Published on 31st October 2022
The impact of COVID-19 on the global economy is undeniable. The oil and gas industry also felt the impact with crashing oil prices, unstable supply chains, and more. More than just buying industrial equipment or replicating processes on drilling platforms is required to ensure oil and gas business scalability.
Adapting to market fluctuations and evolving company needs is only possible by adjusting internal processes and operating models and developing organizational agility.
Oil and gas companies are rethinking their operating models and decision-making strategies with game-changing digital technologies.
According to a report, investing in digital solutions can help oil and gas companies save up to 5% on operational costs and 20% on capital expenditures.
Digital maturity unleashes new growth opportunities, makes the transition easier to a low-carbon future (amid tighter green energy norms), and creates long-term value not limited by quick wins, such as cost savings, incremental efficiency gains, and process optimization.
In an industry with heavy capital investments and operations spanning several regions, digital technologies can help uncover new value streams, increase production, and boost cost savings.
Several CIOs surveyed in the O&G industry have expressed interest in building a change leadership culture driven by digital transformation.
Read on to learn more about digital and other impactful O&G industry trends of 2022.
Top 20 Oil and Gas Industry Trends 
AI and IoT have had the biggest impact on the oil and gas industry. While Blockchain solutions provide visibility and transparency across the O&G value chain, augmented and virtual reality technologies boost worker safety and enable remote operations.
Let us dive deep into the trends transforming the O&G industry worldwide (listed in alphabetical order):
Realistic representations of subsurface reservoirs and other oil and gas equipment are possible with 3D modeling and high-quality visualizations. For example, 3-D seismic, linear program modeling helps deliver operational efficiencies across the value chain and discover new hydrocarbon resources.
Using 3D modeling in combination with historical production data, oil and gas engineers can optimize operations planning and production through data based on simulation of the production and injection phases during a reservoir’s lifecycle.
In addition, 3D modeling lowers costs, reduces risks, and improves O&G asset performance.
O&G Cloud: The Singapore-based startup provides XXSim—a cloud-based platform that consists of thermal, black oil, and compositional reservoir simulation modules. XXSim enables reservoir engineers to predict reservoir performance and recommend relevant inputs to maximize reservoir production.
Maillance: The French startup offers oilfield.ai—a cloud-native solution to automate reservoir modeling and visualization and enable real-time decision-making for petroleum and reservoir engineers. Oilfied.ai combines AI-based analytics, geoscience, and physics to optimize production and predict reserve estimates.
4D seismic technology involves acquiring, processing, and interpreting 3D seismic surveys (3D seismic data) at different times over the same area to assess dynamic changes like fluid movement and saturation in a producing hydrocarbon reservoir.
4D seismic technology makes deep-sea exploration accessible to O&G companies and allows geologists and petroleum geophysicists to map out potential exploration reserves without spending large amounts of money.
4D seismic technology uses augmented or virtual reality software to provide a “flyby” experience from above an oil rig and a 3D visualization during drilling operations with other useful information on mineral extraction sites.
Additive manufacturing (AM) or additive layer manufacturing (ALM) is the industrial name for 3D printing. Additive manufacturing facilitates the production of parts on-site to reduce traditional supply chain costs and time massively.
3D printing is gaining momentum in the O&G industry, with several major players like Bake Hughes, BP, GE Oil & Gas, Siemens Energy, and Shell undertaking projects at 3D printing facilities/labs.
For example, Shell used a 3D printed scale model to validate structure design and avoid potential construction issues and cost overruns. Additive manufacturing is revolutionizing parts prototyping in the O&G industry and providing cost savings while developing more efficient ways to develop and maintain equipment.
Digital technologies have become instrumental in extracting actionable insights from large, siloed data sets—it is now possible to utilize AI-driven data insights to improve site efficiency and worker productivity. Earlier, many companies struggled to deal effectively with data loss and outdated and unlinked data sets.
AI-enabled platforms offer insights derived from cognitive, predictive, and prescriptive analytics to help petroleum engineers and O&G industry managers implement ROI-increasing exploration and production (E&P) ideas on the field, optimize upstream O&G resources, and solve complex problems in O&G operations.
Reality technologies like augmented reality headsets allow field workers to inspect dangerous areas without being physically present by using their smart headset devices.
Nesh: The US-based startup’s virtual assistant “Nesh” collects data from multiple sources and uses natural language processing (NLP) to answer industry-related questions. In addition, the AI-powered chatbot enables field operators to make fast and informed decisions based on relevant insights from on-site data.
NeuDax: The US-based startup’s AI solutions include advanced analytics and data science, which support field engineers in the confident and efficient development of their resources.
