https://doi.org/10.3311/PPso.

20830
Creative Commons Attribution b |1
Periodica Polytechnica Social and Management Sciences, 32(1), pp. 1–16, 2024

Digital Transformation in Oil and Gas Industry

Opportunities and Challenges

Chourouk Haouel1, András Nemeslaki1*

1
Department of Management and Business Economics, Faculty of Economic and Social Sciences, Budapest University of
Technology and Economics, Magyar tudósok krt. 2., H-1117 Budapest, Hungary
*
Corresponding author, e-mail: [email protected]

Received: 15 July 2022, Accepted: 04 December 2022, Published online: 06 March 2023

Abstract
Digital technology can benefit the oil and gas sector by increasing hydrocarbon recovery, ensuring safety throughout the corporate
ecosystem, and improving operational reliability. This study addresses the oil and gas supply chain digital transformation tendencies
as well as the Norwegian petroleum refining company Equinor's initiatives. The main objective is to explore the opportunities for
digitalisation in the oil and gas industry as well as the state of the industry's digital strategy more generally. The findings support the
industry's major players continuing to invest in their collaborative ecosystem by partnering with their suppliers and start-ups and
sharing with them a platform where data that can help them improve their economic position can easily be shared. It is recommended
that they should develop a digital strategy roadmap, as in the case of Equinor, as a matter of priority. Supporting innovation and
technology adoption through continued investment and the hiring of qualified experts is also of critical importance. It is also important
to improve the digital skills of employees and spread a digital culture throughout the company so that they can protect themselves
against future cyberattacks or other potential risks. On a global level, the successful implementation of a digital solution will reshape
market dynamics (in terms of supply, demand, and investment) as well as the way energy networks are managed.
Keywords
digital transformation, digital solution, oil industry, gas industry, supply chain

1 Introduction
Today, the oil and gas industry face three major challenges: lowers operating costs and eliminates waste by automat-
1. The increasing transition to clean, green energy. ing processes, improves safety, and increases sustainabil-
2. The international pandemic that has caused a huge ity. Successful digitalisation requires collaboration among
shock to oil and gas prices worldwide due to the spread key stakeholders in leading industries, communities, and
of Covid-19, and its impact, both directly and indi- policymakers. Creating global data standards will also
rectly, has caused massive disruptions in global trade require new regulations for data sharing and security,
and supply chains. While some supply chains have as well as promoting operational transparency. As a result,
recovered or adapted, others are still struggling to cope policymakers should take action to assess, channel, and
with the pandemic. harness the benefits of digitalisation, as well as mitigate its
3. Technological innovation is disrupting nearly all in- threats. On a global scale, the successful implementation
dustries, such as energy companies, as well as gov- of digital solutions will change the dynamics of the energy
ernments. It affects how companies can compete, market (in terms of supply, demand, oil prices, and invest-
run, and develop their businesses. ment) as well as the way energy networks are managed.

To manage this change and remain competitive, it is 1.1 Research questions

advisable to invest in digitalisation, because fostering the In this context, the research question is as follows. How is
transformation from hierarchically managed organisations digitalisation transforming the oil and gas industry, is it
to digitalised businesses creates value for all stakehold- changing from a disruption into an opportunity? And how
ers and has enormous potential to benefit society. It also can major industry players reform their strategy to meet

Cite this article as: Haouel, C., Nemeslaki, A. (2024) "Digital Transformation in Oil and Gas Industry: Opportunities and Challenges", Periodica Polytechnica
Social and Management Sciences, 32(1), pp. 1–16. https://doi.org/10.3311/PPso.20830
2|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

this challenge? If oil companies succeed in implementing Today we are witnessing a fourth industrial revolution that
a digital solution in their value chain, how will the market is taking the world by storm (Deloitte, 2015). Industry 4.0
dynamics change, and what could be the future scenarios is one of the most innovative recent research areas (Drath
and trends of digitalisation in the oil and gas industry? and Horch, 2014). It is taking place not only in the technol-
The research was conducted using a qualitative, explor- ogy sector itself but everywhere, including the value chain
atory approach. Extensive secondary literature was col- of the oil and gas industry, which has played a significant
lected and data was analysed from industry observations, role in the implementation of these advanced technologi-
a review of research articles, books, journals, company cal solutions (Al-Nahhas, 2018). In addition, we can see
reports, and electronic sources dealing with digitalisation that the discourse about it is clouded by new technical jar-
in the oil and gas industry and its technological innovations gon and concepts such as artificial intelligence, Big Data,
(trends, issues, and opportunities), followed by an in-depth and machine learning, which promote autonomous deci-
case study assessment focusing primarily on the strategies sion-making, interoperability, effectiveness, and cost reduc-
of oil and gas companies: Equinor as an early adopter com- tion, among others (Perales et al., 2018).
pany in terms of the digitalisation of the oil and gas industry. Since the Industrial Revolution, the oil and gas industry
The rest of this paper is organised as follows. In the has played a crucial role in the economic transformation of
Section 2, we examine the characteristics of the oil and gas the world by meeting the needs of the world's population for
industry and how they can implement digital innovation in heat, light, and mobility. Currently, the oil and gas indus-
their value chain. Then, we draw attention to the digital try has an opportunity to redefine its boundaries through
capabilities of the oil and gas industry. In Section 4, we out- digitalisation. After a period of falling crude oil prices and
line a research approach to study the strategy and policy regular budget and schedule overruns, as well as higher
of digital innovation, the future scenario where digitalisa- transparency requirements related to climate change and
tion has been implemented successfully, and its impact on the challenge of attracting talent, it can now offer practi-
market dynamics. The paper concludes with a case study cal solutions. Digitalisation can act as an enabler in over-
analysis providing insights into oil and gas companies' coming these issues and can provide value to all investors
strategies: Equinor is an early adopter company in terms (World Economic Forum, 2017). According to the IEA, the
of the digitalisation of the oil and gas industry. extensive use of current digital technologies could reduce
production costs by 10 to 20%. Technically recoverable
2 Digitalisation in the oil and gas industries oil and gas reserves could be increased by about 5 billion
Traditional manufacturing industries worldwide are in the barrels globally through the adoption of current and new
early stages of a digital transformation driven by exponen- digital technologies (IEA, 2017).
tially increasing innovation and technology. The pace of
change is in line with 'Moore's Law' concerning the speed 2.1 What is digitalisation?
at which change occurs through information technology. Digitalisation represents the increasing use of information
A new process that connects digital and physical realms and and communications technology (ICT) across the econ-
improves human decision-making with data-driven ideas is omy, particularly in energy systems.
essentially changing the way businesses do things (MEED The approach, practice, or procedures of converting
Mashrek, 2019). Enterprises and the energy industry are (usually analogue) information into a computer-read-
now forced to change their strategies and, more importantly, able digital form is commonly referred to as digitisation.
the way they do business, adopt new technologies and digi- Digitising information allows it to be archived, stored, and
tise their industries to adapt to this rapid change, else they shared more quickly, which is more practical and benefi-
will lose their competitive advantages and be left behind cial. This general term corresponds to the real-world con-
by their rivals. The widespread adoption of communication version of analogue data into digital bits of the 1 s and 0 s
and information technologies by manufacturing industries series, the binary language. This is the binary data that
around the globe is now paving the way for disruptive devel- can be processed by computers and many devices with
opment methods that imply a drastic change by improving computing capacity (Freeman, 2018).
the productivity of new business models, as well as the The increasing communication, convergence, and inte-
safety, efficiency, and reliability of their operations; this gration between the physical and digital worlds can be con-
will then have a remarkable impact on the economy in the sidered digitalisation. Moreover, the digital world consists
context of other industrial revolutions (Bauer et al., 2014). of three basic elements:
 Haouel and Nemeslaki
|3
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

