Digitalisation: The Hot Topic in Oil & Gas
Digitalisation, artificial intelligence and machine learning; it is a hot topic. Everyone across the world, including in the oil and gas industry, is talking about it, although it could be admitted that in some ways we were a little bit slow to join the party.
Why is this so important? Money is, as ever, a prime mover; according to a 2018 Wood MacKenzie report, the adoption of digitisation and machine learning technologies could result in cost savings in the order of $75 billion in the upstream sector alone by 2023. These are likely to come from things like speedier drilling, fewer dry holes, more automation in production and the ability to undertake predictive maintenance. There are also benefits in health and safety, as fewer workers are required to work in dangerous wellsite situations.
The technologies involved have developed rapidly in the last couple of years, and their adoption by O&G is increasing at a very fast rate. At conferences and meetings, presentations on the subject of digitalisation and AI have moved in a very short space of time from simply explaining the concepts and how they could help the industry, to giving practical examples and case histories of the time- and cost-savings of applying these technologies. Ideas that barely a year or so ago were presented as new and innovative, such as using machine learning to rapidly update reservoir models in real-time, are becoming mainstream, as discussed in a couple of articles in this issue.
Interestingly, there are newcomers among the ‘usual suspects’ of oil and service company people giving talks at these conferences and seminars; the likes of Amazon, Google and Microsoft are now commonly sending delegates and speakers to address this industry, which they see as ripe for further digitisation and ready for the disruption − to use that popular buzzword − that this will inevitably bring.
As the use of digitalisation and artificial intelligence moves more mainstream it becomes accessible to a greater number of people and to a larger range of companies, possibly allowing small start-ups to leapfrog slower moving established organisations. In the always volatile oil industry, flexible, fast-moving companies that embrace this trend, using their data as an asset to be mined and learnt from, will ultimately be the successful ones.