NeuDax’s AI platform FracDax includes deep learning and reinforcement learning (RL) to assist oil and gas operators in the analysis of thousands of oil-well parameters, assessment of completion options, and formulation of refracturing solutions.
Immersive technology solutions, such as Augmented Reality and Virtual Reality (AR/VR), Extended Reality (XR), and Mixed Reality (MR) combine real and virtual environments to increase efficiency and reduce errors.
Downhole imaging, remote monitoring, and virtual training help Exploration & Production (E&P) companies manage plant maintenance and worker training and make safety improvements.
How does virtual reality serve as a valuable tool? Virtual reality provides immersive spatial representations of data to make critical decisions better and faster in a range of scenarios—from off-site orientation to remote issue diagnostics.
It can be used to conduct virtual reality site visits, understand existing site conditions, and enable teams to be better prepared in an emergency, such as viewing a remote and potentially hazardous oil and gas site. Virtual reality improves productivity and outcomes and reduces site exposure hours by offering a scalable virtual reality solution for oil and gas assets.
Daily O&G operations generate large volumes of unstructured data. With advanced analytics and Big Data platforms to analyze production and performance data, it is possible to optimize O&G operations, reduce production costs, and increase ROI.
The usefulness of advanced analytics in the O&G industry goes beyond asset management and seismic data interpretation. Other significant applications include:
Additionally, predictive analytics reduces downtimes and the costs of unforeseen reactive maintenance, especially for critical equipment and large-scale maintenance projects.
Welligence: The US-based startup specializing in Big Data and AI solutions provides engineers and energy operators with data analytics dashboards, production forecasts, valuation models, and visualization tools to develop better strategies at an asset or a company level.
Phoenix RDS: The British startup uses data analytics to provide drilling, production, and waterflood optimization solutions to O&G asset owners and operators. In addition, the company offers reservoir modeling algorithms and optimization workflows for enhanced oil recovery (EOR).
Blockchain is the way when it comes to providing security and transparency to O&G gas documents and operations. O&G companies can use distributed ledgers to verify contractors and employees and maintain smart contracts. Blockchain finds other uses in:
Block Gemini: Block Gemini uses Blockchain, AI, and IoT to provide transparency into complex O&G processes and enable full digital transformation of the O&G industry through demand pricing, forecasting, planning, transportation, and warehousing.
Moreover, O&G companies can use Block Gemini’s business solutions to share and coordinate plans digitally, increase overall operational efficiency, and make strategic decisions.
Ondiflo (US-based startup): Ondiflo uses Blockchain and IoT to develop Oilfield Transaction Automation. Apart from automating the procure-to-pay process for fluid hauling by leveraging sensor data, the company’s solution increases operational efficiency while reducing the O&G carbon emission footprint.
Cloud services are indispensable for efficiently processing oilfield data and scaling data management and storage at any O&G business development stage. It is well known that cloud-based enterprise content management systems help digitize day-to-day paper documents and legacy oil records.
Using cloud technology and software applications improves operational efficiency, reduces overall costs, and frees up expensive local memory and computing capacities for O&G companies. Cloud computing not only works well for local computing and storage but also increases data availability and accessibility.
Furthermore, cloud infrastructure provides the flexibility of only paying for the resources a company uses and expanding storage according to business requirements (such as cloud storage expansion for a new exploration site). So, buying cloud services is much more convenient than acquiring and installing on-premises hardware.
Engage: The US-based startup helps O&G operators and vendors increase productivity, reduce costs, and save time with “ENGAGE”—a cloud-native digital field management platform.
ENGAGE is a complete field solution that integrates accounting software, IoT devices, and production data to automate jobs and provide transparency into oilfield operations. Moreover, it uses Digital Field Tokens to enable data analytics-based reporting, predictive scheduling, and real-time tracking.
inerG: The US-based startup provides PetroBase Pro and PetroBase Explorer—O&G data management tools that enable well data analytics and end-to-end petroleum asset management.
Additionally, the company’s cloud-based O&G reserves and economic evaluation software improves the accuracy and efficiency of A&D (acquisition and divestiture) evaluation, integration, and O&G asset management.
Ensuring employee safety and managing remote operations have always been major challenges for the O&G industry. However, connected worker technologies are becoming critical in:
A connected field worker can respond to actions in real time and play a key role in better decision-making with click-distance access to information and precise data visualization.
Cybersecurity solutions are indispensable for enhancing the safety of upstream, midstream, and downstream O&G operations because cybersecurity attacks can result in the loss of confidential information or OT (operational technology) disruption.
