Oil and gas refiners are looking at analytics and big data as they chase improvements in operational performance. Digital technology is increasingly being viewed as key to a shift from reactive solutions to a more proactive approach.
A recent survey of 200 industry professionals, conducted by PennEnergy Research in partnership with Oil and Gas Journal on behalf of Accenture, found about two-thirds of the respondents planned to increase investment in digital over the next three to five years. Of these, 74% viewed analytics and big data as having an impact on performance.
Digital, however, was considered among the top three areas of investment by only 19%. Even though 39% gave reduction of operational costs top priority, investment in digital technology was viewed by about 50% as the top barrier to adoption. About 38% said lack of a clear strategy or business case prevented them from adopting such technology.
The study suggests this is because refiners have struggled to understand how digital can drive enough incremental benefit to offset its own costs. However, this did not stop the respondents from identifying areas of benefit, the top three of which included more effective plant management (63%), reducing operational risk (59%), and more efficient and predictive maintenance (54%).
“The fact that refiners plan to spend more on digital shows they are cautiously optimistic about the incremental benefits to operations that new digital technologies can provide,” said Andrew Smart, managing director, energy practice, Accenture.
“Investments in digital technology, when deployed at scale, can generate operational savings far exceeding the investment costs, even in the short term.”
Optimism over digital was also borne out by another trend revealed by the survey. While the national oil companies have led on adoption so far – 21% said their digital take-up was ‘mature’ – about 41% of independent companies said they aspired to improve their adoption of such technology. Moreover, 24% of national oil companies said they were spending 20% or more than they were a year ago.
Another indicator of digital’s growing importance is the value the sector places on cybersecurity – 41% said it was the second biggest element that would impact operational performance, with companies seeking to offset the risk of cyberattacks that came with more connected refinery operations.
Refiners must switch to digital as a standard way of doing business to fully exploit big data and analytics. The study suggests industry leaders will work out the link between operational cost reduction and the contribution of digital technologies – they will focus on scale and push for entirely digital enterprises.
Tracey Countryman, managing director, asset and operations services, Accenture, said: “Refiners must move beyond simply piloting new digital technologies and into deployment at scale to see the benefits of digital.”
Digital requires long-term commitment and scale for the refining sector to fully reap its benefits. It cannot work as a separate strategy and must be embedded into business models, the study suggests. Key to its success will be skills and a mind-set that helps build digital maturity.