Upstream development in a digital world
August 16, 2018
August 16, 2018
Over the last four years, oil and gas companies’ unprecedented focus on CAPEX and OPEX has enabled them to reduce their portfolio breakeven costs by 20 percent and the average time to first oil by 25 percent. This is a good start – but it is only just that. An additional 15 percent savings and 20 percent cycle times compression is theirs for the taking if they use digital technologies more strategically and holistically to underpin their development programs.i Specifically, oil and gas companies can use digital solutions to connect, consolidate, accelerate and automate activities and decisions across the asset development lifecycle.
Upstream activities can be carried out more efficiently when functional teams involved in finding and producing crude oil and natural gas work together from a standard playbook. Two digital solutions can help oil and gas companies streamline and integrate their upstream operations:
Fifty-seven percent of upstream oil and gas companies strongly agree that they need to innovate more quickly just to keep a competitive edge.ii Faster decision-making leads to faster action. Similarly, faster processes allow the company and its systems to react quickly to changes, and scale production up or down, as needed. Two digital solutions enable this agility:
Automating processes enables oil and gas companies to reduce the variability, cost and resource intensity of their operations, while improving safety. Two types of automation can help companies further streamline their upstream operations:
While some operators have begun to apply some of these digital advances and are seeing tangible results, the application is mostly isolated and limited to pilots. Realized value will accelerate and multiply when oil and gas companies embrace these and other solutions across the exploration and production arena.
To unlock this digital potential, companies need a visionary yet pragmatic approach. First, they need to re-imagine their upstream capabilities and develop a clear vision for how applied intelligence, asset automation, digital workforces, smart ecosystems and customized standardization will change their operations. With this re-imagined upstream vision, they can create a digital initiative engine that captures new value and ensures their competitiveness for years to come.
1 Accenture Strategy Global Data, 2018
2 Accenture 2017 Tech Vision Research.
3 Accenture, “The Digital Thread Imperative,” 2017.
4 Accenture Strategy, “A New Way Forward for Oilfield Services,” 2017.
5 B. Mantha and R. Samuel, “ROP Optimization Using Artificial Intelligence Techniques with Statistical Regression Coupling,” Society of Petroleum Engineers Annual Technical Conference, 2016.
6 Jennifer Pallanich, “Doubling Down on Digital,” Upstream Technology, June 26, 2017.
7 David Steuer (Accenture), “Seven questions to ask before making the jump to robotic process automation,” July 27, 2017.
8 GE, “The World’s First Digital Rig: Digitizing Operational Excellence”.