Technology Currently Impacting the Oil and Gas Industry
Over the last couple of years, the international oil and gas industry has had to navigate troubled waters. Due to an extended run of growing and high rig counts, abundant capital to support hefty investments and various mega-capital-expenditure projects, oil prices plummeted in both 2014 and 2015.
Within just a few months, many oil corporations that had made huge investments based on profitable and rosy forecasts began to curtail or even halt operations. However, the latest price rebound has managed to increase optimism a little, and now efforts are being made to cut down costs by lowering head counts, cutting expenditures and postponing projects.
Still, experts in the industry contend that in the face of dubious long-term forecasts that plague the industry, it is high time that companies explore and pursue some more drastic measures and strategies in order to enhance efficiency.
In response to the latest technological advancements, it is important that oil executives consider and leverage digital technologies. These recent advancements have the potential to generate more profits from current capacity and transform operations. Research indicates that by effectively using digital technologies, companies in the oil and gas industry can cut down their capital expenditures by as much as 20 percent; moreover, they could lower operating expenses by 3-5 percent.
Advanced and sophisticated analytics are being heavily utilized to overhaul various functions, like procurement, as well as support more informed decision making. Meanwhile, a slew of current technologies, like equipment sensors and drones, are revolutionizing maintenance and monitoring too. The use of advanced analytics in predictive maintenance can decrease maintenance expenses by up to 13 percent.
Through the integration of digital applications, many companies have successfully increased their reservoir limits to a considerable extent. This has resulted in a decrease of about 20 percent in both downstream and upstream capital expenditures; moreover, there are various ancillary benefits as well.
Many companies have started utilizing high-tech 4-D seismic imaging in order to incorporate a time-lapse dimension to conventional 3-D imaging. This has enabled them to predict and measure fluid changes in their reservoirs. This improved view of the reservoirs usually increases a company’s recovery rate by up to 40 percent and boosts upstream revenue by as much as 5 percent.
Digitally-enabled Distribution and Marketing
Retailers in a variety of industries have successfully implemented numerous digital technologies in order to get a more in-depth understanding of consumer preferences and habits, better manage supply chains and optimize pricing models. That being said, oil companies are not far behind, as they are leveraging the same methods and techniques, with remarkable results to increase revenue by nearly 1.5 percent.
For example, through the use of geospatial analytics, oil executives are considerably improving the efficiency and effectiveness of their distribution and supply networks via route optimization and location planning. Collectively, various efforts in this specific category have managed to lower costs by as much as 10 percent, while increasing revenue by nearly 3 percent.