The Importance of Agility in Oil & Gas
The oil and gas industry rebounded significantly in 2021, with oil prices approaching $100/barrel in early 2022. Then the conflict between Ukraine and Russia disrupted the supply chain and caused a dramatic price increase for crude oil. While no one knows exactly how long the conflict will continue or how the resulting economic sanctions will continue to affect the supply chain, one thing is certain: Oil and gas companies must be agile enough to react to this volatile market.
According to a recent IDC Report, “Oil and gas companies and their suppliers need to have capabilities in place to enable greater resiliency and adaptability as they face disruptive market environments.” In other words, oil and gas companies need to react even faster than the rapidly shifting market.
Achieving profitable industrial operations requires harnessing all the available tools at your disposal—companies can’t afford not to. Legacy systems will not allow you to achieve your objectives with markets this volatile. It is no longer sustainable to piece together disparate software in isolation. Unlocking value from industrial data silos is critical to achieving engineering and quickly reacting to volatility. As the industry and workforce change, the systems used to make critical decisions must embrace new technologies that enable the creation of a digital twin, so plant personnel can respond quickly and change direction to meet demand, maximize profitability, and operate sustainably.
The poor integration between legacy value chain tools (figure 1) shows the amount of manual data transfer with the purple arrows. This poor integration leads to the following:
- Low transparency: Misalignment among various stakeholders
- Low consistency: Different views of the same asset
- Low agility: Delay in responding to changes to external factors
- Low accuracy: Inaccurate asset representation
- High maintenance: Manual communication between people and tools
- High tool dependency: Required expertise in different toolsets
Digitalizing the value chain is an essential part of staying competitive. It is crucial that all departments and teams across the value chain collaborate on a journey that will benefit the overall business significantly. A value chain optimization strategy tackles the supply chain, operations, and optimization. It enables you to maintain momentum by adapting to internal and external business constraints at a moment’s notice. You will also empower production teams to respond quickly and change direction to meet demand, maximize profitability, and operate sustainably by implementing digital tools.
AVEVA Value Chain Optimization solutions create a digital twin of the value chain to provide operational insight in real time. It allows enhanced decision-making so that the business is making data-driven decisions faster, remaining competitive in a volatile market. For a concrete example, learn about how Idemitsu Kosan is transforming its refining operations with AVEVA.
We have entered a time of great change with major societal, technological, and political trends reshaping the environment in which oil and gas companies operate. There is no crystal ball that will predict the future. There is only one certainty in the foreseeable future: market volatility. As the market changes, oil and gas companies have the power to embrace this volatility.