It’s easy to see digital transformation playing a major role in consumer-facing firms. Digital customer experience sits at the core of retail — through Web sites, mobile devices, and increased focus on customer experience across the complete engagement cycle. However, it might be surprising for many how digital technology transforms core process industries like oil & gas.
At Huawei’s Global Energy Industry Summit 2015 — held this past August 19 in Almaty, Kazakhstan — the impact of digital to this traditional industry was the key topic. At this conference I gave a keynote, prepared with my colleague Holger Kisker, on the major industry trends and the challenges and opportunities of the digital business transformation in oil & gas. The current deep price drop for oil has focused firms on rapid and targeted response to increasingly dynamic markets of hydrocarbon supply and demand.
Some roles in the sector have a natural ability to thrive in price drops — like refiners, distributors, and retailers. But the closer you get to production, the tougher it is to stay whole. And this is where digital comes in. Firms that can dynamically react to volatile market needs — with growing operational efficiency — can meet market and customers’ changing expectations and still make money. And digital is at the core of this capability.
These challenges in oil production operations clearly highlight problems, like the aging workforce, leaving gaps across the industry. But filling the biggest operational gap will, at the same time, open the biggest door. Take, for example, the absence of modern remote sensor equipment at the majority of wells. When production falls off, many pumps must be checked by people traveling into the field to determine the cause. It’s costly, slow, and misses critical information like reduced cred pressure and production volumes.