The oil and gas industry has always been at the cutting edge of technological innovation. Digitization is Fueling Growth in the Oil and Gas Business Digitization is the buzzword in the oil and gas sector as it’s seen as transformative for the future of the industry. The company has committed an investment of 1 billion to 2 billion Norwegian kroner ($128 million to $257 million) in digital and emerging technologies, to be executed through the center of excellence. Digitization of Oil and Gas Markets in 2019 - Understanding the Impact of IIoT-based Monitoring - ResearchAndMarkets.com December 18, 2019 08:39 AM Eastern Standard Time With a computing speed of 18.6 petaflops (a single petaflop computer can process a quadrillion calculations per second), this technology saves time and money by allowing analysis of exploration prospects to be done in weeks instead of months. Buy our reports to address business challenges and make better commercial decisions with objective insights, analyses and data. This unconventional producer found US $1 billion of savings in their third party spend. In the past, capabilities may have focused on technical expertise to deliver excellence in engineering projects. US $75 billion each year. Drilling, performance monitoring, and production optimization could become highly automated. The company is encouraging its employees to develop apps stored on common platforms to improve workflow processes. The prize of going digital is clear, but for most companies, getting there is not easy. Learn more. As a result of these activities, PowerAdvocate’s customer found US $1 billion of savings in their third-party spend. But how close is the industry to achieving this? The upstream oil and gas sector is well behind other industries when it comes to being digitally enabled. Some oil and gas companies still view digital technology as something peripheral to the core business. Decision making could be transformed, as the use of augmented reality and digital twins would underpin the simulation of “first oil” — the initial amount of oil that emerges from a field that’s being commercially drilled — before final investment decisions are made. Why are we nonetheless seeing a gradual awakening in this sector? Those companies that simply view digitization as a technology play and fail to transform are likely to become digital dinosaurs and risk extinction. As illustrated in Exhibit 1, savings can be realized in operational excellence (such as more efficient maintenance and better operation of assets); in the supply chain; in the use of artificial intelligence; and in the use of integrated platforms (connecting the organization with external partners). PowerAdvocate, Wood Mackenzie’s sister company, does exactly this. That era also saw the development of a number o… All stakeholders around new field development —including the host government and the oil service providers and contractors — need to be digitally enabled. The difference between the two images is clear. Microsoft Azure, Amazon Web Services and Google Cloud make cloud storage and analytical engines available to everyone. The customer could then understand the competitiveness of their rates and negotiate accordingly. He has over 20 years of experience in the oil, gas, utilities and mining sectors, working with the boards… Read More Simon Flowers is Chief Analyst and Chairman for Wood Mackenzie. Often during the time of crisis Operator companies such as Shell, Exxon Mobile, ENI, ADNOC, ARAMCO etc. Eni has developed its own supercomputer, the HPC4, which is used to process data on oil and gas reservoirs. Still, L48 operators have adopted Big Data initiatives and advanced analytics and been rewarded. Best-in-class players do not incur higher costs to improve productio… Businesses stand to benefit from the sharing of data, knowledge, experience and insights as cross-functional teams form. In the Upstream Oil and Gas digitization Survey, 66% of those surveyed believe analytics represents a transformational opportunity for their business but only 13% believe their company has fully mature analytics capabilities. We will reach a 7% reduction in production costs thanks to: advanced algorithms to ensure reduced asset downtime and higher production rates; and, predictive analysis systems, based on big data, which allow us to optimize maintenance, logistics and well operating costs. Digital transformation is not a technology-led solution. As we’ve said, energy firms are at different points in the digitalisation journey. The digital transformation in upstream oil and gas Industries are embracing technology to reshape their operating landscape and reap the benefits of improved productivity, higher efficiency, and increased cost savings. Accenture's energy consulting services in the oil and gas industry can help you company thrive in the digital world. In the not too distant future, the image of oil workers manipulating drill pipe on platforms could be replaced by something dramatically different. At its heart, digital technology offers the industry, the opportunity to increase predictability, productivity and efficiency at all stages of the upstream value chain. Digitalization is touching every part of Repsol; Upstream, including the development projects, exploration, downstream, the corporate center and it will change how we plan, we develop, we monitor and we are managing our businesses while we are at the same time improving margins and efficiency, lowering costs and delivering long-term value. In so doing, it offers increased safety of our operations and profitability of our businesses. The oil and gas sector has a relatively long history with digital technologies, notably in upstream, and significant potential remains for digitalisation to enhance operations. The case for becoming digital The customer found that they could determine where they were paying different rates for the same equipment in a specific play; they could ensure that they were always paying the lowest negotiated rates; and they could improve their negotiating leverage with some suppliers. Putting Digitization in the Pipeline Oil & gas businesses face additional challenges in adopting digital technologies, which is slowing their adoption rate compared to other sectors. In our earlier "Laggard or Leader"  insight we identified up to US$150bn in annual operating cost savings that could be achieved in the energy and natural resources sectors through digitalisation. Upstream executives are right to be sceptical of promises to transform cost structures; they have been burned before by these kinds of promises. The customer thought they were spending US $480 million on rig charges... their actual spend was 1.7x higher. As a first step, they are setting up pilots across their organizations to assess how best to apply digitization, as well as to identify the key digital capabilities that need to be developed. Some of that has been through technologies that sort and operationalise data to unlock structurally lower costs. The reason for this fairly piecemeal approach to date is the industry’s aversion to catastrophic risk, which is well known. Find out when you purchase this insight. The value of data analytics is potentially transformative in the oil and gas industry. The iconic image of “roughnecks” — overall-clad workers with oil-stained faces handling equipment on a drilling rig — has not changed much over the past few decades, even as the industry is recognized for its technological innovation. Sign-in to our platforms to access our extensive research, our latest insight, data and analytics and to connect to our industry experts. They let you easily navigate your way around the site and allow us to improve its performance, or even recommend content we believe will be of most interest to you. We conservatively estimate that use of digital technologies in the upstream sector could result in cumulative savings in capital expenditures and operating expenditures of US$100 billion to $1 trillion by 2025. At the start of the industry in the 1960s and 1970s production was dominated by a small number of very large fields, such as Inde, Leman, Forties, Brent, Ninian and Piper. It is setting up a digital center of excellence with a holistic road map for digitization stretching out to 2020. The Real-Time Production Optimization solution helps reduce deferred production by moving more oil, condensate or gas from wells to sales export. Production of natural gas began in 1967 with the West Sole field in the Southern North Sea. But there is a disconnect; the E&P sector is conservative when it comes to adopting new technologies. Further digitalisation in the upstream oil and gas industry in the future is likely to initially focus on expanding and refining the range of existing digital applications already in use. (For more insights on how operational efficiency is achieved through the application of technology, please refer to “Not your father’s oil and gas business: Reshaping the future with upstream digitization.”). Benchmarking data also illustrate the broad opportunity for improvement. 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