The Prospects of Robotics in Egypt’s Hydrocarbon Industry

The Prospects of Robotics in Egypt’s Hydrocarbon Industry

By Mahinaz El Baz

Advances in technology and automation have changed many industries. Now, due to shrinking resources and increasing demand for hydrocarbon products, robotics is making its way into the oil and gas industry. Key industry players are rethinking the pace of their automation timelines as new oil and gas fields are mostly located in extreme conditions that pose serious development challenges in terms of human and environmental safety.

The use of automation, particularly robotics, offers the hydrocarbon industry extensive opportunities to further human and environmental safety, cost efficiency, and production. Experts believe that the future oil and gas technology will be increasingly automated, digital, and smarter, according to DNV GL’s Technology Outlook in 2016.

Past, Present, and Future Applications

In recent years, international oil companies (IOCs) have been exploring the potential of robotics. The main drivers of this exploration are heath, safety, and environment (HSE) considerations and improvements to cost and production efficiency. Oil companies are experiencing complex challenges that need unconventional techniques in order to be solved. For instance, in order to meet growing energy demand, the industry is moving to tap hydrocarbon reserves located in harsh or remote locations, making development more difficult and more expensive, according to a report by Royal Dutch Shell on robotics, sensor systems, and automation.

Not only are many of these hydrocarbons more difficult to extract, many of them require additional processing, according to the report by Shell. At the same time, the report states, retirements from the industry are creating a shortage of expert staff, causing companies to centralize their decision-making processes. Experts argue that automation, in general, and robotics, in particular, will enable companies to meet these challenges, Shell’s report argues.

Robotic systems have been used by the oil and gas industry “for a variety of tasks since the 1960s, but the range of applications was generally limited to areas where direct human intervention was impossible,” the report by Shell notes.

Robotics is now used in both upstream and downstream processes. Uses include: pipe handling, daily drilling operations, pipe inspections, tank inspections, weather monitoring, pressure and flow measurements, and remote controlled underwater vehicles (ROVs), according to a review of robotics in the onshore oil and gas industry by Shukla and Karki.

Application: Drilling Operations

Drilling operations are one of the biggest expenses for oil and gas companies. Not only is drilling costly, it involves considerable safety hazards for workers and is highly technical.  Experts believe that automating manual portions of the process, such as pipe handling and pressure drilling, could significantly reduce safety risks and speed up the overall drilling process, noted Peter Maier, General Manager of Energy & Natural Resources, Industry Cloud, SAP, according to Rigzone.

Application: Diagnostics and Inspections

“Underwater drones and unmanned submersibles can help monitor when equipment needs repairs, and can also aid in the inspection process. These vehicles can be controlled remotely, eliminating the need for skilled pilots, and can even broadcast live video feeds and data back to a central location,” stated Maier.

Application: Weather Monitoring Systems

“Sensors are objects that detect events or changes in their environment, and respond to that change by providing a corresponding output. There are many different types of sensors and various outputs, but in most cases, these outputs will be electrical or optical signals,” according to Shell. IOCs are already using weather sensors to monitor seismic activity and “ocean and atmospheric levels,” Maier writes. Companies believe that these sensors will help predict major weather events, such as earthquakes and hurricanes; thereby allowing oil and gas companies to take the necessary safety precautions.

Application: Pressure and Flow

Robotics can easily improve the measurement of pressure and oil flow. Installing smart sensors—connected to centralized monitoring software—allows the reporting of oil level, pressure, flow from the field without an on-site crew. Upon receiving this information, rig crews can easily and safely monitor and adjust settings as needed.

Industry players expect developments in robotics to be applied to subsea-production systems and drilling and well operations. In addition, they expect autonomous pipeline inspections to increase both on and off shore. By 2025, the DNV GL report predicts that this technology will be used to improve several aspects of operations including: fully automated drilling operations, simpler and smarter completions, smarter subsea tie-ins, autonomous inspection of pipelines, Biodegradable polymers for enhanced oil recovery, rigless plugging and abandonment, and LNG as fuel for trucks and railways.

Benefits vs. Challenges 

By using automated technology and robotics, oil and gas companies can make more wells economically feasible due to the higher efficiency and enhanced safety of the technologically advanced operations. “Advanced automation technology can fundamentally change how a well is drilled, but needs a complete redesign of drilling-related processes to reap the full benefits,” the DNV GL report stated. Robotics offers many potential benefits in the upstream value chain of exploration, drilling, and development. Some of the biggest future opportunities appear in production operations, such as reducing unplanned downtime, maximizing asset and well integrity, increasing field recovery, and improving oil throughput. Given the hydrocarbon industry’s substantial increases in upstream capital investment, optimizing production efficiency is essential, according to the analysis of Martinotti et al.

“The Iron Roughneck, made by National Oilwell Varco Inc., automates the repetitive and dangerous task of connecting hundreds of segments of drill pipe as they are pushed through ocean water and oil-bearing rock into the well hole,” according to Bloomberg. “This robot increases crew and rig safety, reduces pipe-handling time, and saves rig floor space. In essence the robot is a versatile, safe, and cost-effective alternative to human roustabouts,” according to a writer for Eniday. On the other hand, Anisi and Skourup argue in their study on oil and gas robotics that applying robotics in the petroleum industry has caused an improvement in HSE standards. “Although this is contradictory to the general goal of automation, work is now focusing on maintaining focus on HSE and at the same time improving [the] efficiency and profitability of the facilities,” noted the study.

