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Will automation kill the job recovery

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One of the distinct qualities of the Oil and Gas industry over the past years has been its heavy dependence of the manual labour for the operations, be it the tasks that require brute strength or the dangerous ones.

Introduced more than a century ago, the counterbalanced pumping unit continues to pump oil in an oil patch of North America. There's finally an innovation to it though, the extraction flow is regulated based on algorithms that are generated by computer monitoring the hundreds of feet of depth.

It's no less than a breakthrough in history as Onshore North America manifests a clear adaption to technology. The shale plays have now become technological plays.

The downturn of the industry, gave the oil companies 2 and a half years of time to reflect on increasing the efficiency and reducing costs. In the good times, when oil was around $100 a barrel, the companies were too busy in pumping oil and innovation neither seemed to be a concern and nor worth the time. When the oil prices tumbled to record lows, oil executives were forced to re-think on the strategies to improve efficiency with data analysis and automated plays to extract more out of the rocks at reduced costs.

Automation has revolutionized many industries and the Oil and Gas industry which is dependent on bulky and complex equipments will benefit greatly in this regard. The industry has been conservatively slow to adapting software and technology. Where it used to be all about a tool box of wrenches and tubing tenders, today the laptop is the main tool.

The industry has started to embrace robotics technology to automate the repetitive and dangerous tasks. The Iron Roughneck, manufactured by the National Oilwell Varco Inc., carries out the heavy task of stringing together numerous pieces of drill pile, while they are propelled into miles of ocean water and the hard oil bearing rock. Such automation has reduced the need for two roustabouts out of three as per professional estimates.

While the year of 2017 has been speculated by many to be a year of recovery, of the 4.4 million jobs that were lost in the downturn, a third to half of them may never return. The increasing use of automation has driven efficiency into the drilling operations and reduced the need for the workforce employed in fields.

Today with automation, a rig can pump twice of oil in shale plays compared to what it used to in 2014 during the boom. Nabors international has revealed of its plans to deploy automated drilling rigs and consequentially, reduce their number of workers from 20 to 5 at each well site.

As per GE estimates, an oilfield that is digitalized in true aspect has the potential to reduce the preventative maintenance costs by around 20% and boost the production by 2.5%.

The industry is however years away from a fully automated play in operations. According to GE figures, only 3 to 5% of the oil and gas assets (which includes the wells and all other equipment used in fracking and drilling) are connected digitally.

But the future looks promising. In a survey carried out by Accenture, 50% of the oil companies that participated stated that they plan to increase spending on digital technologies in the next three to five years of period. Big data and mobile devices for roustabouts are the two areas where investments are expected to centralize.

This does not overturn industry’s reliance on manpower. And with the onset of technology new jobs to support the field are increasingly available. It is only natural that modern technology can never eliminate the need for human workforce. The robots that automate dangerous and bulky tasks need to be supervised by human engineers to ensure smooth procedures. They also need to be maintained and inspected by technicians for wear and tear.

Automation jobs for software specialists, data scientists, cleaners and analysts are in demand. 3D engineers are increasingly taking up the roles in the industry to create visually graphic 3D models to depict the well development and construction and thereby chalk out instructions to build it.

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