The falling costs of renewable and batteries, cost-effective clean electricity, shale gas along with excessive supply of oil has made oil prices to fall and energy companies in loss for quite some years now. E&P companies who are willing to innovate and use disruptive technologies will unlock tremendous potential value and will remain profitable in many years to come despite of oversupply.
Organizations when confronted with disruptive technologies that threaten their current way of life, some survive while others failed. Examples of companies that have not survived include Kodak, a firm over 100 years old, Blockbuster, Nokia (cellular business) and Borders. Disruptions are impacting industries like education, supply chain, entertainment and ecommerce.
Emerging disruptive technologies that are reshaping many industries include Blockchain, Machine Learning, Artificial Intelligence AI, Robots, Automation and Cloud Computing.
Blockchain is a transformational technology and is expected to disrupt the oil and gas sector in near future. Cryptocurrencies based on Blockchain are shaking up the financial sector where it makes possible for parties to exchange money without the need for intermediaries like banks. The main advantages of Blockchain are cost and time savings, increased transparency and trust among parties and mitigation of fraud risks. Smart contracts are another interesting application of Blockchain that execute under specified conditions. Blockchain application can be applied in oil & gas supply and financial transactions. Smart contracts can be used between E&P operators and service providers. Blockchain can be used in regulatory filings and as a platform to improve cybersecurity of critical data which can be applied to E&P data & record management to mitigate risk of data breaches.
One of the biggest challenge for oil & gas sector is to mitigate risk to human life. Sophisticated robotics can be deploy to monitor and inspect offshore oil and gas pressure vessels, rigs and these sophisticated robots can operate where humans’ involvement is risky. Other industries are already in transition phase to deploy robots. World’s first person-less bank has been opened in Shanghai, China in late April 2018, where robots (AI workers) run entire banking operations with no help from humans. This high-tech branch is meant to making banking more personalized, convenient and efficient. Sweden is reshaping healthcare through Artificial Intelligence with machine learning for efficient solutions specifically for heart failure patients. This will help in improved decision making by reducing risk of medical errors, improved care quality and reduced costs. AI and Machine learning can be applied in oil & gas sector particularly in prospect evaluation which results in improved knowledge, better decision making and reducing uncertainty.
With availability of 5G revolutionary technology around corner, huge number of things connected to network (IOT), high speeds, minimal delays, increased reliability creates brand new opportunities for oil & gas sector especially for offshore like monitoring of rigs & live data streaming to onshore. 3D printing is another interesting area for oil and gas sector which means fast, cost effective repair/replace tools at offshore.
McKinsey publish report in Dec 2017 that 800 million workers will be replaced worldwide by machines in 2030. Some mentioned that 02 billion people will lose jobs in next 12 years due to automation. These will also create new jobs but people need new skills.
This talk was given at Oil&Gas conference ECIM at Haugesund Norway and it focused on greatest potential of disruptive technologies and its applications in oil & gas sector. What strategies oil & gas companies should adapt to leverage all these new disruptive technologies? How to experiment with new technologies to accelerate the pace of innovation and focus efforts where they are needed in your organization?
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