Oil and gas companies are all facing a critical problem: it’s becoming harder to find new oil. And with stricter regulations and the retirement of a generation of experienced employees, the industry needs to innovate in order to thrive in the current and future market conditions.
One frontier that many companies are turning to is digital technology.
The oil and gas digital transformation is here and it’s revitalizing the industry for the better.
Opportunities in the Digital Transformation
For oil and gas companies to evolve, they must address every step of their value chain (upstream, midstream, and downstream). If they want to succeed, their change must be made across the whole chain.
So, if transformation is such a process, why would companies undertake it?
Benefits of digital transformation are far-reaching and include things like:
- Improved safety
- Increased productivity
- Cost savings
Digital analytics also allow companies to get a better view of where they are. That way, they can stay agile, and weather industry downturns.
What’s Holding Companies Back?
Access to technology and the cost of digitization isn’t a problem for many companies.
Right now, the biggest deterrent to digital maturity is the digital muddle that every company has to sort through.
Once companies have completed digitization, they can take advantage of its biggest benefits. The problem, for most companies, is getting that far.
They can’t halt all operations while they digitize, which means they have to digitize their processes gradually. There’s employee resistance, the awkward transition period, and essential information that gets lost between the cracks.
New Applications for Digital Technology
Oil and gas companies are applying digital technology in three main focus areas:
- Maintenance operations
- Reservoir limits
- Digital marketing and distribution
Digital technology is good at helping companies organize and analyze the available data to make smarter decisions. For example, predictive analytics can be used to reduce unplanned downtime with preventive maintenance.
It can also be used to track expenditures and capitalize on benefits, especially when it comes to reservoirs.
Finally, digital analytics provide companies with a better understanding of consumer behavior, allowing them to market more effectively.
The Digital Operations Transformation Model
Since digital transformation is such an extensive process, it helps to have a model to fall back on.
One option is the Digital Operations Transformation model (DOT). It’s a digital roadmap with key milestones.
First, companies need to mechanize their processes to prepare for failures and unusual operating conditions. Then, companies need to capture information from the physical world with sensor information and data transmission.
From there, companies progress by integrating diverse data sets to augment their decision-making capabilities.
Many companies make the mistake of halting their development with data collection. But if you truly want to succeed, you also need to revolutionize how you use your available data. Data should provide critical insights to improve your processes, and you need to adapt based on the data.
Building Oil and Gas Digital Transformation
The oil and gas digital transformation begins with a commitment. Companies must be prepared to change to meet the times. That means improving their processes for consumers and workers alike and making the necessary investments to bring those improvements to life.
That’s where we come in. We know the challenges that oil and gas companies face. And we know that you need your employees to keep your company strong. But to keep your employees around for the long haul, you have to keep them safe.