TECH FOCUS
29
oilandgasmiddleeast.com AUGUST 2019
Not only does a digital transition improve
operational activities, but it can also
minimise human involvement in high-risk
activities across the fi eld, integrate supplier
and operator ecosystems to deliver better
results more economically, and reprioritise
activities by using intelligent systems that
use real-time, dynamic results.
Digital evolution
The industry needs to evolve from
a traditional mindset to adopt a more
innovative attitude, and fast. The structure
of the industry is being challenged by internal
and external forces, including: pressure on
revenues and costs from price volatility,
an accelerated energy transition due to
demand for lower carbon alternatives that
is supported by governments globally, and
increased complexity in technology and
global trade fl ows. In light of these signifi cant
structural changes, there is now a need for
pervasive visibility and insights on cost and
production, agile fi eld development, and an
integrated supplier and operator ecosystem
to drive returns.
Oil & gas companies thus need to
transition from the traditional, conventional
ways of operating towards innovation and
digitalisation. Yet the sector seems to be
biding its time. So far, the oil & gas sector
has been conservative in its adoption of
new technologies. At this pace, upstream
companies may take decades to realise
the true benefi ts of digital technology such
as reduced costs, improved margins, and
millions of dollar revenue, further exposing
oil & gas organisations to external pressures
hitting the industry.
Meanwhile, new, disruptive players are
rapidly entering and reshaping the industry
through their use of digital technologies.
Google has invested approximately $6bn
in third-party energy and mobility-related
technologies and BYD grew from a $350,000
start-up to $8.5bn revenue generating
company over 10 years by playing in the
energy and mobility business. Depending
on what your vantage point is, these new
entrants can be seen as either a threat or an
opportunity for partnership and collaboration
within the extended ecosystem.
Are we there yet?
Some oil & gas companies have already
jumped on the train of digital evolution.
ENI has been employing predictive analysis
systems that enable the optimisation of
logistics, maintenance and well operating
costs and advanced algorithms that reduce
asset downtime and increase production
rates. Shell has been employing artifi cial
intelligence to predict when maintenance
is needed on compressors, valves and other
equipment, helping steer drill bits through
shale deposits and leveraging real-time data
to help geologists chart a more accurate
course for the well, boost productivity and
reduce drill wear-and-tear. Saudi Aramco
has also been employing digital surface
and subsurface technologies to optimise
fi eld development and operations and has
also developed the Reservoir Engineering
Integrated Environment (REOnline) tool,
designed to help engineers better plan,
develop, and manage fi elds and reservoirs.
Operators are at diff erent points on the
digital organisation spectrum. But while some
have explored the benefi ts of digitalisation- by leveraging traditional technologies
to automate existing capabilities – they
have done so with little change to the
organisation. Other operators have moved
towards business, operating and customer
models that are optimised for digital and are
profoundly diff erent from prior siloed and
unsynchronised models.
But when it comes to transforming
towards digital intelligence in the oil & gas
industry, point solutions don’t work. A
technical solution that only focuses on digital
technologies and agile methodologies whilst
ignoring the people factor, or vice versa,
cannot lead to a quick adaptation of, and
capitalisation on, the gains of digitalisation.
Revolution, not evolution
The oil & gas industry needs to
fundamentally re-imagine and change how
operations are conducted and managed
across the entire value chain and do so
without constraint.
As a starting point, organisations within
the industry need to defi ne a specifi c strategy
for digital transformation, allowing for an
integrated view of where digital delivers value
across the business, rather than placing
emphasis on the implementation of tactical
digital solutions for incremental gain.
With effi ciency still the focus, oil & gas
companies should be bold and strive to
create a culture of experimentation driven by
“fail fast and learn faster”. A digital strategy
based on strong digital leadership, combined
with skilled and capable resources, and an
eff ective operating model, can then allow
organisations to harness the full capabilities
of digital and generate signifi cant value for all
stakeholders involved.“THE INDUSTRY
NEEDS TO EVOLVE
FROM A TRADITIONAL
MINDSET TO ADOPT
A MORE INNOVATIVE
ATTITUDE, AND FAST.”Bart Cornelissen is managing partner at Monitor Deloitte and heads the energy, resources and industrials division at Deloitte Middle East