The future for the North Sea oil and gas industry is bright and exciting.
By deploying new technologies, embracing new skillsets and fresh thinking, our industry can secure a successful future.
For many this long-term vision is a long way off – fixed far offshore and shrouded in mist. Few businesses have a clear understanding of what might be possible in years to come and are sitting back, avoiding taking on the role of an early adopter and waiting for others to forge the route forward through the unknown short-term.
However, it doesn’t need to be daunting.
The industry should ignore any intangible perception of the future and focus on what small steps of progress they can take right now. Failure to do so could lead to the demise of individual companies and an increased struggle for the wider industry in the UK to compete internationally.
On the surface, the oil and gas industry appears to be a role model for innovation with operators pushing further and deeper than ever.
However, technology advances often exist in silos rather than throughout the organisation of many oil and gas companies.
A recent EY survey highlighted this disconnect. It showed that 83% of US oil and gas executives think the industry is excellent or good at leveraging innovative technology.
When asked about applications for new technology, 64% indicated the opportunity for front end (in the field) processes.
Only 6% of respondents indicated back-office processes.
Perhaps they were unaware that adopting something like robotics process automation (RPA) offers a variety of high-impact benefits in addition to cost savings, such as increased digital security and heightened accuracy and compliance.
For example, outside of oil and gas, the insurance industry has made cost reductions of between 25-40% by using RPA to automate standardised processes.
The splintered approach to digital transformation within the oil and gas sector is a limiting factor on companies’ abilities to withstand commodity price volatility.
In an environment where budgets are restricted, any proposal to invest in new digital capabilities will rightly face robust challenges.
But understanding of the investment case might be hindered by a confusion between the long-term, futuristic ambitions for the sector and the practical steps that can be taken today to improve
operations.
Revolutionary, front-end inventions could radically improve business performance but they might be perceived as too expensive when, in reality, the most beneficial
innovation might be a small, step-change rather than major project implementation.
The significant factor behind digital transformation is the increased pressure to innovate and drive change from external
disruption; for example, the changing nature of the energy mix.
The oil and gas industry has been the dominant source of power for a very long time but within the next few decades this is predicted to shift as the adoption of electric vehicles and the development of associated infrastructure increases.
The oil and gas sector must question how to stay relevant in a low-carbon future. Embedding and encouraging a culture of innovation will be vital in forging a way forward.
The future for the oil and gas industry is out there whether you choose to navigate through the mist or not. Those who devise a plan and start to make steady progress are poised for success if they do it right.
Gemma Noble, EY partner
Recommended for you
