Oil industry makes the digital leap to cut costs and lift efficiency

Fossil fuel companies are setting up digital oilfields to improve efficiency, cut costs, and enhance customer satisfaction amid focus on renewable energy­

The fossil fuel industry is going digital, even as many believe that its era has ended. Renewable energy may be expanding, but oil and gas remain the centre of the global geopolitical theatre. Amid worries about its role in greenhouse emissions, the industry continues to pump out black gold with more than a little help from digital and emerging technologies. 

It is doubling down on new technologies to improve quality and efficiency in extractions. In many cases, technology is helping the industry to accelerate sustainable and low-waste operations. Digital oilfields represent a strategic transformation in the oil & gas sector, where advanced software, data analytics, and automation are integrated to drive smarter and more profitable operations. While the concept of such an oilfield covers a wide range of technologies, its core purpose is to enhance decision-making, streamline workflows, and get greater value from assets. By enabling real-time monitoring, predictive maintenance, and data-driven production optimisation, a digital oilfield helps reduce operational costs and improve recovery rates. It also fosters seamless collaboration across teams and geographies, supports faster and more informed decisions, and ensures that data from across the enterprise is unified and actionable. 

The global oil & gas automation and control market was worth $26.87 billion in 2019 and it is expected to grow to $41.8 billion by 2030, according to Statista. 

The fossil fuel industry is turning to digital solutions to have more energy options, reduce cost and improve customer satisfaction, according to Cognizant, which provides some of these technologies. The information technology (IT) company says it helped a Saudi oil and gas company achieve 200 per cent improvement in efficiency by automating its plant. The automation solution “doubled the operational efficiency and helped generate a one-time cost savings of $150,000 as well as an expected annual cost savings of $5.6 million.” 

Schlumberger, a more than 100-year-old oil and gas exploration company, has reinvented itself as an energy technology provider called SLB. It offers connected rig equipment that are monitored remotely, allowing maintenance to be performed precisely. Similarly, connected wellhead systems leverage real-time data to ensure consistent performance and operational reliability. 

The Indian oil and gas industry has also embraced technology: from discovery to delivery. State-owned Oil India Limited uses advanced technologies across its upstream and midstream operations. Over the decades, the company says it has deployed “state-of-the-art, fit-for-purpose” solutions that span the entire hydrocarbon value chain: from exploration and development to production and transportation. 

These include digitalisation and automation as key enablers of operations improvement. Oil India uses internet-of-things sensors, advanced data analytics, and artificial-intelligence-powered predictive maintenance systems to improve asset reliability, extend equipment life, and reduce downtime and operating costs. ONGC, another state-owned company, says it’s developing “digital twins” in engineering and operations. The concept involves creating systems with augmented and virtual reality capabilities for collaboration, training, and equipment maintenance in oil and gas fields with predictive analytics. 

Global energy companies are working with Indian technology companies for digital transformation. Aramco Digital, the technology subsidiary of Aramco, and LTI Mindtree, a unit of India’s Larsen & Toubro, have announced a strategic joint venture for IT services. NextEra, as the joint venture company is called, is part of Saudi Arabia’s plan to accelerate digitisation of its economy. A statement by LTI Mindtree and Aramco Digital said that NextEra will create “future-ready solutions that enhance operational efficiency, enable intelligent decision-making, and deliver seamless customer experiences.” 

With fluctuating energy prices and increasing competition from renewable energy, companies are under pressure to cut costs. Automation and digital solutions provide significant savings by reducing manual labor, preventing equipment failure, and streamlining operations.