Market Study Big Oil is Still Investing in in Digital Technologies, Despite Price Downturn
The digital revolution continues for oil and gas multis: Despite a continuing price decline period, companies plan to invest the same amount or more in digital technologies. Especially big data and IIoT are in high demand.
Despite current lower crude oil prices, most companies in the oil and gas industry plan to invest the same amount or more in digital technologies, says a new survey by Accenture and Microsoft. It seems in fact that the industry hopes to find the answer to address today’s challenges in digital technologies.
Two Thirds Plan Tech Offensive
In the near term during the current low crude price cycle, approximately three out of five respondents said they plan to invest the same amount (32 percent) or more or significantly more (25 percent) in digital technologies.
Over the next three to five years, approximately 80 percent of the oil and gas industry professionals surveyed said they plan to invest the same amount (18 percent), more (44 percent) or significantly more (18 percent) in digital. Respondents from IOCs and NOCs were the most bullish in the same time period.
Big Data, Internet of Things and Automation in High Demand
Mobility, infrastructure and collaboration technologies currently represent the biggest investment areas across the oil and gas industry. Over the next three to five years, investments are expected to increase in big data and the Industrial Internet of Things (IIoT) and automation.
The key for continued digital investment in the upstream sector is improving operational efficiency, rather than simply reducing cost, as faster, more informed decision making and a more efficient workforce were seen as the key areas where digital technologies are adding value and creating business efficiencies.
However, to get the most value from digital technologies, oil and gas industry leaders say they need to overcome several barriers, with work flows and processes that create bottlenecks and physical and cyber security issues topping the list.
Analytic Capacities Expected to Bring Business Value for Big Oil
Approximately 89 percent noted that leveraging more analytics capabilities would add more business value, 90 percent felt more mobile technologies in the field would increase value, and 86 percent said that leveraging more IIoT and automation would boost value.
Collaboration technologies were highlighted as an area that could be increasingly used in upstream to create a more efficient workforce and to make faster decisions.
“Digital Technologies as a Way to Address Key Challenges”
“Oil and gas industry leaders continue to look to digital technologies as a way to address some of the key challenges the industry faces today in this lower crude oil price cycle,” said Rich Holsman, global head of digital in Accenture’s energy industry group.
“Making the most of big data, IIoT and automation are indeed the next big opportunities for energy and oil field services companies, and many are already starting work in these areas. They are increasing investments in enabling people and assets, with a growing emphasis on developing data supply chains to support analytics projects that can improve efficiencies, manage cost and provide a competitive edge. Our survey tells us that companies who do not continue to invest in digital technologies risk being left behind.”
“Mobility and other digital technologies are gaining traction as oil and gas players learn to use these technologies to make faster and better decisions from the field to the front office,” said Craig Hodges, general manager of the Gulf Coast District at Microsoft.
“Predictive capabilities to optimize maintenance and maximize production can create value, and digital technologies also support better use of scarce resources and talent, management of more complex work, cost reduction efforts and innovation to remain competitive and continue operating safely.”
The Microsoft and Accenture “Oil and Gas Digital and Technology Trends Survey 2015,” conducted by PennEnergy Research in partnership with the Oil & Gas Journal, surveyed industry professionals worldwide, including engineers, geologists and mid-level and executive management from the upstream, midstream and downstream segments.