Applying robotics is not without its own challenges. Automated oil fields are “flush with digitally enabled wired systems, equipment, and components.  A typical offshore production platform can have more than 40,000 data tags”—though not all of these data tags are necessarily connected or used, according to Martinotti et al. They argue that “[c]onverting this huge amount of data into better business and operating decisions requires new, carefully designed capabilities for data manipulation, analysis, and presentation, as well as tools to support decision making.”

“The impact of addressing these automation challenges can be material. Judging by our benchmarking research, improving production efficiency by 10% can yield up to $220 million to $260 million bottom-line impact on a single brownfield asset,” according to Martinotti et al.

Furthermore, a number of sub-challenges must be addressed to produce a reliable and intelligent robotic system which enables the remote operation of normally unmanned oil and gas facilities. Operator interface, control room visualization, high-level robot allocation and task scheduling, camera-viewpoint planning, 3D mapping, telerobotics, safe human-robot interaction, collision handling, SCADA control networks, and motion planning could all provide challenges, according to  Anisi and Skourup’s study. Nevertheless, even if all these sub-challenges are successfully addressed, system integration would still remain a serious challenge. Work in this direction includes robotic prototypes for industrial maintenance and repair applications.

The Changing Labor Market

The rapidly growing world population is burdening the hydrocarbon industry by increasing demand. By 2050, the global population is expected to reach almost 10 billion people who will require safe, reliable, and affordable energy. In order to meet this demand, oil and gas companies have begun to focus on new areas where they can embrace innovation to increase efficiency. At the same time, the petroleum industry is suffering from a skilled labor shortage. “This shallow talent pool has made it difficult for oil and gas companies to hire new team members with the technical skills required to work on new energy sources. Without skilled workers in these positions, it has now become essential for energy companies to rethink their operations and include the use of automation, predictive and self-learning systems, and digitally connected infrastructure,” noted Maier. He further explained that these technologies can dramatically raise both productivity and efficiency.

On the contrary, some experts believe that automating the industry and replacing humans with robotics could have negative effects on the labor market. For oil rig workers, using robotics would probably mean that some of the jobs lost during the oil price downturn would never return. Moreover, some of the new job openings would require a different type of skill set. For instance, between 2014 and 2016 in response to a fall in oil prices, the industry cut around 440,000 jobs worldwide. As prices recover, former employees are once again seeking employment. Many are likely to be disappointed, however, as oil companies have adopted advanced technology to cut costs and create savings.

This adaptation of robotics has reduced the need for lower-skilled labor in favor of fewer, yet highly skilled, employees who possess information technology and computer skills,  noted Nicholas Newman in his analysis on robotics on oil rigs. “It used to be you had a toolbox full of wrenches and tubing benders. Now your main tool is a laptop,” stated Donald McLain, Chairman of the Industrial-Programs Department at Victoria College in south Texas, according to Eniday.

In addition, using robotics for drilling rigs may reduce the number of humans on a drilling crew by almost 40% in the future, from 25 to 15 workers, Houston Chronicle’s Jordan Blum writes, quoting industry analysts, according to Oil Price. Nabors Industries, a drilling company, expects that it could reduce the size of the crew at each well site to around five people—from the current 20—with additional use of robotics and automation, according to Bloomberg.

The Future of Robotics Technology in Egypt 

Although IOCs are using automated technologies in many countries, they have yet to be implemented in Egypt. Amr Manhawy, General Manager at Seaharvest Oil & Gas Services, believes that the reason behind this delay is mainly due to the high cost of these technologies and falling oil prices. He further explained that it will be hard to implement such technology in Egypt in the near future due to its high cost, except in the deep drilling concessions in the Mediterranean Sea. Yet, using robotics and automation in Egypt’s oil and gas industry could prove beneficial by providing better performance, decreasing drilling time, and offering a safer work environment for the drilling crew.

On the other hand, economists argue that using robotics to replace humans in Egypt’s hydrocarbon industry will have a direct effect on the economy. “From [an] economic perspective, further automation enhances [the] capital productivity of Egypt’s oil and gas sector. That is critical to long-term economic growth, because two-thirds of incoming FDI [Foreign Direct Investment] to Egypt go[es] to the energy sector, which is capital-intensive by nature,” noted Youssef Beshay, Senior Banker, BNP Paribas. In addition, some economic experts believe that investing in transferring and developing new technologies, such as applying automation and hiring robotics, is economically rewarding, while others believe that it has a negative effect on Egypt’s labor market as the country is suffering from a growing population and high unemployment rates. “It is rather case-dependent. While it makes sense to invest in new upstream technology such as unconventional drilling, it is less so in the downstream sector where Egypt’s very competitive labor cost (post EGP floatation) reduces the incentive for automation,” stated Beshay.

With the world population growing, the demand for new hydrocarbon resources will increase as well, driving up costs for petroleum companies. By using robotics to conduct daily operations—both on the job site and in the office—companies will be able to decrease risk, enhance and accelerate decision making, reduce facility turnaround requirements, and achieve and maintain performance excellence during process operations. While the impact of robotics on the labor market is not entirely clear in a developing economy, increased utilization of modern technology can increase productivity and efficiency while boosting asset integrity.

Dr. Mahinaz El-Baz 318 Posts

Mahinaz El Baz received her PhD degree in International Economics from Helwan University in 2022. She has +10 years of experience in journalism and economic analysis. She received the "Best Economic Article Award" in 2016 from CFA Society Egypt.


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