Several months ago, I attended a large oil and gas conference in Madrid. All major oil and gas corporations were at the conference, presenting impressive technologies from their huge booths. What was surprising to see was that most of the technologies presented were technologies focusing on next-generation energies – technologies that correspond with the strategy of all major gas and oil companies to become broad energy companies that offer a wide range of energy sources and products besides just gas and oil. Next-generation technologies are not just part of oil and gas companies’ business strategies that are re-branded as “energy companies” but are part of these companies’ commitment to becoming carbon net zero by 2050, if not sooner.  In private conversations that I conducted with executives who presented at the conference, they mentioned that while next-generation energies are, indeed, the future, oil and gas as major sources of energy are here to stay. These conversations are in line with the International Energy Agency’s (IEA) projections that by 2050, oil and gas will remain a major energy source and makeup between 45%–50% of the energy market. These projections also assert that there will be a 40% increase in global demand for and consumption of energy, and a similar, if not higher, production of fossil fuels in 2050.  As such, oil and gas companies need to become more efficient in order to withstand competition from the renewable energy industry, which is projected to be valued at $1.1 trillion by 2027. The oil and gas sector needs to leverage digital transformation to overcome these disruptions and remain competitive. In order to continue to provide the much-needed energy while reducing environmental impact and becoming more efficient, oil and gas companies are embracing technology to reshape their operating landscape, improve productivity, increase efficiency and cost savings and reap the benefits of reduced environmental impact. In fact, a 2022 report by McKinsey suggests that carbon emissions could be reduced by up to 20%. 

Although the oil and gas industry is known as a major driver of climate change, digital transformation can make it as efficient as possible. Digital technologies have proven their potential in the oil and gas sector. Leading players have used digitization to cut costs, boost output and improve efficiency across the end-to-end value chain. Now companies want to take the next step: embedding technology-enabled operations into every part of their business. We see more and more digital technologies being adopted by oil and gas companies. AI, ML, data analytics, IoT, cloud computing, and robotic automation have all paved the way for the oil and gas digital transformation. These technologies allow the physical maintenance teams to be less reactive. Today, physical maintenance, remote monitoring and predictive maintenance activities can all be done by using IoT technologies. This also ensures the safety of workers by helping them move away from potentially hazardous workspaces. For example, IoT deployment reduces the need for travel to offshore oil and gas production sites. AI and ML also enable the facilitation and reduction of the cost of the process of analyzing seismic imaging.

Digital technologies have already proved their potential in the oil and gas sector. Leading players have used digitization to cut costs, boost output and improve efficiency across the end-to-end value chain. Now companies want to take the next step, embedding technology-enabled operations into every part of their business and for that they are looking for innovative technologies from variety of vendors – large and small. This is a great opportunity to start-up companies with disruptive technologies to take part in this growing lucrative industry.