From Irina Slav: Oil and gas is hardly the first industry that springs to mind when one mentions cloud computing. The tech that has been expanding at a breakneck pace, disrupting business models and enabling innovation across industry boards, has not really met with a lot of enthusiasm in the energy industry—at least not yet. But this may be about to change.
The silver lining of the 2014 oil price collapse is making itself increasingly obvious: energy companies have had a wake-up call: They must change the way they play the game. Enhancing operational efficiency, keeping costs low, and approaching new projects more cautiously and flexibly are among the changes we have already witnessed.
Deeply rattled by the price crash, Big Oil – and small independent operators, too – is striving to turn into Lean Oil, going for smaller projects to maximize and accelerate investment returns and even venturing into renewables to ensure long-term growth.
Yet, the nature of the business, which involves so much sensitive information, is not particularly conducive to eagerness to adopt cloud services. But the cloud has been evolving and data security worries attributed to the cloud are being stifled. It seems that energy companies are becoming more comfortable with the cloud, and the near future might see it strap on this new tech.
A forecast from the UK-based Oil and Gas Council, for example, argues that the oil and gas industry stands to benefit particularly from cloud computing. Using a hybrid version of the technology that combines software as a service (public cloud) and software infrastructure as a service (private cloud) could not only bring IT costs down, but could also improve the way the business is managed.
According to the forecast’s author Chris Walcot, the cloud would provide oil and gas businesses with the powerful processing capabilities that they need, while facilitating the links between multiple offices across the world and enhancing the security of sensitive information by storing it in a virtual hub rather than on local servers—all at an appealingly low cost of entry.
Still, Walcot admits, the cloud has further to go before it makes these capabilities available to the oil and gas industry.
Other industry experts believe that cloud adoption will be one of the main IT trends for oil and gas this year, alongside the Internet of things, drones, intelligent rigs, and leak-detection software. The benefits of the cloud, they note, include realizing value from projects much more quickly, and developing new solutions that are flexible and quicker to deploy.Related: Oil Price Rebound May Come Too Late For UK Oil Sector
Speed is a core element of the cloud’s appeal, regardless of the industry. The technology eliminates much of the hassle associated with using an IT network, and invariably saves time, regardless of what you do on it. Of course, breakdowns are a possibility, but the very nature of the service ensures that this downtime– which providers will strive to make sure is a rare occurrence – is quickly addressed and damages minimized.
According to the experts cited above, the early adopters of cloud tech in the oil and gas industry will stand to benefit the most, just as the first entrants in the shale oil patch were the most successful.
On the supply side, we see a growing choice of cloud solutions specifically targeting the oil and gas industry, such as the DecisionSpace 365, developed by Halliburton’s Landmark together with Oracle Cloud, and the recent partnership between Germany’s software giant SAP and Accenture, aimed at developing cloud solutions for E&Ps.
In the world of oil and gas, cloud computing is trending, and it looks like a stable trend.
The SPDR S&P Oil & Gas Explore & Production ETF (NYSE:XOP) was trading at $40.60 per share on Tuesday morning, unchanged on the day. Year-to-date, the largest ETF focused on oil & gas equities has declined -1.98%, versus a +1.23% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of OilPrice.com.