Digital Transformation Drives Operational Excellence in Oil and Gas

Having just returned from the beautiful city of Calgary in Canada where I spent a couple of days attending the Operational Excellence in Energy, Chemicals & Resources conference, it is clear that the oil & gas industry is now more than ever open to considering new ideas, new technologies and solutions and, most importantly, working with strong technology partners to realize operational excellence (OE) and thrive in challenging times. Thanks to the wonderful folks at Tata Consultancy Services (TCS) for sponsoring the Digital Transformation track during day 1 of the event and giving me the opportunity to participate as a speaker, panelist and audience member.

There were several great presentations and panel discussions given that highlighted how owner-operators, pipeline operators, E&P firms, chemical providers and related stakeholders can leverage technologies such as analytics, machine learning and AI, mobility and IIoT to achieve operational excellence without compromise by improving asset reliability and ensuring asset integrity, optimizing well and field performance, optimizing artificial lift, reducing NPT, increasing production, and, most importantly, removing cost per boe thereby improving profitability.

Rustom Mody, Vice President, Enterprise Technology at Baker Hughes gave an excellent presentation – Digital Transformation: The Impact of Innovation and OE which began with stating Baker Hughes’ stated purpose of enabling safe, affordable energy improving people’s lives. He defined the word innovation as as a new idea that is turned into a good or service that can be sold or traded; otherwise ideas are wasted without successful execution. Innovation must be tied to customer needs, be economically sound, and built on viable technology. Innovation requires knowledge, according to Mody, and he-cited UBER as an innovation that created a $60 billion market.

Mody outlined the many challenges the oil & gas industry faces today including low oil prices, increasing global energy needs, and production sustainability at $50/bbl is the “new normal”. He said the main goal is to reduce finding and development costs for new wells, focus on production optimization and risk mitigation on new and old wells, and ultimate recovery and booked reserves are key metrics for which companies are measured.

Mody sees a big Digital Data gap in oil & gas since it data intensive, but an unconnected and disparate value chain and feels that big disruptions such as tools like IIOT, data analytics and machine learning, and virtualization and automation will help close gap over time in moving the industry towards ‘intelligent energy’. We both agree that the oil & gas industry is in the ‘perfect storm’ position for change since “lower for longer” pricing is forcing companies to reimagine their operations through digital transformation.

ARC will be developing a more comprehensive report (and more blogs) on the key takeaways from this thought provoking energy conference in the coming weeks so keep your eyes out for more information on how IIoT and analytics (along with working with strong technology partners such as TCS) can enable oil & gas companies to not only thrive in challenging times but also realize operational excellence.


  1. I personally agree. Oil & gas producers have deferred investment for some time but to address long-term business needs the production companies can no longer defer modernization and now invest for cost reduction. New technology such as digital field networks, analytics software, and cloud computing makes condition monitoring for a broader scope of production equipment practical, including from an engineering center, and enable new IIoT-based business models requiring no capital outlay. Results from easy to replicate digital transformation and de-manning solutions include extended life of production equipment, reduced maintenance spend, reduced energy cost and losses, reduced personnel cost, improved productivity, and increased production. Learn more from this essay: