related volumes they need, helping them do their scheduling at the most favorable cost levels.
Advantages of the Cloud-based Approach
The cloud-based methodology has three major benefits for BWs. First, they can avoid having to invest in and maintain IT infrastructure, thus saving resources. The most up-to-date infrastructure, skills, and technology are always accessible by using a cloud service provider.
Second, the BW does not need to be concerned about scaling. A BW can expand or decrease the number of retail locations at any time without being concerned about ways to adjust the IT infrastructure’s size or deal with redundant assets.
Lastly, since cloud infrastructure is usage-based, the BW will only need to pay for its use, allowing for efficient resource allocation. An added benefit of using a cloud-based approach is that it will always be available and reliable, which would not be valid if the BW chose to set up and administer its own IT infrastructure.
Gain Insight into the Oil and Gas Industry By Joining COPAS
COPAS is the Council of Petroleum Accountants Societies. Members of COPAS are at the forefront of driving change and innovations that shape accounting in the petroleum industry.
By becoming members of COPAS, petroleum accountants societies gain leverage in the industry, increased knowledge and insight, and a platform to collaborate with like-minded professionals. You can outpace the rest and learn more about our industry’s best accounting practices, standards, and guidelines.
In addition, we established our Accredited Petroleum Accountant® (APA®) program in 1996 to certify accountants within the oil and gas industry. It ensures that petroleum accountants are proficient in the basic elements of knowledge essential to oil and gas accounting.
COPAS POLICIES: Complaints | Cancellation & Refund Policy