In the age of digital technology, rapid access to applications and big data sets becomes the “fuel” for the development of the oil and gas industry, according to the Gaz de România platform. The digital transformation has already become the norm globally, but, unfortunately, as a result of legislative obstacles, Romania has lost the start in the process of digitalizing the oil and gas industry and will bear higher costs to close the gap.
For more than a century, the local oil and gas industry has contributed to the economic and social development of the country, providing fuel for lighting, heating, transportation, jobs and consistent revenues to the state budget. Since the first well drilled in Romania in 1861, with a wood gasket and drill bit, the local oil and gas industry has continuously innovated to support demand, the technologies applied being, over the decades, at the highest level from Europe and even from the world.
It is now necessary for legislative changes to make it possible to move to a new stage, that of digital transformation, a wave that has already engulfed the global industry.
“The need to use advanced information technology tools is even more pressing in the case of Romania, which has mature oil and gas fields in operation, with a significant natural decline in production,” said The Oil and Gas Employers’ Federation (FPPG).
The intensive exploitation of the deposits has its say. Today, most fields are mature and fragmented, with well production being one of the lowest in Europe. Digital technologies are one of the key solutions to reduce the natural decline in production, while streamlining operator costs, with benefits for end consumers as well. Their adoption is all the more necessary as the oil and gas industry has been hit hard by the pandemic, and the climate agenda that focuses on decarbonisation raises new challenges and brings fierce competition with new energy sources. Therefore, increasing cost-effectiveness is essential in this context.
Digital is rewriting the operational landscape of industries
Globally, industries are embracing digital technology to reconfigure their operations and reap the benefits. “Digital technologies help almost every industry rewrite its operational landscape, and the oil and gas industry can no longer lag behind. The potential benefits of digital transformation are clear – higher productivity, safer operations (for the workforce – ed. n.) and cost savings,” reads a study by Deloitte (“From Bits to Barrels. Digital transformation in oil and natural gas production”).
The use of technologies such as cloud computing, analysis on big data sets (Big Data) is a status quo today and represents a huge potential for the oil and gas sector. Big data & analytics helps innovation by supporting companies in analyzing large amounts of structured and unstructured data from disparate sources, generating their understanding in real time.
“Combining these technologies in innovative ways can exponentially enhance their capabilities. The combined impact will soon add a new level of intelligence connected to operations in the oil and gas sector,” reads the WEF study (“Digital Transformation Initiative. Oil and Gas Industry,” 2017).
Here is just one example of the benefits of using big data & analytics: “Modern offshore drilling rigs have about 80,000 sensors, which are expected to generate about 15 petabits (or 15 million gigabytes) of data over the life of an asset. Big data & analytics will help companies navigate through this huge amount of data,” the WEF study also states.
Real-time information received from Internet of Things (IoT) sensors also leads to the accumulation of a huge amount of data, and using cloud computing platforms can lead to faster and smarter decisions, an essential aspect for reducing costs and business opportunities in an industry challenged by the climate agenda, which focuses on decarbonisation and zero-emission energy sources.
Romania, blocked in the era of documents sent by military mail
Therefore, the generation and transmission of data, their analysis and storage are the elements that facilitate the digital transformation. Unfortunately, the classification of some data in the category “classified”, imposed by the Romanian legislation, makes difficult their use and capitalization through “Cloud” technologies, representing at the same time a huge operational obstacle.
“There is a rupture between the need to digitalize the oil and gas industry and certain elements of the legislation in force, disconnection given specifically by the fact that, in the upstream sector (exploration & production), certain data represent classified information. This makes it difficult to manage these documents, they are kept in data rooms specially designed for this purpose, and their transport and circulation are done only by military mail. Thus, the most up-to-date technological solutions, such as cloud, cannot be used for these documents, which blocks the digitalization process in the industry. This is in the context in which, at EU level, there is, since 2018, a Regulation that expressly provides for the free movement of non-personal data on the EU territory,” explains Oana Bucur, Task Force Leader, Digitalization at FPPG.
In fact, Romania is the only country that maintains territoriality requirements for data specific to the Upstream industry, according to a Deloitte study from 2019 – “Study on the legal framework in Romania and the European Union on data management in the Upstream sector.”
“This is contrary to the European trend to remove restrictions and barriers to the transfer, use, storage, processing and access to non-personal data,” notes FPPG.
The companies in the oil industry have repeatedly signaled the importance of declassifying data and information in the oil industry, an action without which digitization is inaccessible to companies in Romania. They called for solutions from the authorities to support the development of an industry that provides many jobs and significant revenues to the state budget.
“The legislation in force must be amended in the sense of declassifying the data and documents that oil companies frequently work with and which, due to their classified status, are difficult to manage and impossible to digitalize,” says Oana Bucur.
On such an important issue as digitalization, the Government needs to support the industry’s efforts to align with European trends.
Open dialogue and a common approach to the challenges and opportunities of digital transformation will maximize the benefits of the new “revolution”. And the time for action is now, to recover the gaps already registered by the Romanian oil and natural gas industry, both for the benefit of the state and of the citizens.