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Oil and gas companies are facing significant challenges. Softening demand and the imperative for decarbonized energy has further increased pressure to reduce costs and drive efficiency across the oil and gas industry.
While exploration and production (E&P) is the lifeblood of oil and gas; it’s also incredibly complicated, time consuming and expensive—and made all the more difficult in an era of volatile oil prices and evolving energy demand. In fact, as one of the most complex and asset-intensive industries, oil and gas spends literally billions on capital projects and operations every year, with payback often taking decades. Most of that money is earmarked for identifying promising new resource deposits and building and deploying new wells to extract those resources.
Yet, as critical as they are to a company’s competitiveness, these upstream operations are often plagued by major data, technology and process management challenges that can make it difficult for companies to minimize the time and cost it takes to find resources, get a well up and running, pump those resources out of the ground and deliver returns.
Increasingly, oil and gas companies are turning to digital to address these obstacles. According to EY research, nearly 9 in 10 (89%) oil and gas executives expect their investment in digital tools to increase in the next two years, with a quarter (25%) foreseeing a significant jump. Just 11% see investment staying flat and, significantly, no one sees it declining. For a majority (55%) of executives, the key priority for investment is operations—their company’s biggest cost center. These findings are consistent with EY experience: nearly all of the oil and gas companies EY works with plan on investing in digital technology in multiple areas of the value chain.
Limited visibility and siloed information can lead to long cycle times and sub-optimal decision quality at all levels of the organization. Limited solutions that can be scaled to include key business functions (SCM, finance, tax, operations, etc.) across the entire upstream value chain, both vertical and horizontal. And, there are a lack of options in the market for a customizable platform that provides enterprise level support and security and can be deployed easily in a variety of environments.
However, successfully deploying new digital technology into existing operations is challenging. The EY Digital Energy Enablement Platform (EY DEEP) has been developed to address these challenges and deliver an integrated, digitally enabled approach for oil and gas. By breaking down silos and integrating data from multiple sources, EY DEEP can help companies address long-standing challenges to create efficiencies and drive value across the oil and gas value chain.
Five challenges to widespread technology adoption:
- Data foundation
- Knowledge exchange.
The platform integrates key processes across the oil and gas value chain with a common data model breaking down silos to multiple disciplines—reservoir engineering to production planning, well operations to supply chain management, and land management to decommissioning; supporting better decision-making; improving efficiency; and reducing both time and cost.
EY DEEP in the field
A leading integrated oil and gas company worked with EY DEEP to streamline their well planning.
Well planning is a highly complex and largely manual process with numerous challenges including disconnected data storage and multiple versions of data, more than 50 disconnected tools, multiple inputs, which often require manual tracking of thousands of data points and lengthy timelines—with 10 to 15 iterations of a design typically required, which can add up to a nine- to 12-month cycle and cost as much as US$150 million
Powered by Microsoft Dynamics 365, EY DEEP enabled the company to integrate and automate well planning and design. The real-time dashboard, based on Microsoft Power BI, provides access to the schedule, status and financial overview, while Microsoft Dynamics 365’s API connects to third-party engineering software to perform complex calculations. Well planning can also be integrated with ERP systems, connecting engineering with the supply chain.
The company expects to cut well planning time in half—a dramatic time savings.
EY DEEP combines Microsoft’s scalable, enterprise cloud platform with EY industry and technology experience to provide a platform that accelerates transformation across the oil and gas value chain. To find out more visit EY.com/en_gl/oil-gas/ey-deep-digital-energy-enablement-platform.