The oil industry dares to look past the clouds
News in oil and gas has gone from bad to worse, and those watching the headlines hoping for a bounceback in the oil price are likely to remain disappointed for the medium-term. This is particularly true in the North Sea, as Oil & Gas UK’s 2016 Activity Report in February spelled further bad news, and even referenced a “collapse” in investment in new projects.
The UK exploratory sector is expected to receive £1 billion to spend on new projects this year, compared with an average £8 billion for the last five years, signalling further disparaging news for an already bruised sector.
However, though the outward appearance of the oil industry is spelling a bleak outlook, internally an air of cautious optimism is spreading. Many are taking this as an opportunity to gather together and find solutions – something that a sector that has historically existed in siloes has been avoiding for too long.
Attending the GE Oil & Gas Annual Meeting in February, executives from across the industry gathered to discuss the latest in industry trends. I was not privy to many of the closed-door conversations, but I did attend many of the keynotes, and gleaned notes from some of the myriad technology sessions. And though this was the first time in years the conference took place in a sub-$30/barrel environment, excitement at the event was palpable.
The theme of the meeting focused on digital capabilities in oil and gas, and even had some hardened industry veterans getting excited about the future. A panel discussion with GE’s digital heads conceptualised what a fully digitised oilfield might look like and even conjectured a “Siri” for oil and gas.
The oil industry is looking to gain efficiencies wherever possible, and this includes convergence of technologies. When one thinks about it, this is quite fundamental. Why can’t sensors from large aircraft designed to work through vast amounts of Big Data adapt to the oilfield? If wearable technology is being tweaked and reworked for recreational Google glass, how can we put it to work in an industry that answers the growing demand for the world’s energy needs? Drones are already being put to good use on offshore rigs, simplifying maintenance checks around the rig.
Oil and gas may not be the first place a person’s mind goes when considering the advent of technology, but why shouldn’t it be? Through advanced developments in other industries, oil and gas stands to benefit greatly. We could be witnessing the renaissance of the oil and gas industry. If nothing else, we may be seeing the next generation of extracting the materials that make the world go round. It just took an oil price drop of nearly 70% to get there.