U.S. integrated oil companies have been slow to adopt broad digital strategies but see high potential for analytics in unconventionals.
The U.S. now consumes a majority of domestic oil and gas. It has been a decade of well productivity improvement generally attributed to better models and knowledge of fracture spacing. Software supports productivity and well-siting decisions, which can significantly improve oil recovery by limiting pressure loss.
Additionally, analytics can help operators make decisions to stimulate or abandon underperforming wells. U.S. oil companies have benefited from internet-connected equipment, cheaper communication costs, and many partners to work with, including domestic cloud computing companies Amazon, Google, and Microsoft.
Middle Eastern national oil companies extend relationships with traditional service providers for efficiency and transparency.
National oil companies in the Middle East are continuing to develop new fields, especially in gas, while new refining and petrochemical plants are scheduled to come online in the coming decade.
Saudi Aramco, the world’s largest oil company, is now partially public. It has an increased focus in attracting international investors, releasing financials to their investors for the very first time. This will increase scrutiny on operating expenses and emissions, leading to a need for better data which can be provided by digital tools. Few local providers of analytics mean that Middle Eastern national oil companies continue to rely on international service providers like Schneider and consultants like IBM. There are few local startups tackling industrial automation and limited regional venture capital. The focus so far for digital has been on developing new fields, such as faster drilling at Saudi Aramco, and bringing together disparate and remote operations, like at Adnoc.
Europeans pursue emissions reduction and positive PR stories.
European companies have been the most keen to share results from digitalization projects. BP Plc has used digital technologies to improve onshore production volumes and reduce inspection costs by $200 million since 2016. Unlike its peers, BP aims to own its digital strategy in-house, instead of using vendors or consultants. Its new Launchpad unit is tasked with scaling technology and commercializing products to sell externally. In May, BP created its first outward-facing startup, Lytt, using fiber-optic sensors and acoustic profiles to label conditions in oil wells. Other oil majors such as Shell also offer their digital products externally, though many like Exxon, Chevron use software mostly for internal operations. Equinor is the furthest ahead in digitalizing
upstream operations, hoping to reduce operating costs for wells by 50% due to digital.
National Asian oil companies stress cost reduction and leveraging domestic technology partners.
With predictive maintenance and asset optimization, Sinopec in China and Petronas in Malaysia have each reaped benefits of more than
$7 million per year, BNEF research shows. These technologies rely on operational data such as pressure, temperature and vibration to help refiners improve energy efficiency, align maintenance schedules to market conditions and optimize output. Oil companies are seeking to commercialize some of these digital systems and are building teams to do so. For example, Sinopec is hoping to sell its digital manufacturing platform, ProMACE, developed in partnership with Huawei, to one million users.
