Oil and gas are still considered as key elements to the economy regionally and globally.
The oil and gas industry is one of the largest and most dominant sectors in the world. Today, as the world has approached the digital, oil and gas companies are progressively turning to digitalization leveraging modern digital technologies in order to restructure production procedures, perform all the remote monitoring as well as make use of preventative maintenance of equipment to minimize the downtime and risk. The evolution of digital technology has opened the way for transmitting and managing the voluminous amount of data, creating opportunities to modernize business models in the oil and gas industry.
In the current time of crisis induced by the COIVD-19 pandemic, the industry has been severely impacted. The epidemic has forced factories to shut down operations, restricting the mobility of cargo ships and planes. It has also grounded the aviation sector that shares 11 percent of oil consumption in transportation, resulting in a sharp decline in oil price.
On the other side, the major issue with the oil and gas industry is many plant operators still rely on tried and tested ERP system that leaves no real room for improvement and lag them behind the innovation. In this way, considering advanced technologies can be an effective approach. For instance, the digital twin of the procurement process is one innovation that can assist companies in garnering enhanced visibility in their disrupted supply. It can identify a breakdown or bottleneck in the supply chain early on and incentivize procurement teams to reallocate resources or explore alternatives.
Using such sort of technologies, companies can use this uncertain time as an opportunity to create stronger, more sustainable businesses. According to Philip Whittaker, Partner and Director, Oil and Gas, at the Boston Consulting Group, the coronavirus has prompted offshore oil and gas businesses to ask how they can extract greater margins and use technological differentiation to create more stable, less cyclical businesses from their exposure to exploration and production.
Participating in an online ADIPEC Energy Dialogue Webinar and discussing the latest developments and impacts around the Offshore verticals in the oil and gas industry, Philip said that offshore companies have had to rapidly adapt to the changing work environment created by the coronavirus.
Driving Sustainability in Oil and Gas
While the oil and gas industry has been disrupted by a chain of events in the time of ongoing COVID-19, companies need to make changes in order to make the most out of business. Adapting to digitization and automation can help cut costs in a time where many other factors are largely out of a company’s control.
Shifting towards sustainability which remains firmly embedded in the Oil and Gas companies’ strategy, whether through lessening CO2 and methane emissions, safeguarding employee safety or securing new data-driven processes, is an effective way to sustain in the current scenario. Moreover, in order to appropriately measure and scale out their progress, companies’ digital infrastructure must be in place properly.