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Technology
The top 10 oil and gas
trends to watch Simon Cushing, senior director analyst, Gartner, discusses trends that oil and gas CIOs should be aware of to ensure that their organisations are agile and resilient in an increasingly complex future. LOBAL OIL AND gas markets are poised between two competing drivers – rising pressure to decarbonise energy provision, and increasing demand for energy in developing economies. Executives must find new ways to maintain competitiveness and growth. The unique stresses of 2020 have elevated three business imperatives for 2021: optimising business performance, creating new capabilities, and strengthening technology foundations. The 10 key trends in this report reflect reformation of the industry in the face of complex growing challenges. CIOs who understand these trends can enable breakout performance that will differentiate them and their organisations in the months ahead.
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1. Enterprise capabilities diverge as new business strategies emerge – As individual business strategies become more nuanced and differentiated, companies will need novel enterprise capabilities to facilitate implementation. For example, refining companies are exploring biofuel and bioplastics production and deepening their presence in regional petrochemicals products. Oil and gas CIOs will need to facilitate these business innovations by incorporating composable architecture principles in the design of the new enterprise architecture. 2. Accelerating digital innovation is now table stakes for CIOs – An increase in discretionary cash flows and strong balance sheets in 2021 are accelerating digital innovation in the oil and gas industry. According to the Gartner 2021 CIO Survey, 87% of CIOs expect their digital programmes to increase or stay the same in 2021. This commitment to digital innovation is a relatively new priority for oil and gas companies. According to Gartner, 85% of CIOs in the oil and gas industry have assumed responsibility for creating a change-enabling technical platform, and 79% are working to build a stronger change leadership culture in IT. CIOs
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Issue 6 2021
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Accelerating digital innovation is critical for CIOs.
will need to reorient themselves toward value delivery by introducing service delivery models that replace cost-based IT siloes with valuebased IT products. 3. Digital twins drive transparency and automation – Digital twins can deliver value across the business via the increased integration of internal systems, human activity and external ecosystems. A digital twin is a virtual representation that serves as the real-time digital counterpart of a physical object or process. Digital twins are trending because of their capacity to improve the performance of business assets. Digital twins improve operational efficiency, prevent downtime, reduce maintenance and maintenance costs, and allow for more effective collaboration between experts and operators. 4. Comprehensive engineering creates intelligent assets – To improve outcomes, such as production efficiency, uptime and yield, oil and gas companies are supplementing traditional monitoring and control systems with additional sensors, cloud-based data aggregation platforms, advanced analytics and AI. According to the Gartner 2021 CIO Survey, as many as 50% of
oil and gas companies plan to increase investments in analytics, AI/machine learning (ML), automation, IoT and cloud this year. CIOs are responsible for creating intelligent asset capabilities using the increased budgets. 5. Key vendor partnerships define enterprise platforms – Covid-19 pushed CIOs of oil and gas organisations to reconsider traditional vendor engagement. While oil and gas CIOs continue to take a lead in their relationship with large IT vendors, they are also developing more open partnerships with a small number of key vendors in areas such as engineering. The distinguishing characteristic of these vendors is their ability to offer an integrated suite of technologies strong enough to serve as a sub-platform for one domain hub within their emerging enterprise platform. 6. Reliance on AI becomes more widespread and less visible – AI/ML are quickly gaining acceptance in the oil and gas industry. Gartner survey data suggests that oil and gas CIOs list AI/ML/analytics and the industrial IoT as the top game-changing technologies in 2021. Several trends in AI technology and approaches promise to
