It is hardly a secret that the oil and gas industry has been racked with struggles in recent years. Extensive supply and waning demand have borne a global price plummet which blindsided investors and left oil execs itching to seek out innovative and efficient ways to streamline production and heal financial hemorrhages.
Andreas Kleinshimdt, in an article for Siemens, one of the world’s largest energy and engineering companies, states
“The low price of oil is both a challenge and an opportunity for the industry. Well-run oil and gas (O&G) companies that are strong today are likely to emerge even stronger after prices rebound. While the availability of oil fields and the associated equipment is always paramount for them, during a slump they have every reason to also focus on cost-effective production.”
For O & G to optimally shrug off price drops and re-stimulate industrial growth, the industry must adapt to a changing landscape where resource scarcity is no longer an issue and advances in oil production methods mean a one-size-fits-all approach to operational procedure is no longer ideal.
Creating a less centralized and more agile management structure could allow companies to mediate challenges rapidly and efficiently. A loose, informal, team-based management style would take advantage of individual expertise to quickly generate specific, objective-based operational prototypes and quickly respond to issues.
Innovations in digital analytics and monitoring tools are another agent of optimization; digital tech could allow companies to act proactively to avoid profit pitfalls such as machinery breakdown and dwindling reservoirs. According to projections by Mckinsey and Company, applying digital technologies to the oil and gas sector could cut capital expenses by as much as 20%.
Digitized resource management could bring an as yet unprecedented level of transparency into oil and gas operational processes, providing data which boosts the accuracy of predictive models and increases workforce efficiency. In addition, replacing manned labor with automated manual processes would limit instances of human error and dispel potential safety catastrophes.
For years, analytics have been employed in retail and other sectors to gauge consumer habits and gain clarity into market trends. As digital practices continue their leak into the oil industry, oil companies can expect a better view into oil and gas consumption trends, facilitating contingencies for or even preventing unexpected price fluctuation.
Digital tech’s potential to ease efficiency and revolutionize operational methods within the oil and gas sector should not be ignored. Nor should analytic practices and decentralized, objective based management, as all have proven themselves a boon when applied in numerous industries, and there is no reason that oil and gas should not expect to gain from making good use of them.