Digital Transformation in Oil & Gas Industry: The Ultimate Guide
ENERGY AND RESOURCES | 27 min READ
    
Digital Transformation in Oil and Gas
Digital connectivity has the power to change the world and make a powerful impact on the life of millions of people. The coronavirus outbreak gave rise to an outbreak of digitalization across various industries and empowered multiple businesses to set a global presence, create unparalleled value, and capture opportunities. The Oil and Gas sector has played a crucial part in the world's economic transformation. The industry needs digital transformation now more than ever.
Sanjay Bajaj
Sanjay Bajaj

Senior Vice President

BFSI

Birlasoft

Todd Wolfe
Todd Wolfe

Vertical Director. OT

Energy & Utilities

Birlasoft

Lenden Vaz
Lenden Vaz

AVP

Energy & Utilities

Birlasoft

 
The oil and gas industry faces an unforeseen demand drop due to the ongoing humanitarian crisis. Today, the prices are touching a 30-year low bar. The sector already suffered two shocks and rebounded, but it is different this time. The supply side is hit. The industry needs to leverage digital technologies to develop sustainable cost-cutting solutions. Also, the industry needs to save efficiently while also keeping in mind that cost-cutting should not be just by pure cutbacks.
The COVID-19 crisis accelerated, allowing the industry to dive deep into the wave of digital transformation. The World Economic Forum's White paper on "Digital Transformation Initiative Oil and Gas Industry" says that digitalization in the oil and gas sector holds the potential to unlock about $2.5 trillion of value for its customers and the industry as a whole.
Top Trends
The global oil and gas sector is witnessing a change like never before. Challenges faced by the oil and gas industry in 2020 called for a worldwide change. According to Gartner's research, the oil and gas sector must build on optimizing business performance to create new capabilities. And for these two, the business models need a solid digital foundation. The oil and gas sector leaders are automating the oil and gas operations using artificial intelligence and machine learning. The digital strategy is focused on reducing costs and increasing the sector's efficiency.
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Market Dynamics
The entire world is returning to business, and the economic growth is stronger than ever.
This means that the living standards of people will rise. The global middle-class population is expected to hit 5.4 billion. As a result, the consumption patterns of this group will shift and increase energy consumption. They will buy vehicles and will want better healthcare and new-age technologies. The oil & gas sector will be the primary energy source and cater to more than 50% of the world's energy needs by 2040. The oil and gas industry bounced back in 2021. The Oil And Gas Global Market Report 2021 states that the market value of the oil gas sector will hit $7425.02 billion in 2025 at a CAGR of 6%.
Why Digital Transformation is Important in Oil and Gas Industry?
The business that digitalizes today will be the winner tomorrow. The energy sector was facing alarming challenges even before COVID-19. Energy companies were still figuring out a way to bring efficiency, sustainability, and profitability in their business models, and then the pandemic struck. As a result, prices collapsed severely, and the entire sector suffered. The only way to fight these systemic challenges is to accelerate digitalization to help save costs by spending on futuristic technologies. Gartner's survey suggests that AI/ML are quickly gaining acceptance in the oil and gas industry. The survey shows that the oil and gas CIOs think that Artificial Intelligence, Machine Learning, Big Data, and the Internet of Things are the top game-changing technologies for energy companies.
Digital Transformation Strategy
Digitalizing Oil & Gas Industry
Technological advancements are not new to the oil and gas sector. Oil and gas companies have been using supercomputers to model reservoirs, pipeline and distribution automation, robotics for drilling operations, and 3-D imaging to find seismic disturbances.
The primary obstacle in the digital transformation of the oil and gas sector is not the technology but organizational shortcomings. The report narrowed down these challenges and gave solutions that included leveraging modern era technologies to transform the strategic framework of the entire industry. The oil and gas companies could not identify and focus on the business's priorities. The companies could not understand the dynamics and requirements of the markets and the customers. Also, they were unsure about the financial returns on digital investments. This made top executives reluctant to invest in big digital projects. This can be addressed via using the right technology.
Example: If AI, ML, Big Data analytics, cloud-based platforms can be used to interpret and understand seismic data and reservoir models, this would improve the accuracy of pre-drill estimates and thus give a better chance and understanding the nitty-gritty of the entire project before starting.
The World Economic Forum's White paper on "Digital Transformation Initiative Oil and Gas Industry" recommends investment in human capital and development programmes. Such programmes will promote new and digital thinking. A digitally equipped workforce will lay the foundation of transformation, thus essential for maximizing value capture.
