The Digital Oilfield in an Industry In Transition
There are a number of simultaneous factors that are reshaping the industry today and driving the need to achieve digitization for Oil & Gas operators. Let’s take a look at these factors:
- Sustained Lower Commodity Prices: The continual shift in oil prices resulting in ‘lower-for-longer’ rates is forcing producers to find process efficiencies that lower lease operating expenses.
- Crew Change: A shifting age demographic has resulted in an enormous loss of field experience and knowledge. Producers need to increase the capture of this knowledge before it leaves the workforce.
- Smaller Teams: It is now routine to see Production Engineers managing north of 500 wells, with some topping 1000. Teams are taxed to find the needed time to identify, diagnose and correct problematic wells.
All of these factors are driving greater scrutiny from investors and public markets and the demand to focus on creating long-term value by protecting base production and maintaining positive cash flow. Many producers now progress toward lowering lease operating expenses and increasing efficiencies and highlight these trends in their quarterly earnings calls.
As a result of all these factors, modern production operations have become more dynamic than ever. Innovations that have improved production operations have also made them more complex to manage. A timely transition to the digital oilfield appears critical for producers to continue to drive operational efficiency and to manage the impact of new financial expectations.
OspreyData has had a front-row seat to observe how organizations are approaching and progressing in their digital transformation.