OIL & GAS: A DEFINITIVE PATH
TOWARDS DIGITALIZATION
Table of Contents Introduction
01
Need for Digital Empowerment
02
I.
Customer Interaction
02
II.
Decision Making
02
III.
Flexibility
02
IV.
Performance
02
V.
Profitability
02
Impact of Digitalization on Traditional Marketing
03
I.
Cost Effectiveness
03
II.
Result Oriented
04
III .
Engagement
04
IV .
Exposure
04
Digitalization in Oil & Gas Industry
05
Digital Themes in Oil & Gas Companies
06
I.
Life Cycle Management of Assets
07
II.
Collaborative Ecosystem
07
III.
New Energies
08
IV.
Innovative Engagement Models
08
Email Fuels Digitalization in Oil & Gas Marketing Field
09
I.
Permission Based Marketing
09
II.
Keeps Your ROI High
09
III.
Analyze Customer Journey
10
IV.
Omni-Present Tool
10
V.
Private Communication
10
VI.
Social Media Connection
10
Implementation of Digital Technology in Oil & Gas Companies
11
I.
Mobile Technology
12
II.
Big Data
12
III.
Automation
12
IV.
Digital Marketing
13
V.
4D Seismic Imaging
13
VI.
Cyber Securitysites
13
VII.
Digital Customer Services
14
VIII.
Blockchain
14
Conclusion
15
About Blue Mail Media
16
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Oil & Gas: A Definitive Path Towards Digitalization | P01
Introduction Oil and Gas Industry is considered as the dominant sector in the globe regarding revenue. It is a global powerhouse with hundreds of thousands of labors that generates hundreds of billions of dollars every year. These industries often contribute a substantial amount towards the nation’s GDP. The fuel oil and gasoline (petrol) form the most significant volume of products of these companies. Since petroleum is the primary material for many chemical products, it is of critical importance to most of the countries. The price collapse and utilization of other renewable sources in the recent years have made oil and gas industry to see a rapid downfall. Also, these industries have to combat the hazards and face rapid changes in the supply chain. Therefore, they must be smart enough to tackle such issues. These industries must keep themselves updated with the fast-growing technological changes. They can adopt digitalization in their business operations to boost the performance and be more efficient. It will not only save dollars but also minimizes the risk involved in the day-to-day activities. A few of the Oil and gas companies have already begun its journey towards digitalization and saw a positive change concerning revenue and sales. They leveraged advanced techniques to restructure the production, perform all the remote monitoring and also preemptive maintenance of equipment to lessen the downtime and risk. Nations like Kuwait have decided to transform the national economy by the end of 2035 with the help of digitalization. It has set an example for every other country to begin the similar transformation. The digitalization has challenged the traditional business models. While the new age oil and gas industries have access to a more significant amount of data, it faces many issues because of data collected from different streams and in different formats. The emergence of digital technology has paved the way for transmitting as well as managing the vast volumes of data. It has also unveiled opportunities for modernized business models in the oil and gas industry. The new models will provide a better overview of industry operations and also gives more control over assets. The utilization of trending digital technology in the oil and gas industry has not only increased the connectivity in the business operations but also made it more reliable, affordable, and scalable. This cost-effective approach allows the companies to analyze big data quickly as well as smoothly.
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Oil & Gas: A Definitive Path Towards Digitalization | P02
The new models will provide a better overview of industry operations and also gives more control over assets. The utilization of trending digital technology in the oil and gas industry has not only increased the connectivity in the business operations but also made it more reliable, affordable, and scalable. This cost-effective approach allows the companies to analyze big data quickly as well as smoothly.
I.
I.
I.
01
Customer Interaction Customer
02
Customer Interaction Decision
03
Making
Customer Interaction
04
I.
Interaction
Flexibility
Customer Interaction
Performance
The advancement in the technology has changed the customer's behavior pattern tremendously. They expect personalization as well as more engagement with the companies. Therefore, to keep up with the expectations of the clients, the oil and gas industries must integrate digital technologies into their business operations. Since you can connect to the multiple digital platforms at ease, it helps in promoting a significant interaction with the customers. Besides, this adoption offers higher sustainability.
