Oilprice.com posed the question “Can tech really transform the oil industry?” in a recent article, and it got me thinking. The idea that this is even a question and not a statement of fact is in itself naive, although I understand why they worded their headline as such. With a million buzz words floating around, let’s keep it simple – the “Amazon effect” will change the industry in the long term. Here’s a take on how…
- Digital products aren’t new, but they are growing in adoption faster and faster at all stages of the industry. Entire global operations are now monitored in one room using sensors remotely connected and transmitting everything form pressure to flow rate digitally around the globe.
- Amazon is winning, not by simply being digital, if that were the case there would be a lot more billionaires out there. What they have done is introduce radical innovation and experience design and implementing automation via artificial intelligence (AI). Almost anything that can be automated for Amazon is and the amount of computer learning to make things more efficient makes heads spin. It’s this same approach that will rapidly transform the oil and gas industry.
Entire rigs will be operated remotely, where one operator (with the help of AI like IBM’s Watson) overseeing 40-50 wells. E&P will use AI to man drilling platforms, feed pipe and even analyze seismic data with accuracy that guarantees a rigs success. Note this trend is already started – a Bloomberg article from January of 2017 reported that automation means wells need only five workers, down from 20.
- Lastly, technology will continue to change the demand and downstream/finished products. While our industry is overly focused on the upstream, followed by midstream projects, the downstream industry will likely see the most “change” outside of automation and efficiencies. The product innovations that will fuel inner planetary exploration, commercial flights to space and yes even the bodies and panels for the future automobile.
Just as the jobs our children have in 20 years are for things we haven’t even thought of, so will the face of the oil and gas industry. It will still be here, it will still be thriving with global demand, shareholders, OPEC and more… but the processes and people will likely only resemble a fraction of what it is today.