Mumbai: Digital transformations are sweeping industries, reshaping businesses, and creating altogether new ecosystems that were never seen before. Like other sectors, the applications of digital technologies are helping the oil and gas industry to become more efficient, competitive, and eco-friendly in its operations. All these changes, in turn, are boosting the sustainability of the sector while allowing participating stakeholders to deliver enhanced benefits across the value chain.
Oil and Gas Sector: Digitalisation Challenges
While digitalisation brings multiple benefits to the table, the integration of digital technologies in the oil and gas sector faces some tough challenges. Legacy methods and physical infrastructure are challenging to do away with as they have been deeply integrated into the industry for a long time now. In addition, the digitalising strategies mandate the integration of large swaths of data into the business functions and operations which in itself is a hard nut to crack. Further, upgrading employees' skills to achieve effective digital integration is a demanding task that mandates investment of both time and resources on behalf of the oil and gas firms. Moreover, the fast-evolving nature of technologies makes it difficult for firms to finalise which tools need to be selected to achieve the desired levels of digital transformation.
Building Sustainable Oil and Gas Sector: Recommended Digitalisation Strategies
a) Decentralised Access: Data silos are created when the data is collected, compiled, and analysed at functional levels without offering any centralised access to other departments. To achieve sustainability in the oil and gas sector, it is crucial to break these silos and to that end, the creation of a centralised database is a prerequisite. This central data repository will offer data access to all participating stakeholders, leading to agile operations, faster decision-making, and more transparency. All these benefits, in turn, will come together and help make the oil and gas sector more sustainable and resilient while delivering better value to stakeholders across the value chain.
b) Leverage Technology: Artificial intelligence (AI), machine learning (ML), and automation can play a crucial role in enhancing the sustainability of the Oil and Gas industry. These digital technologies can help firms in demand forecasting, inventory management, and supply chain optimisations. Further, the use of these tools can help in reducing wastage, lowering emissions, and cutting costs associated with the inbound and outbound logistics of oil and gas firms. All these benefits then accrue to elevate the sustainability quotient of the entire ecosystem of the oil and gas industry.
c) Digital Replicas: Creating digital twins of strategic activities can prove extremely beneficial for enhancing the sustainability of the oil and gas sector. The biggest advantage of digital replicas is the deep understanding these offer to stakeholders and partners to deliver better value to end customers. This profound knowledge helps firms know their strengths, identify weaknesses, and detect the potential issues that might hamper the sustainability of the sector in the long term. The comprehensive assessment also allows organisations to make changes with the desired speed and efficiency, thereby helping the oil and gas industry to become more sustainable and eco-friendly in its operations.
d) Collaborative Partnerships: By striking collaborative partnerships with researchers, entrepreneurs, and tech startups, the oil and gas industry can achieve higher levels of digitalisation and sustainability. Such partnerships can prove extremely beneficial in enhancing the reliability of assets, delivering operation insights, strengthening configuration management, and promoting technology innovations, thereby putting companies on the path of digitalisation and enhanced sustainability. The enabling role of policymakers also becomes crucial here as open and constructive policies can prove instrumental in catalysing such collaborative partnerships in the oil and gas sector.
Digitalisation can become instrumental in enhancing the sustainability of the oil and gas industry. Firms operating in the industry must integrate digital technologies as it will help them achieve superior functional effectiveness and operational efficiency. Digital tools also strengthen workflow improvements and increase net productivity by facilitating superior forecasting and data-driven decision-making. In addition, digitalisation also makes oil and gas firms more sustainable by helping them cut down their carbon footprints significantly.
The article is authored by UPES ON assistant professor Rahul Sharma.