The oil and gas industries generate a massive volume of data. Every single drilling rig at the oilfield is capable of producing terabytes of data every day. But for the decision-making process, only the small fraction of it is used by the analysts. The usage of digital technology in these industries will help them to analyze as well as derive an excellent data from this vast pool efficiently.
It is essential for every industry to be flexible in their business operations. Likewise, the oil and gas industry have to support the demands of the flexible market every single day. The companies must invest in digital equipment’s to manage the production based on market volatility. This remodeling in the business structure makes them more agile to the unpredictable changes in the marketing environment.
The integration of digitalization into oil and gas segment improves the work performance drastically. It will lead to the better asset management and sounds safer than a manual task. The companies can also utilize digital sensors and drones in the work area to save both the time and effort. Also, the engineers can use wearable digital devices to ease their job. Besides, the automation of task reduces the number of dangerous incidents in the oil and gas field. It will also reduce the operational cost involved in executing the business operations.
05
I.
Customer Interaction
Profitability
The improvement in the performance has allowed the highest profit margins. Through digitalization, one can reduce the operational costs, automate the workflow, monitor the performance of the labors, and also simplify the process. Although it consumes extra effort and cost in the beginning, you can see an immense rise in the revenue in later stages. Therefore, utilize the power of digitalization to boost the profitability rate in the oil and gas industry.
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Oil & Gas: A Definitive Path Towards Digitalization | P03
Impact of Digitalization on Traditional Marketing
The internet transformed the marketing space a few years ago. It has not only affected the business operations but also changed the way how industries interact with the customers. The paperless trend has taken over the traditional marketing pattern. The digitalization has given the businesses an opportunity to become eco-friendly. The businesses around the world have already started to utilize the advantages of the technology. The integration of digitalization has provided them an opportunity to compile the data in real time effectively. It is necessary to go digital in today’s online world although it is challenging for the industries who are beginning to grow their online presence.
Therefore, you have to install digital technology in your oil and gas industry to stay ahead of the competition. The digitalization has various impacts on traditional marketing. Let us see them in detail.
I. Cost Effectiveness The utilization of digital technology in marketing space has helped the industries to save the time as well as cost. They can flawlessly execute the business operations in a short period. Since technological apps or tools handle most of the complicated tasks, it reduces the labor work and thereby the cost involved to manage the resources.
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$
$
Oil & Gas: A Definitive Path Towards Digitalization | P04
II. Result Oriented The traditional marketing takes weeks, months or even years to boost the company’s sales target or revenue. But the digitalization is capable of fastening this task and produce the quick results. It makes you possible to view the result in real time. You can instantly identify the most active time or week regarding sales or visitors. Also, you can check the conversion and bounce rates at ease, unlike traditional marketing which takes weeks of analysis to study the outcome. Therefore, digitalization saves your time by providing you everything in real time.
III. Engagement When you look back, you will identify that in traditional marketing, the interaction with your customers or target audience took a few weeks of time or sometimes more. It was a tedious task since you had to wait for the responses to plan your next stage. But in the digital marketing world, you can quickly engage your customers in real time. You can chat as well as discuss your brand or procedures with the real prospects immediately. By investing some time in engagement will boost your industry growth tremendously.
IV. Exposure The traditional marketing was limited to a specific zone or locality. But digitalization provides access to the whole globe in a single click. You can instantly broadcast your message to the outside world, unlike a traditional setup. Also, you can quickly identify the user’s reaction to this new technology. Therefore, you can make changes to your current plan and execute accordingly. The scope of the digital marketing is much broader than any other marketing strategies.
