We’ve been hearing for years about the digital transformation of multiple business sectors. And the technology sector is hardly alone in this regard: For the past decade, legacy industries have been making the transition, too,and the result has been massive opportunities for entrepreneurs.
Moreover, as each new age group has increasingly gone "digitally native," the overall workforce has demanded higher workplace technology standards.
Entrepreneurs have left their fingerprints all over the resulting current digital landscape, creating brand new technologies and updating antiquated processes. Such innovations are being driven by the younger generation, whose members have stepped up to become the new leaders in the field. With this millennial management has come an openness to adopting new technologies, and a knack for solving old problems with new approaches.
One of the biggest industries opting for digital efficiency and subsequently thirsty for young, entrepreneurial leadership? Oil and gas.
Why oil and gas?
One reason this particular sector is ripe with entrepreneurial opportunities is that oil is projected to stay below $60 a barrel throughout 2018. With this booming market and its eagerness for innovation, the industry is ripe for disruption to existing business models, and for real growth.
“Companies that are willing to innovate and invest can unlock tremendous value and may remain financially strong regardless of what happens to global supply and demand trends,” Deloitte executiveJohn England wrote in a 2018 Energy Outlook white paper.
“So, the digital cavalry is coming," continued England, who is vice chairman, U.S. energy and resources leader, and U.S., and Americas oil and gas leader for Deloitte."But it likely won’t rescue everyone -- possibly only those who are brave enough to embrace it.”
What might seem like yesterday’s technology headlines are headlines only now making a splash in the oil and gas industry. This means that technology experts from entrepreneurial companies should be watching the horizon for opportunities in energy. Here are four innovations transforming that sector:
“Artificial intelligence (AI) is set to have the biggest technological impact on the oil and gas industry over the coming years,” according to Omar Saleh, Microsoft's oil and gas director for the Middle East and Africa, who spoke to CNBC.
ExxonMobil, ranked No. 1 in the industry by Forbes' 2017 Global 2000 ranking of the world’s biggest public companies, is spearheading AI exploration through a partnership with MIT to explore the oceans using AI software. With the biggest names in oil and gas investing in AI ventures, it’s clear that the technology will have a major impact in the coming years.
Oil and gas giants have long been wary of cloud technology because of security risks. While adoption may be low as of today, there is still a strong future for cloud computing. A forecast by the U.K.-based Oil & Gas Council explains that, due to the “many commercial benefits and the world of possibilities, cloud computing is becoming a popular model for the IT savvy business that has growth on its agenda.”
“Some of the most complex organizations from banking to government, have fully embraced the computing power and agility of cloud,” Shiva Rajagopalan, CEO and founder of Seven Lakes Technologies said during his remarks for my podcast scheduled for next month. “They’ve been rewarded with a competitive edge to respond to markets faster and incubate transformational ideas within the organization at unprecedented speed.
"The faster information is available," Rajagopalan added, "the more quickly large corporations spin up new ideas, initiatives and innovations. The oil and gas industry should be afforded exactly the same competitive edge, not confined by their own data centers.”
3D printing has moved beyond the hype phase, and we are now seeing practical uses in play. For oil and gas, 3D printing means fast, cost-effective representations of assets that can be used for maintenance planning and execution.
According to LaserDesign, “3D printing allows oil and gas companies to reverse-engineer and measure oil and gas tools in virtually every shape and size. Scan data can confirm whether the replacement part will fit existing equipment and also provide a clear documentation of tooling erosion to improve product design and reproduce tooling components.”
The internet of things
The value of the internet of things (IoT) becomes apparent when companies can demonstrate new applications for information gleaned from these technologies. Paul Turner, CMO of Cloudian, said he believes that the promise of IoT lies in creating a set of standards “to guide how devices are structured, and a common language that can be understood . . . " Such standards, Turner said, "are critical for IoT companies looking to sell their technology to oil and gas.
“Startup companies looking to sell IoT solutions to the oil and gas sector should also adhere to standards,” Turner told RigZone. “Value is derived not only from the data collected and aggregated, but data being in a well-known format.
He added: "A service model that features one data repository that can be used by many companies is needed.”
One of the biggest challenges in the oil and gas sector is how to mitigate risk. One of the best ways deploying sophisticated robotics that humans can operate, keeping themselves out of harm’s way. Earlier this year, Chevron announced a partnership with OC Robotics to inspect offshore oil and natural gas pressure vessels in the North Sea. The robotic P100 snake arm, is built to operate in confined spaces, deploying an arm into the inspection area, using wire ropes and software.
“There is real potential to improve inspection outputs and extend asset life by characterizing vessels and assessing fitness for service without human entry into dangerous and confined spaces,” Rebecca Smith, project manager at OC Robotics, was recently quoted as saying by JWN.
Exciting advances in AI, cloud computing, 3D printing, IOT and robotics are transforming the future of the oil and gas industry. “The upstream oil and gas companies have survived turbulent markets, fine-tuned lean teams and know exactly where to drill," Rajagopalan told me. "In spite of all that transformation, meeting production targets remains a blindfolded, high-wire act. This must change."
Raising "an army of people" to solve the problems ahead isn't enough, she said. What may be, she said, is adoptable predictable technologies, which give time back to the field "so that they can shrink unplanned down time."
Entrepreneurs and startups looking to be a part of the next generation of technologies should explore this billion dollar industry because that rig drilling away down in Texas or out in the Gulf is no longer working your father’s oil field; it's the digitally driven oil field of the future, powered by disruptive tech.