1. Data: digital information. GIS product, ARC/INFO, in 1981, ESRI began to evolve into
2. Analytics: the use of data to gain valuable informa- a manufacturer of GIS software (Kumar et al, 2019).
tion and insights. Workflows in the oil and gas industry have rapidly devel-
3. Connectivity: data exchange between people, ma- oped and improved with the introduction of Geographic
chines (including machine-to-machine), and devices Information System (GIS) technology, especially in terms
via digital communication networks. of exploration, production, and distribution of goods from
the field to end users (Epuh et al., 2017).
We find that the trend toward greater digitalisation is Moreover, when satellite imagery and other digital in-
driven by advances in all three areas: increasing volumes formation is combined with GIS, it can provide project
of data due to falling costs of sensors and data storage, managers with a bird's-eye view of oil and gas explora-
the rapid development of advanced analytics and compu- tion and development operations and help monitor produc-
tational technologies, and improved connectivity with the tion fields without being on site, as well as assist in asset
faster and cheaper transmission of information. assessment, pipeline corridor planning, contingencies,
and hazards, which can highlight potential risks to sensi-
2.2 History of digital impacts on exploration and tive areas (Durham and Marr, 1999).
production (E&P) As PCs evolved, operators began to use them for non-
Energy companies have relied on digital technologies for seismic processing and modelling purposes. For example,
years to help increase fossil fuel production, optimise the first computerised improvement in drilling hydraulics
production methods, reduce costs and improve safety. in 1986 led the industry to increase drilling success rates by
The oil and gas industry has a particularly long history 50% by the late 1990s. Since then, the 1990s and early part
of implementing digital technologies and is no newcomer of this century have seen a flood of digital oilfield projects
to Big Data, technology, and innovation, especially in in many industries.
the upstream sector, which was among the earliest adopt- Yet until now the oil industry has failed to capitalise
ers of computer technology to process inventory data in on the opportunities presented by the effective use of data
mature fields. This is the most lucrative part of the oil and and technology. For example, a single rig in an oilfield can
gas sector, and it is here that digital technologies have produce terabytes of data every day, but only a small por-
had the greatest impact. In addition, technologies that tion of it has been used to make decisions. The revolution-
can produce more oil or natural gas and increase the effi- ary impact of digitalisation is becoming increasingly clear
ciency of production processes are prime candidates for to the oil and gas industry, prompting them to consider
research, development, and deployment. For example, to investing in digital solutions (Ernst & Young, 2016).
define the makeup and structure of reservoirs to optimise
production, the upstream industry has taken on the com- 2.3 The current state of the industry
plex task of processing enormously large data sets gener- The oil and gas industry remains the world's most import-
ated by seismic surveys of land and oceans. Processing ant source of primary energy and has a significant impact
this information requires some of the most powerful com- on the development of the global economy.
puters in the world (IEA, 2017). On the one hand, the global demand for fossil fuels
As early as the 1980s, oil and gas companies began using continues to increase, while on the other hand, compa-
digital technologies to better understand reservoir resources nies face complicated investment challenges due to the
and their production capacity, improve health and safety, difficult environment for exploration and production work
and increase marginal operational efficiencies in oil fields (Mojarad et al., 2018).
around the world (World Economic Forum, 2017). Many studies that have been developed based on long-
As oil and gas companies expand their operations to more term energy scenarios and published by major energy com-
remote parts of the world, satellite imagery and the data de- panies such as Shell, BP, and Exxon Mobil are consis-
rived from it are increasingly being used to manage explora- tent with the U.S. Energy Information Agency's (EIA) In-
tion and production activities. Satellite imaging has evolved ternational Energy Outlook for 2017. They show contin-
significantly since the launch of the first satellite to image ued global demand for hydrocarbons, but at a slow growth
the Earth's surface, Explorer VII, in orbit (Kio and Agboola, rate, suggesting that crude oil prices may remain near cur-
2010). Furthermore, with the release of the first commercial rent prices (Aspen Technology, 2017).
4|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

According to BP, the oil and gas industry currently vehicles. The effect of these movements can be felt in Oil
already accounts for more than 50% of global fuel con- and Gas and related markets, along with the possible dis-
sumption, and hydrocarbons are projected to remain the ruption of digitalisation.
main source of energy in 2035 (BP, 2017). Remarkably, there is growing consensus that the oil and
The U.S. Energy Information Administration's Inter- gas industry is on the verge of a new era, as a surge of
national Energy Outlook 2017 projects that global energy business and digital technology is expected to reshape the
consumption will increase by 28% between 2015 and 2040 market, powered by a variety of macroeconomic, indus-
(see Fig. 1). trial, and technological trends.
Most of this increase is expected to come from countries
outside the Organisation for Economic Co-operation and 2.5 Disruption of supply, demand, and commodity prices
Development (OECD), and mainly from countries where The sector is experiencing one of its worst downturns,
demand is fuelled by strong economic growth, especially driven by a slowdown in the supply side. Compared to the
in Asia. Non-OECD Asia (including China and India) rates of June 2014, we can see that the commodity prices
accounts for over 60% of the growth in global energy con- had dropped by more than 70% at one point and, just as
sumption from 2015 to 2040 (EIA, 2017a). some nascent signs of recovery appear, another crisis
By 2040, the IEO2017 forecasts an increase in global could be on the horizon, induced, on this occasion, by high
consumption of marketed energy from all fuel sources oil demand. We would say that this disruption would cre-
except coal demand, which is projected to remain constant ate pressure on oil and gas prices and will enable oil com-
(EIA, 2017b). panies to concentrate more on restructuring their portfolio
To meet this long-term demand, new production from and taking a significant presence in the energy transition.
existing and added resources must come on the line. But, the disruption of supply, demand, and commodity
This means that future upstream investments must be prices, together with excessive market volatility, has left
sustainably lower than today's breakeven costs (Aspen shareholders suspicious and less confident of the sector,
Technology, 2017). which has a lower total shareholder return (TRS) than
other sectors (see Fig. 2) (World Economic Forum, 2017).
2.4 A new trend in oil and gas operations We can assume that this will have serious drawbacks for
The oil and gas industry and the broader energy value chain the industry, as if there is no trust, the shareholders could
were influenced by several strong supply and demand forces, abstain from investing any more in the oil and gas indus-
as previously discussed Section 2.3 outlining the current try and will choose another profitable business instead.
industry situation. This involves advances in technology
such as horizontal drilling and hydraulic fracturing, which 2.6 Rapid technological advances
unleash shale reserves and play a major role in developing Increased complexity of the platform as well as flexibil-
the oversupply accounting for persistently low crude prices. ity, connectivity monitoring, and storage technologies
Several trends influencing demand should be taken combined with the ability to process and analyse data
into consideration, such as the growing interest in electric instantly, we believe it will improve efficiency and facil-
itate real-time decision-making and execution.

Fig. 1 World energy consumption by energy source (1990–2040) Fig. 2 Total return to shareholders across industries (World Economic
(EIA, 2017a) Forum, 2017)
 Haouel and Nemeslaki
|5
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

