August 27, 2018, Zurich, Switzerland – In an evolving energy mix environment, ABB makes recommendations for preparing a digital strategy that will help overcome potential hurdles
A robust digital strategy will avoid risks of creating technology silos that lead to fragmented working and poor performance, says ABB in a new guide for oil and gas operators considering the future energy ecosystem.
Many industry players are issuing their own energy transition strategies as part of a plan to migrate their core business to new energy sources between now and 2040. The ABB guide titled ‘Innovation to transform the energy future – How digitalization enables oil and gas operators to transition to a new energy ecosystem’, complements this thinking of oil and gas operators.
“A successful energy transition requires an effective digital transformation roadmap, driven by a culture of innovation, technology adoption and digitalization, Per Erik Holsten, managing director of ABB Oil, Gas and Chemicals said. “This will help energy companies achieve faster and better business decisions, higher production, fewer outages and reduced costs.”
The guide suggests that building a digital strategy requires preparing and retraining executives, investing in talent, continually exploring the potential of digital, assessing and benchmarking current data architecture, working the data harder and greater collaboration throughout the supply chain.
It also acknowledges that the transition will not be an easy one and identifies several challenges facing oil and gas companies. For digitalization to deliver all its potential benefits, systems, equipment and sensors across industry must start sharing data and learning from one another.
The guide also notes that today’s data security regulations do not serve the fast-evolving energy industry. This can only be rectified through technology and due diligence in the operational use of data. Similar to views expressed at CERAWeek 2018, the guide explains the lack of global standardization in the industry and the need to develop an ‘ISO-like standard.
Creating a strong culture of data integrity by ensuring data confidentiality and security is the most significant digital investment to be made. Without a strong foundation in capturing, safeguarding and sharing data, transformational business insights could potentially be lost. Without adequate integration, new investments will be wasted as they will not be able to rely on historical data and will merely add fresh, high-quality, insufficiently used data to the rest.
Furthermore, much of the data coming from sensors is not standardized or integrated across platforms. Ownership of, or access to, data between suppliers, operators and contractors is often uncertain. Even when data is accessible, it is often too complex or large, obscuring any clear insights.
The ABB guide says companies need to improve the integration of their information technology (IT) and operational technology (OT) to reduce costs and boost efficiencies.
Companies also need to change their mindset about digitalization and automation. “CEOs can no longer afford to be sceptical about digital and de-prioritize automation in relation to other parts of the business deemed to be more critical, such as geology, well services or turbomachinery,” said Havard Devold, global digital lead, ABB Oil, Gas and Chemicals. “When digital changes that challenge existing work models are proposed, it is imperative that the stakeholders most likely to grasp the impact are included in top table discussions about it. At present, they are typically not invited and so the potential benefits are overlooked.”
The guide concludes that for a successful energy transition, the industry needs to continue to develop collaborative partnerships with peers and suppliers to innovate, develop digital capabilities quickly and capitalize on new business models. “Harnessing innovative ideas and, more importantly turning them into reality, will not be possible without industry collaboration both by production companies and suppliers along the value chain,” concludes Per Erik Holsten “Only in doing so will companies innovate in ways sufficient enough to secure competitiveness and longevity in the new ecosystem currently being developed.”