Chapter 1
Instilling a culture of innovation
A new generation of leaders and decision-makers is needed to facilitate adoption of digital technologies for innovation.
Nearly two-thirds of respondents in the abovementioned survey consider the inability to change quickly as a major challenge to the adoption of digital technologies in their companies. Oil and gas companies are basically process-driven. From upstream to downstream, every step of the value chain is organized by rules and regulations designed to achieve a routine working environment, posing a major obstacle to effective transformation in the sector.
A new generation of leaders and decision-makers is needed to move the needle on progress toward instilling a culture of innovation that supports the adoption of digital technologies. However, disruptive thinking does not necessarily come naturally to large, process-driven companies. Company-wide communication and training programs are ways to enable staff of all levels to better understand how these tools can help to improve individual and collective performance in the long run.
Chapter 2
Breaking down data silos to create value
Data consolidation is key to optimizing the potential of data insights.
Oil and gas companies, especially large and integrated ones, generate reams of data, much of which gets siloed within different business lines, geographies, or even single operating units. By not consolidating this data, next-generation digital solutions will fail to deliver maximum value. Fortunately, many companies are seeking to break down data silos. For example, some oil and gas companies have expanded their collaboration with technology firms to consolidate data on custom AI platforms, such as a “data lake” that holds data from the entire downstream portfolio, making it easily accessible and sharable.
Chapter 3
Developing internal resources and leveraging partnerships
Partnerships and developing internal resources will be key to fostering a culture of innovation.
There still appears to be a lack of confidence among senior oil and gas executives on how to define and execute their digital vision. Developing internal resources can be a valuable opportunity to foster a culture of innovation. Partnerships will also be key to developing digital capabilities, and we are starting to see steps in this direction.
For example, an international oil company (IOC) has formed a joint venture with a Chinese NOC to develop an automated well manufacturing system, and with an aerospace company to enable the use of fiber optics for oil and gas production monitoring. The larger players are also forming partnerships with technology companies to deliver digital capabilities. For instance, a Europe-based IOC is working with a large software company to optimize subsurface image interpretation using AI.
The energy landscape of the future will be vastly different from that of today. AI and digital technologies are poised to transform the oil and gas sector to unlock new insights and breathe new life into old processes. Realizing this value will mean answering key questions around data, talent and culture.
Realizing the value of AI and digital technologies in transforming the oil and gas sector to unlock new insights and enhance processes will mean answering key questions around data, talent and culture.
The demand for digital skills continues to grow across every industry, and those with AI and data science capabilities will remain some of the most sought-after talents in the coming years. The oil and gas industry will encounter stiff competition for talent and will have to overcome negative perceptions among younger generations who tend to favor careers in technology and other sectors. This makes reskilling and upskilling a greater priority for oil and gas companies.
It is no coincidence that the best leaders are those who manage the greatest transformations in trying times. Executives should ask the following key questions to move toward concrete, systemic solutions:
- To what extent is our business strategy reliant on digital technologies to get through the pandemic and make growth gains in subsequent years?
- Do we have an accurate assessment of our employees, and their current skills and development potential, as well as a sense of how many workers can be reskilled or upskilled?
- What are the current maturity, availability and access levels of critical skills within our organization and the local market, and which systems are in place to consistently and accurately measure those levels?
- Which tools, partnerships and resources are available to aid in digital transformation, and which still need to be identified, forged or acquired?
- Do we have a comprehensive view of organizational needs and resources to strategically prioritize our efforts and find the balance needed to position our organization for success now and in the aftermath of the pandemic?
Summary
Oil and gas companies are under significant pressure to remain competitive as they face a disruption in demand from COVID-19 and oversupply. The resulting convergence of digital, cloud computing and the new normal in oil prices underscores the potential for a massive transformation in the industry.
By instilling a culture of innovation, breaking down data silos, developing internal resources and leveraging partnerships, oil and gas companies can better position themselves for success through digital transformation.