2.7 Changing needs and expectations of consumers 3.2 Big data and analytics
Consumers expect enhanced engagement, customisation, Cheap detectors, expanded connectivity, and ever-increas-
and accuracy across industries. They also pay more at- ing computing power are driving the growth of data col-
tention to environmental issues that affect their energy lected by oil and gas companies.
choices; seek transparency from businesses in a variety In a single day, the oil and gas industry generate a large
of areas (e.g. greenhouse gas emissions and hydrocarbon amount of data. The new offshore drilling fields, with
sources) and improve their technical competence by link- a total of 80,000 sensors, can generate 15 petabytes and
ing them to a wide range of technology or digital plat- 15 million gigabytes of data during their lifetime.
forms. Regarding these important shifts, many of Oil and Digitisation is helping to manage and analyse Big Data.
Gas's digital initiatives to date have been seen as conser- Some studies have shown that while nearly 36% of the oil
vative and have limited effect on an existing business or and gas industry has invested in these tools, only 13% are
operating models. Almost all the effort has yielded prog- using their data strategically (IQPC Middle East, 2018). This
ress so far. Companies are making gradual improvements discrepancy highlights that these companies have not always
in performance while strategically leveraging market and fully integrated Big Data and analytics into their processes
emerging technology. These include basic effective main- but are merely applying Big Data technology. Full imple-
tenance practices, look-backs on finished activities, and mentation could have far-reaching implications for opera-
the use of limited data sets for all aspects of the value tions and productivity (World Economic Forum, 2017).
chain of oil and gas. Digital innovation will generate tre- The oil and gas industry's experience with this tool is
mendous value for the business as well as the community currently limited to pilot projects, and efforts are under-
(World Economic Forum, 2017). However, we would like way to test this technology in practice and analyse its
to point out that such a transition will necessarily involve potential benefits.
companies adopting a structured digital strategy spon- Shell has conducted a trial project using Hadoop for
sored by CEOs and executive teams, as well as a culture seismic sensor data; sensors with fibre optic cables are
of innovation and adoption of technological advances. installed in the wellbore to collect data. The data collected
It will also require dedication and determination to eval- is analysed to determine how the wells are performing and
uate and revamp the current procedures, infrastructure, how much oil/gas is left. Large amounts of sensor data will
operation, systems, and facilities also the ability to coop- be stored in the Amazon Virtual Private Cloud (Amazon
erate across the ecosystem. VPC). Shell intends to install fibre optic cables in 10,000
oil wells (Aliguliyev and Imamverdiyev, 2017).
3 Emerging digital technologies and their opportunities
for the industry 3.3 Mobile technology
3.1 4D seismic imaging Like every other industry in the world, oil and gas com-
Nowadays, a seismic "4D" image can be achieved by panies are investing heavily to incorporate mobile devices
performing 3D tests over time. This provides a moving into their daily activities and operations. The benefits of
image to understand how properties have changed in this inclusion range from better workflows to improved
existing oil fields. In addition, many organisations have communication, higher productivity, and greater reli-
developed algorithms to produce more accurate images, ability of field data collected (IQPC Middle East, 2018).
such as reverse time migration, wave-equation migra- By using advanced smartphones, tablets, and even wear-
tion, Kirchhoff migration, and full wavefield migration. able devices, oil and gas industry workers can track data in
Recently, a research team at the College of Calgary has real-time and perform proactive maintenance, enhancing
experimented with the use of advanced visualisation tech- their safety by eliminating hazardous conditions. When
niques and virtual reality to help Canadian producers bet- used in conjunction with radio frequency identification
ter manage and understand steam-assisted gravity drain- tags, mobile applications make assets intelligent and their
age (SAGD) technology (Giovanni, 2018). movements identifiable (World Economic Forum, 2017).
In addition, introducing the time-lapse dimension to the
legacy 3D imaging technique allows operators to measure 3.3.1 Autonomous operations and robotics
and estimate changes in the reservoir. It has proven to increase In addition to improving the efficiency and safety stan-
upstream revenues by 5% and recovery rates by 40%. dards of oil and gas assets, automating appropriate pro-
6|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

cedures will also help inform future planning decisions technology, which uses your vehicle's Alexa-enabled device
such as portfolio management, well-site identification, and or the Alexa app, enables a new contactless form of pay-
improved maintenance. ment for our retail customers and has the potential to reach
For example, an Enterprise Resource Planning (ERP) more than 60 million U.S. households using Alexa at home
system is a business management system that controls and on the go (ExxonMobil, 2022).
key business processes. These comprise: controlling
resources, automating processes, and bringing together 3.4.1 Blockchain
various organisational functional areas. ERP enables the Emerging digital technologies such as blockchain can also
integration and optimisation of several business processes, help accelerate the industry's very sluggish payments pro-
improves the quality of planning and decision-making, cess and free up resources for exploration growth and fur-
enables smoother coordination between business units, ther digitalisation initiatives. Years of limited innovation
increases efficiency, and speeds up responses to customer in compensation technologies have resulted in upstream
inquiries and requests (Mishra and Mishra, 2009). companies having production-to-payment cycles of up
With capital spending on exploration down about 25% to four months, posing a potential terminal dilemma for
since 2014, optimising the quality of existing assets is many companies (IQPC Middle East, 2018).
more important than ever. Drones are perhaps the most All major industries have begun to incorporate block-
widespread and prominent type of robotics currently chain technology into their business operations. Now is the
being deployed to achieve the dual goals of increasing time for oil and gas companies to embrace this innovation,
operational efficiency and safety. as it is known to create more opportunities in this indus-
ExxonMobil is the first company to use automated drill- try. Some of the key opportunities for blockchain include
ing in Deepwater. The company has developed its drilling supply chain, land management, finance, marketing, and
advisory system, now deployed in Guyana, which uses warehousing. For example, some oil and gas companies
artificial intelligence to select the best drilling parameters. began utilising Blockchain-powered smart contracts that
Closed-loop automation, which regulates the drilling pro- are self-checking as well as self-executing contracts that
cess without human intervention, is also possible. operate autonomously while communicating with their
First, this technology increases drilling security and vendors and companies in engineering procurement and
efficiency through consistent, repeatable processes. Sec- construction (EPC) (Blue Mail Media, 2019).
ond, it relieves rig personnel of repetitive tasks, allowing Shell has completed a pilot project to create a decen-
them to focus on other tasks (ExxonMobil, 2022). tralised digital passport for verifying equipment, compo-
nents, and products. Blockchain technology allows data
3.4 Digital marketing and digital sales to be disclosed between specific parties in a supply chain,
Many companies have already used digital marketing to creating a digital passport for a piece of equipment. Shell
increase their sales. Modern retailers have used digital tech- is collaborating with other companies, such as manufactur-
nologies very effectively to gain a more comprehensive view ers, inspectors, and contractors, to rethink how they work
of their customers (IQPC Middle East, 2018). The oil and with suppliers. These improvements are expected to save
gas industry has also used the same strategies and tactics costs, increase production, and contribute to safer opera-
to promote its business. They use digital marketing to iden- tions for all stakeholders in the ecosystem (Shell, 2022).
tify and study customer behaviours, habits, and preferences.
It is also used to better manage supply chains. According 3.5 The Industrial Internet of Things (IoT)
to some studies, this strategy can increase sales by 3% and The IoT (an IoT application) is a "system of interconnected
reduce operating costs by 10% (Blue Mail Media, 2019). computing devices, mechanical or digital machines" as well
From lubricant analytics to mobile apps for paying at the as people with unique identifiers and the ability to transmit
pump to digital products for car care, new digital solutions are information over a network without human-to-human or
redefining the experience ExxonMobil offers its customers. human-to-computer interaction. The IoT has broken down
ExxonMobil is partnering with IBM, Amazon, and the walls between operational (OT) and information tech-
other digital giants to offer consumers additional payment nology (IT). The IoT can help optimise the upstream sector
alternatives at Exxon and Mobil gas stations across the by revealing new technical perspectives through the anal-
United States, including 'Alexa, pay for gas'. This digital ysis of various operational data (e.g., drilling parameters).
 Haouel and Nemeslaki
|7
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

