There is no doubt that digital tools are partners of energy companies - which we must use collectively. The company's digital transformation lies on the three pillars such as digitizing, work and enable.
Upstream of the supply chain, which focuses on exploration and production, has historically been the digital leader in the energy market. Workflow integration and data usage have become the norm, which means there is a lot of knowledge and practice to use as a springboard for the industry.
There are plenty of economic opportunities, which are especially relevant when oil prices remain stable at a relatively low $ 75 a barrel.
McKinsey said, “Using improved connections to optimize drilling and production throughput and improve maintenance and field management could add $250 billion to the upstream operations of the oil industry by 2030.”
The good news is that up to 72% of the $250 billion can be achieved by saving time and money with existing infrastructure in the oil and gas sector. For offshore operations only, larger connections for digital equipment and analysis can reduce oil costs by up to 25% per barrel.
Due to Covid-19 unexpected supply-demand dynamics, global energy transformation, net-zero targets, and geopolitical uncertainties are putting them under pressure. In this fog of speculation, real-time analysis symbolizes an opportunity for consistent data pricing and agile decision-making across the supply chain.
This is especially true for the oil and gas sector, which has remained a pillar of many national economies in the region. Both Covid-19 and falling oil prices have increased the challenges of existing sectors such as price volatility, operating costs, labor shortages, safety, and environmental pressures.
The Covid-19 epidemic has served as a strong reminder of the benefits of having a strong digital conversion strategy to ensure business continuity to various industries in the Middle East. In recent years the oil and gas sector has been embracing digitalization as they have seen the benefits of proactively engaging in the digital world firsthand.
After a year of epidemic-induced stress, a large economic saving is extremely tempting. The International Monetary Fund (IMF) says 2020 was the worst economic crisis since the 1960s. In today's environment, there is a huge opportunity for oil and gas companies to revive themselves and move towards real profits as the economy recovers from the effects of Covid-19.
Digital investment can provide much-needed relief. There is a great scope for digitization of the oil and gas industry as a whole. The world's energy demand will increase in the long run, which will require the deployment of new equipment.
The industry needs to transform its challenges into opportunities for the future, and this moment must help revolutionize the energy sector as a whole. These include investing in advanced technologies to enhance operational activities, enhancing their health and safety plans, and strengthening exploration and production.
At a functional level, taking advantage of emerging technologies such as AI and IoT can enable more real-time tools and environmental-situation monitoring, as well as provide transparency and greater control over the process.
Speaking of human resources, the oil and gas industry still relies heavily on humans. Using digital tools to protect the health and safety of your employees must be a top priority. With advances in digitization, they can now make it possible to use a single, function-rich terminal for more efficient inspection along with audio and video communication.
In addition to operations, today's high-performance computing solutions are also a strategic advantage in the oil discovery race. Rapid processing of public information is needed to expedite decision-making. An overall solution that integrates a company's hardware, system, and cluster management, is now available to average service processing hours to minutes and service processing error rates by less than half.
Companies have decided to explore based on seismic and other geological survey data, be it coastal or offshore. In the face of today's market challenges, either you have to invent or disappear. Covid-19 has put additional pressure on this need for digital transformation in the oil and gas sector.
Currently, in the UAE oil and gas sector, the main focus is to increase efficiency, reduce costs, focus on results, and optimize performance. Automation and digitization are the only way to reach each of these goals effectively. Moreover, technological aggression and digital transformation cannot be neglected when the goal is to meet the country’s growing energy demand and its trade relations.
Like any other business sector, digital transformation will make Dubai's oil and gas industry bigger and better. Through this, the sector will gain better skills for incident forecasting, which will reduce operational risk and effectively protect workers.
Production is still exceeding the market demand in the country, which keeps prices low with urgency for new skills. The country's oil and gas companies have to go to this stage. Currently, it is all the huge production that matters for the company and not about the margin of the company.
From acquiring rights, from exploring to pricing, great decisions come from good data. It helps oil and gas companies develop new capabilities in exploration and operations that ultimately help them make more return on investment.
Significant opportunities for digital transformation exist in the oil and gas sector. There are far more opportunities for advancement in cloud computing than the industry is currently using. Also, a service-centric architecture, digital tracking, and industrialization have all come together to expand management capabilities to reduce IT costs but increase efficiency and agility across the sector.
IT pays the price of optimization in the oil and gas sector, and this could lead to a step-change in quality creation over time, which will also reduce service costs. It aims to reduce complexity, increase responsiveness and provide higher efficiency and performance in businesses.
The study predicts that savings in general, sales, administrative and operating expenses will increase by 25%. Production rates will increase by 8%, while production costs will decrease by 4%. Even the bottom will improve by 10%.
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That means working as an industry role model for sustainable health, safety, security, and the environment (HSSE), reducing our carbon footprint, and maintaining highly efficient and effective process management. This means a customer-centric, preferred business partner and a reputable employer.
When the current fields are exhausted, and companies have to find more complex, isolated, and expensive energy sources, especially during the long period of low oil and gas prices, it will be necessary to survive to increase efficiency.
Start using digital opportunities shortly by publishing a clear digital marketing plan in the complete business plan. This will allow companies to allocate the right resources towards the goals and stop non-productive investments. An added benefit is the use of digital technology's value-added capabilities to eliminate operational efficiency and build coordination with key business partners.
Digital innovation and platforms can also be used to create values as part of the resources division. To further illustrate this, companies need to seek similar financial performance from their digital assets and their business investments. An important advantage of the strategy will be the increased economic margins achieved using digital solutions and the abandonment of complete dependence on the industry as the sole earner.
The next step in the transformation is to move consumer processes towards a customized and seamless experience. Sectors like robotics and artificial intelligence will adopt digital tools, improve efficiency and performance, and reduce costly shutdowns and downtime.
The ultimate opportunity is related to value creation, which transforms a business model for all entities that leads to digital-based models through all value chains that subtract the maximum efficiency that is typically related to the conventional approach.
Dubai is using technology to create a whole new kind of city destination from the ground up. To encourage digital start-ups and innovation, as well as technology initiatives aimed at reducing traffic congestion, changing healthcare, and increasing resource smart metering, Dubai is moving towards a technology-driven future, making the UAE a digital hub.
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