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Measuring the oil and gas industry’s digital transformation

Measuring the oil and gas industry’s digital transformation

The oil and gas industry: Building momentum toward the industrial metaverse

Massive refineries containing miles of pipes and specialized equipment. Hazardous environments that can put workers at risk. Intense pressure to make their operations more environmentally friendly. Yet despite these challenges, the oil and gas industry is further ahead than most other sectors when it comes to digital transformation and their adoption of Industry 4.0 technologies, especially in its use of digital twins.

In this blog, I will provide a quick overview of the digital technologies companies in this industry are investing in today and how they are utilizing those technologies to improve their operations — and what they can do to keep building momentum as they chart a path toward the industrial metaverse.

What do oil and gas firms want to achieve with Industry 4.0?

The oil and gas industry is seeking to address a number of short, medium- and long-term challenges by adopting Industry 4.0 technologies. On their path to the industrial metaverse, they are looking to:

  • Improve machinery, equipment and asset performance

Extracting oil and gas, transporting it over thousands of miles, then refining it is a complex and finely tuned process. Any unexpected breakdowns or unplanned downtime can have costly consequences. That makes maximizing the lifespan of equipment a top priority for the sector. Predictive or automated maintenance, powered by advanced data analytics, can identify root causes when problems occur, ensuring timely repairs and restoration of workflows.

  • Optimize operations and workforce safety

Enhancing productivity while also increasing safety is a must for any company in the oil and gas industry. While automation can simplify processes, hazardous work environments still remain, so companies are looking to deliver programs that can effectively improve workers’ knowledge of safety issues and elevate overall quality levels.

  • Enhance operational agility

Supply shocks, political risk and economic variables are of particular concern for oil and gas companies. They are seeking technologies that can help them navigate unexpected changes in their operating environments, including ways to bolster their supply chains to better handle swings in demand for oil and gas.

  • Support sustainability goals

Oil and gas companies are actively seeking ways to reduce emissions from their facilities to meet increasingly stringent sustainability targets.

What is the current state of digital transformation in the oil and gas industry?

When it comes to information technology (IT), companies in the oil and gas industry have implemented mobile devices (such as smartphones, tablets and ruggedized devices) and industrial Wi-Fi across all applicable facilities. They are also in the process of scaling up their use of private 4G networks and cloud-based applications, such as enterprise resource planning, supply chain management, quality control and more. However, the industry is still in the early stages of exploring edge computing and private 5G networks.

On the operational technology (OT) side, oil and gas companies are leveraging predictive maintenance and data analytics to ensure equipment lasts as long as possible. Robotic process automation (RPA), collaborative robots (cobots), digital twins and drones are further helping to improve productivity and worker safety — for example, by facilitating remote drone-based video inspections of facilities and equipment.

These innovative Industry 4.0 technologies and use cases offer many promising opportunities for the oil and gas industry. For the sector to truly maximize the benefits of Industry 4.0, however, investments in IT and OT must remain in alignment. if they are not, it can lead to poor performance or wasted resources, holding back or preventing further progress.

What is the Industry 4.0 Maturity Index?

In collaboration with ABI Research, Nokia developed the Industry 4.0 Maturity Index to gauge the progress of multiple sectors on their journey to the industrial metaverse. The Index draws its data from a survey of 500 senior managers and IT and OT leaders from a wide range of industries, including 53 respondents in the oil and gas industry.

The Index assesses not only the progress made concerning the sector’s IT infrastructure but considers it in relation to the OT use cases being deployed. By assigning weighted scores for IT maturity and OT use case deployment, the Index offers insights into the overall progress of each sector as well as the level of alignment between the two.

Where does the oil and gas industry score on the Industry 4.0 Maturity Index?

The oil and gas industry is fairly advanced when it comes to the deployment of OT use cases, scoring 70.5 out of 100 — ranking behind only the fabricated metal industry and the electronics and appliances sector. In terms of IT maturity, the oil and gas sector’s progression is closer to the average score, landing at 65.2.

While respondents acknowledged a lack of alignment between IT and OT as a potential barrier on their path to Industry 4.0., the overall survey results indicate promising operational momentum. On the cusp of a pathway to the industrial metaverse, the oil and gas industry stands out as a leader in its advanced thinking and deployment of innovative technologies and use cases.

Want to know more about the Industry 4.0 Maturity Index and how the oil and gas industry stacks up against other verticals? Get the full results in our white paper.

David de Lancellotti

About David de Lancellotti

David de Lancellotti is Enterprise Head of PWLS Campus, CNS Cloud and Network Services at Nokia.

Since 2001 David has been in sales leadership roles within the Verizon Sales Team. David is a dynamic and successful leader who started his journey in sales at Lucent Technologies as part of the Verizon Sales Team and has taken various leadership positions through the company’s evolution as it merged with Alcatel and now with Nokia. During a brief stint during 2019, David led Nokia’s North America Enterprise Sales Team delivering the highest sales in its history. David’s previous notable leadership assignments within Verizon Sales Team were Head of Verizon West Market responsible for Optical and IP Routing, and Head of Mobile Networks Field Sales delivering $6B in sales for the company.

David holds a Bachelor of Arts in History from the University of Redlands.

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