Digital Transformation in Oil & Gas – Value Chain Needs
The Oil & Gas industry is enormous, thus dividing the operations into multiple value chains. The oil and gas industry companies are divided into three groups: Upstream, Downstream, and Midstream. Companies capable of large-scale handling can integrate all three or two industry streams. Such companies are "integrated." When the world is growing fast in terms of digital transformation, why should the Oil & Gas sector stay behind?
Here's a look at multiple chains of the Oil & Gas sector and what sort of digital transformation is needed to make each stream more efficient, safe, and cost-effective.
Upstream Oil and Gas
This is where the work begins. The Upstream Oil & Gas Industry is involved in all the steps till the extraction of resources. Oil and gas firms of all sizes in the Upstream chain are standing at a crucial time in the digital transformation history. This sector deals with exploring potential land sites through surveys led by geologists and geophysicists for resource production; the upstream companies can be involved in either of the steps or all the steps in this phase. Thus, they require greater capital efficiency to achieve their goal. Digitalization becomes pertinent as it will drive operational improvements, which will lead to better results with the same capital influx.
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
Executives throughout the industry have constantly been working to diversify their digital portfolios to get better returns of investments. Researchers in the industry have been able to find a digital portfolio of initiatives that dominates the industry. Specific processes in the upstream chain need better technologies with particular enhancements. Let us take exploration as an example:
Exploration: This part of the upstream industry has been a leader in data and digitization. For years, vendors and Producers of the Exploration & Production section software platform have been driving data and workflow integration. However, work can be done to improve the data interpretation and speed. The software vendors and researchers have been working on several new algorithms to speed up the processing of vast volumes of data. The integration of data can significantly improve the speed of seismic data processing which can improve decision-making for exploratory drilling and several other processes.
There is no denying that the wave of Digital transformation has hit the Upstream oil and gas companies. Some companies are ahead, while others are still evaluating a cost-effective and efficient way to expand their digital portfolio. A wealth of $1 trillion is awaiting for those companies who take the path of digital transformation.
Midstream Oil and Gas
The operations in the midstream section link the upstream and downstream sects. This section works on the transportation and storage of the produced resources from the wells to the refineries with the help of pipelines and gathering systems. The resources extracted by the upstream oil and gas sector are transported to the refineries (Downstream section) to be processed. The capital influx in this segment and its success is dependent on the success of the upstream oil and gas sector. Framing a digital strategy for the midstream sector majorly requires enhancements in transportation capacity and transportation infrastructure safety.
Case Study: Columbia Pipeline Group – Pioneering Intelligent Pipeline Technology
The Columbia Pipeline Group developed intelligent pipeline technology to transport natural gas through pipelines. The pipeline infrastructure faces threats of human intervention and natural calamities. Thus, it is vital to ensure the safety of the entire infrastructure. Columbia pipeline group's intelligent pipeline technology allows quick evaluation of threats and alerts the systems to respond. It helped pipeline operators to minimize the potential for unforeseen events. Columbia Pipeline Group has more than 15,000 miles of interstate pipelines. The tool provides Columbia to monitor pipeline threats, improve risk management and provide situational awareness.
Technological advancements in the midstream sector will help considerable operational gains. The high capital influx required during the pipeline construction phase can be moderately decreased by embracing digital solutions. The pipeline industry spends around $40 billion annually to expand and maintain its network of assets worldwide.
Estimates show that effective and efficient project execution through digital transformation can decrease this cost by over 20%. Technologies such as IoT Pipeline Monitoring could effectively monitor the world's 2.5 million kilometers of pipeline. The uptime of the channel could be significantly increased through AI and IoT-powered pipeline management systems.
Downstream Oil and Gas
Once the upstream sector explores and produces raw resources, the midstream sector transports the raw resources to the downstream industry. The end products are processed and sold to the end customers in the downstream sector. The closer a company in the oil and gas sector is to supply customers with the end products, the further downstream it is considered. The downstream oil and gas sector also markets the end products to the point of sale. Diesel, petrol, natural gas, gasoline, etc., come directly from downstream oil and gas companies.
