For the oil and gas industry, the last 10 years were more about production than cost. The next 10 years will be about implementing digital technology to drive significant cost efficiencies.
With oil below $50 a barrel, energy companies are facing a cost war to prove which operator will produce oil and gas at the lowest price. This requires a fundamental re-imagining of the operating model, everything from scheduling to training to production surveillance. Things that used to be sacred, such as keeping “data within our walls,” are now on the table, and it’s time to take it to the next level.
Accenture recently collaborated with GE and JuneWarren-Nickle’s Energy Group to conduct new research on adopting digital technology across industry verticals such as exploration and production, human resources, procurement, etc. One of the key findings of this research was that 46 percent of those surveyed felt they had inadequate knowledge and expertise in digital oilfield technologies. There is a digital revolution taking place—all of us are empowered by digital technology to quickly make smart, informed decisions––but these same technologies have not yet penetrated deeply the otherwise highly innovative oil and gas industry, the research found.
Another key finding was the high level of confidence respondents had in technological maturity. However, that general optimism did not translate into a feeling that their own organizations had the operational readiness to adopt the technology. This disconnect suggests that institutional barriers (rather than technology readiness) are standing in the way of deployment.
Accenture’s experience finds that while companies are deploying a digital technology on an asset or a process through pilots, they are not going in yet for scale. It’s time to look at digital more holistically––across technologies, processes, and assets––and scale up to lower the cost profile. Digital transformation in other industries shows the possibilities; it’s time now for the energy industry to invest in scale and divert capital toward improved operations. Watch how digital technologies can help companies discover new ways to drive increased efficiency.