Technology Adoption Could Unlock Around $300B in Savings for Oil, Gas

Technology Adoption Could Unlock Around $300B in Savings for Oil, Gas
The deployment of data analytics, robotics and other technologies could boost productivity across the oil and natural gas sectors, potentially unlocking close to $300 billion in annual savings.

The deployment of data analytics, robotics and other technologies could boost productivity across the oil and natural gas sectors, potentially unlocking close to $300 billion in annual savings for producers by 2035, according to new research from the McKinsey Global Institute (MGI).

MGI expects technology to have substantial effects on the supply of resources, reducing the costs associated with extracting and producing them.

Technology adoption is likely to put wells that were once inaccessible within reach, according to MGI, with equipment such as robotics allowing resources to be accessed more efficiently and safely.

Tech deployment will also enable producers to shift to predictive maintenance, which is considerably less expensive than reactive maintenance, and use sophisticated data analysis to identify, extract, and manage resources, MGI said in its report.

“Changes in the resource sector in the past often came about as a result of regulation, but now it is technology that is driving the shifts,” Jonathan Woetzel, Shanghai-based director of MGI, said.

Richard Sellschop, a partner in McKinsey’s global energy and materials practice, said resource companies must adapt to the technological shift quickly.

“Resource producers are still recovering from the supercycle and now face a new era of disruption as technological innovation reshapes the sector,” he said.

“Resource companies must adapt quickly, incorporating new technology into their operations, boosting productivity, and looking for new growth opportunities,” he added.

Safety Benefits of Technology in Oil, Gas

The increased use of robotics in the oil and gas sector could automate many activities that are currently high risk for humans, reducing variability in outcomes as well as making the workplace safer, MGI said.  

Examples listed in the report include the use of underwater robots to repair pipelines in subsea locations and the use of drones to inspect towers on offshore oil rigs.

“Drones rather than people can conduct pipeline inspections and real-time constant site surveys in oil field development,” the report said.

MGI also stated that on-site employees could use wearables to be tracked across a platform, limiting their exposure to danger, and equipment could be shut down if an employee got too close. 

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist.

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