Digitisation will cut energy sector costs globally

Significance

While many industries have been transformed by the development of such new digital technologies as data analytics and artificial intelligence, the oil and gas industry has been a laggard. That is starting to change as the industry looks to new technologies to help it become more efficient and productive. The oil price downturn, which has put a premium on cost cutting, has accelerated the move to take up new technologies. The opportunity is significant, with a World Economic Forum report (pdf) from earlier this year claiming that the industry could generate 1 trillion dollars in added value over the next decade by embracing digitisation.

Impacts

• Local communities in oil-producing regions face disruption as digitisation reduces employment and puts a premium on high-tech skills.
• The oil industry will be a significant new market for tech firms working on artificial intelligence, machine learning and automation.
• Embracing new technologies could help the oil industry attract younger workers, a key challenge as a wave of older talent retires.