Research shows the following benefits of digital transformation in the downstream oil and gas sector:
  • Reduction in the operating cost by 12 % to 20 %
  • Reduction in unplanned shut down by 15 % to 25 %
  • Improvement in refinery plants efficiency by 8 % to 12 %
  • Improvement in the workplace health, safety, security, and environment.
  • Improved workforce efficiency
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
To capture these benefits, the downstream companies need to understand the "why" and the "how" of the digital transformation framework. If the sector fails to understand these, they risk opting for the wrong digital transformation portfolio and waste time and money. Digitalization in the downstream oil and gas industry is less mature than in other sectors.
Improving business operations is necessary to successfully implement a digital transformation framework in the downstream oil and gas sector. Workforce productivity could be increased with better utilization of maintenance and technical resources. Basic digital support tools such as "digital twins" and AI-based simulations can benefit the sector by reducing maintenance, improving employee productivity, and reducing industry downtime.
Oil and Gas Digital Transformation Use Cases
Unprecedented events require unprecedented advancements. Since the pandemic struck, the oil and gas industry has struggled to get back on track. Technological advancements will be the key to keeping the ship on track, staying afloat, and stopping the oil from spilling. 104.1 mb/d is the expected increase in oil consumption worldwide by 2026, an increase of 4.4 mb/d from 2019.
The industry has advanced its digital portfolio and is leaping by greater bounds every year. The usage of AI, Ml, data analytics, cloud computing, and robotic automation has paved the way for the oil and gas digital transformation.
  1. Remote Maintenance
  2. Seismic Imaging
  3. Precision drilling
  4. Refinery corrosion reduction
  5. Demand-supply optimization
  6. Fleet management
  7. Logistics route optimization
  8. Robotic drilling
  9. Field safety
  10. Field productivity optimization
  11. Predictive maintenance
  12. Digital prototyping
  13. Pipeline monitoring
  14. Connected workers
  15. Emission modeling
Remote Maintenance
Leveraging smart techs such as AI, ML, Data Analytics, Cloud Computing, and IoT allows the physical maintenance teams to be less reactive. This also ensures the safety of workers by helping them move away from potentially hazardous workspaces. IoT deployment reduces the need for travel to offshore oil and gas production sites.
IoT connectivity has changed the game for the oil and gas industry by developing Low Power Wide Area Networks (LPWAN). An LPWAN satellite hybrid architecture monitors and manages the rig actively. Real-time tracking of the rig structures helps to predict any rig damage. Uninterrupted monitoring in all three streams ensures a safer work environment, lesser downtime, increased productivity, and decreased losses due to machinery failure.
Seismic Imaging
The upstream exploration and production industry requires 3D imaging and seismic surveying at the scale of the reservoir. Image processing is a time taking process. With the help of Artificial Intelligence, the time taken for processing the 3-D images was reduced significantly. To thoroughly analyze a potential drilling area, experts have to study and segment 3D images, also called seismic cubes. To conduct such a study, the time taken can be as long as more than a year. The data collected is vast, and its interpretation would take months. Research on the subject shows that the data interpretation using AI's pattern recognition techniques accelerated the process by 10-100.
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
Precision Drilling
Organizations are leveraging ML and AI to control their drilling equipment. The reinforcement learning method trains a machine based on simulations of drills being steered into the subsurface and historical drilling records. Once the machine learns to navigate the drill while into simulations, the machinery adapts to operating conditions. Other vital variables like temperature, pressure, etc., are fed to the reinforcement learning algorithm by the engineer using the sensor data from the seismic survey to make the simulations even better and help the machine adapt in real-time.
Refinery Corrosion Reduction
Among the most demanding challenges, the oil and gas industry faces, corrosion control and corrosion protection are at the top. Research shows that pipeline corrosion costs the oil and gas sector more than $US 7 billion annually. Corrosion is the second leading cause of oil and gas spills. The oil and gas industry needs to leverage digital technology to tackle the problem of corrosion. The Internet of Things is the solution to this problem. The real-time monitoring of the entire refinery through sensors sensitive to corrosion will help detect the fault at the right time, thus giving a head start to deal with the situation and prevent any unforeseen event that may result in pipe leakages.
Demand-Supply Optimization
