Why do you feel that innovation in new technologies seems to be driven by smaller companies rather than larger downstream operators?
Small companies exist to take risk - they must in order to challenge the status quo and generate positive visibility of their brand and product. In this regard, they’re natural innovators and disruptors. This is a position only underlined when compared to traditional or big businesses that simply aren’t as nimble and have more people, geographies, processes and budgets to consider.

The upshot being is that large downstream operators are happy to take a punt on a new start-up or piece of technology. It can be done as a proof of concept on a small, stand-alone project to test the water at a scale both sides are comfortable delivering. The successful ones are rolled out and trials that fail are sent away to be improved on which creates a self-perpetuating cycle of innovation.

What is the downstream sector doing to reduce costs and increase reliability?
In any business, not just the downstream oil and gas sector, there is always a pressure to reduce cost and improve efficiencies. This is one of, if not the biggest, driver behind the digitalisation and automation of business processes. We’ve already seen huge advancements in the supply chain, the advent of intelligent machinery capable of performing automated checks and the growth in AI and machine learning is only fuelling this fire.

However, there is still much to be done when it comes to the downstream sector reducing costs and increasing reliability. There is a still a massive amount of process done inefficiently, usually using paper - everything from audits to changeovers and day to day machinery reports is still done in a manner that is almost impossible to analyse at scale.

How important are new technologies to the downstream sector?
In an environment where businesses are hungry to safeguard their long-term competitiveness on a global stage, access to, and the understanding of, new technologies has never been more important. Today, businesses are under huge pressure to deliver high output at rapid speed and reasonable cost but are less capable of absorbing big mistakes that may have historically been the case. Factor in the risk, health and safety requirements and huge number of processes and the size of the challenge becomes clear.

Thankfully, technology is available today that can blend information held within existing systems and legacy data and combine it with existing worker knowledge, manuals and documents to drive continuous improvement with intelligent self-learning systems and processes. These can be accessed anywhere, at any time and in any language via a computer, wearable devices, tablet or phone. The capture, analysis and utilisation of data in real-time is a game-changer for downstream companies that adopt these new technologies too. It provides real-time data that is able to deliver insights and analytics to foster continuous improvement and innovation. Capturing data directly from workers in the field does away with the administration and time cost of ‘typing up afterwards’ that is required for electronic storage of information from paper-based processes; It also improves traceability for audit purposes and it opens up the possibility for much richer data capture.

Why does it appear that the sector is lagging behind some others in adopting these technologies?
Whilst demand continues to be high, it’s fair to say that the boom years for the oil and gas sector as it currently exists are in the past. Looking forward, decisions must be made as to how and where to invest to stay relevant in the future. Indecision and a lack of clarity is deterring companies from making even low-level investments in technology. According to a 2018 Gartner report “the sense of urgency for harvesting the benefits of digitalisation is higher than ever, but the harsh reality is that culture and methods change slowly within oil and gas companies.

The nature of downstream means health and safety, compliance and audit checks are frequent and detailed. Unless it is done digitally, each of these processes creates a huge volume of paper which is difficult to track and practically impossible to measure with any degree of value or accuracy. Done digitally, anybody from the worker, to the supervisor or the auditor can see the characteristics of a check in real time, the impact it has and provide digital evidence, such as pictures or data, to know it is done correctly. All in a fraction of the time. For example, one of our clients was asked in a recent audit, ‘how many times was filter X changed last year?’. Historically, this would have taken a day to find the information and prove the claim. Today it takes the team three clicks and less than 10 seconds.

What are the challenges that the sector faces in adopting these new technologies?
The question for the industry as a whole is how to best transition from the methods they know, trust and are proven, towards technologies and processes that is not necessarily any of those things now but has the potential to completely calibrate and future-proof the sector in the long-term. This means tackling inertia, fear and lack of knowledge and embracing change.

James Woodall will be talking about digitising business processes at Future Downstream conference that is being held in London on December 4^th