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Oil & Gas: A Definitive Path Towards Digitalization | P05
Digitalization in Oil & Gas Industry A few studies have reported that the oil and gas industries overrun on time and cost in most of the cases. The utilization of digitalization in these industries will overcome such problems effectively and thereby improving the productivity. Digitization allows oil and gas industries to add value to their business operations by reducing costs, increasing the productivity of their workforce, and improving the decision-making process. These digital solutions will not only create a streamlined process for hiring and training new employees but also helps the businesses to scale up with ease. The various reports have shown how digital technologies can be an add-on to the oil and gas industry: It is capable of unlocking approximately $1 trillion of value for oil and gas industries and another $640 billion for both the customers and society.
With savings of roughly $170 billion for customers, the digital transformation is said to improve the productivity by approximately $10 billion
The oil and gas industries can save $30 billion from dropping the water usage whereas $430 billion from decreasing the emissions
Digitalization also helps the environment by reducing CO2 emissions by approximately 1,300 million tonnes. It saves up to 800 million gallons of water and also avoids oil spills which are equal to 230,000 barrels of oil.
The total estimated value by the integration of digital technology may increase to $2.5 trillion if the operational costs are relaxed, and also the impact of upcoming technologies are measured.
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Oil & Gas: A Definitive Path Towards Digitalization | P06
Digital Themes in Oil & Gas Companies According to some studies, there are four different digital themes which will play a vital part in the digital transformation of these industries in the period of 2016-2025. The Oil and Gas industry must realize the full impact of these themes on the broader energy system to remain relevant to their customers. The digital initiatives within each theme will define the technologies that are expected to have a meaningful impact on the industry’s workforce, value chain, the environment, adjacent sectors, and broader community. It depicts the methods that companies can practice as they use digital technologies into their sales model.
Value at Stake for Oil and Gas Industry by Digital Theme Potential Business Impact ($ Billion)
Potential Societal Impact ($ Billion)
Emission Reduction (million tonnes C02e)
Total Value at Stake ($ billion)
Net Impact on jobs (1000s)
Assets Life Cycle Management
745
110
855
370
(114)
The Collaborative Ecosystem
30
0.5
31
2
-
Innovative Engagement Models
100
27
126
12
21
New Emergies
70
500
570
900
35
CUMULATIVE TOTAL
945
637
1582
1284
(57)
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Oil & Gas: A Definitive Path Towards Digitalization | P07
I. Life Cycle Management of Assets The digitalization is capable of handling the entire lifecycle of digital assets such as its design, operations, capturing the data, and analyzing it at every step. These initiatives utilize specific sensors that are capable of obtaining the real-time information from all the physical assets and process this data efficiently. The increasing power of these innovative technologies will give rise to the latest business operation models. These operating models can significantly extend the life cycle of these oil and gas assets. Also, they are said to increase the operational efficiency as well as HSE performance.
II. The Collaborative Ecosystem The integration of digital technology in the oil and gas ecosystem has helped the collaboration among different participants. This collaboration enhances the innovation, reduces the cost, optimizes the real-time supply, balances the demand, and also makes all your business operations transparent. With this, you can connect better with your customers, vendors and even the society. That is, within this ecosystem, you can work together to improvise the designs and innovate faster in any of the mutually beneficial projects.
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Oil & Gas: A Definitive Path Towards Digitalization | P08
III. New Energies The integration of digital technology in the oil and gas ecosystem has helped the collaboration among different participants. This collaboration enhances the innovation, reduces the cost, optimizes the real-time supply, balances the demand, and also makes all your business operations transparent. With this, you can connect better with your customers, vendors and even the society. That is, within this ecosystem, you can work together to improvise the designs and innovate faster in any of the mutually beneficial projects.
IV. Innovative Engagement Models The latest and innovative engagement models in the oil and gas industries will offer personalized experiences for the customers. This flexibility is said to drive new revenues in this segment. The companies must evolve to keep up with these technological developments that are capable of changing the business operations globally. For instance, the customers may not refill the petrol at the pump shortly or may charge their electric car while they shop in grocery stores. This drastic shift in customer expectations made the oil and gas companies build innovative business models that extend the traditional barrel setup. With the new models, the industries can effectively engage the customers by analyzing their fuel purchasing patterns and provide customized offers.
