Oil and Natural Gas Industry Must Invest in New Technologies
Companies must take advantage of stable oil prices to digitalize their business
Automated inspections and data-driven optimization of operations are among the most significant trends
Smart fuel stations are champing at the bit to get started
Digitalization is in full swing and is bringing about profound transformation of companies and, indeed, entire industries and sectors. In the last several years, oil companies have had to struggle with relatively low oil prices and declining profit margins, which has diverted priorities away from the topics of innovations and investments in this field.
“But as energy prices become increasingly stable, the companies now have the resources for investments and innovative technologies. They should take advantage of this opportunity to reduce costs long-term and ensure that they do not fall behind in their competition with innovative competitors,” said Volkr Rieger, Partner at Detecon.
The search for, assessment, and comparison of new technologies and trends presents a challenge to companies, however, who are confronted with a scarcity of time and resources. This situation has prompted Detecon to take a close look at the latest developments in the oil and natural gas sector and to summarize the findings in a trend report that will give decision-makers in the industry a valuable overview over current and future trends that could become relevant for their own business model.
The trend report, prepared with the aid of the Detecon Radar, the online trend database of the Detecon Innovation Institute in San Francisco, consolidates a broad range of technological trends into seven trends specific to the oil and natural gas industry. These developments are followed for a number of years along the oil and natural gas supply chain: from exploration and production to transport, refining and on to trade and sales. In addition, every trend is assessed according to the following criteria: complexity, market penetration, risk, novelty, and maturity.
Three huge trends are becoming evident for the oil industry in 2019:
Automated site inspection
Pipelines and refineries are vulnerable to damage because of the great distances of thousands of kilometers and the remoteness of their locations. As a consequence, the sites must be regularly inspected and monitored so that possible damage can be revealed. In the near future, these inspections can be automated using drones and robots in combination with automatic learning algorithms.
Data-driven optimization of the production facilities
Emerging technologies such as low-cost sensors, 5G, the internet of things, and artificial intelligence will enable companies to collect large quantities of data along their up- and downstream activities. Real-time data from below-ground sites or sites that are difficult to access will help the operators to understand better the actual condition of their equipment, allowing them to optimize drilling and production operations. The combination of real-time and historical data records will also make possible predictions and computer-supported recommendations for operating decisions in the field.
Smart gas/fuel stations
The development of new fuel station concepts is the third trend that companies should, as a minimum, prepare to tackle. Changes in customer behavior and developments on the mobility market are forcing fuel stations to rethink their traditional business models. At the same time, new technologies are giving rise to new types of services that can be offered. For instance, when traditional fuel stations are transformed into smart gas and service stations, customers will be able to drive into the station, have their vehicle refueled by the personnel or robots, and leave the station without ever getting out of their vehicles. Payment will be made in the background via mobile payment. Any purchases that are made will be delivered straight to the car.
“The first two of these trends make it possible to reduce costs and optimize operations, resulting in a competitive advantage on the market. Developments relating to the smart gas and service station create opportunities to rethink the traditional fuel station concept and to exploit new business potential. That is why companies should act now and develop new business models that create profitable ecosystems encompassing their current retail trade networks,” said the Detecon Partners Dr. Christian Kleinhans and Dr. Volker Rieger in summary.
Detecon prepares trend reports for many different industries in regular collaboration with the Detecon Innovation Institute in San Francisco.