Many industries have exploited the exciting opportunities to create new products and markets, but the oil and gas sector has lagged behind and has resulted in the oil and gas industry failing to exploit the potential of new technologies
The oil and gas industry is now at a pivotal point in its evolution and we are now on the cusp of a transformation. The rise of new technologies, coupled with the ongoing global push for a reduced environmental impact, is altering the industry. Organisations across the sector face growing pressure to streamline their operations in order to improve overall efficiency and unlock additional barrels of oil to maximize revenue.
Despite these new hurdles, the oil and gas sector has been generally very slow compared to other industries when it comes to leveraging the potential of new technologies to innovate and optimize the performance of its systems. While companies have tackled the lower oil price with positive actions to reduce environmental impact, lower operating costs and increase efficiency, these gains must now be made sustainable, Therefore, we must truly transform the way we work.
In light of these challenges, it is now vital that players, both new and old, fully embrace the potential of new solutions to kickstart the sector’s technological revolution and achieve the higher level of stability it desperately needs. Research conducted by McKinsey & Company found that the effective use of digital technologies across the industry could lower capital expenditures by up to 20%, reduce operating costs in upstream by 3 to 5% and by about half that that in downstream, demonstrating the clear cost-savings opportunities and efficiency to be had.
Investment in today’s visionaries for tomorrow
With new technologies emerging every day, many with the same promise of reducing costs and optimizing a business’ performance, ways to achieve technological advancement across the industry are now in abundance and oil executives must consider how best to accelerate this innovation to ensure its continued success on a global scale.
At the core of most of today’s technological innovation is either a desire or need to solve a particular problem. This way of thinking is often demonstrated best by those with a different vision of the industry’s future, who are able to identify the areas needing improvement and develop new solutions accordingly. The current oil and gas sector is no exception, and we are now seeing a rapid increase in the number of emerging oil and gas startups looking to move the industry away from its traditional practices and towards a new and more efficient way of operating.
In an industry where innovation is now the key to sustainability, the ‘if it isn’t broke, don’t fix it’ approach to development will no longer suffice. Larger companies must refocus much of their investment on the smaller, more ambitious technology developers to ensure revolutionary solutions enter the oil and gas market faster and enable them to prepare their existing solutions for success within a new era of innovation.
Accelerating changes to how we work and embracing new technologies will, therefore, be at the heart of the industry’s transformation; improving productivity, increasing efficiency and creating well-paid jobs. That said, it still vital that companies continue to balance this level of innovation with their existing knowledge of best practice for oil and gas organizations, to ensure a consistent position within the industry of both today and tomorrow.
One particular concept we have seen emerge across the oil and gas industry within the last decade is the digital oilfield, which refers to the real-time automation of operations through a combination of business process management systems and complex information technology, to ensure the simple management and tracking of the data. This has presented oil and gas companies with one way to streamline systems and achieve technology innovation, however, a greater investment in startups could see many other opportunities come to fruition. This means we must have a technology vision for the industry and a future where remote operations and automation are the norm.
Embracing a collaborative approach
One of the biggest challenges for oil and gas companies when achieving this degree of innovation on an industry-wide scale is finding the best way to integrate ground-breaking, new technologies. Embracing a more collaborative amongst new entrants and existing players is essential for streamlining the oil and gas landscape, reducing costs and overcoming the current lack of widespread technological development across the sector.
Partnered with a clear strategy for implementing this innovation across their business model, a greater convergence between the old and new will ensure companies are taking the best solutions from across the industry, not only to achieve innovation but to also give them a greater competitive edge within an increasingly in-demand and saturated market. This will require the industry, technology providers, government, regulators all working in partnership to deliver the technology transformation.
This kind of approach can provide huge benefits for all involved. For startups looking to enter the space, it can help them to connect with major investors and bring their solutions to market quickly and successfully as a result of increased investment, facilities, and resources. For the larger companies looking to invest in technology-driven solutions, this can help to change their outlook on their existing infrastructure and help to fill any technology gaps with revolutionary companies and products.
Oil and gas technology has not yet been at the forefront of the global innovation agenda, yet with demand for these services increasing every day, it is becoming increasingly ranked as a priority for change in many countries worldwide. It is now time to fully kick-start the industry’s technological revolution and the key to achieving this lies within the hundreds of emerging solutions being created by developers striving for sustainability and efficiency.