March 2018, Vol. 245, No. 3

Features

IDC Gas and Oil Predictions

As we embark on 2018, one of the biggest challenges for oil and gas companies is the rate at which technology has advanced, outpacing the ability of companies to adopt and leverage new innovation to their advantage.

Most oil and gas companies would likely agree data management and the lack of clearly defined business objectives and expected outcomes are the biggest challenges to successful digital transformation (DX).

Smart companies started their DX journey when oil prices were down, hoping to digitally adapt their businesses to cloud, big data and analytics in order to become a tightly integrated, resilient organization capable of rapidly adapting to change.

To help lay out the framework for better information technology (IT) and line-of-business (LOB) planning, IDC Energy Insights presents the IDC FutureScape: Worldwide Oil and Gas 2018 Predictions.  This annual study provides the analyst team’s outlook for 2018. The highlights of these predictions include that by 2020, 25% of large oil and gas companies will have implemented a platform to develop, analyze, model and simulate best practices in cognitive-based continuous learning environment.

Many oil and gas companies are turning toward technologies like advanced analytics, modeling, simulation, digital-twin and cognitive computing as an approach to overcome and offset some of the performance and compliance challenges they face in the oilfield.

Immediate, accurate data is critical to apply analytics for gaining deeper insight into how oil and gas companies are looking to optimize operations performance, as well as improve productivity and achieve other positive outcomes such as adhering to compliance requirements and minimizing risk.

It is important, therefore, to first determine and prioritize what business objectives are to be achieved and to identify the key metrics and benchmarks to monitor, predict and manage performance.

Cognitive computing is the future and provides a key to unlocking existing and untapped data through an ability to understand, reason and learn from all forms of data and turn that into prescriptive and actionable recommendations.

By 2018, 75% of all oil and gas companies will have at least one DX initiative in full operation deploying cloud, big data and analytics, process automation, or IoT for the organization to advance their IT ecosystem.

The key to success for a large oil and gas company is to have the fastest and most efficient exploration, production, transportation and refining operations performance with maximum asset uptime.

Companies are leveraging DX third-platform technologies, automation and innovative new ways to transform their IT environments.

Mobility applications enable workers and bring processing directly to their level, including analytics and collaboration to make better decisions directly in the field when possible.

Analytics can be applied to help optimize processes and performance and meet compliance requirements to improve their environment, health and safety standards.

By the end of 2018, 15% of oil and gas companies will have developed solutions leading to the rollout of collaborative development capabilities based on open-source software and systems hardware.

Oil and gas companies are looking for new ways to enable IT environments to develop new capabilities outside of the control of commercial software vendors to reduce costs and improve performance.

Open source applications and systems are becoming more common as some companies and vendors have endorsed this concept and are investing time and money to participate in various efforts to promote the development of new software applications and even platforms to help establish standards for design, protocols and foster collaboration.

Upstream oil and gas is affected by lower oil prices more than midstream and downstream, and the differences can be subtle yet important to distinguish as each sector has their own unique drivers, initiatives and priorities for implanting technologies strategically.

In 2018, upstream oil and gas companies will be more focused on improving operations efficiencies and less concerned with reducing costs as oil prices continue to rise and companies strive to achieve operational excellence.

Upstream operators are implementing different strategies to achieve a lower break-even point and most of the attention and activities are in the shale plays today.

Oil and gas CIOs are challenged to continue to focus on traditional IT, and at the same time, reserve funding for high-impact innovative solutions to help digitize and transform the business into a tightly integrated, and agile environment.

Many midstream IT initiatives should focus on the growing need to upgrade outdated systems and build new energy transmission networks aimed at improving operations efficiencies by improving how companies optimize processes, increasing worker productivity, and meeting compliance requirements.

Midstream companies need to deal with an old infrastructure and must have immediate access to accurate information about several factors, including leaks.

Compliance is a top driver for midstream, and companies will be looking for such innovative solutions.

Enterprise content management (ECM) solutions are ideal to meet compliance requirements to manage the data, maps and specifications of various pipelines, manufacturers, types, size and locations.

For midstream oil and gas, mobility is the top technology in terms of anticipated effect. Midstream workers leverage mobility devices and applications to bring processing directly to their level, including analytics and collaboration to make better decisions directly in the field. P&GJ