Midstream companies – e.g., in transportation, including creation in the industry is a function of financial perfor-
pipelines and storage, to increase network reliability and mance and customer, environmental and societal value.
create new business opportunities – will gain opportuni- Where the value-at-stake analysis aims to evaluate the
ties by building data-driven infrastructure. Then, down- ability of these digital transition projects to obtain value
stream operators (e.g., oil refiners and retailers) could see over the next decade (2016–2025) for the oil and gas indus-
the potential for new sales opportunities by expanding the try, its clients, wider society, and the environment.
visibility of the hydrocarbon supply chain and reaching out The primary results are as follows:
to digital customers with new forms of connected advertis- • In the oil and gas industry, digital transformation
ing (World Economic Forum, 2017). can create approximately $1.6 trillion in value for the
We can summarise the main potential benefits in Table 1 industry, wider society, and its customers.
(IBM Chemicals and Petroleum, 2017; IQPC Middle East, • This total predicted value from digitalisation may
2018). further rise to $2.5 trillion if existing organisational/
operational limitations are laid back and consider-
3.6 Benefits for stakeholders ation is given to the effect of "innovative" technolo-
Digital technologies may play a pivotal role in reducing gies, such as cognitive computing (for which there is
costs, risks and increasing production and operations per- a lack of evidence at this time to make a significant
formance. McKinsey & Company concluded that digital value assessment).
technologies could minimise capital spending by about • Digitisation has the potential to create a profit of about
20%, upstream operating costs by 3–5%, and downstream $1 trillion for oil and gas companies. Of Fig. 3, upstream
costs by around 50% (Ward, 2016). companies are expected to receive $580–$600 billion,
We already mentioned that digital technologies have an midstream companies approximately $100 billion, and
enormous ability to push oil and gas companies beyond downstream companies $260–$275 billion.
sluggish growth and offer exceptional benefits to inves- • The industry's digital transformation could bring
tors, customers, and the environment however, capturing benefits worth around $640 billion to the wider soci-
this value does not have to take place outside or instead of ety. In addition, digitalisation could also improve
corporate goals where they can potentially play an import- productivity by about $10 billion, reduce water
ant role in creating a coherent approach to shifts in the use and emissions by $30 billion and $430 billion,
industry. In the following White Paper framework (World respectively, and save customers $170 billion.
Economic Forum, 2017), we want to show you how value
Table 1 The potential benefit of the implementation of digital technologies in the oil and gas industries
Digitalisation in the petroleum industry
Digital technology Sector/areas of application Benefit
Operators can determine and forecast fluid changes in reservoirs,
4D seismic imaging, autonomous
Exploration increasing recovery rate. Thus, boosting the profitability (IQPC Middle
operations and robotics
East, 2018).
Allows using a large portion of the generated data while drilling to choose
Big data and analytics, mobile
Drilling process the right strategic decisions. Mobile technology could also provide data
technology, blockchain
monitoring in real time, thereby improving security and safety.
Gives a good and dynamic reservoir model for (initial oil in place,
Big data and analytics Reservoir modelling recovery among other necessary information which may be needed) as
well as for good decision-making.
Autonomous operations and robotics Production Makes it possible to ramp production.
Decreased cash cycle times.
Enhanced efficiency with lower capital costs and lower intermediaries.
Enhanced visibility of transactions to limit the spread of tampering, fraud
Blockchain Finance
and cybercrime.
Creating transparent transactions through the use of shared processes and
record keeping (IBM Chemicals and Petroleum, 2017).
The industry could make better use of data trending to support decision
Big data and analytics, mobile
Data management making, with the intention of identifying problems that industry could
technology, blockchain, cybersecurity
address.
8|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

Fig. 3 Potential value of digital initiatives and technologies in oil and gas for the industry and the society (World Economic Forum, 2017)

• Environmental gains include lowering CO2 pollution Table 2 summarises the various changes that have occurred
by about 1.300 million tons, saving about 800 mil- due to the emergence of digitalisation (Mustafa, 2021).
lion gallons of water, and preventing oil spills of about To remain competitive in this market, a company must
230,000 barrels of oil (World Economic Forum, 2017). thoughtfully plan and develop a strategy that will deter-
mine the fate of the company.
4 Digital transition strategy advances in oil and gas A well-defined strategy summarises a company's key
industries plans, objectives, actions, activities, and commitments.
Due to the increasing complexity of today's business envi- Today's business environment is changing rapidly, and
ronment, organisations are starting to rethink their strate- most leaders are trying to implement flexible procedural
gies and adopt new technologies. These changes are likely techniques to ensure that the company can respond to
to affect how they compete in the market. Some of the key change (Mjaku, 2020).
factors that have changed include the limitations of tradi- Developing a digital strategy is a must for successfully
tional business strategy and the increasing familiarity of IT. transforming a business into one that operates in the digital

Table 2 Comparison between traditional business strategy vs. digital business strategy
Traditional business strategy Drivers of the digital transformation Digital business strategy
Digitalisation allows organizations to improve their processes
modelling by providing them with more accurate and timely data.
Market research and surveys For example, through advanced sensor networks, the oil and gas
are examples of traditional companies can also automate the monitoring and analysis of their
data collection approaches. geological and geophysical data.
Limited data points that With real-time data, producers can improve their production
Enterprise resource planning (ERP) system
require time to analyse. performance. This can help them make informed decisions and
Cloud computing
Producers have limited improve their safety. For instance, by analysing data related to
Connectivity and Internet of Things
incentives to improve the accidents and maintenance, E&P can provide better insight into
Machine learning Autonomous operations
efficiency of their products. their operations.
and robotics
Direct client interaction is Strong incentives for service providers to invest in maintenance
Big data
limited. and efficiency as their strategy in order to instantly increase profits
Block chain etc.
The client database was kept Automated management of systems and processes (such as fully
up to date by maintaining the automated offshore platform).
manual registers and record Interaction with customers via platforms and apps that is timely
books (Mustafa, 2021). and regular.
The digital customer database facilitates the recording and
updating of customer records (Mustafa, 2021).
 Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024|9

age. The pace of development and innovation in digital conduct restructuring projects to improve their core busi-
organisations is not slowing down, and almost no company ness performance. Those who integrate digital and innova-
today can ignore its digital component. However, digital tion as a strategy beyond efficiency, are already capturing
transformation is a strategy rather than just the adoption of multiples values and gains such as they found out that those
technology. Therefore, the ability to digitally reshape the technologies can create wide synergies across the business,
enterprise depends on a clear digital strategy and leaders decrease investment duplications and gain new opportuni-
who can put that strategy into action (Turuk, 2020). ties for their investment. Added to that, they can hold off
Strategic management is an ongoing process that in- from building the new with traditional thinking and tech-
volves identifying an organisation's strategic goals, vision, nology. Moreover, the best digital strategy may require
mission, and objectives; analysing the current situation; changes in management or different leadership skills; new
developing appropriate strategies; implementing those resources and expertise are most likely needed.
strategies; and evaluating, modifying, or changing those Additionally, companies have found that the digital
strategies (Dess et al., 2008). technologies that provide the greatest investment value are
The most important task of leadership is to align its the ones that have gaps in ability and qualifications. Recent
vision with the company's goals so that the company can Accenture research into the value of digital technology to
compete effectively in a dynamic environment, and train Asset Intensive Companies shows that digital technologies
and motivate employees to achieve the vision. The vision persist underexploited by most Asset Intensive Businesses,
should be simple enough to be understood by all. A per- the omission being those that have adopted fully incorpo-
son's mission should be clearly defined and different from rated digital strategies (Accenture, 2017).
that of another company (Mjaku, 2020). However, we think that developing and implementing
According to management professor Peter Drucker, a strategy that is effectively enabled by digital is a difficult
the founder of many contemporary ideas on the corpo- task. Concentrating on agility, flexibility, innovation, and
rate mission, the question "What is our business?" Is akin better management of technology, involves moving away
to asking: "What is our mission?" A company's mission from thinking less about markets, rivalry, and value in the
defines it. Only a clear definition of the corporate mission core business alone.
enables clear and realistic corporate goals because the
mission defines the purpose of the company in terms of its 4.1 Keys to successful technology adoption
sustainability. The mission sets the long-term vision of the The Deloitte Insights team has developed three key ques-
organisation in terms of what it wants to be and whom it tions that they assume to be important to the development
wants to serve (Drucker, 1974:p.96). of any digitalisation project in an oil and gas company
The Oil and Gas companies need to act decisively by (Mittal et al., 2017). Table 3 represents how oil companies
proactively preparing plans and pledging resources to iden- can adopt digital technology strategically by answering
tify digital technology as a catalyst for success and profit- those questions (Sylthe and Brewer, 2018).
ability. Most oil companies and players in oilfield services
Table 3 Main questions to address to successfully adopt the digital technology in the company's strategy (Sylthe and Brewer, 2018)
Basic questions Steps for adoption
This self-assessment would allow Chief Technology Officers (CTOs) and other Chief Digital Officers to create
How digital are you today? a matrix for current digitalisation within their organization, that will be the framework for the next move
towards forward-thinking integration objectives.
Typically begins in relation to the framework that you developed according to the previous question. Based
on the start-up level of digitalisation of the company, especially their ability to incorporate digital technology
in their activities also their actual capital reserves, will help you to create a road map for step-by-step digital
How digital should you become?
incorporation. This roadmap will address the key questions of "why" and "why now", as well as give CTOs an
overview of their business's place in the sector of industry and the specific role they perform in optimising their
unique skills to create competitive advantages, improve collaborative effectiveness, and differentiate themselves.
In order to successfully transforming the digital capacity of an oil and gas company the best place to start is
with the use of "Big Data", "Internet of Things", and "Smart Devices", all of these technologies are basically
How do you become more
only valuable when their data can be resolved and processed into productive things. This occurs within oil and
digital?
gas companies 'processing systems or, as technology continues to improve and develop, programs based on
cloud platforms and databases.
10|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

