Automation can have a direct impact on the profits made by petroleum companies. Anything that improves the processes of oil and gas companies will make them more efficient, and that means profits will increase for petroleum companies that market those products.
Some areas of the oil and gas industry are much more adaptable to automation than others, for instance, the logistics and supply chain sector, safety and retail operations, production operations, process control, and drilling.
The oil and gas industry has recently been making much more extensive use of sensors that are tied into the Internet of Things, as well as self-learning systems that contribute to greater productivity.
Greater use of artificial intelligence has also come into play, as that field has matured and become much more useful to the oil and gas industry. Because of a shortage of skilled workers, artificial intelligence has proven to be very useful in filling the gaps left by a lack of adept personnel.
Here are some of the ways that automation has had a major impact on the oil and gas industry, which has had a ripple effect in helping petroleum companies become more profitable as well.
More cohesive enterprises
The remote areas where upstream producers harvest oil and gas have been much more accessible because of recently developed automation which includes submersibles and drones.
These new technologies have proven to be essential for monitoring inspection processes, as well as for measuring pressure and the flow of oil and gas.
The improvements made by this new automation can have major benefits for downstream, midstream, and upstream producers.
Given that automated systems allow for much greater connectivity in the various aspects of an oil operation, these automated systems have made it far easier to distribute data across all phases of production and have resulted in far greater efficiency across the enterprise.
Digital technology and artificial intelligence are opening up opportunities to lower costs, in some cases, by replacing human labor, and in other cases, by enhancing the accuracy and safety of tasks that are performed by humans.
Cost savings can be achieved in various phases of exploration and production, such as the drilling process, pipe handling, and in many of the safety procedures that are implemented on an oil site.
Automation can offer tremendous savings in time and can make a number of processes far more efficient, thereby minimizing site injuries and lowering costs incurred by the company.
Greater efficiency and productivity
With internal IT processes being modernized and automated to a greater extent than ever before, oil and gas operations have been able to simplify production processes and boost yields.
It has also allowed drilling companies to reduce their carbon footprints, thereby causing less disturbance to the environment and contributing to the long-term health of the earth.
The great thing about all these measures is that they also increase potential earnings because of the increased efficiencies achieved in streamlining processes.
Workflow automation and scalability
Apart from what happens at the actual oil and gas drilling site, automation has become extremely beneficial for petroleum companies with regard to their internal processes.
For example, having an automated workflow can ensure that there is better communication between departments, fewer forgotten actions, and less wasted time.
When companies grow in size, a number of undocumented processes begin to appear, for instance, sending the appropriate notifications to those individuals who require them.
A skilled and knowledgeable employee could leave your company, taking valuable knowledge with them. It can act as a brake on your business when scalability can only occur by one to two people at a time.
If all these processes are documented in a solid workflow tool, any new employee can step right in and handle the position far more easily. In fact, this allows for any company to scale up or scale down as needed, while maintaining the appropriate integrity for the company.
Ease of auditing
If your company does not have an automated workflow tool in place, and you are confronted with an audit, it might take you days or weeks to track down all the information you need in order to provide three years worth of data about a specific well.
When you have a great workflow tool in place, you’ll be able to streamline data collection and provide auditors with everything they need, including reports, accounts payable invoices, deck changes and set-ups, approvals, or any other documentation the audit team requires.
If other files are necessary, they can be found online rather than having to check paper binders and making manual copies for the auditors.
When you can save this kind of time and be more efficient, the audit will be concluded much more quickly, and your employees can get back to their normal duties much faster.
Reduction of repetitive tasks
Another area where a good workflow tool can save you tons of time and effort is carrying out repetitive tasks over and over again. For instance, COPAS offers CEPS, a computerized equipment pricing system that allows for batch processing and material transfers.
If you had ten material transfers to enter, they would normally have to be entered on five different screens, which means you’d be doing 50 different data entry processes. This only handles the accounting portion of the overall task as well. It would still be necessary to enter some of the same information at the warehouse or out in the field.
If you set up a workflow tool that handles this for you, you can post the information once and have it rippled throughout the system, thereby eliminating all the redundant tasks that might have followed.
Setting up one area of record can save you countless hours of data entry and repetition, and it can feed all systems within your operation such as accounting, production, reporting, forecasting, etc.
Your workflow can also send the appropriate alerts to recipients who need them when anything happens within the system, for instance, having manual journal entries ready for approval.
Internal and external benefits
As can be seen from the above, automation can significantly increase productivity and efficiency for oil and gas companies when it’s applied effectively by an oil and gas operation.
With streamlined processes, improved safety procedures, elimination of redundancy, and greater auditability, both internal processes and site processes can become much more effective, thus saving time and effort and increasing profitability.
Become a member of 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.
Being a member of COPAS gives petroleum accountants societies leverage in the industry, increased knowledge and insight, and a platform to collaborate with like-minded professionals and advance further than ever before.
By joining COPAS, you can outpace the rest and learn more about our industry’s best accounting practices, standards, and guidelines. Our Accredited Petroleum Accountant (APA) program was established in 1996 to certify accountants within the oil and gas industry.
It ensures that petroleum accountants are proficient in the basic elements of knowledge that are essential to oil and gas accounting.