Within months, oil companies were scaling back. Project developments were postponed, operations were halted, and workers were laid off. As the price per barrel continued to fall, with no sign of a rebound, some companies went to the wall.
Since then, global oil prices have remained in a constant state of flux. A bounce followed by a fall. Everyone in the industry has been forced to operate on shifting sands.
For the companies that survived, it became a case of adapt or die. The industry needed to strategise, to figure out how to cut costs while boosting production efficiency. It had to decide how it could maximise profits while the price of oil plummeted to historic lows.
It meant that oil and gas producers were faced with a paradox: new technologies could benefit operations by optimising efficiency, but the low price of oil created a risk-averse environment which restricted investment.
Today, as technology continues to revive, rejuvenate and reshape legacy industries, oil and gas operators have once again started to invest in the future. With prices somewhat stable around the $60 per barrel mark, experts and analysts believe the industry is in the throes of a technological revolution.
The general consensus among analysts is that producers are unlikely to ever see a return to pre-2008 prices. So, to survive in the era of cheap oil, companies will need to invest more and more in technologies such as artificial intelligence (AI), distributed acoustic sensing (DAS) and automation.
It’s imperative that the industry capitalise on the business and production intelligence that such technologies offer. Oil and gas companies are no stranger to big data, pioneering it’s use in the 1980s and the 1990s. But to stay on top of production – and to gain a greater insight into the status of their assets – companies should be combining technologies such as AI, DAS and cloud computing to deliver efficiencies throughout their operations.
The truth is that the oil and gas industry is well suited to digital transformation. For many producers – especially the “Big Oil” supermajors – the data derived from digital technologies can provide unprecedented information into extended supply chains that span multiple territories, countries and continents. The access to such insights can inform strategic decision-making and support global business strategies – highlighting new opportunities for production growth and capital investment.
This is a welcome boost for an industry wary of fluctuating market prices and its impact on profit margins. The faster oil and gas producers integrate digital technologies into their operations, the further they can reduce costs, enhance performance efficiencies and boost production. For an industry that suffered a severe downturn in 2008, the coming of a second digital age could finally spark an upturn.