The oil and gas industry is in a state of transition, largely because of increasing demands. Regulatory, economic, environmental, and geopolitical components are influencing the future of energy for oil and gas companies. Modernizing processes and operations is imperative to push the sector toward resilience and survival. A key part of this change is the ability to leverage automation.
How will automation facilitate this transition, and what opportunities lie ahead to secure the future of energy?
As the oil and gas industry looks to the future of energy, key parts of the journey are modernization and digital transformation—but the reality is complex, involving many different stakeholders, regulations, priorities, and logistical concerns. Pursuing any digital transformation initiative comes with the weighty tasks of considering all these factors and creating a path toward efficiency. Let’s look at some of the challenges you might face.
In many areas, budgets for oil and gas are decreasing. There are fewer dollars to move operational projects forward for a variety of reasons including volatility in the market, the potential for a recession, and geopolitical turmoil. Revenue remains steady, but forecasting it requires many assumptions that haven’t played out yet.
Another concern is that operational costs are rising, and because the industry is capital expense-heavy, companies can’t just pinch pennies to reduce those costs. Especially concerning is the cost and availability of labor. The oil and gas sector, like many others, is contending with labor gaps. Workforce numbers from the Bureau of Labor Statistics (BLS) for the field saw unemployment drop to 1.8 percent in May. With fewer workers in 2023, production cannot grow at the rate it did in 2022. Additionally, to retain the workers they have, companies are increasing compensation. ExxonMobil did so by an average of 9 percent in 2022, which amounted to a 15-year high in raises at the company.
Companies have to invest more in their recruitment strategies to keep their pipeline flowing, and these budget strains require a reliable solution.
The oil and gas industry is steeped in compliance and regulations that impact every area of the business in some way. Adherence is a multifaceted—and non-negotiable—process. With many regulatory bodies in the U.S. and around the world eyeing oil and gas, managing all these regulations and their associated costs is becoming increasingly difficult.
Oversight must be part of all operations, and there must be constant observance of the data regarding adherence to regulations and safety protocols. As a result, oil and gas companies are struggling to digitally transform these processes in an attempt to ensure they’ve crossed every t and dotted every i.
The oil and gas industry is mature, which means it has aging infrastructure, equipment, and technology. Without upgrading these things, the industry may see little advancement in finding, producing, transporting, and refining oil and gas. Digital transformation and the future of energy for oil and gas is dependent on renewal and updates.
Unfortunately, legacy systems are hard to migrate, integrate, or decommission without substantial costs. With those costs in mind, oil and gas companies are pursuing digital transformation with little traction. Few have had substantial victories here; 70 percent of projects have trouble moving past the pilot phase. The industry recognizes the great value in digitization, but the digital transformation journey is often a bumpy one for companies in the oil and gas sector, which tend to be massive, global, and complex.
These factors create a volatile environment, making efficiencies harder to attain. The ability to harness the power of automation, both Robotic Process Automation (RPA) and Intelligent Process Automation (IPA), is integral for the future of energy in oil and gas.
Automation is a broad term with potential application in every area of the oil and gas landscape. It can accelerate digital transformation and help you realize operational efficiency.
Here are some use cases for both RPA and IPA in oil and gas.
RPA takes repetitive processes off of human employees’ plates and gives them to digital robots. With RPA, oil and gas companies can do many things to save time and money, including:
IPA adds Artificial Intelligence (AI) to RPA, enabling automation to do more than simple tasks. The oil and gas industry can use IPA for:
With RPA and IPA, the future of energy for oil and gas can be more consistent and efficient.
The benefits the sector can achieve from automation center around operational efficiency, which is the primary goal of digital transformation. In such a fragmented and expansive industry, the implementation of automation must deliver big results. Here are some of the advantages you can realize:
To hit those digital transformation and modernization objectives, your organization must have a defined automation and efficiency path. Maybe you’ve already started, stopped, pivoted, and resumed—but do you have everything in place to succeed this time?
Here’s what our experts recommend:
The future of energy for oil and gas is bright—so long as the industry embraces and commits to automation. Improvements are possible across the board, with one of the most critical being the ability to build the future of your company with more meaningful work.
Learn more about automation and meaningful work by reading How Automation Plays a Key Role in Meaningful Work.