Oil, Gas CEOs Sold on Tech Benefits, but Unprepared for Disruption
While oil and gas CEOs recognize the benefits of technology, many still haven’t mastered how to bolster that technology to become a disruptor in the industry.
Data from KPMG’s 2018 Oil and Gas CEO Outlook, released Oct. 10, reveals that globally, 97 percent of oil and gas CEOs believe new technology creates opportunities. Eighty-five percent are piloting or have already implemented Artificial Intelligence (AI).
But realized benefits don’t always equate to confidence.
The report also finds that 59 percent of oil and gas CEOs feel their organization is an active disruptor in their sector and 57 percent believe lead times to achieve significant progress on transformation can be overwhelming.
This indicates there is still work to be done in this space.
“Technology is disrupting the status quo in the oil and gas industry,” Regina Mayor, global sector head, energy and natural resources, KPMG, stated in a release. “AI and robotic solutions can help us create models that will predict behavior or outcomes more accurately, like improving rig safety, dispatching crews faster and identifying systems failures even before they arise. This level of predictability can have a profound impact on our industry.”
Benefits and Long-Term Growth
According to respondents, 46 percent said acceleration of revenue growth is the biggest long-term benefit of AI, followed by increased agility as an organization (39 percent) and improved risk management (39 percent). They anticipate this within a three-year time frame.
And 58 percent of oil and gas CEOs believe AI and robotics technologies will create more jobs than they eliminate. Ninety-three percent expect headcount in the oil and gas industry to increase over the next three years.
The companies are poised for growth, as indicated by the report. Eighty-five percent of oil and gas CEOs are confident or very confident on growth in the industry and 88 percent are confident or very confident on growth in their companies.
And how do the CEOs plan on achieving this growth?
According to the report, 83 percent anticipate a moderate to high appetite for M&A activity over the next three years, largely driven by the need for cost reduction through synergies/economies of scale, a speedy transformation of business models, increased market share and low interest rates.
“Executives are really honing in on ways they can improve internal efficiencies through strategic M&A moves and the use of robotics, AI and other means of digitalization across the industry,” Mayor said.
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Senior Editor | Rigzone