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Modern innovation is helping the oil industry keep up with the competition cut costs, addressing security concerns and incorporating better data analytics to continuously improve existing systems. In the face of growing global uncertainty about oil demand and its price, digitization and the introduction of new technologies will help the industry address these challenges head on. Supply chain costs have always been one of the major costs of the oil and gas industry, a cost that has been rising in recent years. Due to the complexity of the system, the use of third parties and the lack of digitization, significant inefficiencies in the industry supply chains lead to higher costs and project delays. A 2017 Weforum report said the potential value of the digital transformation of the oil and gas industry could reach $ 2.5 trillion if operational constraints were relaxed to accommodate modern technologies.
Furthermore, the digitization of the sector could have a positive impact beyond savings and financial gains. New technologies could lead to a significant reduction in CO2 emissions. We can expect to see an estimated equivalent reduction of 1,300 tons of CO2, 800 million gallons of water and a decrease of 230,000 barrels of oil lost in oil spills.
New technologies are rapidly being introduced by major players in the industry. For example, digital twins provide interactive 3D simulations that engineers can use to operate oil rigs and rigs remotely when they can’t reach the rig.
Digital twins, while not a recent innovation, are proving increasingly useful during the current global pandemic. Thanks to advances in technology processing, they are now being used by the traditional oil industry, allowing engineers to work remotely. Providing a much needed response to restrictions such as social distancing, Mitch Flegg, CEO of Serica Energy Plc. he told Bloomberg.
Furthermore, we have seen great advances in the use of data analytics. In an EY Global Oil & Gas survey earlier this year, 85% of respondents said they already use some form of advanced analysis. Analytics played a huge role in the digitization of the sector.
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EY analyzed 500 oil and gas projects worth $ 1 billion or more and found out 60% of the projects suffered delays and 38% exceeded the budget. They found that many of these delays were due to poor data analysis systems. Some of the major mistakes were the lack of centralized and reliable data, ineffective processes, and the need for manual data transfer. Delays in reporting and poor communication times also contributed to these shortcomings.
Large companies recognize that the way to combat many of these challenges is through greater digital innovation. In fact, 80% of respondents highlighted their intention to invest at least a moderate amount in technology to keep up with the technology trends in the industry. Furthermore, 58% said there was a rush to invest in these types of technologies in response to the global pandemic.
Although Covid-19 has hindered the oil industry in several ways, reducing demand and production in different areas of the world, it has had some benefits for the industry. For example, the drive towards greater digitalization and technological innovation is stronger than ever. Companies are rushing to find alternative work options for rig personnel due to unpredictable pandemic restrictions. Remote monitoring systems such as drones they are used to examine the pipes and make sure they are in full order. And the economic concerns of the downturn seen earlier this year are being addressed by increased efficiency and automation.
By Felicity Bradstock for Oil “
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