Executive viewpoint

As oil and gas operators face increasing pressures to become more efficient and environmentally sustainable, human resource savings, smarter capital investment, knowledge preservation and risk management are all more critical than ever. Leveraging new ways to break down the silos that exist within companies, so that the right data and knowledge have the greatest impact on decision-making, is essential for success, as the industry transforms itself.

The oil and gas industry just experienced its third price collapse in 12 years. This most recent drop was unique, in that it combined a supply shock with an unprecedented drop in demand, due to a global health crisis. The Covid-19 pandemic accelerated what was already shaping up to be one of the industry’s most transformative periods.

Time to re-invent. Today, the industry is at an inflection point, making it necessary for operators to reinvent their businesses to focus on efficiency, amidst a rapidly shrinking pool of experts and a global imperative toward carbon-neutral energy solutions. Technological transformation is essential to success in taking the desired leap forward. Companies that are most proactive in effectively adopting digital transformation, to permanently change the way their businesses operate, are the ones that will come out on top.

However, much of the industry has yet to take advantage of opportunities that derive from using data and technology in an optimal, meaningful way. This leaves vast opportunities to do more with knowledge and data available by using digital transformation to capitalize on the value of investments made and/or to be made.

As early as the 1980s, operators 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 in oil fields around the world. What followed was a wave of digital oilfield initiatives that swept through most of the industry in the last three decades.

Harnessing massive data volumes. The amount of data generated per field has since increased exponentially, with ever-increasing live streams coming from wells, seismic and so forth—the volume of data generated today is vast and constantly being updated. Add to that the various initiatives around the Internet of Things (IoT), and the volume of constantly evolving production and drilling information that drives automated modeling and prediction technology is off the charts.

While oil and gas companies are data-rich, the efficient management and use of data has not kept up. These immense amounts of rich data are locked within silos inside different departments, unable to be accessed easily across an enterprise and leveraged to make more informed and rapid decisions. Company organization and legacy (and frequently proprietary) formats form these silos. Revolving door technical teams caused by resource cuts and outsourcing are also a major challenge. The resulting isolated workflows, poor utilization of data and derived knowledge, and thus compromised decisions, are exacerbated by cost, resources, skills and, in many cases, outdated company cultures.

Enabling access to, and utilization of, all this rich data held within an organization is especially critical now, because it redefines how the industry approaches the entire oilfield lifecycle, from appraisal to decommissioning, in a more sustainable manner driven by carbon-neutral objectives. With mounting shareholder pressure for operators to be as efficient and scalable as possible, and market pressures driven by shifting demand, identifying previously missed zones of pay or accurately predicting and planning for negative drilling events before they occur can have the potential to free up millions in capex budget and dramatically increase ROI.

It has never been more important for operators to drill smarter and safer with less capital investment and human resources. Yet, the key that makes this possible—digital transformation—continues to challenge many operators because of the perceived complexity.

Executing a plan. Formulating a sensible plan that takes the nuances of an operator’s business into consideration can be intimidating. For an industry that is generally very conservative and often reluctant to change, this is a massive challenge. Unfortunately, there is no “standard playbook,” when it comes to digital transformation, which is why it requires the insights and guidance of cloud and data analytics subject matter experts early, and throughout the process.

From our point of view, we have recognized the urgent need for operators to make this digital shift and have focused our resources on how to help unlock the value of data and knowledge isolated within any company. We’ve witnessed the value promoted in our clients when the correct technology, coupled with defined processes and empowered organizational culture, is applied to technical subsurface challenges. Project ramp-up becomes instantaneous, real-time drilling is seamlessly incorporated, and derived results are shared immediately with decision-makers across the business units, to assist with de-risking and maximizing the potential of asset exploitation. Digital transformation is the crux of these foundational operational aspects.

The time is now for this important pivot for oil and gas businesses. To maintain growth and survive in the future, businesses face a sizeable challenge to find innovative solutions that maximize productivity while controlling rising costs and promoting long-term business viability. True digital transformation is the only way to make this happen. The companies that actively embrace and manage this digital transformation will make their businesses smarter, more efficient and more profitable.