Industry creates waste. But better decision-making can reduce waste, and better data analytics should lead to better decision-making – hence, the importance of digital transformation within the fossil fuel industry. In this white paper from the World Economic Forum, Bob Dudley makes the argument that speedier digitization could mean an added $1.6 trillion in value for fossil fuel companies. That’s good news for an industry struggling with a tumultuous market and societal change. Millennials are demanding greener energy; the oil and gas industry will have to scramble if it wants to deliver.
The oil and gas industry hasn’t yet made effective use of new technology for data collection and analysis.
The oil and gas industry began using data to improve safety, efficiency, and reservoir capacity predictions in the 1980s. But early adoption doesn’t mean fossil fuel companies have kept up with current data capabilities. Consumers are changing. They’re more engaged and connected by digital technology, and are showing more concern for the environment. Some estimates suggest that up to $70 billion could shift from oil and gas companies to more environmentally friendly energy sources.
If the oil and gas companies hope to weather ongoing market turbulence, they must embrace digital transformation. Cloud computing, cheap sensors, the Industrial Internet of Things (IIoT), big data and analytics can help the oil and gas industry stay agile in the face of supply and demand fluctuations. Digital transformation will require investment, commitment and collaboration across the energy ecosystem.
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Bob Dudley chairs the Oil and Gas Climate Initiative (OGCI), an international industry-led organization created to “accelerate the reduction of greenhouse gas emissions.” Dudley is the former group chief executive of BP. The World Economic Forum is an international NGO based in Switzerland.