Struggling oil and gas sector 'must embrace tech from other industries for future success'

Oil and gas companies are like American pioneers “trying to cross the Rockies with their canoes” if they do not embrace new technology, an industry boss has said.

Wood Group chief executive Robin Watson made the remark this morning to a packed lecture theatre at the SPE Offshore Europe conference in Aberdeen, as he outlined the recent industry slump and a road to recovery.

Since oil prices dropped in 2014 the sector is less profitable, said Watson, who highlighted 71 bankruptcies last year – up from 52 the previous year and 11 in 2014. About 350,000 people lost their jobs in the slump, he added.

The sector must reinvent itself because “the world in front of us is nothing like the world behind us,” Watson claimed. Responding to a question from Professional Engineering, he said companies must adapt technologies from other sectors and referred to a simple digitisation project at Wood Group’s North Sea operations, which reduced required visits to some sites from eight down to just one.

Other heads at the conference opening urged companies to look at other industries for inspiration when aiming to improve efficiency and prepare for the future. “The oil and gas sector is a little bit behind,” said event chairwoman and Schlumberger drilling group president Catherine MacGregor. New digital technologies like the Internet of Things and resulting “big data” can provide massive benefits, she said.

“As an industry we are already second in the sense of… the lack of sensors we have all through our wells,” said BP CEO Bob Dudley. “We need to look outside the industry at the ability of the aerospace industry or even automotive.”

Exhibitors at the biennial conference are also highlighting other new technologies such as robots, additive manufacturing and augmented reality, which could all transform work and operations at offshore sites.

Our reporter Joseph Flaig is at the SPE Offshore Europe conference in Aberdeen this week. Contact him on joseph.flaig@caspianmedia.com or follow him on Twitter @Joseph_Flaig.