Digital transformation is becoming a major driving force behind environmental changes. The oil and gas sector has been instrumental in facilitating economic change, both at the national and international levels; however, in comparison to other industries, it has been slow to adopt digitalisation for its operations and maintenance (O&M). There is a vast amount of unrealised potential that can be harnessed to boost the sector’s operational efficiency through digitalisation. At present, the industry calls for an overall mindset change to embrace digital innovation. This would inevitably prolong the lifespan of the non-renewable energy system by lowering its costs to compete with renewables while also reducing the overall carbon footprint.
Adopting digital solutions
In August 2023, sector major Indian Oil Corporation Limited (IOCL) undertook a major data-driven digitalisation drive with the aim of optimising its crude purchase, refinery operations and financial management, and efficiency. The ultimate intent behind this initiative is to improve yields and reduce interruptions in everyday operations. Financially, each day of refining interruption implies a loss of Rs 2 billion to Rs 3 billion in sales. The new digital architecture acts as a preventive measure, predicting potential issues and enabling the organisation to take corrective measures to prevent them. IOCL has created virtual twins of its refinery units, which helps the company optimise its operation, resulting in financial gains. Compared to physical units, virtual twins offer the flexibility to dynamically adjust input parameters, enabling the generation of varying outputs. Another key development has been the use of robotic process automation. Automated software bots carry out repetitive tasks such as payroll reconciliations, daily operations reporting, travel expense bills processing, and goods and services tax filings, thus freeing up many employees from routine work while ensuring accurate and speedy processing. Similarly, the tendering process has become smoother with the use of digital tools and is soon expected to go paperless.
As the country progresses, it is essential that a holistic and cautious approach to digital road mapping, execution and implementation is adopted in order to unlock the intended value of the oil and gas sector. It is time to tap into the potential for value realisation and value creation through digitalisation. To enable digital deployment across the sector, all key stakeholders, such as government regulators, operators and oilfield service providers, should come together and work collaboratively to drive a partnership-driven model for digital transformation to flourish.
It is essential that a holistic and cautious approach to digital road mapping, execution and implementation is adopted in order to unlock the intended value of the oil and gas sector.
The way forward
The oil and gas sector should be encouraged and incentivised to develop a digital strategy, creating a coalition of reinforcing initiatives to direct organisations’ actions towards integrating digital technologies into their operations. Stakeholders should discuss the technical feasibility, associated costs, economic gains and other considerations. Oil and gas market players, banks and funding agencies, professionals, entrepreneurs, think tanks and consultants have important roles to play in promoting innovation and overcoming the prevailing lack of digital acceptance in the industry.