Overcoming the key challenges on the road to digital transformation in Oil & Gas
Jamie Bennett, CEO of OPEX Group talks about navigating the dual challenge of maximising production whilst minimising emissions.
04 December 2020
Oil and Gas Innovation Director
For the first time in its history, Oil and Gas' position as society’s main fuel source is being challenged. From the sharp incline in growth seen in renewable power, to tightening government legislation, some commentators are suggesting the noose has tightened: we may have already reached ‘peak oil’.
Technology, of course, holds the key to evolution (and revolution). The challenges are manifold: it isn’t just widespread adoption that will help to protect the industry, but widespread culture changes that for years have caused digitalisation to remain slow. Cautious, short-term thinking and investment in projects based solely on ROI will keep the industry alive for now, but ignore the urgent need for long-term sustainability planning. So where do we go from here?
Jamie Bennett, CEO of OPEX Group – pioneers of the first purpose-built predictive technology solution for oil and gas – is in the eye of the storm, helping operators navigate the dual challenge of maximising production whilst minimising emissions. For him, it’s important to take stock of where we are and understand the industry’s DNA, before pressing the panic button.
“Oil and Gas has always been a showcase for new technology and innovation. It’s an industry with a history of overcoming the seemingly-impossible – putting jackets into the world’s harshest environments, drilling miles into the ocean bed to extract volatile substances – and we should view ourselves as technological pioneers. The challenge now is to mirror this in the digital space – something we’ve been slower to adapt than perhaps the industry as a whole anticipated”.
The pace of change is often highlighted as a defining factor on the road to sustainability, and unfavourable comparisons are often drawn between industries like manufacturing when the subject of digitalisation is broached. But, where an industry like retail has seen both customer expectation and increasing competition cause technology to become almost omnipotent, these factors are only just coming into play for Oil and Gas.
Alongside this, other industries often benefit from generic solutions. For example, in e-commerce operating systems can be bought off the shelf and implemented in hours. When it comes to the oil and gas sector, the challenges are far greater.
“Technological solutions need to take into account the nuances of each asset and company. Wells, configurations, equipment, fluids, pressures etc. all differ. These are highly complex environments – whilst the principles of the process are the same, no two assets are the same. We have seen a number of mainstream AI solutions stall, even though they work really well in other industries.
“For us to unlock the true potential of digital tech, solutions need to be built by data scientists and technology developers working side by side with oil and gas domain experts who understand the intricacies of our industry.”
Part of this challenge is a cultural one. With the stakes so high, an understandable fear of failure can often influence the way certain projects are approached, as well as the need to bridge the skills and knowledge gap in key digital areas. These shifts don’t happen overnight, but Bennett believes we are already beginning to see green shoots appear.
“At the same time the industry goes through a digital transformation we also need an accompanying shift in mindset. Disruption is as much about new technologies as it is about people, culture and a desire to change, and most operating companies are taking this really seriously across their planning, logistics and operations.”
The pressure is on, and the industry is aware of it. In years gone by, when the bottom line has weakened, the recovery process was a comparably simpler one. Workforces were trimmed, projects were postponed. Today – particularly in the long shadow of a pandemic – these measures are arguably not enough.
For those attempting to inspire the digital change necessary to solidify the bottom line, presenting new technologies as a business case is a difficult task. This is another argument in favour of solutions that appeal directly to an organisation’s specific set of needs.
“Quantifying digital technology has always been tough. We know that efficiencies can be generated from them, but often the systems aren’t in place to measure this properly.“
“Now we’re presented with an opportunity to get smarter with the way we work and drive down costs - as well as increasing productivity and improving performance. It’s these marginal gains across an entire operation that can make all the difference, and it’s what decision-makers want to see.”
A crucial part of this is working with the data streams that these technologies are creating. At OPEX, Bennett says there is already a significant uptake of customers now utilising data to drive down operational emissions without the need for any Capital Expenditure. Key to this is creating an understanding around what is achievable at any given moment in time, and what daily operational changes can be taken to reduce emissions.
This is one pathway Oil and Gas can learn from other industries. The financial sector, while still struggling with its own cases of unprecedented demand, has managed to reshape the products available to consumers with significant success. As digital experiences change, so have their strategies – something that could, and should, be used as a model to build from.
“The changes that banks have experienced over the last few years has been astounding. Overnight, it felt like they were able to move from a standard business model, with masses of branches on the highstreet, to a digital delivery model via apps and the web. It just shows that when society demands it, even the most traditional businesses can completely transform”.
All of this, of course, is leading in one direction. As the world continues to navigate new unknowns, there is a demand for industries like Oil and Gas to respond in the right way. The changes needed are from the top, down and the bottom, up – and developing a deeper understanding of the intricacies and nuances of digital requirements is key to that.
“The main goal for all of us is achieving cleaner, more efficient and lower cost energy production. The roadmap laid out before us is ambitious, but not unachievable. Now, all we need to do is accelerate our focus and continue to learn from each other”.
This article is a part of our Innovation Leaders in efficiency series. To view the report and further interviews and insights into efficiency solutions, visit our Innovation Leaders page here.