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From Raw Materials to Services: The Digital and Technological Transformation of Oil and Gas Companies
6 June 2019
Digitalization is a development tool for the energy industry

It is an important and relevant topic, especially that digitalization is the Forum’s most dicussed one if you add up all the time speakers used to address it — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

We face great opportunities to make our business more efficient, if we learn to manage – and that means to make decisions – based on data — Andrey Belevtsev, Director of Digital Transformation, Gazprom Neft.

We see that the world of technologies is changing. Conventional businesses merge with IT companies, and new competition arises — Chris Dartnell, President, Oil & Gas and Petrochemical Business, Schneider Electric.

The things that define the future of the industry for the next 20–30 years is the way the industry uses technologies. They should not be viewed just as part of the solution for the climate change and global warming, but as part of the solution for the search of balance — Raad Alkadiri, Senior Director of the Center for Energy Development, BCG.

Oil and gas companies are traditional digitalization leaders

The oil industry has always been among leaders of new technologies introduction, not just becasue it employs special people or scientists, but because it has been an industry that had to explore new deposits and enter new markets. The need called for new technologies — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

The energy segment is highly competent and professional [in terms of digitalization, – Ed.]. We have companies that own cutting-edge technologies by global standards — Evgeniy Kovnir, General Director, Digital Economy.

Energy competition is growing

Overall energy consumption will grow up to 2035, and the increment will reach 30%, but renewable sources will take a large share — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

Industry performance needs better monitoring

The government needs certain information about the industry performance. The problem is it is not stable: some information is monthly, some is annual, and sometimes – when it is a project review – it is once every 3–5 years. The quality of information is not always good enough for making a managerial decision either — Grigory Vygon, Managing Director, VYGON Consulting.

Weak cooperation among market players

Today, business has certain problems: it is a fairly weak connection among business units and sometimes it can even be upstream and downstream, but there are cases of ideological dissonance, i.e. geologists, developers and economists think in different terms — Grigory Vygon, Managing Director, VYGON Consulting.

Collaboration between government and business to develop the industry

The most important thing here is the role of the government. We need to help with the infrastructure, with removing administrative barriers and creating an environment for technological development, i.e. a certain ecosystem — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

It is important for the government and business to find common ground in preparing a digital programme for the oil and gas industry — Grigory Vygon, Managing Director, VYGON Consulting.

Creating incentives and mechanisms for attracting business to modernization

Efficient digitalization is not possible without cooperation among market players. The role of the government is truly important here – it needs to come up with incentives for this type of cooperation — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

We have a great team of scientists and other experts that invest their efforts in improving our customers’ productivity. Data analytics and other methods of data processing are key to improving profitability and profit margin — Chris Weston, Chief Executive Officer, Aggreko plc .

A digital project will be successful if there is a customer. Then we will get economic benefit — Marina Belyakova, Partner, EY.

Management’s motivation to improve efficiency

The key factor in how fast a company goes through digitalization is its desire to win. We see that the biggest share of the effect is driven by processes overhaul and the management’s attention. Digital tools are responsible for just a part of this effect — Vasily Nomokonov, CEO, SIBUR.

The key topic is human resources. They determine success in every respect — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

The material was prepared by the Russian news agency TASS