4 Ways Digitalization Can Help The Oil And Gas Industry To Survive The Crisis


Companies involved in oil extraction and processing are now facing significant risks caused by Covid-19. The International Energy Agency reported that oil demand may shrink by 23.1 bpd in Q2 as oversupply worsen the price crash; oil prices have decreased by around 50% since January, 2020. These challenges are exacerbated by the lack of analogous events in the past and require resilience planning and organisation flexibility from the industry players. 

Some experts see digitalization as a “magic pill” that may provide companies with the majority of tools needed to move through the crisis. Based on the experience of our clients, participants of AUTOMA Congress, we made a list of opportunities to see how digital tools can help O&G companies and even be the chance to grow.

Reducing costs

It is Step 1 when the crisis occurs. However, most companies have already adopted cost-cutting measures after the oil price crash in 2014 and 2015 and there may not be as much room for significant reductions. 

Digitalization may be the key to this issue. According to a 2019 study by Rystad Energy, E&P upstream budgets can save up to $100 billion through automation and digitalisation. The low oil-price environment is an issue but it is also a good testing ground as the costs of implementing are lower. The main tools to lower expenses and increasing productivity are AI, imaging technology, and IoT sensors for faster data gathering. Their implementation can increase uptime, optimize reservoir depletion strategies, improve the safety, and lower greenhouse emissions.

Enhancing decision-making and risk management

During the crisis, organization’s data strategies becomes crucial for rapid decision-making. The ability to quickly access and analyse data is one of the keys to successful crisis management as it allows to identify discretionary expenses and to cut them.

The Digital Twin is another viable option which enables companies to optimize operating processes and improve capital investment in a virtual world before applying them. Combined with the maintenance optimization, Digital Twin could support the preparation of the different maintenance interventions and improve risk management and schedule optimization by providing more than 15% of gains in productivity.

To develop a flexible business model companies need a better understanding of their B2B and B2C customers. By implementing customer data strategy they can collect and process the information on customer’s behaviour and preferences and change strategy by turning to relevant products while oil demand decreases.

Remote work

Working remotely

To ensure safety, oil and gas companies are trying to facilitate working remotely for most employees. There are two ways digital tools can help with remote working.

On-site operations may be significantly reduced by digital technologies. Combination of smart sensors and Digital Twin technology is an example of such application. It allows monitoring equipment uptime and downtime and conditions. Work can be scheduled remotely to deal with any operational downtime.

Digital management tools are a necessity to coordinate a team remotely. For the team’s communications, the most popular ones are Slack and Microsoft Teams. Good project management options for larger companies may be Notion and Jira. For the smaller ones, there are more lightweight and simple tools like Monday. Webinars and virtual models allow providing online learning to the remote workers and teams from different locations. 

Ensuring cybersecurity

You may ask why Zoom is not included in the previous point as many companies switched to it for their meetings. The reason is there are some serious security issues revealed.

Crisis caused an increase in malware as cybercriminals try to take advantage of the situation with phishing, online scams, and malware installed via Covid-19 heatmaps and social media campaigns. With the increasing use of remote technology and employees working from home, cybersecurity is becoming one of the top priorities. Ton Diemont, KPMG’s Head of Cybersecurity in Saudi Arabia, recommends the following steps to best prepare for the current threat landscape:

  • Ensure to inform employees how they can work securely and safely and how they should handle situations in case of doubts

  • Ensure the helpdesk is fully operational

  • Be vigilant for phishing emails

Despite instability, earnings calls for the first quarter of 2020 have shown that the current downturn could accelerate the adoption of digital technologies. Schlumberger and Halliburton noted it in their reports. Schlumberger underlined their intentions of doubling down its digital strategy and raise the number of the OFS provider’s drilling operations conducted remotely by 60%.

Covid-19 has paved the path for decision-makers to get a first-hand experience with some digital tools and provoke the interest to the transformation in other parts of their companies. You can join the discussions or present your products and solutions to whole oil&gas value chain this autumn at AUTOMA 2021 - Oil and Gas Automation and Digitalization Congress. Congress includes the reports from the industry experts on Artificial Intelligence, Big Data, Machine Learning, Digital Twins, Cybersecurity, and more relevant topics covering upstream, midstream, and downstream operations.

Article by Regina Chislova, Director of AUTOMA Congress.


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