5 Case study: Statoil's digital transition and renaissance is establishing a digital centre of excellence with a holis-
as Equinor tic roadmap for the digitalisation that extends to 2020.
5.1 About Equinor The company has committed spending of 1 billion to 2 bil-
Equinor is an international energy company operating in lion Norwegian kroner ($128 million to $257 million) to
more than 30 countries around the world, including one be delivered through the centre of excellence for new and
of the most important oil and gas provinces in the world. emerging technologies. Equinor's main goal is to signifi-
It was founded in 1972 as Statoil (Norwegian State Oil cantly increase the use of data analytics and robotics to
Company) under the name Den Norske Stats Oljeselskap improve safety, reduce its carbon footprint, and increase
and was renamed Equinor in 2018 to support the com- profitability (Strategy and part of the PWC network, 2018).
pany's strategy and growth as a broad-based energy
company. The company is headquartered in Stavanger, 5.2 Digital innovation strategy
Norway, employs more than 20,000 people, and is 67% According to Åshild Hanne Larsen, CIO and Senior Vice
owned by the Norwegian government. President Corporate IT, and her co-authors, Equinor is
The company's total revenues in 2018 were $79,593 one of the companies that have asked themselves almost
million and total assets were approximately $ 112,508 mil- the same questions that many large companies are asking
lion. Oil and gas production per day is 2.11 million boe themselves now. There are four main questions to answer:
and renewable power generation is 1.25 TWh. How do we balance future investment with today's oppor-
Equinor is the leading operator of the Norwegian con- tunities? How will we win the new war for digital talent?
tinental shelf and has significant international operations. How do we fund digital initiatives as effectively as possi-
The company is active in oil and gas exploration, devel- ble? How do we continue to increase the scale of digital ini-
opment, and production, as well as wind and solar energy. tiatives? (Larsen et al., 2018; Fig. 4).
Equinor is a major European supplier of natural gas and
sells crude oil, with operations in processing, refining, and 5.3 Four main building blocks
trading. The company has eight business units, personnel, We have tried to answer these questions based on the infor-
and assistance groups operating in Africa, Asia, North and mation and data available to us to show how Equinor has
South America, Europe, Norway, and Oceania. changed its strategy by following the four main building
It is a good example of digital transformation in the oil blocks that contain the same basic keys to successful tech-
and gas industry. Currently, Equinor is rolling out new nology adoption that we analysed in Section 5.2 with the
initiatives to develop the Norwegian Continental Shelf measures for new business models. This gives us a clear
(NCS) to address the future issues of declining produc- overview of how the company can grow and develop its
tion, ageing infrastructure, and the need for lower carbon operations and processes to achieve its goals.
emissions. The organisation aims to maintain competitive
oil production from the NCS at current levels through to 5.3.1 Adoption of innovation (digital strategy): Where
2030 as well as to improve drilling, but the NCS will reach do you want your company to go?
a more mature stage thereafter. First, we can state that digitalisation is already part of
They have leveraged elements of digitalisation, which Equinor's DNA. They invest in digitalisation not because
we describe as the strategic business value of data-based digitalisation and innovation are goals in themselves, but
technology that includes the Internet of Things (IoT), cloud
computing, and artificial intelligence. Examples of these
elements include 3D geological engineering, automated
oil and gas installations, and advanced reservoir model-
ling in the North Sea areas. Equinor's activities generate
huge amounts of data, operational data, drilling data, sub-
surface data, and supplier data, with a total of more than
26 petabytes stored in Equinor's data centres, equivalent
to 50 times the US Genetic database. It is not in doubt
that they will reach 2500 petabytes by 2030. Now Equinor
has embarked on a centralised and integrated technology Fig. 4 Building blocks and subtopics for a digital transformation
transformation programme (Equinor, 2019). The company (Larsen et al., 2018)
 Haouel and Nemeslaki
|11
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

because digitalisation is an important part of their busi- 5.3.2 Transforming operations and activities (business
ness strategy. They want to produce more effective oil and model): How does that fit what your business does?
gas with lower greenhouse gas emissions, pioneer car- Equinor recently commissioned an Integrated Operations
bon capture and storage, and invest heavily in renewable Centre (IOC) to improve safety, increase productivity, and
energy (Fig. 5). reduce emissions from their facilities on the Norwegian
Equinor's main new technology strategy is to expand Continental Shelf. Over time, the centre will be connected
the company's research on CO2 reduction and digital solu- to all its 30 operating offshore facilities on the Norwegian
tions. The strategy focuses on five technology directions: continental shelf. In the U.S., the Onshore Integrated
1. Low-carbon digital solutions for oil and gas and Remote Operations Centre is already using this cloud-
minimise greenhouse gas emissions. based data platform called "Omnia" to develop machine
2. Discover and develop frontiers and Deepwater areas. learning and data analytics that will significantly improve
3. Unlock low recovery reservoirs. Develop opportuni- operations and make better data-driven decisions.
ties for renewable energy. Omnia is a cloud-based data platform that, along with
4. Improve production from existing and near-field data science and virtual reality, are the three innovations
resources. that most support the company's core strategy to achieve
its goals and gain a competitive advantage in the market.
Their digital roadmap is the priority of their top man- Omnia is designed to give the company's employees access
agement teams. They have developed a detailed digital to integrated information across networks and organisa-
roadmap for Equinor and are now working to accelerate tional boundaries, and to connect the broader ecosystem
innovative solutions, pilots, and trials, and scale them with the same platform. They are already developing the
across the business. They have already carried out some capabilities of internal data science and using AR/VR on
major projects that create value today for the industry, the digital twins to improve the efficiency of their employ-
stakeholders, and society (Equinor, 2019). ees, which is also a major concern for them. They are now
Their digital roadmap focuses on six company-wide dig- looking at other emerging technologies, including block-
ital programmes and three key enablers: developing digital chain and 3D printing (Capgemini, 2019).
functionality, capabilities, and leadership, using the exter-
nal ecosystem, and establishing a unified data platform. 5.3.3 Encouraging collaboration (Enablers): What do
For example, they also established a digital Centre of you need to get there?
Excellence, which will focus on improving business per- Leveraging and developing the existing ecosystem is crit-
formance using advanced digital solutions and new busi- ical for the company, working with start-ups and explor-
ness models. It will drive digital opportunities via three ing new avenues with its current partners – such as major
technology enablers: digitalisation processes, data sci- oil and gas service providers – by more seamlessly inte-
ence, robotics, and remote control. grating data between companies. They have partnered
By 2020, Equinor is planning to invest approximately with Techstars, a start-up acceleration programme that
$4 billion in digital technology to develop more benefits has selected ten international start-ups to work with for
and improve processes. three months. To work on and develop new solutions, these
start-ups have access to their experts and data. One of the
start-ups, Deep Stream in the UK, is a technology-enabled
bidding and supplier prequalification platform for oil and
natural gas companies.
Equinor also uses Aspen ONE Process Explorer visual-
isation with IP.21 process historian to drive the digitalisa-
tion of its offshore operations, enable remote and onshore
data access, save significant OPEX, and increase produc-
tion (Aspen Technology, 2017).

