Why the oil and gas industry must innovate now

Greg_Rohde_100x120Greg Rohde, Vice President - Intergraph Process, Power & Marine Australia, shares his thoughts about the future of the global oil and gas industry.

As global energy demands increase, the oil and gas industry is under pressure to keep up. This is a trend that is expected to continue – analysts forecast that as much as US$38 trillion in capital investment will be poured into oil and gas projects over the next 20 years to meet consumer demand.

At the same time, the size, complexity and expense of mega projects require multiple contractors and companies (in joint venture arrangements) to pool their resources and combine their efforts. Outdated project methodologies that may have been suitable for smaller, local projects are no longer sufficient – every year, roughly 40 percent of oil and gas projects globally fail to meet schedule. Access to information and the ability to share it efficiently between multiple stakeholders is usually cited as a major factor for these delays.

And finally, the tightening global economy can hardly be ignored. Owner operators in all industries - not just oil and gas - are increasingly focused on extending the life cycles of their existing brownfield facilities, and therefore maximising the value that can be extracted from them.

In this context, it is unsurprising that the oil and gas industry has been seeking out new and innovative ways to drive efficiency and productivity. I believe it comes down to two key factors: information management and communication. Over the next few months I will be publishing a series of articles exploring various technology strategies that you can implement today, no matter where you are in the life cycle of your oil and gas project or asset.

Now is not the time to be complacent. It is the time to reflect on the recent exploration boom, taking into account what worked and what didn’t – so you are ready for the next uptick in activity. There are efficiencies to be found at all stages of the asset life cycle – from engineering and design, through to construction, and finally to operations and maintenance. The most successful strategies will be those that are implemented early on in the project life cycle, rather than added on down the track as an afterthought.

In next month's article I will be taking a look at the technology innovations that can be used to boost efficiency and productivity during the design and engineering phase of a project. Until then, I would love to hear your thoughts on how you think the oil and gas industry - or indeed, any other exploration or process industry - can innovate effectively in the current market conditions.