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Modern innovation helps the oil industry keep up with the competition by Lower the costs, addressing security issues and integrating better data analysis to continually improve existing systems. As we face increased global uncertainty over the demand for oil as well as its price, digitization and the introduction of new technologies will help the industry meet these challenges head-on. Supply chain costs have historically been a major cost in the oil and gas industry, a cost that has steadily increased in recent years. Due to the complexity of the system, reliance on third parties and lack of digitization, significant inefficiencies in industry supply chains lead to increased costs and delays in projects. A 2017 Weforum report said the potential value of the oil and gas industry’s digital transformation could reach $ 2.5 trillion, if operating constraints are relaxed to accommodate modern technologies.
In addition, the digitization of industry could have a positive impact beyond financial savings and income. New technologies could lead to a significant reduction in CO2 emissions. We can expect to see an estimated equivalent reduction of 1,300 tonnes of CO2, 800 million gallons of water and a decrease of 230,000 barrels of oil lost in oil spills.
New technologies are rapidly introduced by the main players in the industry. For example, digital twins provide interactive 3D simulations that engineers can use to maneuver oil rigs and factories remotely when they can’t access the rig.
Digital twins, while not a recent innovation, are proving increasingly useful during the current global pandemic. Thanks to advances in computer technology, they are now used by the traditional oil industry, allowing engineers to work remotely. They provide a much needed response to restrictions such as social distancing, Mitch Flegg, CEO of Serica Energy Plc. Bloomberg said.
In addition, we have seen great advances in the use of data analytics. In an EY Global Oil & Gas survey conducted earlier this year, 85% of respondents said they already use some form of advanced analysis. Analytics has played a major role in digitization Of the industry.
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EY analyzed 500 oil and gas projects of $ 1 billion or more and found that 60% of projects experienced delays and 38% were over budget. They found that many of these delays were due to poor data analysis systems. Some of the main failures were the lack of centralized and reliable data, inefficient processes, and the need to manually transfer data. Delays in reporting and poor communication times also contributed to these failures.
Large companies recognize that the way to tackle many of these challenges is through greater digital innovation. In fact, 80% of survey respondents pointed out their intention to invest at least a moderate amount in technology to keep up with technology trends in the industry. Additionally, 58% said there was a rush to invest in these types of technologies in response to the global pandemic.
Although Covid-19 has hampered the oil industry in several ways, reducing demand and production in several parts of the world, it has had certain benefits for the industry. For example, the push for further digitization and technological innovation is stronger than ever. Businesses are rushing to find alternative work options for drilling personnel due to unforeseeable pandemic restrictions. Remote monitoring systems such as drones are used to inspect pipelines and ensure they are in top operating condition. And economic concerns related to the recession seen earlier this year are being addressed through greater efficiency and greater automation.
By Felicity Bradstock for OilUSD
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