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Oil & Gas: A Definitive Path Towards Digitalization | P09
Email Fuels Digitalization in Oil & Gas Marketing Field The present objective of the oil and gas industry is to maintain sustainable profit, and one can achieve it through digitization in its business operation. Most professionals in this industry recognize the importance of email. Although email is known as the oldest digital channel, it acts as a locomotive for digital trends in the oil and gas industries. It helps in bringing all the essential information to customers as well as prospects across the world in a cost-efficient manner. Hence it is imperative to invest and embrace emails in this area. Both the employees and contractors must be adequately trained before implementing these changes in the operations, including every other relevant new technologies and practice.
Unlike other marketing strategies followed in the oil and gas industries, the email marketing has a higher value because of this feature. That is, you promote your products or new services only if the customers or prospects permit you to do so through an opt-in option. Hence whether your list is one thousand or one million, it will be the most valuable list for your industries journey towards success.
I. Permission Based Marketing
The utilization of email marketing in the oil and gas segment can help you to yield the maximum return on investment. It is one of the best marketing channels to boost the business growth through digitalization. Most of the oil and gas industries have also integrated this strategy into their business to fuel their sales.
II. Keeps Your ROI High
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Oil & Gas: A Definitive Path Towards Digitalization | P10
The analysts in almost every industry including the oil and gas segment use digital technologies to study the customer's behavior pattern. Email being the cost-effective digital channel, the industries use it in the majority for this purpose. The in-depth study on customers journey will help these industries to execute the plans as well as make changes to it accordingly. The insufficient integration of this technology in your business operation may lead to the gradual drop in your sales ratio.
III. Analyze Customer Journey
Almost every industry use professional business email because of its increased security. The oil and gas industry can also adopt the same to record the past conversation with the clients and the employees. Although there are multiple tools for team management, tracking, reporting, and delegation, industries still use email today to delegate, enquire, report, request and share the data in daily business tasks.
V. Private Communication
You can use email in almost every device that supports internet connection. Since the oil and gas industries are moving towards digitalization, the emails act as a backbone to it. It can be a customer, vendor or the employees in this industry; everyone can utilize the power of email marketing at ease. It acts as a 24/7 digital channel that helps the oil and industry to boost its revenue.
IV. Omni-Present Tool
Email has become the source of communication for a social media platform. With the help of the email data, you can verify the users, and also send important messages or notification in the social media. It helps you to build strong brand value and also establish a great connection with your customers. This platform helps the oil and gas industries to digitalize themselves with the support of its clients.
VI. Social Media Connection
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Oil & Gas: A Definitive Path Towards Digitalization | P11
Implementation of Digital Technology in Oil & Gas Companies Today the Oil and Gas industry has made a drastic change in their business operations. With the help of digitalization, the enterprises could explore vast opportunities to redefine its margins. These companies have faced several issues such as dropping crude prices, time and cost overruns, changing supply demands, climatic changes, and many more. But now the oil and gas industries can offer practical solutions through digitalization. It tackles these challenges and provides the best solution.
Investment in Digital Technologies
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Oil & Gas: A Definitive Path Towards Digitalization | P12
Oil and gas industries can implement these technologies in their day-to-day business activities to overcome the challenges and reap maximum benefit.
I. Mobile Technology
Like every other industry worldwide, the oil and gas companies have also started investing enormously in mobile technology for their daily activities. The usage of this technology has improved the communication as well as the performance of workflow. With the highly accurate recorded data, it has helped to increase productivity. Also, you can monitor the data in real-time and improve the safety of oil and gas workers with the help of mobile devices. You can easily integrate digitalization in this segment in the form of smartphones, tablets or wearable devices.
