The future of IT in Oil & Gas industry to achieve business objectives

The Oil and Gas industry gears up for a digital future. Now, that the role of IT in achieving business objectives with agility is being acknowledged the world over.

The increasing demand for energy in developing countries further compels CIOs to explore new ways to grow and remain competitive.  

Gartner confirms 85% of CIOs in this sector have taken on the responsibility of creating a change-enabling technical platform while 79% are taking the necessary steps to build a change leadership culture in IT within their organizations.  

As per the Gartner 2021 CIO survey, 87% of CIOs are expecting their digital programs to increase or remain the same in 2021 and 50% of oil and gas companies are planning to invest more in analytics, AI/machine learning (ML), automation, IoT, and cloud. 

As Simon Cushing, Senior Director Analyst, Gartner explains, "The unique stresses of 2020 have elevated three business imperatives for 2021: optimizing business performance, creating new capabilities, and strengthening technology foundations." 

So how is IT the perfect enabler for speed and growth in 2021? Let’s find out. 

The digital landscape of Oil and Gas 

Oil and gas has been one of the hardest-hit sectors due to unprecedented lockdowns and the resulting work-from-home culture globally.

The focus is therefore clearly on enabling efficiencies and maximizing gains.

Technology will be required across processes to enable quicker decisions, higher profitability, precise forecasting, and waste reduction.  

Those who have understood the importance of the role of IT and digital adoption have already integrated enterprise SaaS, advanced analytics, and automation across production environments to modernize legacy tech stacks. 

Read More:- How Digital Transformation implement Payments in Oil & Gas industry

The biggest challenge however with regards to digital technology adoption is the ability to change quickly as confirmed by 63% of respondents in a 2020 survey while 57% of executives believing that integrating technologies from different eras is a big challenge. 

What we need is context-driven information in real time without the complexities of using digital technologies.

There is a lot of resistance to change and those who are willing lack the skills to leverage new tools to elevate the user experience.

Then, of course, there is the impact of Industry 4.0 wherein transformative technologies such as cloud computing, the Internet of Things (IoT), big data, and augmented reality are making a big difference.

These technologies are helping market players address data silos in the energy market.  

According to research, the digitalization priorities for the Oil and Gas industry in 2020 were as follows: 

• Cloud-based applications (47 percent) 
• Data platforms (44 percent) 
• Artificial intelligence (27 percent) 

No doubt there are barriers to technology implementation.

While PwC iterates insufficient digital training (74%) limited knowledge sharing (77%), and lack of digital talent (72%) in its report, KPMG points out the top areas organizations are keen on addressing with the help of IT solutions.

These include increasing operational efficiencies (75%), improving business processes (70%), saving costs (64%), delivering consistent IT performance (64%), and improving efficiencies through automation (58%).  

Clearly, oil and gas organizations will have to do all that is necessary to upskill the workforce, foster a digital work culture, and accept the role of technology in being responsive to the needs of employees as well as customers.    

Technologies to consider 

To accelerate digital transformation, organizations are going to need a very focused approach at every stage in the back office as well as plants and production sites.

Advanced analytics will ensure that the necessary data is made available in real time to dramatically improve efficiency and sustainability.

Here are a few technologies you must consider for your growth and sustainability. 

1. Big data and analytics
   
2. Internet of Things (IoT) 
   
3. Cloud computing 
   
4. AI and machine learning 
   
5. Robotics and drone technology 
   
6. Blockchain technology
   
7. Augmented reality (AR) and virtual reality (VR) 

Big data and analytics  

For the oil and gas industry, drilling projects are massive undertakings that require huge capital and solid equipment.

Even the smallest error can be extremely damaging. Big data and analytics insulate them from errors and enable those associate with the projects make the right decisions based on real-time data.  

With a vast volume of all kinds of data including production data and that acquired through seismic surveys, organizations are able to make the necessary improvements required to enhance the safety and efficiency of diverse tasks.

Companies are also leveraging energy analytics to monitor energy usage and control costs pertaining to company operations. 

Internet of Things (IoT) 

With Internet connectivity extended via several hardware devices, oil and gas companies are able to communicate and interact through sensors.

Real-time data on pipes, storage, transportation, and equipment helps monitor safety and productivity.  

Sensors also enable efficient equipment integration and remote performance monitoring which are an absolute must to stay efficient and competitive.

Companies are running edge computing workloads via connected devices to increase operational efficiency. 

Cloud computing  

Data is the driving force for all industries to manage complex tasks and value chains. It plays a pivotal role in oil and gas too that generates large volumes of data.

Cloud computing improves the quality of data and makes it accessible and available.

Cloud-based platforms are being used to increase collaboration and share detailed planning and forecasting along with inventory measurement processes with oil and gas field workers. 

AI and machine learning 

Technology is being used to complete important tasks and operate machines and devices.

Companies are now more dependent than ever on responsive technology to complete tasks, solve problems, and interact with customers.

AI is now helping the oil and gas industry survey facilities, monitor machines, enhance safety, and make forecasts.

The global AI in this sector is predicted to increase from $ 2,040.89 million in 2019 to $ 3,349.89 million by 2026, at a CAGR of 10.14% for the forecast period. 

Machine learning is being leveraged to analyze data to identify operational patterns, spot shortcomings, and enable predictive maintenance.

AI-enabled FAQs, manuals, and training materials that can be easily accessed via smartphone devices help customers without necessitating them to call the helpline for every little thing they need. 

Robotics and drone technology 

Deployment of cameras, drones, and subsea robotics significantly reduce reliance on human effort to conduct surveillance and inspection of remote assets.  

They provide the operational efficiencies required on the field. Drone technology allows oil and gas companies to hover over the field area to monitor facilities, carry small objects, and even click pictures.  

Blockchain technology 

With the help of blockchain, crude oil transactions can be digitized to enhance security, improve transparency, and optimize efficiency.

Blockchain is helping companies improve trust among all parties by storing all the transactional data on a blockchain network to be accessed in real time.

It is also ensuring big savings by helping companies reduce operational costs.  

Explains Ravindra Puranik, Oil & Gas Analyst at GlobalData, “Blockchain as a service (BaaS) holds the key to driving mainstream adoption of blockchain technology.

It allows companies to experiment with blockchain applications without being concerned about developing expensive in-house resources.

Integrating blockchain into core technologies facilitates ease of use, making it a more attractive option for digital transformation efforts.” 

Augmented reality (AR) and virtual reality (VR) 

AR and VR are being extensively used by the oil and gas industry for training, maintenance, and 3D virtual planning purposes.

AR headsets that can be easily clipped onto hard hats are a boon in places where hands-free instructions are required for the technician to conduct a thorough inspection of systems.  

AR animations help boost efficiency and accuracy, provide checklists and sensor data, and visually demonstrate the components that need repair, replacement, or maintenance.

AR and VR are helping customers visualize the design or blueprints to ensure if they are the best fit for their job sites through a display of virtual overlays.

AR and VR-enabled self-service tutorials are helping customers find what they need with minimal human intervention.  

Summing up 

Digital adoption is no longer a choice but an absolute necessity for the oil and gas industry.

It's time you build more efficient operations and deliver value to your customers and stakeholders through sustainable digital strategies.

All you need is an open mindset and a digital partner to help you master digital transformation and unlock new opportunities with modern technologies.