Dr. Atul Rawat has more than 16 years of experience in the energy research and consulting domain. He did Ph.D. in the field of energy management and is a Postgraduate in business administration from UPES Dehradun. He also holds a postgraduate degree in Mathematics from HNB Garhwal University, Dehradun.

The oil and gas industry can significantly enhance its efficiency and reduce carbon footprints by enabling the digital transformation of its business model across the value chain.

With the size of the oil and gas industry expected to reach $8.6 tn in 2027, the sector will continue to play a crucial role in meeting global energy needs in the years to come. Digitalization can play an important role in boosting the prospects of the industry and by elevating efficiencies, cutting down costs, and reducing carbon footprints, it can help the companies in the sector stay competitive in the long term. Digital transformation can also help the industry reinvent its business practices and how exactly that can be done, here are the complete details:

Digital transformation can save a lot of money as well as time to enhance the operating efficiency and profitability of oil and gas companies by a considerable margin

a) Remote Monitoring and Seismic Analysis: Digital transformations allow firms to remotely monitor the crucial aspects of oil and gas exploration, thereby helping them to reduce both costs and dangers associated with stationing human beings at hazardous places. By installing remote sensors and connecting them with IoT devices, firms can monitor the crucial aspects of oil and gas exploration from a distance. Further, inventions such as low power wide area networks now allow long-rage communications to aid in monitoring rig data and transmitting the information to central command centres for further processing. AI can help in the analysis and evaluation as it can process swathes of data in a matter of minutes. This capability is specifically beneficial for the evaluation of 3D images as conventional methods take months of time to analyse what AI can accomplish in a matter of minutes. Clearly, digital transformation can save a lot of money as well as time to enhance the operating efficiency and profitability of oil and gas companies by a considerable margin.

b) Precise Drilling and Reducing Corrosion: The combination of AI, ML, and IoT can save billions of dollars by helping oil and gas companies achieve superior drilling results and reducing pipeline corrosion in their refineries. By feeding the machinery with historical data, ML algorithms can train drilling machines to navigate complex operations with ease and proficiency. Similarly, firms can benefit from real-time monitoring to save refineries from corrosion which is the leading cause of oil spills and causes an estimated loss of $7bn to the sector annually. The installation of the sensors and IoT will allow companies to proactively identify vulnerable spots and carry out preventive maintenance to stop any potential corrosion and leakage from the refinery.

"The use of new-age innovations such as AI, ML, IoT, and Advanced Analytics can enable the fundamental transformation in the business practices that are carried across the value chain"

c) Managing Supply Demand Dynamics: The value chain of the oil and gas industry is quite complex and convoluted. From the identification of potential sources and extraction of the crude to refining operations and delivery to end-consumers, there is involvement of multiple models, modes, and mechanisms at different levels. The complexity of all these operations can be reduced comprehensively with the help of digital technologies. While sensors and IoT devices can collect and transmit data on a real-time basis, AI, ML, and Data Analytics can be used to extract insights from the collected data. This, in turn, helps firms manage market dynamics and face unpredictable circumstances with proper contingency mechanisms in place. Similarly, the use of blockchain technology and cloud computing can also be done to achieve enhanced transparency and efficient operations.

d) Supply Chain Optimization: By using digitalisation, oil and gas firms can take the efficiency of their logistics networks to new heights. While IoT and AI can aid in live tracking and analysis of fleet management, the use of ML, Data Analytics, and blockchain enables companies to make their movement spill-proof, safer, and cost-effective than before. The optimisation of the routes with the help of AI and Data Analytics can also reduce the carbon footprints of the industry, thereby making it more sustainable and environmentally friendly.

e) Prototyping, Modelling, and Connected Work: 3D prototyping and printing are helping the oil and gas industry in more ways than one. These technologies allow companies to build digital prototypes to test the presumptions, identify flaws, and explore improvement possibilities by virtually testing the products. Advanced levels of emission modelling can be used to understand emission patterns, possible leaks in the refineries, and other potential causes of abnormal hydrocarbon release in the environment. Further, the use of digital technology is also enabling connected work which, according to a white paper from the World Economic Forum, can enhance the productivity of the Oil and Gas sector by up to 15% by 2025.

Digital transformation in the oil and gas sector will have a significant positive impact on both the profitability and sustainability of the industry. The use of new-age innovations such as AI, ML, IoT, and Advanced Analytics can enable the fundamental transformation in the business practices that are carried across the value chain. These coupled with the increasing integration of blockchain, digital prototyping, modelling, and connected work will help the industry to rewrite its growth story in the coming years.