Harnessing the power of Digitization in Oil and Gas

Oil and Gas is one of the most highly regarded and sought after industries in the world. According to Ektinteractive.com, “The first oil had actually been discovered by the Chinese in 600 B.C. and transported in pipelines made from bamboo. However, Colonel Drake’s heralded discovery of oil in Pennsylvania in 1859 and the Spindletop discovery in Texas in 1901 set the stage for the new oil economy.”

 

Since then, the oil and gas industry has seen significant technological transformations to achieve the enormous feat in the modern world. Both upstream and downstream companies have harnessed the power of technology to deliver the energy to the consumers.

 

Today, with the rising anxiety among environmentalists and the scientific community, it is set to change the face unlike ever before. The sustainability drive is on its way to changing how it has transformed the world. Today, it’s not about the oil or the gas but about the energy it provides to light up the world. But with such transformations come modern challenges to cater to the world’s needs more effectively and constructively. The need for energy is at its peak. Hence, efficient management of natural resources and their utilization lies at the core of organizations.

 

“Digital” is what the world looks keenly at. So is the energy industry. Many CEOs correctly see digitization as crucial for achieving their desired outcomes. In the last ten years, advancements in cloud computing, data analytics, artificial intelligence (AI), and the Internet of Things (IoT) have enabled businesses across various industries to optimize complex processes, identify hidden sources of loss and inefficiency, and respond more effectively to volatility, shocks, and disruptions.

 

While consulting firms like Deloitte in its article Turning downstream disruption into competitive advantage considers “Making a commitment to digital transformation is not just doing “random acts of digital.” It is adopting a digital mindset, launching new digitally driven business models, and looking at all touchpoints and activities from the perspective of today’s digitally empowered customer.

 

True digital transformation in oil and gas also calls for establishing and nurturing a customer-centric culture—one in which people are recognized and rewarded for delighting customers by providing an easy, seamless, and satisfying digital experience.”; firms like McKinsey finds it disappointing to see minimal adoption of digitization stating “Only 30% of oil and gas companies have successfully scaled digital manufacturing. But a few digital transformation ideas can help oil and gas CEOs achieve real impact on production KPIs.” in Harnessing volatility: Technology transformation in oil and gas.

 

The question is, what is the best way to handle this in order to harness the utility of digital transformation? The actions listed below may help us arrive at a likely solution for technology transformation and digitization in the modern oil and gas industry:
Identifying the digital maturity of a firm and its intention to change

 

• Illustrating the value creation for the forms with the adoption of new digital technologies
• Identification of the impact of bottom-line digital transformation
• Implementation of large-scale cultural transformation and change management program to foster new skills and behaviours among the stake holders.
• Standardizing technologies and digital platforms for integrating all the stakeholders of the business
• Adoption through testing and digital pilots
• Implementation across the companies Recent advancements in digitization offer a substantial opportunity to fundamentally transform the management and operations of oil and gas facilities.

 

However, many management teams find the vast array of new technologies, their rapid development, and the complexity of implementing them across large enterprises overwhelming. To navigate these options effectively, companies should prioritize a business-first approach to technology instead of a technology-first approach to business. Finally, one should remember that it’s always the values and their impact on the people rather than the mere product or service that is offered.