Big data and industry-wide collaboration hold the keys to unlocking potentially huge energy capabilities
Despite turbulent times there are more opportunities in energy than ever before, said experts, practitioners and alumni at the student-led Global Energy Summit.
“Uncertainty continues in the energy markets following the oil crash of 2014/15,” said Professor Sir Andrew Likierman, Dean of London Business School, in his opening comments. Despite this, the industry “has its share of excitement”.
Owen Williams, Vice President of Strategy at Norwegian multinational Statoil, announced the company’s involvement with the Oil and Gas Climate Initiative (OGCI) today. The company will collaborate with nine other oil and gas companies that have together pledged an investment of US$1 billion over the next 10 years to accelerate the use of low-emissions technologies.
He said: “The creation of OGCI shows a collective determination to deliver technology that will create a step change in helping to tackle climate change. Statoil is committed to the initiative for the long term… we will integrate renewables into our business.”
Maurice Berns, Senior Partner and Managing Director at the consulting firm BCG, referred to headline-grabbing topics that have fuelled uncertainty – the UK’s nuclear plant Hinkley Point, competitor price hikes and oil job losses – to reinforce the message that the energy market had experienced instability.
Nevertheless, “There many exciting opportunities for the energy industry today”, said Berns. He identified six breakthrough areas based on data pooled from areas of investment interest, the most keenly anticipated being new technology and digital businesses.
“New technologies are transforming the energy industry. Digital transformation – or industry 4.0 – is the biggest area in terms of investment.” He pointed to smart grids, digital oil fields and smart homes as developments to watch out for.
In recent years, the digital oil field has become a reality. Sensors installed across environments such as oil wells have provided large volumes of data to support operational decision-making – companies are able to prevent costly problems before they occur. Berns said that the time had come to consolidate big data from, say, different contractors and maintenance logs. He claimed that extracting meaning from such data could be worth US$10 billion.
Rasmus Sunde, CEO at Forsys Subsea, the 50/50 joint venture between two subsea industry leaders (FMC Technologies and Technip), said digitalisation and collaboration were helping to “bring cost-competitive solutions to a low-price environment”. Forsys’ strategic area of focus is on “investing R&D in data management and digital collaboration”.
This combination of technology and collaboration is offering markets such as oil new opportunities for sustainability and growth.
Joining the debate was Jim Pearce, Partner at global management consultancy AT Kearney, who called for governments to tear down red tape in the name of cooperation. He relayed an industry-wide sense of urgency for governments to enable sharing capabilities. “Oil and gas companies will need to redefine their competitive advantage. They will need to share more.”
He added, “Innovation is hard because of the siloed nature of companies,” and pointed to AT Kearney’s ‘12 deadly sins’ framework to combat the issue. “The siloed world of many oil and gas companies means that decisions like specification, sourcing and execution processes are made in isolation of other functions… you need to cut across all of that and take a more integrated approach.”
Pearce concluded with five levers of digitalisation and collaboration:
1. Capturing intelligent data
2. Sharing cross-sector data
3. Making objective (as opposed to linear) decisions
4. Utilising artificial intelligence
5. Developing robotics and drones
“These areas must all be wrapped up in a rapid, scale-up innovation mindset,” he said.
“The most important opportunity does not come from technological advancements like drones. It stems from an entirely new way of working.”