Digital Asset Management

Data-driven & efficient

Data is fast becoming energy companies’ most valued asset. With data volumes of a typical energy company doubling every 18 months, cloud technologies rapidly advancing, and AI investments growing by 40% each year, the opportunity for oil and gas companies to make better use of data is tremendous.

A major production facility of a large oil and gas company operating in the North Sea gained a 2% increase in production without increasing emissions after it used real-time advanced analytics from remote IoT sensors.

Maintenance typically accounts for between 10 and 15% of total production costs, and smart maintenance could reduce these outlays by 10%. Additionally, fewer shutdowns for unscheduled maintenance events could increase production volumes by 1%.

Delivery logistics are especially costly for remote unconventional and offshore sites, representing 10% to 15% of total production costs. Logistics assets (such as vessels, aviation, and trucks) are utilised at around 55% across the industry, leading to inefficiencies. Using digital technologies in logistics management could reduce the cost of delivery vehicle service by 20% and the cost of materials by 2%.

Drives Internet of Things, cloud, artificial intelligence, analytics and security.

Decarbonising Operations

Clean & intelligent

The imperative for oil and gas companies is to take actions that will limit the 20% of the total emissions that occur in their operations (Scope 1 and 2 emissions). These emissions occur in activities around extraction, processing, transportation and refining.  

The energy used in the process of extracting and refining hydrocarbons accounts for almost 40% of the Scope 1 and 2 emissions. Tackling methane leaks and reducing venting and flaring could decrease Scope 1 and 2 emissions by up to 50% alone. Operators can further reduce energy intensity during extraction by shifting to power generation from low-carbon sources and replacing existing fleets with electrified equipment. Recent deployments of “powerfrom-shore” and “floating wind/solar farm” solutions for platforms have the potential to deliver up to 20% of the offshore energy requirement by 2030. This is equivalent to a 2 to 3% total emissions reduction.

Another key technology is carbon capture (CCUS) which could reduce sector emissions by up to 80 MTCO2e per year by 2030.

 Overall most companies could reduce their carbon emissions 10% to 20% without having a negative impact on the company’s return on investment. Many companies could reduce their emissions an additional 30% to 40% while still maintaining a positive internal rate of return.

Technology includes IoT, cloud, networking, automation and analytics.

Digital Retail

Evolving customer engagement

Over the past decade, fuel retail has been one of the more resilient segments in the oil and gas industry. The growth of both out-of-home consumption and small-format retail has enabled forecourts to capture significant incremental value from convenience retail and other nonfuel retail (NFR) business. As a result, industry asset values have soared. For example, acquisition multiples for US convenience stores have almost doubled and now exceed the multiples of integrated oil and gas companies.

However, the interplay of the energy transition with changing demographics is creating a challenge for many fuel retailers, who must transform their operations to attract and retain a new generation of customers while also adapting to a changing fuel mix. Around two-thirds of survey consumers view alternative fuel offerings, along with digital-driven customer engagement and experience, as a key requirement for transformation.

The long-term outlook for fuel retail envisages a decline in the global value pool from $87 billion in 2019 to $79 billion in 2030. Developing markets in Asia, Latin America, and the Middle East can expect modest growth in consumer fuel purchasing, while mature economies are likely to see a gradual decline, with the most pronounced impact in Europe, followed by the United States and China. This decline will be driven by the rise of electrification and shared mobility as well as the rise in working from home and the acceleration in migration to online shopping.

However, the decline in the fuel retail value pool is expected to be offset by gains in nonfuel retail, with the global forecourt value pool increasing from $22 billion in 2019 to $30 billion in 2030. In particular, the EV-charging value pool is expected to rise from negligible today to $20 billion by 2030. Capturing this value pool will require significant investment in building not only EV charging infrastructure but also enhanced customer facilities such as seating and toilets, as well as new on-site service offerings in some cases.

Looking forward, the future of nonfuel consumption is likely to be shaped by three consumer trends driven by lifestyle choices and technological developments. One is “fresh and frequent,” referring to consumers’ tendency to cut down on big weekly shopping trips at out-of-town supermarkets and to purchase more of their groceries at small local stores. The second trend, “delivery and on the go,” refers to the increase in online ordering of food for delivery and the rise in consumption outside the home. Some innovative players have captured new demand by partnering with food delivery platforms; examples include BP with Deliveroo in the United Kingdom. The third trend, “frictionless customer experience,” refers to the use of digital menu boards and contactless payment solutions in stores to streamline the shopping experience. 

 In order to survive in this ever changing world, oil and gas companies need to do a much better job of keeping pace with consumer demand for ever-more seamless, connected, and personalized experiences.

Requires the integration of networking, cloud, AI & analytics and security.