If ever there was an industry and a time that epitomize “disruption,” it is the oil and gas industry today. Price declines of more than 50 percent since June 2014 have upended the sector, and dominate the agendas of industry executives. In fact, a new Cisco study identified “energy price volatility” as the external market force causing greatest concern for the industry today. The study, “A New Reality for Oil & Gas: Complex Market Dynamics Create Urgent Need for Digital Transformation,” shows an industry ripe for transformation by the Internet of Everything (IoE).
In the past, oil and gas (O&G) companies have attempted to address oil-price declines by resorting to short-term cost-cutting measures to see them through the slump. But this time is different. For one thing, it does not appear that prices will recover any time soon—if at all. Demand is down, and new production technologies are driving efficiencies that will increase production and keep prices low for the long term. This time, O&G firms will need to do more than cut costs – they’ll need to change their operating models through digital transformation.
For the study, we interviewed oil and gas executives, consultants, and analysts in 14 countries about the industry’s challenges, opportunities, and priorities. These experts identified intelligence from data as the key area needed to improve operational efficiency, and data analytics as the No. 1 driver of faster, better decision-making.
Additionally, the survey named faster problem resolution, better process control, and improved worker safety as the top three business benefits of IoE-powered technologies. The top three IoE-driven operational benefits were improved production efficiency, reduced downtime, and equipment performance optimization.
As an industry, oil and gas has been “digitized” for some time. True digital transformation, however, now requires adoption of the Internet of Everything — the networked connection of people, process, data, and things — throughout the value chain. Innovative firms are using today’s turbulent market landscape as an opportunity to grab competitive advantage by harnessing new IoE technologies. Read More »