The oil and gas industry, a colossal economic force, has been the backbone of global energy supply for decades. Yet, beneath its shiny surface, there lies a struggle that hinders its potential for growth and efficiency. At the heart of this struggle is the lack of technology integration at the refinery level. This issue has far-reaching implications, ranging from heavy reliance on contract companies to the inefficiencies of maintaining outdated systems. In this blog, we delve into the key reasons behind this challenge and explore potential solutions to modernize the industry.
The Heavy Reliance on Contract Companies
One of the primary reasons behind the technological lag in the oil and gas refinery sector is the industry’s heavy reliance on contract companies. While these external partners play a vital role in various operational aspects, they often introduce complexities in technology integration. These companies come and go, taking with them the knowledge and expertise required to maintain and update the technology systems. This continuous influx of contractors leads to a lack of consistency and ownership of technological advancements within the refineries.
Secrecy for Competitive Edge
Contract companies are motivated by competitive advantages and, therefore, tend to keep crucial information private. This includes proprietary technological solutions they develop for refineries’ operational needs. While this approach safeguards their value in a competitive market, it leaves refineries in a vulnerable position, dependent on external entities for technological upgrades. This secrecy also hampers the collaborative sharing of best practices and innovative solutions among refineries, hindering the industry’s collective progress.
The Vicious Cycle of Repetitive Planning
Refineries pay substantial amounts to contract companies to plan for recurring Turnarounds – periods of maintenance and equipment inspection. Unfortunately, the lack of information ownership becomes apparent in this aspect as well. Refineries end up paying for the same planning processes repeatedly since they do not possess the information required to plan efficiently in-house. This not only leads to financial waste but also perpetuates a cycle of dependency on external expertise.
The Challenges with Large Software Systems
While refineries have invested in large-scale software systems like SAP and Oracle, these systems often fall short in addressing the everchanging needs of the industry. These systems, while comprehensive, lack the agility and adaptability required in the fast-paced oil and gas sector. Implementing updates and customizations becomes a cumbersome process, hindering the refineries’ ability to swiftly integrate new technologies and respond to emerging challenges.
Charting a Path Forward
To address the technological gap at the refinery level, the oil and gas industry needs to take proactive steps:
- Ownership of Knowledge: Refineries should strive to retain essential knowledge and expertise in-house, ensuring continuity even when contract companies change. Establishing dedicated teams for technology management and fostering knowledge sharing among refineries can help mitigate the knowledge loss.
- Collaborative Innovation: Contract companies and refineries must find ways to collaborate more openly, sharing technological advancements that benefit the entire industry. This can be achieved by promoting forums and platforms that encourage knowledge exchange.
- Investing in Agile Solutions: Refineries should consider adopting more agile software solutions that can adapt to changing needs rapidly. This would allow them to integrate new technologies seamlessly and respond to evolving challenges effectively.
- Long-Term Planning: Instead of paying repeatedly for the same planning processes, refineries should work on developing in-house capabilities for Turnaround planning. This can significantly reduce costs and enhance their independence from external contractors.
The oil and gas industry’s journey toward technological modernization at the refinery level is undoubtedly complex, but the potential benefits are immense. By addressing the challenges of heavy reliance on contract companies, knowledge secrecy, repetitive planning, and inflexible software systems, the industry can pave the way for a more efficient, agile, and competitive future.