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The pressure is mounting on the energy sector to become both more operationally efficient and environmentally sustainable. Investors, policymakers and the broader public are increasingly challenging energy companies to report and share everything when it comes to their emissions, energy use, waste, environmental impact and operational safety. Nowhere is this truer than in the energy industry’s offshore drilling practices, where everything is high stakes: physically complex operations, big price tags for infrastructure, massive environmental footprints and vulnerable public perception.
At the same time, competition and internal politics pose yet another source of pressure to energy companies, which is aimed squarely at how to apply technology to make their most costly area of business—offshore operations—more streamlined and cost efficient. At first glance, it would seem as though companies are forced to pick between these two mounting pressures, and many are choosing technology.
Rise in tech investments
Digital front-runners are scaling up data-driven predictive maintenance and production optimization as well as empowering their offshore workers with technology that assists in everything from visualization to reporting and decision-making. While it’s been varied in terms of speed and dollar values, investment in technology is alive and well in most energy companies. Investment in sustainability is seemingly not following suit. This is surprising considering that there is equivalent pressure from equally important stakeholders.
Sustainability goals unachievable without tech
Paula Doyle, Cognite’s senior vice president of sales and marketing, recently published a piece in which she argued that many of these digital expenditures could be a two-for-one investment, supporting both the business as well as sustainability targets, whether it was intended that way originally or not.
In principle, much of the energy industry agrees with this. The State of the U.S. Energy Industry Report, a large-scale survey conducted in partnership with Harris Poll, Axios Studio and Cognite, found that there is an overall consensus among energy leaders that technology can be the biggest accelerator of sustainability goals. In fact, 84% of energy leaders stated that their sustainability goals would be impossible to achieve without technology.
Businesses, and in particular the energy industry, invest in technology to help efficiency and other operational needs. Digital front-runners in the offshore world are making large technology investments right now. But there is no question that they would have little motive for making such investments if it didn’t help them optimize production, advance workflows, integrate computer vision and other forms of artificial intelligence (AI), and help equip their workforce with the tools necessary to make smarter and safer decisions.
But what’s interesting beyond this, as our own customers’ experiences make clear, is that the technology investments they have made toward productivity or efficiency gains also show sustainability gains.
For instance, one of the largest oil and gas companies in the world has been able to reduce flaring and chemical use through smart tracking and dashboarding, originally meant to prevent plant degradation, help maintenance oversight and save money.
Meanwhile, Framo, a pumping system giant, and Aker BP, an Norwegian oil and gas operator, have worked together to roll out predictive maintenance via contextualized data. Along the way, they found ways to reduce transport-related emissions. And finally, a Norwegian grid operator is using remote and AI-augmented leak detection that also has the side effect of reducing workers’ truck-time emissions.
I do not see it as coincidental that the pressure to transform sustainably and the pressure to transform digitally have been building at roughly the same time. Sustainability and technology should be seen not as two different cost centers but as symbiotic and strategically critical areas. Prioritized investments in both, with true intent to drive both, will help offshore operators design a much more business- and environmentally sustainable future for themselves.
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U.S. oil rigs rose 10 to 411 this week, their highest since April 2020, while gas rigs fell one to 100.
Drillers cut seven oil rigs in the week to Jan. 3, bringing the total count down to 670 vs. 877 active rigs a year ago, energy services firm Baker Hughes said in its closely followed report.
The oil and gas rig count, an early indicator of future output, rose 3 to 351 in the week to Dec. 30, energy services firm Baker Hughes Co. said in its closely followed report.