Energy industry should embrace digitalization

July 1, 2020
The energy industry should move faster along the digital transformation process, if it is to withstand the repercussions of the volatile oil price and COVID-19.

The energy industry faces continual pressures to operate more efficiently and with a lower carbon footprint. The downturn of a few years ago forced companies to implement more widespread efficiencies, with digital solutions enabling wider gathering, distribution, and analysis of information to support the streamlining process.

Once again, our industry has faced a major crisis this year, as oil prices briefly touched new historic lows amid the COVID-19 pandemic. Improving efficiency has never been more critical.

We need to de-mystify the hype around the digital transformation process. There are widespread practical examples of digital solutions already helping to change work practices. They include use of robotics and remote monitoring of equipment offshore; digital platforms cutting design and engineering times from months to weeks; digital twins developed at the design phase leading to optimized asset performance during field life as engineering, manufacturing and test data are combined with live-streamed operational data. A recent field development in the North Sea was designed from concept to enable automated drilling, digital twin, field worker tools and digitized logistics to support operational and maintenance planning.

Cost and speed are key considerations, but improved efficiency of equipment and personnel offshore also supports the drive to reduce emissions and deliver a sustainable energy transition.

Understanding how digital technology can be used to improve areas ripe for optimization is a starting point. Another is being open to how other industries are operating, which though it may not bear immediate relevance to today’s offshore environment, can help the sector progress more quickly in the future. 

Banking, which evolved from a high street to internet and app-based self-service, is a good example of an industry that adopted a particular digital route but ended up, through insight gained along the way, with a very different business model than originally foreseen. This type of incremental approach encourages the digital mindset needed to build cultural change, accelerate the adoption of new ways of thinking, and establish new business models.

Artificial Intelligence (AI) and robotics are widely employed in manufacturing and for large parts of the energy industry can provide benefits such as lower cost operations and carbon reduction solutions. Remote operation of offshore floating wind solutions can potentially further drive down the costs of sustainable energy.

Data sharing can be a contentious issue where a competitive advantage is perceived to be at stake; but the banking and pharmaceutical industries both have data-sharing platforms for certain confidential and sometimes proprietary information, so it can be done. There are now various industry repositories under which energy organizations are sharing data, particularly where collective value can be achieved.

In the defense industry, combat pilots are being re-trained to fly drones. This has parallels for the switch to remote visual inspections offshore, and there is undoubtedly an opportunity to learn from the challenges experienced in re-skilling.

Much future value will be driven by equipping those with deep, domain knowledge with the right digital tools and mindset to apply this knowledge in different ways. Over the course of the present decade, there will be a need for roles that currently do not exist, in fields such as data science, AI and machine learning. Developing digitally-enabled individuals with transferable skills is essential to creating a relevant workforce for the future.

Transitioning to a lower carbon future will make the energy industry a more enticing and exciting proposition for the next generation. However, other industries are also competing to attract individuals with digital skills, so the sector must continue to adapt if it is to retain or recruit major talent.

The energy industry has a long history of extraordinary achievement and a highly skilled and knowledgeable workforce. To continue to thrive, adapt and drive toward the next stage of the world’s energy future it should now more widely embrace the opportunities which digitalization offers.

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