Cloud Computing in the Oil and Gas Industry: The Way Forward


May 16, 24

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The advances in technology have completely revolutionized the business operations and everyday needs. The evolving cloud computing has provided companies with fast processing capabilities while establishing the link between multiple offices across the world by improvising the data security at a virtual hub rather than on local servers. Oil and gas companies around the world are now seeing the cloud as a powerful enabler. Cloud allows oil and gas companies to store, manage and process a large amount of data at low cost. According to Accenture, cloud computing will be the largest sector of investment in the coming years. The benefits of digital technology on exploration to production and particularly, data and insight gathering have the greatest impact on oil and gas sector. It’s helping to increase the lifespan, uptime, and reliability of plant and infrastructure, which ultimately increases returns. This is particularly true as companies face five critical and largely universal issues:

  1. Data management
  2. Older plants and refineries with maintenance and operational challenges
  3. Abrupt failures leading to losses, attributable mostly to downtime
  4. Integrating old and new infrastructure
  5. Challenges in managing the workforce

Cloud hosting services technology has existed for a long time, but concerns of organizations over security and accessibility kept oil and gas companies away from investing. These issues are now being expelled by advances in technology, bringing the return on investment and innovations from hosting to process manufacturers. Indeed, the potential cost savings are a strong aspect for cloud but for oil and gas companies, cloud adoption is a strategy towards an effective digital innovation. For a majority of oil and gas companies, cost-cutting is becoming a secondary concern as they focus on to speed decision making and shorter time intervals. According to digital trends survey, more than 70% of companies plan to invest in the new digital areas such as high-performance computing, Artificial Intelligence, robotics, Big Data, Augmented Reality, blockchain over the next five years. Organizations adopt cloud for various reasons:

  • Cost reduction by leveraging the economies of scale.
  • IT agility to respond faster to changing business needs.
  • 100% utilization of resources.

There is a wide range of deployment models that can be used for cloud technology. Organizations can choose to go with different deployment models for different types of applications and data depending on their business requirements and other needs. The most important things to consider when evaluating cloud technology and finalizing what type of cloud technology to use for different applications and data are described below:

  • Companies need to evaluate the current situation of their IT and analyze how cloud technology can impact organizational dynamics. Overall, organizations should make sure their contracts with cloud providers are sound, and they understand what they are paying for.
  • Asset ownership versus asset control will also bring about some challenges. Companies will need different skill sets from their IT staff to be able to successfully manage the cloud environment.
  • Companies need to answer questions about cost effectiveness, security, data privacy and compliance, system availability and performance.
  • Companies need to evaluate their business requirements before making a decision about moving to the cloud.
  • Companies need to understand the existing players in the cloud market.

Cloud technology is constantly evolving to overcome organizations’ security concerns and will stabilize further in the coming years ahead. Gartner research shows that big data will reach the peak of the productivity within the next five to ten years, and cloud security frameworks are on the rise. Similar to investing in security solutions for legacy infrastructure, organizations need to make investments to secure their data in the cloud. Organizations will need new technologies and solutions to monitor and manage cloud services. Also, organizations can also stand-up cloud technology in-house which can store their IP data, to ensure more control and visibility into this data and the infrastructure hosting this data. Irrespective of the type of cloud solution, it is wise to invest in security solutions to manage these services. Oil and Gas industries are process intensive industries. By monitoring large amount of data from every location efficiency can be achieved. The Oil and Gas industry has changed dramatically over the last 20 years. With Geo political parties creating a highly fluctuating crude oil and gas market, the competition for depleting natural resources continues to grow. Main business drivers include lowering operating costs and increase finding and recovery rates. The shareholders pressurizes companies for a return on their investments that is equivalent with other long-term investment strategies. Advancement in innovative technology can help in reducing uncertainty and increasing success of exploration and production. There is often too much complex information to process and understand the time needed to make a quick and accurate decision. Process efficiency and real-time information is key for decision making and to automatically monitor wells and fields, with preventative measures to avoid production downtime. Cloud Computing in Organizations Many oil and gas companies already are enjoying the benefits of the cloud. For example, Hess Corp. is expecting to optimize costs by roughly 40% by transferring workloads to a PaaS (Platform as a Service) solution. Hess also is set to save between 10% and 20% in labor costs through automation on a cloud management platform. The opportunities that come with cloud technology are profound and is an important parameter for the oil and gas industry as it transforms itself in the future. Wrapping Up! In conclusion, it is important to understand that cloud technology necessitates a paradigm shift in organizations and the way they operate daily. Moving to the cloud can take significant time and effort. Organizations, therefore, need to develop a Cloud Strategy before investing in the technology. Most benefits of the cloud are achieved when organizations focus on a very specific strategy and look to cloud-based technologies to accelerate their performance. To make the cloud infrastructure cost-effective, it can utilize the Linux-based cloud systems which can be added to supporting public cloud. Cloud computing allows managers and employees to access the company database wherever they are, preventing any possible hindrance in the communication.


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