The post-pandemic world is different. 2020 has been a climacteric year in demand and supply chain strategies. Certain digitalized parts of the chain could still make it through the pandemic, but the industry is reconsidering significant aspects. The demand-supply chain in the oil and gas industry involves multiple modes and levels.
From moving cumbersome equipment to oil rigs to delivering end products such as gasoline and liquified petroleum gas to consumers, the wave of digital transformation has been changing the dynamics by increasing operational efficiency. Leveraging blockchain for secure transactions and cloud computing for data centralization is leading to business growth.
Fleet Management
According to Mckinsey, delivery logistics holds around 15% of the total production gas in this sector. Using the right technology to automate fleet management systems can help in the timely delivery of drilling equipment, lesser carbon emission from the transportation network, and remotely track equipment/material after purchasing it. All these sums up to increase the productivity of the entire production chain, decrease losses by cutting down wastage of fuel, increase safety by real-time monitoring of equipment, and connecting scattered sections in an industry.
Logistics Route Optimization
The logistics in the oil and gas industry is a humongous task to handle. The transportation of produced resources can be cost-effective, leakproof, and safer by leveraging AI and IoT. AI can help coordinate the operations team with the warehouse to check the availability of crucial parts in the upstream sector. AI can help optimize shipping operations to help improve delivery time, thus rescuing overall costs. Companies in the oil and gas sector leveraging digital tech to manage logistics could see a 20% cost reduction in the delivery vehicle service and material cost by 2%.
Robotic Drilling
Drilling holds up to 30% of production costs. Technological advancements such as advanced analytics could increase drilling productivity and make the drilling rigs' productive time even more effective by enhancing the drilling speed. 40-70% of capital is spent on well planning and construction by an oil and gas company. Drilling and completion costs can see a reduction of up to 20% with the help of drones and autonomous robots.
Case Study: Robotic Drilling Systems developed a fully electric and robotic drill floor. They wanted to speed up the drilling operation and decrease human intervention to reduce error possibilities. Their studies over the entire model indicated savings of up to 40 rig days per year per rig. A full robotic system can help increase productivity, decrease costs, improve workplace safety and decrease human intervention.
Field Safety
Oil and gas companies have constantly been working to make the work environment safer. In recent years, personal safety in the oil and gas industry improved by 15% per year, while process safety improved by 7%. Nothing's more important than field safety in the O&G sector, as field technicians here deal with dangerous work environments. Leveraging Augmented Reality and Virtual Reality can help an organization efficiently relay necessary information in real-time, thus improving field safety.
A petrochemical company completed the VR assessment of about 700 employees in just three days and reviewed the results within two weeks. The VR assessment helped them understand every individual's performance. It also gave tailored training needs to help every individual understand the working conditions of the oilfield.
Asset Management in Oil & Gas Industry: The Complete Guide
Field Productivity Optimization
The Oil and gas sector is leveraging digital twin technology to optimize field productivity. The digital twin journey helps companies in five stages: Organize/execute, improve asset reliability, configuration management, operational insights optimization, and maintain $ visualize information.
After successfully implementing digital twin technology, an oil and gas company started production ahead of schedule and within the allocated budget. They also saw a 30% reduction in information search time, a 70% reduction in data exchange time, and a 25% improvement in document coordination efficiency.
IoT deployment in the upstream oil & gas industry resulted in reduced consumption and emissions produced throughout the process. With the help of IoT, the physical requirement of labor decreased drastically and thus optimized production efficiency by cutting down human intervention.
Predictive Maintenance in Oil and Gas
Predictive maintenance technology is used to cut losses resulting due to unplanned downtime. If the downtime lasts for just 3.65 days, the losses can increase to $5 million.
An offshore oil and gas company leveraged predictive maintenance technology and reduced its downtime by 20%. Also, lesser downtime helped them increase their production by more than 500,000 oil barrels yearly.
Example: Predictive maintenance solutions can help in Oil & Gas Pump Condition Monitoring. The solution looks for issues such as leakage. It keeps track of the variables of the gas pump in real-time. If the system detects a potential leak, it generates a report and immediately alerts the technician. The system's historical data clubbed with real-time data can help run simulations of possible failures and prepare the company for future maintenance activities.
Digital Prototyping
