To say the oil and gas industry has had a tough couple of years would be a bit of an understatement. Today, public perception is that oil and gas companies are not keeping up with the times. Not only are organizations, like Google, spearheading clean energy projects that threaten oil and gas, but other industries are also adopting new technology at faster paces.
From robotics to artificial intelligence, organizations across verticals recognize that in order to stay relevant among consumers, they have to change with the times. So why are oil and gas companies still lagging behind?
Luckily, there's still time for companies within these fields to revamp their operations and propel themselves to the modern-day playing field. All organizations existing in traditional verticals can learn how to reignite progress within their companies by assessing the problems that plagued oil and gas, as well as the technological advancements that have the potential to turn things around.
The Problem: Slow to Adopt Technology
Like many other industries, the oil and gas industry is undergoing a rapid digital transformation.
Unlike many other industries, however, oil and gas companies have been slow to adopt technological innovations on the software front. Lloyd's Register accurately summarizes the current state of the industry:
"Innovate or die. In today's Energy industry, the speed of adoption lags behind that of other industries; industries that are subject to the same rash of safety, legal, commercial and financial pressures faced by Energy companies, such as Aerospace."
Many of the reasons that the industry is slow to evolve are understandable; the capital that was once plentiful has seen a rapid decline and the industry is stuck in the "old way" of doing things. Discussing the current state of the industry, Shiva Rajagopalan, CEO of Seven Lakes Technologies, a mobile field data capture platform working in the oil and gas industry, says:
"Ironically, the reason oil companies have been slow to invest in more efficient practices is due to their wealth. High market prices and a steady influx of capital allowed them to hide inefficiencies. The focus was growth and reserves exploration. If they are killing it in the market, why should they change? There is an old-guard that doesn't necessarily understand how technologies can drive bigger business value."
While this enormous undertaking may scare others, entrepreneurs should view this as a massive opportunity.
The Opportunity: Digital Transformation
The oil and gas industry, combined, are multi-billion dollar industries; big oil is big money and the time is now to bring the industry into the digital age.
The following are top technologies that have been adopted in other industries, yet have been slow to integrate into the oil and gas industry.
Robotics: The industry was slow to adopt the use of robotics before 2014, but now companies climbing out of the collapse are implementing them. For example, Iron Roughneck, which was developed by a company called National Oilwell Varco Inc., automates the dangerous and repetitive tasks of connecting drill pipes on oil rigs.
While technologies like these do add value to the companies, there is potential for workers to lose their jobs, which is a recurring fear that many have when it comes to robots.
Chris Blackford, the founder of Sky-Futures, a drone company for the oil and gas industry, explained that "the inspection data we can collect in five days takes rope-access technicians about eight weeks."
Artificial Intelligence: In the oil and gas industry, AI allows companies to uncover trends that pinpoint and predict inefficiencies. Leveraging AI to improve performance operations from C-level to field worker, automate processes, streamline manual business operations, and connect with IoT devices, makes every arm of the company more efficient and profitable.
"To survive the current era of cheap oil, we will see the democratization of tools like AI, automation, and IoT. The oil and gas sector must capitalize on such business intelligence, otherwise, they will undoubtedly be left behind in a worldwide digital revolution," says Rajagopalan.
Cloud Computing: As the oil and gas undergo this enormous transformation to a digital infrastructure, cloud computing will prove to be a powerful engine. The sheer amount of data companies can harness and further analyze through automation, will reduce operational expenses, down well times, and lessen risk. As more oil and gas companies integrate cloud computing, this will empower field workers to optimize production.
"To take effective action, the entire production chain, from COO right down to on-site well engineers, need to see the very detailed cost and production data, narrowed down to the invoice level. By leveraging cloud computing capabilities, accuracy and transparency are achieved in the shortest amount of time to drastically improve well-cost management," explains Rajagopalan.
Even industries that aren't traditionally progressive can no longer afford to staunchly opposed change and digital transformation. Luckily for organizations that may have been slow to adapt, emerging technologies, including cloud computing, AI, and robotics can be easily implemented and impactful almost immediately.