Digital Oil — O&G Sector On Verge of Transformative Changes

Data is the new Oil is often used term while discussing the role data is playing in triggering disruptive changes across industries. Nothing can prove it better if Oil also starts heavily depending on Data for its survival and sustenance :)

O&G had an amazing run over the decades. It has fueled unprecedented transformation and created amazing riches for Oil countries and companies. Though, this sector is currently under tremendous pressure for various reasons:

  • Suppressed Oil Price Cycle
  • Bulk of Oil Fields getting to “Maturity” stage. Which means more money spent per barrel of Crude generated. This also means that equipment failure gets more frequent and needs closer monitoring
  • Renewable energy sources like wind and solar and alternate sources like Shale gas are putting demand and cost pressure on conventional energy

Given this background, O&G sector is well poised for a disruption and change. IoT can be and is a big catalyst for this change. It is the perfect recipe for solving the issues being faced by this sector

Digital Oil is the term used to define the initiatives in O&G where digitization is being leveraged to bring efficiency, reduce risks, reduce break downs and make O&G competitive and profitable again.

O&G can be broadly categorized into Up Stream [Exploration and Drilling], Mid Stream [Refining and Storage] and Down Stream [Delivery to PoS and other consumers]. Each of these areas has huge opportunity for digitization and disruptive changes.


  1. Operational Efficiency
  • Breakdown Prevention and Optimal Resource Utilization
  • Cost Reduction
  • Improved Throughput
  • Better oversight over entire scale of distributed operations
  • And much more

2. Safety and Security

  • Oil and Gas being highly inflammable the operations are in a hazardous environment.
  • Safety of the personnel as well as the billions of dollar of assets is highly critical
  • Also, because of remote locations [many of which are in politically disturbed areas] having a comprehensive security and safety mechanism becomes difficult

Current State of Digitization

Because of high value assets, there is a high degree of instrumentation available. Especially in Up Stream and Mid Stream. Which means that there are already a number of sensors placed and automation done. This is both a strength and a challenge.

Strength because of a lot of data is already available that can give very valuable insights to bring efficiency in processes. Just that currently the data is segregated across different systems and layers. This data needs to be aggregated at the cloud level and leverage the current state of art in Big data and analytics to get actionable insights. The issue might be about plugging some holes that might exist in the information available. through extra bit of instrumentation. Ability to process and analyze complex and peta bytes of information will be critical for achieving it

Challenge with having a mature instrumentation and digitization is that its done through a discreet approach and each system has its own standard and model. Aggregating all this at a common location and making sense of it all will be tough. Re-engineering these systems and driving change in current business processes can some times be more difficult that doing something from scratch.

Way Forward

As I discussed above, O&G does provide an excellent opportunity for applying the new developments around IoT, Analytics and Big Data to help transform a beleaguered and often beguiled industry. Driving change in a very mature industry with aging personnel is the elephant in the room and will be key to success or failure of any initiatives. Though, with tough business conditions, the industry is more ready for the transformation than ever before. I can be contacted at

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