Case Study: Shell holds the deepest oil and gas drilling station globally, located in the Gulf of Mexico. Shell wanted to build a real-life buoy that featured 222 pieces of syntactic foam, and all needed to fit together in sequence. Using 3D printing to print a scaled-down plastic version, they understood design complexities and improvement possibilities. The 3D prototype helped Shell save $40 million by allowing the team to find design flaws early. Also, with the help of 3D printing, complex obsolete machine parts can be built, which would otherwise become a complex and time taking task.
Pipeline Monitoring
There are 2.5 million kilometers of hydrocarbon pipelines laid across the world. Transportation of oil and gas products becomes more effective and efficient with the help of these pipelines. However, natural calamities or human intervention can damage this network. Also, it is not possible to guard the entire network physically.
Thus, pipeline monitoring becomes essential. It helps to keep track of any leakages or hydraulic failures. The Internet of things is the solution to this problem. It has a feature that offers real-time pipeline monitoring to help detect any leaks in the network during the supply process. IoT clubbed with intelligent sensors, and other intelligent devices are put across the entire network of pipelines to help detect the exact location of the leak.
Connected Workers
"Connected workers" are employees equipped with digital wearables which help them entirely use the data generated by these devices. The World Economic Forum's White Paper on Oil and Gas Industry digital transformation suggests that by 2025, connected workers in the upstream and downstream operation could be up to 15% more productive than the non-connected workers. Schlumberger has already taken a step ahead. The company is using wearables based on Google Glass to improve the safety and productivity of its field employees. The solution is a part of a workflow management tool for oilfield workers. The glasses will help management optimize workflow by logging the time taken for each step as soon as it is completed. The glasses can help workers save time on routine tasks, such as completing checklists in the field.
Emission Modeling
The oil and gas sector affects the environment heavily due to the amount of hydrocarbons released into the air during the oil and gas extraction process. Since the carbon emissions due to drilling, extraction, and transportation are massive, the industry is tasked with reducing carbon emissions. For example, 1 million tons of methane gas are released into the environment by the oil and gas sector in the US. Digital advancements can help in this matter.
Leveraging Internet of Things powered technologies, it will become easier to foresee pipeline leaks and quickly send a team for its maintenance. Similarly, simulation of emissions can be run using AI/ML, and data can be used to understand the reasons behind the emission. Once the reason is known, a solution could be put in place.
How to Build Your Digital Transformation Strategy in the Oil & Gas Industry?
The pandemic struck when the oil and gas industry was adjusting to the growing competition due to the alternative energy sources sweeping the sector's market. With many companies fighting hard to stay afloat amid the competition, the pandemic decreased the demand for oil and gas drastically. This led the top leaders and executives of the industry to further the wave of digital transformation in the oil and gas sector.
Strategy&'s research shows how to advance an effective digital transformation strategy. According to the study, companies in the oil and gas sector need to take a holistic approach to digital transformation. A holistic approach means covering the entire industry and not just certain parts. Digital transformation strategy must be such that it integrates all the operations in the industry.
From production sites and transportation to refineries for the end-product, every aspect of the industry must be considered to transform the industry's digital outlook holistically. The survey found that the top executives in the oil and gas sector have opted for technologies that combine data and analysis.
Against the backdrop of streamlining operations, maintenance, and asset allocation, the main motive is to enhance operational efficiency. These solutions improve the overall uptime and performance of assets, also improving the life expectancy of equipment. Asset management strategy insulates industries from market volatility by optimizing operations and reflecting long-term profitability.
The survey listed the top five technologies chosen by executives to create a diversified yet correct digital portfolio for their companies.
  • Manufacturing execution system: It creates a link between individual pieces of equipment and the company's resource planning system to develop operational coordination.
  • Cloud Computing: 79% of CIOs in the oil and gas sector want their company's IT culture transformed. This result shows the path for adoption of Cloud Computing is clear. For the oil and gas sector to truly unlock its digital capabilities, a central and easily accessible repository of data is needed. Cloud computing is the first step towards streamlining the operation in all the industry streams.
  • Internet of Things: It will ensure seamless remote monitoring and efficient equipment integration. It will increase productivity, ensure workplace safety, and cut losses due to unforeseen leakages.
