However, a question mark remains over the sector’s current capacity and ability to connect to and analyse disparate data streams as the amount and complexity of digital information rise. There is a growing consensus that data could be better coordinated to transform decision making. DNV GL estimates that the industry could become at least 20% more efficient by making full use of digitalization to provide greater and sometimes unexpected insight to predict failures, and to time interventions more efficiently.
Industry leaders see the potential: ”Without embracing digitalization, we would not have shale oil and gas today, as we would not have the sophisticated, directed and monitored technologies that made shale extraction possible,” commented Christoph Frei, secretary general of the World Energy Council.
While digitalization has begun to make its mark on the sector, only 20% of senior industry players currently regard themselves as highly advanced in digital adoption across physical assets and operations. This picture has emerged from DNV GL’s research into the outlook for the industry in 2016.
“Our study indicates that industry professionals see the adoption of digitalization as more of an evolution than a revolution. However, we believe that change will come more swiftly and disruptively than some might think,” commented Nada Ahmed, senior consultant, DNV GL - Oil & Gas.
“Interviewees also commented on a lack of infrastructure in place in oil and gas sector companies, to store and analyse large volumes of structured and unstructured data, needed to exploit fully the opportunities for more effective operations and decision making,” Ahmed said. “The industry also needs certainty that it can rely on data. Levels of trust vary, reflecting the fact that data is fragmented and from multiple sources.” Rapid adoption of new, digital technologies depends too on easing concerns about cyber security.
“If we can remove barriers to digitalization, we could see step-change gains sooner rather than later,” Ahmed predicted.
“Trust could improve by ensuring that data is properly sourced and meets an established standard for the quality of centralized data.” It also requires monitoring to ensure data is of sufficient quality for decision making. Stringent standards can minimize security breaches and enhance information flow within projects and with trusted partners, she said.
“We anticipate more and quicker change in the next three years as companies accept that investing in a digitalization strategy can deliver substantial cost savings and improve health, safety, security and environmental (HSSE) performance (figure 1). Some companies also recognize the potential for advanced data analytics to achieve efficient and transparent regulatory compliance.”
The sector’s interest in industries that are more advanced in the process is one sign of its growing appetite to explore digitalization benefits. Portugal’s Galp Energia is examining how the health sector uses massive amounts of data efficiently, for example. “We hope cognitive computing could be useful for us when managing our huge amount of seismic data and in our pursuit of finding global analogues,” said Thore E Kristiansen, COO exploration and production. “We are also studying how the auto-manufacturing industries manage their very efficient supply chains.”