Oil and gas industry is an old industry. And anything old rejects change. As astonishing as it may be, but the oil and gas industry has proved this old adage wrong by embracing digitization in a far better sense than other industries. It becomes all the more evident when we talk about digitization in the downstream sector. The downstream segment of the oil and gas industry is fairly established in optimizing process and operations due to their standardized operations and a long history of automation and process-control systems. It wouldn’t be hard for this sector to adapt and become the next frontier for digital technologies in the oil and gas industry
Let us explore in detail how digitization is setting up the future prospects of the downstream sector, and realize the challenges that lie ahead in its way!
Data and Downstream!
Yes, and data from all over the refinery, be it equipment, valves, control systems has drowned the industry. It appears as the downstream industry is tailor-made for the digital transformation. In a research conducted by McKinsey, three categories for the application of digital technologies were identified, namely Operations of the future, Reservoir limits, and Digital-enabled marketing and distribution. This really goes onto reflecting the key areas where digitization is taking place as you read this article. Refiners and petrochemical players are now trying to remove as many manual control systems. It shows their intention of going all out on the digital front and in operational areas. Downstream players understand that with the advent of new digital technologies, a combination of data-driven insights and tech, operational efficiency and strategic decision-making will be transformed like never before.
Obstacles that stand, obstacles that will fall
A study conducted by Accenture last year in 2017 found that though digital technologies are slowly making their way into the refineries, many Indian refiners are still reluctant to invest in digital tech. Only around 19% of the refiners rated digital technologies as the top three investment areas for the next three years. The most frequently mentioned barrier in the digital implementation was the investment that was needed, coming from 50% of the people. The good thing is that over 57% of the people have started investing in digitization of refineries more than they had in the past year. Hari S., MD at Accenture believe that Indian refiners have begun with their transformative journey into the ‘new’ and are gradually embracing digital technologies. He points out that the common use of digital tech for refineries lies in corrosion management, predictive asset maintenance, safety management, and others.
Another problem that still persists is Cybersecurity. More than one-third of the present refiners cite cybersecurity as one of the biggest hurdles for them to embrace the digital change. However, the downstream sector has to work on dealing with cybersecurity issues. While this happens, the refiners must stay patient. The sector has a long history of coming back with effective solutions. Digitization must be seen as a way to enhance productivity, improve the management, and not as an obstacle. The reluctance in accepting a change should never hamper the progress technology is making.
Read our blog on Digital Rig to know how digitalization has transformed the concept of drilling operations in the upstream sector!
Visit our Insights section for more such reads!