The robots are coming

 By Chris Dalby

For those in numerous industries, the risk of automatization is now a real opportunity or a clear danger, depending on where you stand. The oil and gas industry is no exception. Numerous processes on oil rigs, at refineries or along pipelines involve perilous operations and costly human capital. This makes the arrival of automatization a logical next step. Robots provide an instant return on investment, do not get bored or careless, and allow for companies to reduce accidents in an instant. Specific advances also make their deployment more likely. The real question now, however, is when this automatization will begin to make a real difference. With the oil industry struggling for profits and with lay-offs in full swing, companies have a choice to make. Set resources aside to invest in automatization when the market picks up or adopt a risk-averse attitude, preferring to trust in tested methods rather than seek to create a new chapter in the industry…

The robots are coming! The robots are coming! For years, this has not been screamed at us from garish B-movie posters but from respectable think tanks and economists.

These assertions have led to mixed responses in core economic industries, including oil and gas. Worth around 2.5 percent of global GDP and employing millions, few industries will be as shaken up by automation as oil and gas. It seems inevitable that reaction to these changes has divided the industry. Many of its workers are worried, particularly in the context of low oil prices, climate change mitigation efforts and affordable renewable energy. Others see a safer and cleaner future, where more dangerous tasks at refineries or on oil rigs are no longer taken on by humans.

report from the Davos World Economic Forum in January perhaps best captured this ambiguity, writing that “while some jobs are threatened by redundancy and others grow rapidly, existing jobs are also going through a change in the skill sets required to do them. The debate on these transformations is often polarized between those who foresee limitless new opportunities and those that foresee massive dislocation of jobs.”

RDS has developed an innovative autonomous robotic drilling rig for unmanned drilling operations

The first of these views has motivated major new changes in the industry in recent years. One of the most talked about advances is an autonomous robotic oil drilling rig, capable of a carrying a 3-ton payload and developed by Norwegian firm Robotic Drilling Systems (RDS). Capable of being deployed on newly built rigs or retrofitted for older ones, the RDS rig allows for the operation of pipes and tools at the drill floor without any need for human operation.

Besides reducing the potential for human error or injury, RDS estimates deploying its robot would save up to 40 rig days a year and avoid thousands of manual operations. The presence of such advances makes it increasingly appealing for companies to deploy the technology.

The founder of RDS, Lars Raunholt, says “oil companies and drilling contractors have recently responded positively to the new opportunities offered by robotics, especially after RDS started showing the robots and their capabilities. There is of course always skepticism to be overcome, but the general feedback is positive.”

The developments made by RDS soon caught the attention of Italian multinational Eni. After investigating the new technology, Eni committed to a Joint Industry Project (JIP) with RDS in order to try and mount the robotic drilling system on an offshore drilling submarine.

Such collaborations are key to exponentially hasten the transition from laboratory tests to field operations, combining the resource and breadth of multinationals with the tailored expertise of technology developers. The next step may well be the production of fully automated rigs, an area of research which accelerated after the 2010 Macondo disaster.

Although the oil industry is infamously cyclical, with workers being laid off during downtimes, many simply take on contract work in the secure expectation that they will be hired on again when prices rise again.

That is now changing. Positions such as pipeline inspectors are falling by the wayside as drones can carry out the job faster, safely and more accurately. Chris Blackford, founder of Sky Futures, a drone company, which works with BP, Shell, Statoil and more, told the FT that “the inspection data we can collect in five days takes rope-access technicians about eight weeks.”

The real question now, however, is when this automatization will begin to make a real difference. With the oil industry struggling for profits and with layoffs in full swing, companies have a choice to make — set resources aside to invest in automatization when the market picks up, or adopt a risk-averse attitude, preferring to trust in tested methods rather than seek to create a new chapter in the industry.

The choice has already been made, says Blackford. “When companies were making a lot more money, it didn’t really matter how long you took to do these inspections or how many people you used. Demand for our services has doubled in 2015 from 2014 levels, and is expected to treble next year,” he points out.

Eni has certainly followed this model, according to Giuseppe Tannoia, its executive vice president, Director of Research&Technological Innovation for E&P Division. “Eni has an internal group dedicated to advanced robotics, set up many years ago. This is a distinctive feature compared to other majors. This group is working both on traditional oil and gas business and on space technologies,” he explains, adding that the company is also collaborating with the European and Russian space agencies to develop a drilling system to explore Martian soil.

“In recent years, we have been continuously transferring these skills within our core business activities, encouraging a cross fertilization that mark our willingness to find innovative, reliable and cost-effective solutions to the challenges that we are facing every day on our assets. The total budget for these departments is about 8 million euros per year,” adds Tannoia.

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These advancements may result in thousands of oil and gas professionals finding themselves replaced. Raunholt predicts technology will underpin this trend. “In the future, it is expected that the number of people on the rig will decrease. Those staying will therefore need to be more skilled to do different things. Also, some of the jobs will be re-created on land in support, surveillance and decision-making roles,” he explains.

His last statement, however, provides a ray of hope for workers fearing the worst. While some layoffs are already happening on specific roles, multinationals do not seem to be preparing mass firings on this basis.

“We do not see a reduction in our manpower due to the application of robotics,” says Tannoia. Instead, robotics can help to run operations in logistically complex environments, and will help in reducing the exposure of workers to the risks.”

Petroplan, one of the world’s leading oil and gas recruitment firms, would stand to be at the forefront of any such industry changes, especially if the number of required positions fell or the skill sets needed changed. Yet its CEO, Andrew Speers, does not seem unduly worried. While acknowledging some pressure on certain jobs, he views the arrival of technology in a positive light.

“The oil and gas industry has always looked to use technology to advance productivity, efficiency and safety and as such, has made huge strides forward over many decades,” explains Speers. “The recent collapse in oil prices has inevitably driven significant advances in the use of technology, benefiting not only the operators and its employees, but also the end user of the oil-based products. Technology always poses a short-term challenge to jobs but a long-term benefit to the industry.”

As automation and robotics become more specialized, it seems unavoidable that some jobs will fall by the wayside, as they have in the automotive and warehousing industries. However, bright sparks will be able to thrive. For example, Eni is already beginning to seek retraining opportunities for some of its staff, with Tannoia viewing robotics as an opportunity to specialize workers with new skills. The Italian company is in the process of converting 20 operators for the operation and maintenance of Eni’s proprietary emergency response technologies. This is likely just to be the first in a long-term process of retraining, allowing oil and gas workers to contemplate a brighter future in the industry.

The robots are coming. They are here to stay. But they will not be condemning oil and gas workers to the scrap heap just yet.

about the author
Chris Dalby
Journalist. Editor. China, Mexico, Latin America, Asia, place branding, Olympics, oil and gas, mining, renewable energy, international politics.