Fig. 5 Internal and external mission and vision of Equinor (Author's

owned)
12|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

5.3.4 Change management practices (orchestration): a 49.3% interest, while other partners are Total (14.7%),
How will you manage change to achieve your goal? ConocoPhillips (2.4%), and Petoro (33.6%). Equinor's dig-
You have chosen both a bottom-up and a top-down ital team has developed the Dashboard Operational
approach. Equinor has three main challenging tasks: shape Planning Tool (OPT) to make it possible easily and quickly
the future, empower people, and deliver results. These to locate all information and data sets about the situation
tasks fit very well with their digital vision. The company is of the plant in real-time (Equinor, 2018).
evolving its operations and improving its business model The AI tool draws on multiple OPT-integrated data
to enable its leaders to achieve these goals. sources, including incident reports. A case is generated
A few years ago, they launched a programme called whenever an incident occurs at one of their facilities,
"Taking Equinor beyond 2025 Digital", which involved whether large or small. It details what, where, and why the
11 senior vice presidents. Today, the CEO and the board incident occurred. The main purpose of these case reports
spend a lot of time understanding and working on the dig- is to prevent such incidents from happening again. They
ital roadmap. They also invest in improving the digital can now use them to provide a wealth of new insights to
skills of all employees. The company has set up its own their operational team.
Digital Academy to develop the skills of its employees and Automation technology can drive efficiencies that im-
prepare them for the digital future. There they can learn prove safety by removing human workers from the dan-
everything about digitalisation, from machine learning to ger zone, as well as delivering environmental and financial
programming to cybersecurity, and they are inspired and benefits. It has the potential to increase revenue, decrease
motivated to understand the impact of digitalisation on costs and carbon emissions, added to that reduce CAPEX
the industry in the future. The academy has already con- by 30%, and OPEX by 50% compared to a traditional con-
ducted more than 20000 training sessions. cept. These advantages seem clear; however, an entirely
In answering these questions, we have found that unmanned platform raises some concerns. The idea of fully
Equinor is on the right path to fully digitalised operational automated systems puts numerous safety aspects into doubt.
systems by developing its digital solutions, improving the Cybersecurity is essential to its success, as with any indus-
digital skills of its employees, partnering with start-ups, try embracing the fourth industrial revolution. Norwegian
and expanding its ecosystem. These actions will help them intelligence authorities have already warned about potential
take advantage of digital opportunities, but the question risks to the oil and gas industry. Equinor must protect their
that remains is: Are they able to address the cyber threat digital infrastructure properly to keep their employees safe
and regulatory challenges? and secure installation. They have chosen to adopt an inte-
We think that we will be able to answer this question grative approach to managing security risks where physical
soon, because they have already launched another proj- security, security of personnel, and cyber security follow
ect that is characterised by digitalisation, an unmanned the same process of security risk management.
platform on the Norwegian continental shelf: Oseberg Equinor manages the threats to cyber security and data,
Vestflanken 2. An analysis of this project now follows. by concentrating on three key areas. Governance and pol-
icies, based on international standards of cyber and infor-
5.4 The Equinor project in the sign of digitisation: mation security, determine the company's requirements
Oseberg Vestflanken 2 and expected level of security. Technologies are intro-
On October 14 of 2018, the Oseberg Vestflanken 2 was put duced to meet the criteria and staff are equipped with
into operation in the North Sea area. The new Oseberg cyber security and information security education to
platform is the first unmanned platform on the Norwegian ensure consciousness in the organisation (Molly, 2019).
continental shelf to be remotely controlled from the Equinor's rebranding for the transition to a global
Oseberg field headquarters, requiring only two mainte- energy company appears to have been launched at a par-
nance visits per year. Recoverable resources are approx- ticularly good time, both in terms of the maturity of the
imately 110 million barrels. The project was well under petroleum industry and in terms of developing the view
budget and more than 20% below the development and of society on climate. Their constructive and sharp strat-
operations plan (PDO) cost estimate. The breakeven price egy, which emphasises innovation and technology as one
was reduced from $34 to below $20 per barrel, further of the four key enablers to deliver, has not only improved
strengthening the already highly profitable development. their potential resilience but has also helped them to move
Equinor operates the Oseberg Vestflanken 2 project with smoothly into a new industry.
 Haouel and Nemeslaki
|13
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

5.5 SWOT analysis model for Equinor where physical security, personnel security, and cybersecu-
Using the SWOT analysis model will help us to point out rity all follow the same security risk management process.
what could be the most influential factors that are favour- Still, the potential for attacks is likely as clever adversaries
able and unfavourable for accomplishing their objectives are still working to develop their skills and capabilities to
by looking at the positive and negative aspects of the inter- disrupt the organisation's operations. Working on vulnera-
nal and external environment of the company. bilities and focusing on the most valuable points of attack is
We see in Table 4, that Equinor's key competitive advan- one of the biggest challenges they must address.
tage is its strong technology base and ability to apply new In general, oil and gas companies are taking different
technolo­gies, which puts the company on the right track to approaches to digitalisation depending on their develop-
achiev­ing its mission and vision. ment priorities. For example, ExxonMobil partnered with
Equinor is on the right track to fully leverage digital Microsoft to drive capital efficiency and unlock the largest
technology in its core business, but to make the transfor- O&G acreage in the Permian Basin with cloud technolo-
mation at scale requires high investments, and this takes gies. ExxonMobil has teamed up with Fuel Cell Energy,
time because digital transformation is a continuous process. Inc. to "enhance carbonate fuel cell technology to absorb
On the one hand, the digitalisation strategy has been a great carbon dioxide from industrial facilities" to help reduce
success for the company, as it has been an important factor greenhouse gas emissions (ExxonMobil, 2018).
in improving production, improving drilling operations, and Shell is focused on introducing digital solutions to its
reducing the carbon footprint. Working closely with inter- existing business, such as standardising operations across
nal and external stakeholders throughout the digital journey its global footprint or streamlining supply chain processes.
and improving the digital capabilities of employees across In addition, the company is concentrating on developing
the company, as well as the continuous development of new business models by investing in digital businesses
autonomous assets and digital solutions based on artificial and bringing them together with the expertise of its indus-
intelligence, will be critical to strengthening the company's try leaders. Shell is also working with Microsoft to deploy
competitiveness in the oil and gas sector for the near future. AI applications in Shell's business operations (Shell, 2018).
On the other hand, it is necessary to consider the data pro- In summary, the oil and gas industry must overcome
tection and security measures that Equinor has adopted as several historical and structural obstacles to realise the
part of an integrative approach to security risk management, full potential of digital transformation. There are major

Table 4 SWOT analysis of Equinor (Author's owned)

Strength Weakness
Pioneer in the advancement and innovation of technology: The most
effective, reliable, and accessible technologies (various business
applications in the value chain of oil and gas).
Digital technology experience and competence: Highly skilled Lack of established supply chain and logistics network.
specialists and experts. Lack of expertise in solar energy technologies.
Entering new markets: Their innovative teams have permitted them to Heavily reliant on the petroleum industry.
develop new products and enter new markets. Constraints (financial, security) linked to the deployment of technology.
Diversification Inherent drawbacks and challenges of big data (maintain data quality
Early mover advantage and integrity).
Strong financial position with consecutive profits
Strategic partnerships with suppliers, retailers, and other interested
parties. This allows them to be able to leverage in the future.
Opportunities Threats
Globally Renewable Energy Project (wind and solar).
Growing energy demand.
With their reliance on it, the oil price is a huge threat.
Market growth is estimated at 10% per annum in renewable energy.
Geopolitical instability and innovations.
Automation of burdensome, dangerous, or risky tasks.
Rapid rival technological growth.
Improved company and equipment oversight.
Internet of Things (lot) information security.
Maintenance anticipation and automation.
Data security regulation.
Decrease the risk of shutdowns or crises in production.
Cyber-attacks risks
Capacity to manage production levels based on expected demand, and
Security at facilities that may result in shutdowns in production and
even operating platform failure situations. Increases in energy efficiency.
threats to supply line safety and environmental disaster.
Creating new technologies that provide new outlets and new revenue
streams.
14|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

