How tapping connectivity in oil and gas can fuel higher performance
The oil & gas industry continues to experience multiple price shocks and supply shocks. Factors like the advent of shale, excessive supply, and forgiving financial markets that overlooked limited capital discipline all contributed to poor returns. Add to this increasing environmental and societal pressure and change would appear to be inevitable. And yet, despite having many of the technologies enabled by advanced connectivity already at its disposal, McKinsey asserts that the oil and gas sector has yet to realize much of connectivity’s potential.
McKinsey make the case for digital transformation, calculating that between $160 and $180 billion could be realized with existing infrastructure, while an additional $70 billion could be unlocked with the addition of low-Earth orbit (LEO) satellites and next-generation 5G technologies. McKinsey’s work with the oil & gas sector suggests offshore operators can reduce costs, including operational and capital expenditures, by 20 to 25% per barrel by relying on connectivity to deploy digital tools and analytics.
The article ends by discussing strategic thoughts around investment, business models, and incentives as well as remaining obstacles and ideas on ways to start the journey.
Why it’s relevant to Nextspace
This article is of interest to Nextspace Partners regardless of industry, as it makes the case for how digital twins can deliver substantial value to an industry swamped with both issues and technological opportunities.
It’s also of interest because it shows how a digital twin can absorb and address multiple issues and stakeholder perspectives. Price, supply, efficiency, safety, compliance, emissions, and the integration of multiple and new technologies. All are addressed by data-based drilling, production, maintenance, supply-chain optimization and automation delivered by technology. Brought together by digital twins.
