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Digitalisation: A new era for oil and gas

by Guest on Oct 17, 2017

Investments in digital technologies: The percentages in the bars are the proportion of oil and gas companies surveyed. (Source: Accenture, The 2016 Upstream Oil and Gas Digital Trends Survey)
Investments in digital technologies: The percentages in the bars are the proportion of oil and gas companies surveyed. (Source: Accenture, The 2016 Upstream Oil and Gas Digital Trends Survey)

The Digital Transformation Initiative (DTI) is a project launched by the World Economic Forum in 2015 as part of the System Initiative on Shaping the Future of Digital Economy and Society.

It is an ongoing initiative that serves as the focal point at the Forum for new opportunities and themes arising from latest developments in the digitalisation of business and society. It supports the Forum’s broader activity around the theme of the Fourth Industrial Revolution.

The following is the Executive Summary of a White Paper – Digital Transformation Initiative:  Oil and Gas Industry – published by the World Economic Forum in collaboration with Accenture:

The oil and gas industry is no stranger to big data, technology and digital innovation. As early as the 1980s, oil and gas companies began to adopt digital technologies, with a focus on better understanding a reservoir’s resource and production potential, improving health and safety, and boosting marginal operational efficiencies at oil fields around the world.

A wave of digital oilfield initiatives swept through most of the industry in the 1990s and the early part of this century. However, for most of this decade, the industry has not taken advantage of the opportunities that derive from using data and technology in a meaningful way. A single drilling rig at an oilfield, for example, can generate terabytes of data every day, but only a small fraction of it is used for decision-making.

As other capital-intensive industries (such as aviation and automotive) have revolutionised their business and operating models through a holistic application of digital technologies, the opportunity for the oil and gas industry to leverage the transformational impact of digitalisation has become more evident.

The industry is now beginning to pay heed. The growing consensus is that the oil and gas sector is on the cusp of a new era. A second wave of business and digital technologies looks set to reshape it, propelled by a series of macroeconomic, industry and technology trends:

Disruption in supply, demand and commodity prices: The industry is witnessing one of its worst downturns, driven by a supply-side disruption. At one point, commodity prices had fallen by more than 70% compared with June 2014 levels. Just as some early signs of recovery have emerged, another disruption may be on the horizon, driven, on this occasion, by peak demand for oil.1, 2 This disruption will maintain pressure on hydrocarbon prices and prompt energy companies to focus more intensely on reforming their portfolio and taking a greater role in the energy transition.

Rapid advances in technology: The growing sophistication of platforms, as well as mobility, surveillance, connectivity and storage technologies, coupled with the ability to process and analyse data rapidly, enhance agility and support real-time decision-making and execution.

Changing consumer needs and expectations: Across industries, consumers expect increased engagement, personalisation and speed. They are also paying more attention to environmental issues, which influences their energy choices; seeking transparency from companies in different areas (e.g., emissions or hydrocarbon sources); and growing in technical sophistication by being connected to multiple technology and digital platforms.

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