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Last updated on 2024年7月9日

Struggling to innovate in established oil and gas companies?

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Innovation is the lifeblood of any industry, and the oil and gas sector is no exception. However, as you may know, established companies in this field often face unique challenges when trying to innovate. The complexity of operations, regulatory pressures, and the sheer scale of existing infrastructure can make it difficult to introduce new ideas and technologies. This article aims to explore these challenges and offer some strategies for overcoming them, ensuring that your oil and gas ventures remain competitive and sustainable in a rapidly evolving energy landscape.

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Stewart McIntosh

Energy / SPE Aberdeen Section Chair / Technology Enabler
Matin Shahin

Postgraduate Researcher | Senior Data Scientist | Senior Machine Learning Engineer | Reservoir & Production Technology…

1 Legacy Hurdles

The weight of legacy systems in oil and gas companies can stifle innovation. You're likely dealing with outdated technology that's deeply embedded in your operations, making it challenging to implement new solutions. The key is to start small; focus on incremental changes that can interface with existing systems. This could mean adopting new software that enhances data analysis within your current framework or retrofitting older equipment with modern sensors to improve efficiency.

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Namdar Mohammadi

Corporate Excellence Enthusiast
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Since legacy systems have been the backbone of the oil and gas operations, overcoming hurdles associated with integration issues, cybersecurity threats, maintenance costs, and compliance complexities requires a strategic approach. In order to address interoperability, the best approach is to prioritize systems that can work seamlessly with newer technologies. Evaluating the pros and cons of upgrading existing systems versus implementing new ones is equally important. Adopting cutting-edge technologies such as IoT, cloud computing, and AI, in collaboration with technology firms for bespoke solutions will significantly enhance data analytics and operational efficiency.

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2 Cultural Shift

Establishing a culture of innovation within a traditional oil and gas company is a daunting task. You might find resistance to change among staff who are accustomed to established ways of working. To foster a more innovative mindset, encourage open communication and collaboration across all levels of your organization. Celebrate successes, even the small ones, and make it clear that taking calculated risks is not just accepted but expected.

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3 Regulatory Navigation

Navigating the regulatory environment is particularly tricky for oil and gas companies looking to innovate. Regulations are often complex and can vary greatly by region. Your approach should be proactive; stay informed about upcoming changes and involve regulatory bodies early in the development process of new technologies. This can help ensure compliance and potentially influence policy development in your favor.

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4 Financial Investment

Innovation requires significant financial investment , which can be a barrier, especially when profit margins are tight. You must be strategic about where you allocate funds. Prioritize projects that promise to enhance operational efficiency or open up new revenue streams. It's also wise to seek partnerships with technology providers or consider joint ventures with other industry players to share the costs and risks associated with innovation.

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Stewart McIntosh

Energy / SPE Aberdeen Section Chair / Technology Enabler
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There are many barriers to technology adoption. I think the financial barrier is one of the easier ones to overcome if it makes sense. Value Proposition - demonstrate what value the new tech will bring. If it costs $2m but will save $5m over 5 years then explain this. If it will help reach a strategic goal (eg. C02 reduction) then show this. Be clear, be concise and be realistic. Show the pros and cons, show the costs and savings and show all impact including safety, uptime etc etc.

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5 Technological Integration

Integrating new technologies into existing oil and gas operations is complex but necessary for innovation. You should look for modular technologies that can be easily added to your current systems. This could involve using artificial intelligence (AI) to optimize drilling operations or adopting Internet of Things (IoT) devices to monitor pipeline integrity. The goal is seamless integration that minimizes downtime and maximizes the potential of new tech.

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6 Future Focus

Lastly, keeping an eye on the future is crucial for innovation in the oil and gas industry. Renewable energy sources are becoming increasingly competitive, and consumer preferences are shifting. You need to consider how your company can adapt to these changes. This might involve diversifying into renewable energy projects or investing in research and development for cleaner fossil fuel technologies. Balancing short-term profitability with long-term sustainability is key.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Matin Shahin

Postgraduate Researcher | Senior Data Scientist | Senior Machine Learning Engineer | Reservoir & Production Technology Engineer | Petroleum Engineer | Geo-Energy Engineer
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To drive innovation in established oil and gas companies, focus on these strategies: 1. Adopt Digital Technologies: Implement AI, IoT, and data analytics to optimize operations and predict maintenance needs. 2. Foster a Culture of Innovation: Encourage creativity and risk-taking by rewarding innovative ideas and supporting intrapreneurship. 3. Collaborate with Startups: Partner with tech startups to access cutting-edge solutions and fresh perspectives. 4. Invest in R&D: Allocate resources to research and development to explore new technologies and processes. 5. Sustainability Initiatives: Embrace renewable energy projects and carbon reduction technologies to stay competitive and compliant.

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Struggling to innovate in established oil and gas companies?

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1 Legacy Hurdles

2 Cultural Shift

3 Regulatory Navigation

4 Financial Investment

5 Technological Integration

6 Future Focus

7 Here’s what else to consider

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