  • Machine Learning: ML ensures the accuracy of data being studied and patterns being analyzed. It will help build a robust environment for predictive maintenance and thus reduce the downtime of various sections in the industry.
  • Energy analytics: Usage of AI to study the data from the sensors and support energy optimization. Taking the right measure would decrease costs across company operations.
Today, the oil and gas sector's efficiency and sustainability challenges can be tackled by correctly implementing the above technologies. Thus, building the right digital portfolio is by understanding the true need of your company.
The Upside of Digitalizing Oil & Gas Value Chain
Digital and analytics-driven change can enhance the productivity of the entire oil and gas sector. The digital advancements have streamlined the operations in all three industry streams, making it ready to reap the benefits of the wave of digital transformation. The digital transformation has made the oil and gas sector safer to work in, increased productivity by digitally equipping the workforce, and increased revenue by decreasing the downtime and optimizing the operations in the industry. There are many upsides of digitalizing the oil and gas value chain, bringing out the most effective ones:
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
Improved HSSE
Health, safety, security, and environmental performance can be improved.
Advanced analytics can help identify risky behaviors based on a study of safety records built over many years. The oil and gas companies will predict safety hazards in the near future. Similarly, robotic process automation can help minimize human needs at dangerous places to work in, thus ensuring the safety of workplaces. Augmented reality and Virtual Reality can help assess unforeseen situations entirely and develop a safer work environment for workers. Also, AI & ML can be leveraged to run simulations of a hazardous work environment to help the workforce understand the entire workplace virtually
Improved Subsurface Planning
Data analytical techniques can help in better subsurface planning. If advanced data analytics supports new digital technologies and more connected data platforms will help improve Well design, development planning, and many other things. This approach also helps in lowering the cost of production and increasing productivity. Also, with the help of artificial intelligence, practical seismic imaging can be done in less time. Pinpointing the location of resource sites decreases the cost incurred on drilling as the sector won't have to drill blindly.
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
Simplified Operations and Increased Operational Accuracy
Automated work processes can simplify operations and increase operations accuracy in upstream, midstream, and downstream oil and gas sectors. RPA, as of today, is well equipped to take up 80% of the tasks or even more. A digital-twin-design tool is being developed to eradicate the need for manual costing. Similarly, the same effects can be seen in predictive maintenance, pipeline monitoring, well design & construction, and remote monitoring. With the evolving digital era, the competition for maximum speed and accuracy is on.
Also, historical data can run automated simulations to help understand every aspect of a scenario and help leaders/executives make calculated decisions. Ultimately, automation and robotics will challenge the current status quo of the work performed and its management.
Secure Transactions ensured by Blockchain
Leveraging Blockchain technology and smart contracting will automate transactions and make the Oil and Gas global value chain more transparent. This will increase the trustworthiness of the system. Also, enabling blockchain tech will allow direct transactions between the value chain and the concerned parties, thus lowering the costs for all parties.
Due to the huge size of the oil and gas industry, the cash flow is sourced and moved between thousands of buyers and suppliers, increasing the chances of corruption. Smart contracts based on blockchain tech have the potential to end this. Also, cross-border transactions are common in the globalized oil and gas industry, and blockchain transactions can be used to process every such transaction securely.
Increased Revenue
The value derived from the digital transformation of the oil and gas sector is vast and waiting to be realized. Key findings from the world economic forum research suggest the revenue growth of $2.5 trillion due to digitalization in the oil and gas sector by 2025. Benefits of $640 billion worth can be created for the wider section of society by successfully digitalizing the oil industry. The wider section of the society includes customers, productivity improvements, reducing water usage, and lowering emissions. Several environmental benefits such as reducing CO2 -equivalent (CO2 e) emissions and avoiding oil spills can also be realized by digitalizing the entire value chain of the oil and gas industry.
Pointers
Upstream
Midstream
Downstream
Business Need
Improved data interpretation and speed of 3d Seismic imaging leveraging AI, ML, and Advanced Data Analytics.
Framing a digital strategy for the midstream sector majorly requires enhancements in transportation capacity and transportation infrastructure safety.