II. Big Data The oil and field industries generate a large volume of data in a single day. Especially the modern offshore drilling fields with 80,000 sensors are capable of producing 15 petabytes or 15 million gigabytes of data in its entire lifetime. The digitalization helps in handling as well as analyzing the big data. Some studies have proved that almost 36% of oil and gas industries have already invested in such tools.
III. Automation The safety concerns have dropped a few practices in these segments. Therefore, it is essential to utilize the digital technology to maximize the revenue. Automation of some processes will improve not only the efficiency but also safety levels in the oil and gas field. Besides, it also helps the workers in portfolio planning, identifying drill location, and easy maintenance. A few oil and gas industries have utilized drones to increase efficiency as well as labors safety.
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Oil & Gas: A Definitive Path Towards Digitalization | P13
IV. Digital Marketing Most of the companies have already utilized digital marketing to boost the revenue. Likewise, the oil and gas industries have started using the same techniques to ease their business operations. They use digital marketing to identify and study the consumer's behavior pattern as well as preferences. Also, it is used to manage the supply chains more efficiently. According to a few studies, this tactic is said to increase the revenue by 3% and lower the operational cost by 10%.
V. 4D Seismic Imaging The introduction of time-lapse dimension to the old 3D imaging technique helps the operators to measure as well as predict the changes in the reservoirs. It is said to increase the upstream revenue by 5% and the recovery rate by 40%.
VI. Cyber Security The advancement in the technology raised the threats of cybersecurity along with it. Since all the information’s are digitized and stored in the cloud or other servers, the chances of being vulnerable to hacking have increased. In 2012, the hack on Saudi Aramco had become the world’s biggest hack with catastrophic effects. This hack is a reminder for every oil and gas industry to safeguard themselves from cybercriminals who attack your data for political or financial reasons. The proper implementation of digital technology in this segment is said to lower the risk of hacking.
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VII.
Digital Customer Services
It is one of the innovative solutions in the oil and gas industries for loyal customers. Instead of customers going to fuel stations to refill the petrol, there are a few digital amenities that aims to bring these petrol stations to the customers itself. For example, the hyperlocal mobile fuel offerings provide this digital service to the customers. You can also include other services such as maintenance check-ups and tire pumps with these digital mobile fuel station to increase safety for clients. Several Oil and Gas incumbents such as Yoshi, WeFuel, and Mobile Fuel have already embraced this model in their business operation recently.
VIII.
Block Chain
All the major industries started adopting Blockchain technologies in their business operation. Now it is the time for oil and gas companies to begin using this technology that is proven to drive more opportunities. Key blockchain opportunity in this industry includes supply chain, land administration, finance, marketing, and inventory operations. For example, some of the oil and gas companies started using blockchain-powered smart contracts which is a self-verifying as well as self-executing agreements that work autonomously when engaging with their vendors and Engineering, Procurement, and Construction (EPC) companies.
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Oil & Gas: A Definitive Path Towards Digitalization | P15
Conclusion
The oil and gas market started reinventing themselves to improve the efficiency as well as overall productivity of their business operations. The development in the digital segment is said to bring a massive benefit to these industries if appropriately implemented. It has got the power to completely revolutionize the operations in the oil and gas industry like other sectors. Since the oil and gas companies are still lagging behind in this advancement, the early adopters are said to reap higher profits and resilience in both ups and downs.
Hence do not ignore your journey towards digital transformation if you do not wish to find yourself left behind. The use of this technology such as sensors and automation in every area such as upstream, midstream and downstream of the industry gives you the ability to collect as well as interpret the data, and take necessary action towards lessening the risks involved in this environment.
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Oil & Gas: A Definitive Path Towards Digitalization | P16
About Blue Mail Media Blue Mail Media provides customized B2B email and mailing lists configured as per industry, geographic regions, demographics, size of the prospective market and so on. With a motive to support your sales and marketing teams in the lead generation process, Blue Mail Media maintains a rich directory of decision makers across all industries and provides marketers with complete access to information to reach out to their prospects via emails, physical mails or telephone.
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