Around 80% of upstream oil and gas companies plan to spend the same, more or significantly more (30%, 36% and 14%, respectively) on digital technologies over the next three to five years, according to a new Accenture and Microsoft report.
Driven by low oil and gas prices, respondents to the 2016 Upstream Oil and Gas Digital Trends Survey said that they were increasing investment in digital technologies to make organisations leaner and smarter, and to drive costs and value. Respondents included international oil companies, national oil companies, independents and oilfield services firms.
More than half of respondents said digital is already adding high to significant value to their businesses, particularly because it reduces costs, while 56% cited making faster and better decisions to as the biggest benefit of digital technology.
Almost 57% have invested in mobile, 44% have turned to internet of things (IoT) technologies and 38% to the cloud, compared to 49%, 25% and 8% in last year’s survey respectively. Over the next three to five years, 38% expect these investments to shift more to big data and analytics, 36% to IoT and 31% to mobile. Almost two thirds plan to implement more analytic capabilities in the next three years.
“In the current challenging environment, the upstream oil and gas industry is focusing digital technologies on areas that help them work smarter and deliver significant efficiencies and savings in the short term while enabling them to make better decisions faster,” said Rich Holsman, global head of digital in Accenture’s energy industry group. “So, in the short term we expect these companies will continue to invest in areas that help lower operations costs through technologies like increased worker productivity with mobility, lower infrastructure costs through the cloud and drive better asset management through analytics.”
Respondents also indicated that digital technology’s biggest impact to date has been increased employee productivity and engagement, better training and reskilling opportunities, and empowering them to connect field workers. Around 60% said they plan to have field workers and assets digitally connected with smart devices and IoT technology.
In addition, respondents indicated that the cloud is no longer primarily used to improve infrastructure, but to enable mobile tools. This trend is expected to increase in the next three to five years as more companies adopt the cloud to get faster and more value from other digital technologies.
“By taking advantage of the intelligent cloud, greater use of analytics and IoT go hand in hand with what we are seeing in our business today – the advent of the industrial internet enabling the power of digital across the oil and gas landscape,” said Craig Hodges, general manager of the Gulf Coast District at Microsoft. “You can see this trend gaining traction from connected wells and intelligent pipelines to highly- efficient digital refineries.”
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