Cybersecurity centers around a three-level approach of assessing, protecting, and responding in the event of a cyber threat to improve an O&G company’s OT cyber readiness. Major cyber solutions focus on diverse safety aspects, including:
Processing and transforming terabytes of energy company data into actionable insights is costly and time-consuming due to the complex nature of O&G enterprise data management.
DMaaS is a cloud-based solution that enables O&G organizations to manage and protect enterprise data, as well as structure and visualize data for easy understanding and further navigation.
Complete digitization of all assets and end-to-end data management support make it easier to leverage various data sources across all time zones.
Moreover, DMaaS is highly useful for saving paperwork and operating & workforce costs and leveraging information to the best possible level. Instead of spending time on lengthy processes, employees are freed up to focus on value-generating tasks.
A digital twin is an exact replica that serves as a virtual representation of a physical object or process and is beneficial in integrating human activities, internal systems, and external ecosystems.
A digital twin provides an analytical what-if model to validate new approaches and frameworks and identify relevant risk mitigation strategies.
Apart from health, safety, and environmental improvements, the benefits of using digital twins include:
As attracting and recruiting new talent with the desired skill set can be difficult and expensive, O&G industry companies are looking to invest money and time in training and empowering their current workforce to retain existing employees, as well as avoid high hiring costs and production delays.
In addition, agile work structures (such as hybrid working and remote) and eco-friendly credentials have considerable potential to attract prospective employees to work in the O&G industry.
Employee experience platforms (EXPs) are useful for driving employee experience and engagement and improving knowledge transfer and onboarding efficiency.
Access to data, candid conversations, and real-time feedback loops empower employees and create opportunities to foster productive communication and trust.
The Environmental, Social, and Governance (ESG) initiatives mandate the O&G industry to focus on environmental friendliness and sustainability.
As the world shifts toward a clean energy transition, the oil industry has a bigger responsibility to step up climate efforts. The IEA (International Energy Agency) press release shows how oil companies can play a crucial role in reducing carbon emissions by taking remedial measures, such as:
Both investors and regulators want oil companies to look for ways to lower climate-warming emissions, reduce their environmental impact, and transition away from fossil fuels.
For example, environmental solution companies are helping oil refineries with processes like oil reclamation and thermal desorption. Many publicly traded companies are wary of new drilling activities, given the increasing pressure from shareholders to control their spending.
European firms, in particular, are planning to invest more in lower-carbon businesses. Big companies like Chevron Corporation and Exxon Mobil Corporation have announced plans to invest in projects to capture CO2 and reduce emissions.
Exxon stated its resolve to reduce emissions in one of the company’s largest operations in the Permian Basin (located in the southwestern part of the United States) oil field.
Access to capital is a success factor for O&G companies. As capital providers are increasingly aware of sustainability risk and analyzing their clients’ absolute and intensity-based emissions, it is imperative to balance the need for capital with realistic expectations for decarbonization outcomes.
Furthermore, energy transition investments will depend on profitability in legacy businesses (thereby ensuring consistent and predictable returns) as alternative/renewable energy projects find their footing.
Amid less third-party investment, capital discipline and digital transformation along with better data analysis will remain key priorities for O&G companies wanting to:
The Internet of Things (IoT) enables oil and gas companies to gain much-needed visibility into equipment and processes, improve production, and minimize maintenance costs. IoT is also instrumental in monitoring remote areas and ensuring worker safety and smooth operations without delay or interruption.
IoT-based production optimization models provide operators with data-driven recommendations for well and reservoir management. For example, IoT sensors placed inside blowout preventers (BOPs) and choke valves facilitate real-time data collection to identify faulty equipment quickly and implement remedial measures on time.
Real-time IoT monitoring platforms improve the efficiency, reliability, and safety of oil wells and pipelines while maximizing the ROI. Furthermore, cloud-based Industrial IoT (IIoT) solutions provide real-time insights and support upstream oil and gas operations, including artificial lift, precision drilling, and production scheduling.
Sensital: Australian startup Sensital offers the iBOTics IoT platform that automates control, initiates maintenance tickets, and remotely monitors to improve the efficiency, reliability, and safety of industrial equipment, pipelines, and wells.
Moreover, iBOTics helps O&G operators maximize the ROI and minimize the overall operating expense (OPEX).
Zyfra: Zyfra is a Finnish startup that provides a proprietary cloud-based IIoT platform for the O&G industry to enable field operators to improve efficiency, worker safety, and real-time processes.
