The OPEC price war and economic effects of COVID-19 have engulfed markets, media outlets and the world’s attention. Recent industry trends and company initiatives have been put on hold as the world takes stock of these events and evaluates how to move forward. With that in mind, this article was written before the OPEC price war and before COVID-19 had spread throughout the world. Although capital spending may be dramatically curtailed in the short-term, the issues discussed herein are no less relevant than they were a month ago.
As producers pivot from dealing with capital spending increases to living within operating cash flow, digital technology has witnessed early adoption, largely in part due to the falling cost of acquiring and storing data. Data analytics, cloud computing, predictive maintenance and artificial intelligence have the ability to transform the oil and gas industry.
Several high-profile partnerships with big tech have been announced along with oil and gas tech start-ups, paving the way for continued adoption across the industry. Schlumberger, Chevron and Microsoft announced the collaboration in September 2019 to accelerate the creation of innovative petrotechnical and digital technologies. Amazon Web Services and Google are also providing cloud services to the industry, which, until recently, had stored much of its data on internal servers.
Digital technology adoption has the potential to revolutionize the industry, while also contributing to a reduction in upstream capital investment as machine learning and artificial intelligence increase efficiency. Oil and gas companies that successfully integrate digital technology into their operations will be those that have buy-in at all levels from management to the operating level, effective gathering, structuring and analysis of data and combining operating knowledge with data analytics capabilities.