Drilling in the Fourth Industrial Revolution-Vision and Challenges

Inspired by the fourth industrial revolution (4IR) and digital transformation (DT), the Internet-of-Things (IoT) and artificial intelligence (AI) have become valuable tools in the oil/gas industry. DT in oil/gas requires the marrying of physical technologies, such as smart sensors, and digital technologies, such as AI, edge computing/cloud-based platforms, which forms the basis for the IoT. The overall strategy for achieving DT in the drilling sector is to set a clear direction for change by not only requiring communication and coordination between the research and development (RD) units but also aligning with drilling engineering/operational stakeholder requirements. Drilling organizations stand to benefit from DT since a set of interlinked technologies, such as IoT, is not simply concerned with the cost savings due to its implementation, but more with the tremendous potential these technologies have in the future to significantly increase revenue generation efficiency and profits by performing tasks differently across a traditional industry such as drilling; laying platforms for integrating future technologies, and the ability to seamlessly connect and coordinate across silos. Implementing IoT has the potential to increase operational drilling efficiency by 5% and cut upstream operating expenditure by 20%-30%; both significant values in a multibillion-dollar industry. Moreover, the economic value creation in the oil/gas industry in the next seven years is projected to be trillions of dollars, and analysts at Nomura, a large Japanese financial holding company, believe the IoT could make oil/gas companies more profitable at 70/barrel than they were previously at 100/barrel. © 1973-2011 IEEE.