Zyfra’s upstream IIoT products include the field development platform “Geonaft,” which supports artificial lift, precision drilling, predictive maintenance, production scheduling, and more.
M&A challenges in the O&G industry include:
Additionally, employee struggle to accept change may lead to a reduction in business performance and value creation. Nevertheless, industry consolidation among oil and gas producers and upstream activities are the biggest drivers of M&A deal-making in the O&G space.
The M&A outlook appears strong in 2022 after making a significant recovery. Furthermore, the deal-making trend has created opportunities to pursue strategic acquisitions (to increase production capacity) and cash in on aging fossil fuel assets.
MACH (Microservices-based, API-first, Cloud-native, and Headless) architecture allows for independent development, deployment, and management of business functionalities. MACH architecture assists O&G companies in various ways, such as:
Furthermore, MACH architecture provides a best-of-breed approach to future-proof tech stack without relying on the traditional, monolithic architecture. An API-first framework makes it possible for two or more applications or services to interact while a headless approach provides much-needed freedom and flexibility.
Hydraulic Fracturing (Fracking): Fracking is a drilling technique, which injects fracturing fluids under high pressure to split the sedimentary rock formations beneath the earth’s surface. Subsequently, the process widens the fractures open to allow natural gas to flow.
Heat Tracing: Heat tracing keeps pipe or vessel temperature constant to prevent heat loss. Furthermore, electricity is supplied to the vessel to heat it up when the system temperature falls before the set point level.
Fueling management: A fuel management system comprises a set of solutions for securing, controlling, and monitoring fuel reserves (as well as supply and consumption). Fueling management includes everything from checking a fuel gauge to real-time fuel analytics.
O&G predictive maintenance finds applications across upstream, midstream, and downstream operations. Predictive maintenance solutions extend the life of installations, improve safety, and reduce O&M costs.
Data collection from sensors in field installations and integration with machine learning algorithms enable engineers to assess equipment conditions quickly and predict potential failures.
TwinThread: TwinThread’s Predictive Operations Platform provides insights into asset life estimation, material and energy costs, OEE (Overall Equipment Effectiveness), and predictive throughput.
Prognostic: The British startup implements IIOT-based PM through end-to-end PaaS (Platform-as-a-Service) solutions to help O&G companies reduce machine downtime-related costs.
Furthermore, AI-driven predictive maintenance increases asset lifetime by analyzing external, historical, and real-time data, as well as noise, temperature, and vibration data.
As oil and gas operators work in complex and dangerous environments, it is necessary to ensure workplace safety without slowing down operations. Robotics and process automation reduce human-induced errors in oil rigs and refineries and are helpful for:
The primary advantages of using robots include accuracy, affordability, less risk of injury or illness from toxic substances, and speediness.
Sensia: The US-based startup’s automation solutions decrease interaction time between detection, diagnosis, and resolution while reducing equipment downtime for O&G companies.
EXRobotics: The Dutch startup offers a cloud-based RaaS (Robotics as a Service) platform for the oil and gas industry and builds various robots suitable for working in harsh environments and rugged industrial sites. The startup’s robots include:
Other trends that have attracted attention are a greater investment of O&G companies into supply and logistics and increased focus on repairing and improving their existing networks to better meet evolving business needs.
In recent times, disruptive changes in the O&G industry have majorly impacted predictability, productivity, and profitability.
COVID-19 placed tremendous pressure on the survival of petroleum and gas production companies, which faced various challenges, including a decline in oil demand, overstocked market, and a price crash
Volatile crude oil prices aside, O&G companies are facing rising pressure to decoke the energy supply and deliver cleaner energy. Also, long-term investors believe that climate change can threaten the viability of oil companies and hurt the bottom lines of their portfolios.
Decarbonization and digital transformation hold tremendous potential as the oil and gas industry realizes the need for enterprise digitalization to enable organizational flexibility and resilience.
Digital transformation is leading O&G companies to make progressive choices and respond better to changing customer expectations, supply chain disruptions, and time-to-market pressures while utilizing assets optimally.
Furthermore, the huge potential for cost savings makes digital transformation investment a viable proposition. Companies like BP are encouraging the development of in-house apps to improve workflow processes and organizing digital boot camps for executives.
In the coming years, O&G companies will continue to adopt best-in-class operational practices, improve efficiencies across the value chain, and invest in technology development and deployment in addition to leveraging the softer skills of enhancing communication, collaboration, and innovation to achieve the above objectives.
As oil producers and oilfield service companies/providers navigate through external uncertainty, digital transformation, fluctuating markets and more, the key O&G industry trends are likely to influence the direction of the industry in 2022 and beyond.