Digital Oil and Gas: A Point of View
At this point, pretty much everyone who’s involved in the oil and gas industry has arrived at a conclusion that sounds something like this: given changes in global hydrocarbon supply and demand, commodity prices remain under pressure, meaning that systemic, enduring, structural cost change is required; the low cost producers in this new environment will be the most attractive to capital markets and will receive the majority of incremental investment, while higher cost producers will struggle to perform, leading to financial difficulty and lack of investment opportunity.
Of course, you could argue that any first year finance student could string together that basic logic regarding how capital markets function, but it’s an incredibly important point for the industry to come to terms with, as it is instructive in how to move ahead.
While the energy industry undergoes a substantial transformation on its own, the broader economy is also rapidly shifting. Advances in technologies have transformed many industries and continue to provide opportunities and challenges, with a rate of change that continues to accelerate.
Now is the time for Canadian oil and gas companies to embrace digital technology and rethink the way they are running their businesses to remain competitive within the global industry.
We Have a Strategic Plan; It’s Called “Getting Things Done”
To support this endeavor, my colleague, Ryley Kornelsen, and I have prepared a series of papers. We explore the state of the industry and then discuss what we believe are four key technologies: the Industrial Internet of Things, Machine Learning, Automation, and Blockchain.
To truly leverage the power of today’s technologies, organizations need to establish a digital foundation. We believe that foundation is comprised of (at least) the following elements:
- Master Data Management
- An Enterprise Digital Core
- A Real Time Transaction Platform
- A Real Time Analytical Platform
- Workforce Management Platform
- Standardized Tools and Processes
- An Enterprise Cloud Strategy
- An Enterprise Integration Strategy
In addition to establishing this foundation, organizations should be experimenting with key technologies to improve operating efficiency and improve returns. One of the biggest existing challenges, however, is that these technologies need to be understood, and paired with a pragmatic approach, to be operationalized.
We have focused our attention on the Industrial Internet of Things, Machine Learning, Automation, and Blockchain by providing:
- (What we hope is) a clear definition of the technology
- The business challenges it addresses
- The potential business value it delivers
- Four use cases for oil and gas
- Some ideas on how to get started with the technology
You can download the papers, for free, right here.
Over the next few weeks, Ryley and I will also post some summary articles here on LinkedIn.
We’re excited about the opportunity for change, and hope these papers add to your conversations on the topics.
We are, of course, also happy to talk about any of these topics, so always feel free to reach out to us.