Most oil and gas executives are aware of the gains to be had from digitisation. According to the recent Digital Operations Study of O&G companies by PwC Strategy&, industry leaders anticipate digital applications will deliver on average a 10 percent increase in revenue due to increased production and reduced time to project start-up, and an 8.5% percent decrease in costs from improved operational efficiency, over the next five years. But despite its recognised potential, the digital revolution in oil and gas has not yet fully materialised. Of the 200+ oil and gas companies in our survey, only 7 percent identified themselves as "Digital Champions," defined as companies that have "a clear position in the marketplace with complex and tailored internal, partner and customer solutions offered via multilevel digital interaction". More than 70 percent of respondents saw themselves as being in the early stages of digital maturity.
Our study highlights a number of digital technologies and applications that have the potential to transform operations from back office to plants and production sites. These include manufacturing execution systems (MES), cloud computing, energy analytics, the Internet of Things (IoT) and machine learning. These digital applications are able to integrate real-time data and advanced analytics for better decision-making, and underpin applications that can dramatically improve efficiency and sustainability.
One of the clearest and most viable responses to these systemic challenges is to accelerate digitisation strategies to help improve resilience and remain attractive to investors. This effort should include:
- Harnessing data integration and analytics applications to focus on business priorities;
- Investing in foundational capabilities related to technology architecture, talent, data management and governance, and partnerships and alliances;
- Adopting a digital operating model with clear governance and accountability guidelines;
- Embedding an agile culture to design and implement innovative solutions.