obstacles facing oil and gas companies that make it diffi- activities. For example, cyberattacks can damage com-
cult for them to take full advantage of the digital initiatives pany operations, which is a major concern for upstream,
described in the analysis from SWOT. The major key bar- midstream, and downstream asset owners and opera-
riers are a starting point for attempts to address the diffi- tors. These destructive cyberattacks pose a risk to the
culties in unlocking the value of digitalisation for business oil industry because their operations and activities are
and society. The oil and gas industry needs to develop an highly volatile and have economic and political implica-
effective strategy based on advanced processing systems, tions. Therefore, companies need to establish a good secu-
programmes, and procedures to defend against cyberat- rity system, take control of data, and create a culture of
tacks, a digital culture developed within the companies, security for their employees. In addition, private compa-
and the skills of its employees, without forgetting that it nies, parastatal organisations, regulators, and policymak-
still has highly professional management teams and infor- ers must work together to improve the security of these
mation technology executives. industrial processes and facilities and mitigate the dam-
age of such attacks that will inevitably occur at some point
6 Conclusion in the future. In the next part, we will highlight the key
In this study, we attempted to answer two main questions: requirements for successful technology adoption by ana-
1. How is digitalisation changing the oil and gas lysing how companies can go down the path of digitalisa-
industry, is it changing from a disruption to an tion, how they can conduct their environmental audit, and
opportunity? set a good strategy that will lead them to success. In our
2. How can these companies change their strategy to opinion, the oil and gas industry needs to overcome some
meet this challenge? historical and structural barriers to unleash the full poten-
tial of digital transformation. There are major obstacles
To properly answer these questions, it was first important that make it difficult for oil and gas companies to achieve
to examine the current state of digitalisation in the energy the full value of digital initiatives. The key obstacles are
sector and analyse the main characteristics of the oil and gas the starting point for attempts to address the difficulties in
industry. In doing so, we find that the trend toward greater unlocking the value of digitalisation for business and soci-
digitalisation is due to advances in all three areas: increas- ety. The oil and gas industry needs to develop an effec-
ing volumes of data due to falling costs of sensors and data tive strategy based on advanced processing systems,
storage, the rapid development of computing capacity and programmes, and procedures to defend against cyberat-
advanced analytics, and increasing connectivity with the tacks, a digital culture developed within companies, and
faster and cheaper transmission of information. the skills of their employees, without forgetting that they
On the first question, we noted that the oil and gas have highly professional management teams and informa-
industry has already begun to radically reinvent its busi- tion technology executives. These key factors have been
ness models to address this disruption and take advantage well integrated into the case of Equinor's digital strat-
of the potential benefits it can offer; improving its busi- egy. We can see the benefits of Equinor becoming one of
ness operations, efficiency, and productivity are its main the pioneers in the development and deployment of digi-
goals. Even if capital expenditures or acquisitions are tal solutions in the energy market. Moreover, this poten-
a headache for executives, investing in digital solutions is tial opportunity will create tremendous value for both the
a move that should not be regretted, as it can improve the industry and society. However, a fully digitalised oilfield
production of current operations. However, there are sev- also raises some concerns. The notion of fully automated
eral prerequisites for such a transformation. We think that systems calls into question numerous safety issues. As in
the best starting point is the use of "Big Data", "Internet of any industry facing the fourth industrial revolution, cyber-
Things" and "Smart Devices". All these technologies are security is a key factor for success. It is important that
only valuable if their data can be resolved and processed Equinor, and oil companies in general, adequately protect
into productive things. This is happening in the process- their digital infrastructure to keep their employees safe
ing systems of oil and gas companies or, as technology and the rig secure. In conclusion, we believe that compa-
continues to evolve, in programs based on cloud plat- nies should always ask themselves how they can counter
forms, programs, and databases. In addition, many chal- the threats that are likely to change shortly based on the
lenges and barriers prevent the oil and gas industry from capabilities of their adversaries, and how they can stay
implementing digital solutions into their operations and informed and prepared for likely attacks?
 Haouel and Nemeslaki
|15
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

Oil and gas companies must continue to invest in the their executives. It is also crucial to support innovation
collaborative ecosystem by partnering with their suppliers and technology adoption by continuing to invest and hire
and start-ups and sharing with them a platform where they qualified experts. It is also important to improve the digital
can easily share data that will help them improve their skills of employees and spread a digital culture throughout
economic position. They should develop a digital strategy, the company so that they can protect themselves against
as in the case of Equinor, which must be a priority for cyberattacks or other potential risks in the future.

References
Accenture (2017) "The digital oil company: getting ahead of the energy Drath, R., Horch, A. (2014) "Industry 4.0: Hit or hype? [Industry Forum]",
transition", [pdf] Accenture. Available at: https://www.accenture. IEEE Industrial Electronics Magazine, 8(2), pp. 56–58.
com/us-en/_acnmedia/pdf-58/accenture-the-digital-oil-company-get- https://doi.org/10.1109/MIE.2014.2312079
ting-ahead-of-the-energy-transition.pdf [Accessed: 14 July 2022] Drucker, P. F. (1974) "Management: tasks, responsibilities, practices",
Aliguliyev, R. M., Imamverdiyev, Y. N. (2017) "Big Data Strategy For Harper & Row. ISBN 0060110929
The Oil And Gas Industry: General Directions", Problems of Durham, G. N., Marr, W. A. (1999) "Field Instrumentation for Soil and
Information Technology, 2, pp. 31–42. Rock", ASTM International. ISBN 0-8031-26042
https://doi.org/10.25045/jpit.v08.i2.04 EIA (2017a) "International Energy Outlook 2017", [pdf] U.S. Energy
Al-Nahhas, N. (2018) "Industry 4.0: 101 – A Simplified Guide to the Information Administration, Washington, DC, USA. Available at:
Fourth Industrial Revolution and its Application in the Oil and https://www.eia.gov/outlooks/ieo/pdf/0484(2017).pdf [Accessed:
Gas Industry", presented at AAPG Middle East Region, Shale Gas 14 July 2022]
Evolution Symposium, Manama, Bahrain, 11–13. Dec. EIA (2017b) "EIA projects 28% increase in world energy use by 2040",
https://doi.org/10.1306/70380Al-Nahhas2019 [online] Available at: https://www.eia.gov/todayinenergy/detail.
Aspen Technology (2017) "Beyond Oil Digitalization: The Roadmap to php?id=32912 [Accessed: 14 July 2022]
Upstream Profitability", [pdf] Aspen Technology. Available at: Epuh, E. E., Ufot, A. I., Orji, M. J. (2017) "Application of GIS to Oil
https://www.aspentech.com/en/-/media/aspentech/home/resources/ and Gas Pipeline Management (A Case Study of South-South
white-papers/pdfs/at- 03430 -w p-beyond-digitalization.pdf Nigeria)", Nigerian Journal of Environmental Sciences and
[Accessed: 14 July 2022] Technology (NIJEST), 1(2), pp. 337–348.
Bauer, W., Schlund, S., Marrenbach, D., Ganschar, O. (2014) "Industry https://doi.org/10.36263/nijest.2017.02.0035
4.0 Volkswirtschaftliches Potenzial für Deutschland" (Industry Equinor (2018) "Production start at Oseberg Vestflanken 2", [online]
4.0 Economic potential for Germany), [pdf] BITKOM company. Available at: https://www.equinor.com/news/archive/october2018-
Available at: http://www.produktionsarbeit.de/content/dam/produk- oseberg-vestflanken2 [Accessed: 10 July 2022]
tionsarbeit/de/documents/Studie-Industrie-4-0-Volkswirtschaftliches- Equinor (2019) "Equinor company official website", [online] Available
Potential-fuer-Deutschland.pdf [Accessed: 14 July 2022] (in Geman) at: https://www.equinor.com/?gclid=Cj0KCQiA2vjuBRCqARIs-
Blue Mail Media (2019) "Oil & Gas: A definitive path towards digi- AJL5a-JDrqzDY9m_QhgPddC8qToU4l7-9if LfsX1VXwyAX5-
talization", [pdf] Blue Mail Media, Irving, TX, USA. Available Etw4sMin-waAkZqEALw_wcB [Accessed: 01 January 2019]
at: https://www.slideshare.net/BlueMailMedia/digitalization-in- Ernst & Young (2016) "Why it's time to invest in digital oil", [pdf]
the-oil-and-gas-industry [Accessed: 14 July 2022] Ernst & Young, London, UK. Available at: file:///C:/Users/user/
BP (2017) "BP Energy Outlook: 2017 Edition", [pdf] BP. Available at: Downloads/ey-why-the-time-is-right-for-digital-oil-companies.
https://www.bp.com/content/dam/bp/business-sites/en/global/ pdf [Accessed: 14 July 2022]
corporate/pdfs/energy-economics/energy-outlook/bp-energy-out- ExxonMobil (2018) "Sustainability report Highlights", [pdf] Exxon
look-2017.pdf [Accessed: 14 July 2022] Mobile Company. Available at: https://corporate.exxonmobil.
Capgemini (2019) "Digital leadership: Equinor: scaling digital initiatives com/Communityengagement/Sustainability-Report [Accessed:
to build sustainable solutions in the energy sector: An interview 01 February 2020]
with Torbjørn Folgerø", [pdf] Capgemini, Paris, France. Available ExxonMobil (2022) "Digital technologies | ExxonMobil", [online]
at: https://www.capgemini.com/research/digital-transformation- Available at: https://corporate.exxonmobil.com/Energy-and-inno-
review-twelfth-edition/industry-leader-perspectives-torbjorn-fol- vation/Digital-technologies [Accessed: 09 July 2022]
gero-equinor/# [Accessed: 14 July 2022] Freeman, B. (2018) "Communication and Media: Types, Functions, and
Deloitte (2015) "Industry 4.0: Challenges and solutions for the digi- Key Concepts", IGI Global. ISBN 9781522540595
tal transformation and use of exponential technologies", [pdf] https://doi.org/10.4018/978-1-5225-4059-5.ch002
Deloitte, Switzerland. Available at: https://www2.deloitte.com/ Giovanni, F. (2018) "The Contribute of Digital Technologies for the Oil
content/dam/Deloitte/ch/Documents/manufacturing/ch-en-manu- and Gas Industry", [pdf] University UCBM, Rome, Italy. Available
facturing-industry-4-0-24102014.pdf [Accessed: 14 July 2022] at: http://www.oil-gasportal.com/wp-content/uploads/2018/06/The-
Dess, G. G., Lumpkin, G. T., Eisner, A. B. (2008) "Strategic Management: contribute-of-digital-technologies-for-the-oil-and-gas-industry_
Text and Cases", McGraw-Hill/Irwin. ISBN 9780073404981 REV_elvy.pdf [Accessed: 03 December 2022]
16|Haouel and Nemeslaki
Period. Polytech. Soc. Man. Sci., 32(1), pp. 1–16, 2024

