ARC colleagues and I recently returned from the Offshore Technology Conference (OTC) in Houston last week and was impressed by not just the amount of discussions centered around IIoT-enabled solutions developed or being developed and the number of VR and wearable solutions on display at many booths, but by the revelation from Havard Devold, Group Vice President, Digital Lead – Global BU Oil, Gas & Chemical at ABB, that a majority of the IOCs and many of the NOCs now have C-level executives that are focused on developing their own digital strategies and initiatives. I could sense the palpable increase in the number (and intensity) of discussions and companies pushing their Digital solutions as a sign that the IIoT root was taking hold, but what really got my attention was that the IOCs and NOCs are finally starting to “get it” when it comes to the necessity for digital transformation and IIoT-enabled solutions to both survive and thrive in this new norm of “lower for longer (or forever?)” oil price environment.
At almost every major supplier’s booth one could see that the traditional “heavy metal” booth fixtures were being replaced by streamlined digital monitors showing each respective supplier’s portfolio of solutions and, in several cases, an emphasis on those offering digital transformational solutions. All the major automation suppliers in attendance including ABB, Emerson Automation Solutions, GE Oil & Gas, Honeywell, Rockwell Automation, Schneider Electric, and Siemens were all highlighting their oil & gas specific solutions as well as their own digital transformation and IIoT solutions such as remote monitoring, analytics and more. Meetings and booth visits with companies such as Bentley Systems and IFS show that they are leading very much leveraging IIoT-enable solutions to add value to their customers.
It was clear that the influence of the pending merger with GE Oil & Gas was being seen at the Baker Hughes booth with a focus on a more digital feel and even the other major oilfield service providers in Schlumberger, Halliburton, and Weatherford were showing signs of digital transformation and advanced technology and service capabilities designed to lower costs, improve production and recovery rates and improve collaboration to enable operational visibility, flexibility and agility.
Perhaps it was also a sign of the tough times and need for streamlined optics which forced most companies to leave home the “big metal “ or physical renditions of products such as subsea control modules, multiphase flow meters, and the like; but my sense was the third attendance decline in three years (down 3,000 from 2016) and the layoffs now in excess of 400,000 caused by almost 3 years now of depressed pricing has forced most oil & gas companies to fully realize the need to embrace new technologies, new work processes and, most importantly, changes in corporate cultures such that people embrace change and the power of digital transformation.
ARC will continue to shout from the rooftops that oil & gas companies can no longer repeat the same insanity over again in expecting that by doing the same thing (retrenchment, layoffs and cutbacks, then rinse and repeat) they will get different results. I think this new normal of “lower for longer” oil price environment and market dynamics is forcing digital transformation and that may very well be the best long-term solution that the oil & gas industry has received in a long time.