Leaders of petroleum, chemicals and oil products must embrace digital technologies … or perish.
Before the onset of digital technology the oil and gas industry had to do things manually. Just like any other businesses and sectors, often characterized as manpower-dependent and explorations are prone to hit and miss.
Gone are the days when an oil and gas company utilized primitive methods like hand digging wells at particular seep locations and a more modern way in the 1800s which is oil drilling using steam engines. These methods are not only capital and labor-intensive, they are also inefficient. Modern research shows that the use of digital technologies can actual decrease capital expenditures. It is by a whopping 20 percent and can even cut the operating cost by 3 to 5 percent in upstream and about half in downstream.
Little did people know that the oil and gas companies are actually a pioneers in the digital age when they started using linear programs for modeling refineries, 3-D seismic, and more sophisticated process control for their operations. As a matter of fact, the use of those technologies has identified hydrocarbon resources.
Taking advantage of digital technology has increased cost savings or production in billions of dollars. Aware of these facts, a growing number of oil and gas players are capitalizing on the use of digital technologies. In a research conducted by McKinsey, it pinpointed the categories where digital technologies find application.
Operations of the future
Advanced analytics primarily aid procurement and decision while drones and sensors revolutionize monitoring and maintenance. It has been proven that predictive analytics can actually decrease maintenance cost by up to 13 percent. Using advanced analytics, a company can even have an equipment maintained even prior to it breaking down, preemptive repair. This could actually reduce the cost up to 27 percent and increasing the equipment’s up-time and reliability. In terms of energy and yield, advanced analytics can boost efficiency up to 10 percent.
The integration of digital applications, companies can increase reservoir limits consequently decreasing up to 20 percent in both upstream and downstream expenditures. The thing is, still not mentioning its other ancillary benefits. The use of 4-D seismic imaging to augment 3-D imaging can measure and even predict changes in the fluid reservoirs. By having an enhanced view of these reservoirs will allow an increase in the recovery rate of up to 40 percent. I will in effect increase by up to 5 percent the upstream revenue.
Digital-enabled marketing and distribution
Digital technologies can help understand consumer preferences and buying habits and behaviors, create a more optimized pricing models, and monitor and manage the supply chains better. Oil and gas companies who have started utilizing digital technologies have increased their revenues by as much as 1.2 percent. On the other hand, geospatial analytics has significantly improved supply and distribution operations and network.
Given the tough competition these days and considering the rapid changes and developments in science and technology, oil and gas companies must keep themselves abreast with the latest trends and invest in technologies that will reduce expenditures and boost revenues.
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