IBM Chemicals and Petroleum (2017) "Digital transformation in oil and Molly, L. (2019) "Inside the first fully automated offshore platform",
gas How innovative technologies modernize exploration and pro- Offshore Technology, Feb. 11. [online] Available online at: https://
duction", [online] Available at: https://www.ibm.com/downloads/ www.offshore-technology.com/analysis/inside-the-first-fully-au-
cas/GJ8WNBNW [Accessed: 03 December 2022] tomated-offshore-platform/#:~:text=The%20world's%20first%20
IEA (2017) "Digitalization & Energy", [pdf] International Energy fully%20automated,Equinor%2C%20previously%20known%20
Agency, Paris, France. Available at: https://euagenda.eu/upload/ as%20Statoil [Accessed: 14 July 2022]
publications/untitled-110950-ea.pdf [Accessed: 14 July 2022] Mustafa, M. (2021) "Impact of Digital Strategy in Business for Small and
IQPC Middle East (2018) "Oil & gas: transforming through digital Medium Enterprises in Developing Countries", International Journal
technologies", [pdf] IQPC Middle East, Kuwait City, Kuwait. for Modern Trends in Science and Technology, 7(9), pp. 205–210.
Available at: https://www.oilandgasiq.com/content-auto-down- https://doi.org/10.46501/IJMTST0709033
load/5b3f406697533d1b9673e18f [Accessed: 14 July 2022] Perales, D. P., Valero, F. A., García, A. B. (2018) "Industry 4.0: A Clas-
Kio, M. T., Agboola, A. O. (2010) "Deep Water Oil Exploration and sification Scheme", In: Closing the Gap Between Practice and
Development Using Satellite Technology", In: Nigeria Annual In- Research in Industrial Engineering, Donostia-San Sebastian,
ternational Conference and Exhibition, Tinapa-Calabar, Nigeria, Spain, pp. 343–350. ISBN 978-3-319-58408-9
SPE-136982-MS. ISBN 978-1-55563-301-1 https://doi.org/10.1007/978-3-319-58409-6_38
https://doi.org/10.2118/136982-ms Shell (2018) "Energy transition report", Shell, Houston, TX, USA.
Kumar, D., Singh, R. B., Kaur, R. (2019) "Spatial Information Technology [online] Available at: https://www.shell.com/energy-and-innova-
Applications in Other SDGs", In: Spatial Information Technology tion/the-energy-future/shellenergy-transitionreport/_ jcr_content/
for Sustainable Development Goals, Springer, pp. 199–217. ISBN par/toptasks.stream/1524757699226/3f 2ad7f01e2181c302cdc-
978-3-319-58038-8 453c5642c77acb48ca3/web-shell-energy-transition-report.pdf
https://doi.org/10.1007/978-3-319-58039-5_14 [Accessed: 01 February 2020]
Larsen, Å. H., Lancry, O., Gul, M. (2018) "A step-by-step guide to digital Shell (2022) "Blockchain", [online] Available at: https://www.shell.com/
transformation", World Economic Forum, Jan. 5. [online] Available energy-and-innovation/digitalisation/digital-technologies/block-
at: https://www.weforum.org/agenda/2018/01/how-to-transform- chain.html [Accessed: 09 July 2022]
a-company-into-a-digital-enterprise/ [Accessed: 14 July 2022] Strategy and part of the PWC network (2018) "Drilling for data:
MEED Mashrek (2019) "Disrupting Oil & Gas: The new technologies that Digitizing upstream oil and gas", [online] Available at: https://
are transforming the world's energy supplies", MEED Mashrek, www.strategyand.pwc.com/gx/en/insights/drilling-for-data.html
Dubai, United Arab Emirates. [online] Available at: https://www. [Accessed: 14 July 2022]
meedmashreqindustryinsight.com/disrupting-oil-gas/ [Accessed: Sylthe, O., Brewer, T. (2018) "The Impact of Digitalization on Offshore
14 July 2022] Operations", In: Offshore Technology Conference, Houston, TX,
Mishra, A., Mishra, D. (2009) "ERP System Implementation: An Oil and USA, OTC-28689-MS ISBN 978-1-61399-571-6
Gas Exploration Sector Perspective", In: PROFES 2009: Product- https://doi.org/10.4043/28689-MS
Focused Software Process Improvement, Oulu, Finland, pp. 416–428. Turuk, M. (2020) "Digital strategy", International Journal of Contem-
ISBN 978-3-642-02151-0 porary Business and Entrepreneurship, 1(1), pp. 62–76.
https://doi.org/10.1007/978-3-642-02152-7_31 https://doi.org/10.47954/ijcbe.1.1.5
Mittal, A., Slaughter, A., Bansal, V. (2017) "From Bytes to Barrels: The Ward, R. (2016) "A billion-dollar digital opportunity for oil companies",
Digital Transformation Upstream Oil and Gas", Deloitte Insights, McKinsey & Company, March 24. [online] Available at: https://
Sept. 15. [online] Available at: https://www2.deloitte.com/in- www.mckinsey.com/industries/oil-and-gas/our-insights/a-bil-
sights/us/en/industry/oil-and-gas/digital-transformation-up- lion-dollar-digital-opportunity-for-oil-companies [Accessed: 14
stream-oil-and-gas.html [Accessed: 14 July 2022] July 2022]
Mjaku, G. (2020) "Strategic Management and Strategic Leadership", World Economic Forum (2017) "Digital Transformation Initiative Oil and
International Journal of Scientific and Research Publications, Gas Industry", World Economic Forum, Geneva, Switzerland, Rep.
10(8), pp. 914–918. REF 060117. [online] Available at: http://reports.weforum.org/dig-
https://doi.org/10.29322/IJSRP.10.08.2020.p104113 ital-transformation/wpcontent/blogs.dir/94/mp/files/pages/files/
Mojarad, A. A. S., Atashbari, V., Tantau, A. (2018) "Challenges for dti-oil-and-gas-industry-white-paper.pdf [Accessed: 14 July 2022]
Sustainable Development Strategies in Oil and Gas Industries",
Proceedings of the International Conference on Business
Excellence, 12(1), pp. 626–638.
https://doi.org/10.2478/picbe-2018-0056