How Digitization Came into the Picture
The introduction of new oil and gas technologies, such as artificial intelligence, RPA, data analytics, and IoT, is driving the digital wave in the industry. From risk mitigation and excellent customer service to enhanced operational efficiency and cost reduction, oil and gas companies are undergoing digital transformation to meet the challenges of tomorrow and emerge victorious.
Most professionals in the oil and gas industry recognize the importance of embracing digital technology, but there are several challenges faced by executives, seeking to implement digitization within oil and gas companies.
This blog will look at the major digitization challenges in the oil and gas industry and some ways to overcome them.
Digitization Challenges in the Oil and Gas Industry
Challenge – Remote Work
The changes adopted during the pandemic in 2020 led companies to transfer maximum employees to remote work. This change hugely impacted the oil and gas industry due to the continuous nature of technological processes. It became difficult for companies to maintain the levels of industrial productivity.
Digital oil and gas technologies allow companies to maintain remote work for most of the workforce. This significantly reduces the number of employees in the field and processing plants, and it helps preserve people’s health. As an added benefit, it helps reduce production costs. However, non-refinery companies need to carefully select the most effective oil and gas IT solutions to accommodate reduced revenues and sequestration of corporate budgets.
Challenge – Organizational Structural Difficulties
Structural difficulties are a major challenge for companies when adopting new technologies
and changes. Digitization disrupts the value chain and operational processes by providing
streamlined data capture, reducing error-prone processes, and automating manual operations.
However, change management is crucial for companies to reap the benefits of digital
Companies need to prioritize digital transformation by placing it at the heart of their business strategy. Managing disruptive changes calls for strong and focused leadership and digital tenacity. Leaders and staff need to have a strong willingness to invest in and embrace digitization in the oil and gas industry. Organizations should train contractors and employees about all the new and relevant technologies and practices.
Challenge – Unlocking Value from Data Analytics
Big data has been a predominant aspect of the oil and gas industry. In the 1980s, when companies started collecting data using sensors, they needed to make sense of the data and use it to their advantage.
In a 2020 PwC survey regarding digitization of oil and gas, the top five technologies or
planned technologies they identified include energy analytics that supports optimization of
energy use and costs across company operations. The transformative power of data can only be utilized if oil and gas companies can unlock the value from data analytics. This requires sourcing experts in data analytics.
Oil and gas companies can improve their ROI from data analytics by using cloud computing to harness maximum potential out of their data. Cloud can help with data collection and storage, analysis, and archiving. This allows companies to access a wealth of information hidden in plain sight earlier. Additionally, cloud computing enables massive scalability for companies, which is otherwise impossible without digitization.
Technology was necessary to extract the highest possible value from the available resources. Even though the oil prices have bounced back since their historical lows, maximizing operational efficiency by following the digital trends in the oil and gas industry is more important than ever.
Prices are trending in the right direction for the oil and gas industry, but the technical knowledge learned in the years following the price collapse should continue to be implemented and improved upon as the industry seeks sustained profitability.
Digitization requires a mandatory presence of a single information space at a company. With the help of IT solutions for the oil and gas industry such as big data, machine learning, and predictive analytics, companies can overcome today’s challenges.
Implementing these solutions will lead to a more competitive industry in the coming years. However, realizing such projects requires a good team with highly educated, experienced IT specialists. At Wipro, we have deep industry knowledge of implementing various oil and gas technology solutions. You can know more about it here.