Increased asset utilization to cut down idle time and increase manufacturing efficiency. The efficiency of multi-plant sites needs to be increased through integrated value chains.
Use Cases
Seismic Image and Surveying
Columbia Pipeline Group’s Intelligent Pipeline Technology
Entering a new digital era.
Technology
Upstream
Midstream
Downstream
Artificial Intelligence
Seismic Imaging and Surveying of potential production land sites
AI Led Inventory Management
Extraction Pump Monitoring
Blockchain
Digitalization of Crude oil Transactions
Supply Chain Management
Multi-Product Supply Chain Tracking
IoT
Remote Monitoring of oil rigs.
Oil and Gas Pipeline Monitoring System
Corrosion Monitoring & Detection
Intelligent Automation
Rig and Well Drilling Automation
Logistics and Fleet Management
Procure to Pay Automation
Digital Twin
Drilling Process Planning Using Digital Twin
Connected Workers
Real-Time Detection of corrosion along with surveillance data
3D printing
Printing complex obsolete machine parts
Digital Prototyping of pipeline network to study and work on increasing its efficiency
Digital Prototyping of refinery system to understand complex machinery and address design faults
Immersive technologies
Predictive Maintenance
Safer Transportation through pipelines
Troubleshooting refining machinery
Cloud computing
Remote Maintenance
Connected Operations
Focused utilization of resources through data analytics
Robotics
Robotic Drilling
Automation inventory management
Refining Automation
Machine learning
Precision Drilling
Vessel Maintenance and Monitoring
Refinery and plant inspection
The Downside of Not Digitalizing Oil & Gas Value Chain
Unsafe Work Environment
An increase in Unsafe work conditions leads to serious fatalities and thus increased downtime of the industry. If the workplace's health, safety, security, and environment are not following standards set by the industry, no one would want to put their lives in danger. Also, since the oil and gas industry deals with hazardous elements, the constant health concern would negatively affect the workforce productivity resulting in overall revenue reduction.
The industry is already under immense pressure to tackle the increasing carbon emissions. If the industry doesn't adopt digital measles to cut down carbon emissions, regulatory pressures will bury those companies not following the environmental norms and regulations.
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
Difficulty in Surviving Growing Competition
The pandemic struck when the industry was already troubled by the competition it got from other energy resources in the market. The dramatically decreased demand bounced back but not to the pre-pandemic levels. Also, researchers suggest that this might be a permanent shift as industries have shifted and adjusted to employees working from home and people traveling less. Amid all this, if the industry needs to survive, it will have to move towards a digital transformation roadmap to increase production capacity by leveraging Cloud computing, AI, ML, Big Data, etc.
If it does not follow a strategic roadmap to diversify its digital portfolio, it might not ever be able to revive itself. Also, due to alternative and greener energy resources, the competition in the market would take over quickly, making it more difficult for the industry to bounce back.
Increased Capital Expenditure
An oil and gas company not using digital technologies can be spending 20% more capital than a company that took the opportunity and diversified its digital portfolio. Research by McKinsey & Co came up with this conclusion. So, now you see that not shifting to digital technologies to optimize operations and increase revenue may result in 20% more capital expenditure. The research also shows that the operations expenditure might increase by 3-5% if digital technologies are not adopted. Thus, the oil and gas sector need to go digital to survive the post-pandemic energy sector.
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
Future of Oil and Gas Industry
Digital Oil Field
The oil and gas sector has faced unforeseen challenges to unprecedented situations today. Before the pandemic struck, the oil and gas industry weren’t very secure. It has been facing formidable challenges in terms of regulatory pressure to tackle increasing carbon emissions and declining fuel prices due to the rise of alternative forms of energy. Once the pandemic struck, the living patterns of the world changed, and the price of fuel collapsed. The collapse led the industry to embrace the wave of digital transformation to stay afloat.
Digital Transformation in Oil & Gas Industry: The Ultimate Guide
The effort to digitalize the sector should include:
  • Focusing on business priorities by correctly utilizing data integration and analytics tech.
  • Investing in human development and driving a culture that supports innovation and accelerates growth.
  • Reforming the industry's digital data infrastructure by utilizing cloud computing the right way.
  • Enforce an agile culture that accepts new-age thinking and promotes innovative design and solutions.
  • Promote collaborative culture between different streams within the industry.
Also, the change in digital infrastructure should begin from the top. The top executive must accept digital change and further the digital transformation agenda to realize the true potential of the oil and gas industry.
 
 
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