THE Australian oil and gas industry has earned its position as one of the most innovative and promising globally. Following a strong revival in 2018, the industry is expected to continue to play a crucial role in the growth and prosperity of Australia.
This results largely from the increasing global demand for Australia’s Liquified Natural Gas (LNG). According to the government’s latest Resources and Energy Quarterly for December 2018, Australia is set to become the world’s largest gas exporter by 2020 and is forecast to export 78 million tonnes of LNG in 2019-2020.
To fully capitalise on this opportunity, counter new sources of cheap gas and navigate the epic disruption that is going on in the oil and gas industry, Accenture believes Australia’s oil and gas companies need to continue to innovate and challenge traditional ways of working.
In particular, they need to consider the following key technology and workforce strategies in 2019.
1: Consider renewable investments as the ‘new normal’
The stakes are increasing for oil and gas organisations as they continue to expand their LNG projects. To improve sustainability and improve cost effectiveness, industry players need to turn to renewable alternatives. The costs and maturity of renewable technology is now at such a point to make them viable as an alternative.
In an Australian-first, we see a major player converting pumps for their oil wells to solar and battery power. This industry leading move delivers the supply to both their South Australia and Queensland sites via 100 percent renewable energy and demonstrates the possibility for renewables to reduce costs and fuel consumption.
2019 will be the tipping point for renewable investments as their adoption gains pace and they are deployed at scale. Renewables will become ‘a new normal’ in managing a cost-effective operation.
2: Foster future ready workforce behaviours beyond metrics
2019 will see the rise of human and machine collaboration enabled by digital technologies. These new workforce dynamics make it paramount for leaders to reskill their workforce to harness the power of intelligent technologies to drive productivity, enable safety and mine data in unprecedented ways.
Humans will need to adapt and machines will need to learn new behaviours as ‘employees’. They will need to collaborate beyond just doing their ‘jobs’ to act ethically and build trust.
Additionally, Accenture believes that to achieve a smarter and more innovative industry, oil and gas organisations must create a diverse and inclusive workplace. Rich diversity makes businesses stronger, more competitive and creative, impacting the bottom line as well as sustaining employee engagement. This will be critical to attract and retain the next generation of leaders who chose their employers based on their ethics and sense of purpose.
In 2019, companies must be proactive in seeking out a variety of talent, especially the inclusion of more women at all levels within industry. There is a lot of evidence to suggest that senior women are emerging, seen recently through the appointment of Shell Australia’s female chairman, Zoe Yujnovich and her subsequently taking on the APPEA Chair role.
However, gender diversity alone will not be enough. Addressing the fundamental behaviours of unconscious bias will foster organisations where inclusion is a reality and not just a metric.
3: Embrace XR to overcome the tyrannies of distance
Physical distance is no longer a challenge with the evolution of Extended Reality (XR). XR’s ability to overcome some of the industry’s common maintenance, operational and efficiency challenges is now well understood.
Many are starting to experiment in the industry using XR to interact with others on offshore platforms, creating a seamless communication despite geographical barriers.
XR technologies such as virtual reality simulators, wearables and holographic projections, hold huge potential for overcoming the distance between the office and the field; improving safety and changing how the oil and gas industry can connect with information, people and share experience.
Accenture’s 2019 Tech Vision lists ‘DARQ’ technology as being key to the next wave of innovation – this includes distributed ledger technology (DLT, or blockchain), artificial intelligence, extended reality and quantum computing. The research found that 89% of businesses globally are already experimenting with one or more of these technologies.
4: Wake up to the threats of OT cyber security
Accenture research confirms that 82 percent of oil and gas companies believe technologies such as machine learning, analytics and artificial intelligence (AI) are critical to securing the future of their organisation. However, this increasing dependence on digital systems means oil and gas infrastructure is perhaps more vulnerable to cybercrime.
Cyber resilience is now a non-negotiable responsibility for oil and gas companies. Investment in cyber resilience tactics is expected to increase by over 30 percent over the next three years. A lack of investment in OT security in particular will raise the likelihood of a cyber attack.
The time is now to awaken the knowledge of your high value assets and the type of relevant threats they could be exposed to. Then test their vulnerabilities to build the resilience and prepare for the worst-case scenario.
2019 will see many sleeping threats arise as cybercrime becomes more and more sophisticated.
5: Explore the potential of industry wide blockchain technologies
Oil and gas companies need to further explore blockchain-enabled transactions to improve how the industry works together, interacts with its suppliers and service providers and transacts with its customers.
Blockchain technologies present an exciting opportunity for oil and gas companies, bringing better integration that, in turn, makes organisations more efficient and interconnected.
The first blockchain solutions are already being adopted by the industry for areas such as trading and shipping. Adopting these technologies can assist the industry navigate volatile oil prices, changing energy portfolios and sustained bottom-line pressures, as well as help to deliver simplified operations with standard, secure processes.
The industry’s future will continue to be dynamic and uncertain. With the global demand for LNG on the rise, Australian companies still have the opportunity to grow by capitalising on their strengths and proximity to key markets.
Oil and gas companies in Australia are already undertaking trials and proof of concepts on many new technologies. 2019 needs to be the year that moves beyond those trials so that the industry considers how to deploy at significant scale.
It is the scale that unlocks the true benefits of digital technologies to solve problems, eliminate defunct processes, recreate a better employee experience and create unprecedented value.
2019 has the potential to be the pivotal moment where an industry comes together to collaborate on these initiatives and accelerate the pace of reinvention in oil and gas.
The author of this piece, Ann Burns, leads Accenture’s Resources practice in Australia and New Zealand.