Things haven’t been easy for the oil and gas industry in recent years. Oil prices were decimated across 2014 and 2015 due to an increasing number of rigs in operation, an almost endless amount of capital to support massive investments, and a variety of mega-capital-expenditure projects.
Across a few short months, several oil corporations that had made massive investments based on good-looking profitable forecasts had started to reduce operations. Some of them hated operations entirely. However, the rebounding prices has managed to brighten up the industry and bring back a little optimism. Now companies are actively working to reduce their costs. This includes reducing head count, postponing projects, and cutting expenditures when possible.
Still, industry experts claim that in the face of these dubious long-term forecasts plaguing the industry, the time has come for companies to look for more drastic measures and strategies for improving efficiency. Knowing how to best use the available resources can do a lot more good than just getting more resources to play with in the first place.
In response to the latest technological advancements, it is vital that oil executives take time to consider the newest digital technologies and find ways to leverage them for their business. These recent advancements could help to generate additional profit using current capacity while also transforming operations to make them more effective. Research shows that by using digital technology effectively, companies across the oil and gas industry can reduce capital expenditure by up to 20%, while also reducing operating expenses by up to 5%. Those savings add up and can lead to bigger and better profits.
Sophisticated, advanced analytics are being employed to overhaul a range of functions in the industry, such as procurement. They are also being used to support making more informed decisions and making smart moves. Meanwhile, a wealth of current technologies, such as drones and equipment sensors, are transforming monitoring and maintenance procedures for the better. Leveraging advanced analytics in predictive maintenance reduces overall maintenance expenses, sometimes by up to 13%. Being able to predict problems ahead of time and fix them before they become an issue can save a lot of time, money, and manpower.
Through integrating digital applications, several companies have managed to increase their reservoir limits by a significant margin. This reduces downstream and upstream capital expenditure by up to 20%. There are several other ancillary benefits attached to increasing reservoir limits too, making the process worth the effort.
Many companies now use high-tech 4-D seismic imaging to incorporate a time-lapse dimension to more traditional 3-D imaging. Doing this allows them to accurately measure and predict any fluid changes in the reservoir. This in turn has improved the view of reservoirs, which leads to an increase in recovery rate of up to 40% or companies, with an added benefit of boosting upstream revenue by up to 5%.
Digitally-Enabled Distribution and Marketing
Retailers across a range of industries have managed to successfully implement digital technology to get a better understanding of customer habits and preferences, as well as better manage their supply chain and optimize their pricing models. Now oil companies aren’t too far behind them in this regard. Oil companies are starting to leverage those same techniques and methods and they have seen some pretty impressive results from doing so. Many companies have reported revenue increases of around 1.5%.
For example, by using geospatial analytics, oil executives can increase the effectiveness and efficiency of their distribution and supply networks through proper location planning and route optimization. Collectively, all the different efforts in this category have reduced costs for oil companies by up to 10%. Not only do these methods decrease costs, but they also increase revenue by up to 3%. It’s a win-win situation for any business.