A well choke, automatically adjusting to reservoir pressure and market economics. A replacement part, ordered and delivered right before it’s needed. A production engineer deftly applying analytics to cut decision making from weeks to days. This is upstream production of the future, characterized by a connected, agile ecosystem that adapts to changing market and geological conditions and provides a platform for workforces to leverage the power of analytics, mobility and digital technologies to improve production safety and performance.

As upstream operating margins decline, oil and gas players are investing in analytics and other digital solutions to drive greater agility in decision making, without compromising safety. Industry leaders are going further. They are recognizing that the real value for operations comes from integrating these solutions. Done properly, the total value of digitalization is exponentially greater than the sum of its parts. In production operations alone, we estimate the value potential to be greater than $300 billion per year.1 Let’s look at some examples of how an integrated approach to digitalization in operations can multiply value.

Asset maintenance. Many operators have already switched from time-based to condition-based maintenance. That has allowed them to improve uptime of critical equipment and reduce costs—in some cases by 50-60 percent.2 However, even when remote monitoring is available, most companies deploy condition-based maintenance at a component level or only for specific types of equipment. That approach yields maintenance savings of just 10-15 percent.3 By linking sensor networks across assets to a central hub for applied intelligence, companies can unlock the potential of advanced analytics at the network, rather than component, level and also achieve real-time integration with the supply chain. This paves the way for assets to self-diagnose, recommend preventative or corrective actions, and automatically order replacement parts. An integrated approach also optimizes maintenance schedules and provides field workers with the exact information they need to act. The resulting performance improvements across the entire asset base could lead to maintenance savings of more than 50 percent.4

Decision-making. Most decision-making in operations is linear, human-centric—and hugely inefficient. Innovations such as Digital Twin models, which use automatically generated production data to identify sub-optimal performance and incorrect assumptions in reservoir modeling, have dramatically increased the speed and quality of decisions. However, because they tend to be implemented in isolation, such technologies fail to deliver their true potential. Integrating rich, high-frequency data flows with analytics, process automation and technologies such as distributed ledgers allows companies to overcome the limitations of traditional decision-making. This approach opens up the possibility for self-operating assets that automatically optimize production in response to changing operational, reservoir, weather or economic conditions.

Incident management. Digital can make the dream of zero incidents a reality. Operators are currently just skimming the surface of what is possible with their limited use of technologies such as personal gas monitoring or drones for inspection. In the future, risk and impact analytics will constantly update the safety status of an asset and issue instructions to mitigate unacceptable risks. The increased use of autonomous vehicles, virtual reality and automation—along with sensors and predictive analytics that combine to trigger intervention responses prior to an event—will remove people from danger. Further, incident data can be shared with the broader ecosystem to ensure a coordinated response to emergencies should they arise.

These examples illustrate just part of Accenture’s re-imagined production domain vision. The foundation of this vision rests on five key concepts:

  1. Applied Intelligence: Applies analytics to internal and external datasets to improve decision making and optimize value
  2. Asset Automation: Optimizes processes and maintenance using real-time data to increase output, reduce downtime and improve health, safety and performance
  3. Digital workforce: Increases safety and efficiency in the field and increases decision speed and quality in the office
  4. A Smart ecosystem: Creates more value across the entire ecosystem via supply-demand balancing and data integration / real-time sharing
  5. Customized standardization: Customizes solutions to the individual asset from a foundation of standard components & processes
Five key concepts illustrating part of Accenture’s re-imagined production domain vision.

Ninety percent of upstream oil and gas executives surveyed by Accenture Strategy expect greater than 5 percent growth by 2020.5 Digital transformations could help fuel that growth by unlocking US$1.6-2.5 trillion for the industry, its customers and society.6 The first step in this 8-10 year journey involves building applied intelligence capabilities to move data and analytics to the core of operations. At the same time, companies should continue pursuing tactical digital initiatives that align to a clear business case that lay the foundation for production operations of the future. That future will be sooner than you think!

1 Accenture Strategy Energy Analysis, 2018
2 Accenture Strategy Energy Client Experience
3 Accenture Strategy Energy Client Experience
4 Accenture Strategy Energy Analysis, 2018
5 Accenture Strategy Revenue Growth Research, 2017
6 "Digital Transformation Initiative: Oil and Gas", Accenture & World Economic Forum, 2017

Andrew Lea-Cox

Senior Manager – Accenture Strategy, Energy

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