Digitalisation: upstream's silver bullet?

The size of the digital prize is large. But deploying digital technologies at scale is proving harder than first thought. What can we learn from digitalisation’s early adopters? Get the highlights below or fill in the form to access the full report.

In this complimentary insight, our experts in digitalisation consider:

  • To what extent can digitalisation really help you move down the cost curve?
  • Digitalisation in practice in unconventionals and offshore
  • What we can learn from the first steps in upstream's digital transformation

Jamie Thompson

Upstream Research Analyst

Upstream research analyst with a focus on the Netherlands and Norway

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Digitalisation is good for business

It promises to reduce costs and bolster the bottom line. And at a time when the oil and gas industry is facing an existential crisis in the form of the energy transition, it could also be key to the industry’s survival. In this new piece of research, Jamie Thompson, Research Analyst, North Sea Upstream Oil & Gas, and Martin Kelly, Head of Corporate Analysis, ask what we can learn from digitalisation's early adopters. 

The size of the digital prize is undoubtedly large – with as much as US$150 billion per annum in potential operating cost savings available to companies that embrace digitalisation. But the challenge of implementing digitalisation is enormous. To date, we believe there’s been more talk than action – and little evidence of tangible change to top or bottom lines.

How much can digital technology reduce upstream costs?

To answer that question, we look at how digitalisation has played out so far. 

Digitalisation is gaining traction in US unconventional plays.

The shift has allowed shale teams to improve well performance. Some wells are now being drilled 20% faster and staying in pay zones more than 95% of the time. These drilling efficiencies and landing zone improvements could save L48 companies up to US$45 billion throughout the exploitation of tight oil. And in existing wells, smart production systems could drastically reduce lease operating expenses: a 10% drop could add US$25 billion of value to fields across the L48.

Operational transformation is hard to achieve when budgets are under closer scrutiny than ever.

Martin Kelly

Global Head, Curated Service, Energy & Natural Resources Research

Martin oversees our Curated Service offering, working across our energy and natural resource coverage

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But digitalisation has yet to make a really meaningful impact

Shale players have successfully moved cost curves down and to the right. But it isn’t solely, or even easily, attributed to the widespread adoption of digitalisation.

Drilling cheaper wells in adjacent zones and testing completions in a ‘fail fast, fail cheap’ way is as much mechanical as it is digital.

Can offshore conventionals deploy digital technologies at scale?

The conventional offshore world faces a very different challenge. Long lead times and a large amount of infrastructure mean few companies have the necessary scale or appetite to experiment in the development phase. But it is this sector that will need digitalisation most.

Norway is leading the way in adopting digital technologies offshore. What can we learn from the Norwegian shelf? Download the full report to find out. 

Why has the digital revolution not had the impact we hoped for?

Most companies have struggled to scale and embed digital technologies. Few are committed to experimenting at the scale needed for radical change. And many investment horizons are too short to test, validate and implement digital technologies in the conventional space. Digitalisation is not a silver bullet. But there is a significant first-mover advantage for companies that get it right.

So how can companies make sure they are digital leaders? Fill in the form on this page for our six recommended strategies.

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