The potential value buried in improved connectivity for exploration and production is more essential than ever due to price and demand challenges in the oil and gas sector.
Fremont, CA: Despite having many of the latest connectivity-enabled technologies at its disposal, the oil and gas industry has yet to achieve much of connectivity's potential, which is substantial. However, a significant technological upgrade can't come fast enough. The oil and gas industry is in the midst of its third price crash in the last 12 years. The industry recovered after the first two shocks, and business as usual resumed, including a lack of focus on efficiency and costs. The current issue is unique, as it involves a supply shock, as well as a notable reduction in demand, and a global humanitarian disaster.
Furthermore, the financial and structural health of the sector is worse than in prior crises. Poor returns have been attributed to the emergence of shale, excess production, and forgiving financial markets that disregarded a lack of capital discipline. Oil and gas executives recognize that change is unavoidable today, with prices at 30-year lows and mounting societal pressure. The COVID-19 crisis hastens what was already shaping into one of the most pivotal periods in the industry's history.
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Reduced carbon emissions are another major element driving the need for significant operational improvements in the long run. Investors are becoming increasingly concerned about environmental issues; the cost of renewable energy is declining, and more governments are putting carbon taxes on firms. The industry's operations account for 9 percent of all human-caused greenhouse gas emissions, while the fuels it generates account for one-third of all human-caused emissions.
Technologies are rapidly changing, and they now have the ability to revolutionize processes and add value. These technologies range from gadgets that enable and enhance connectivity to backhaul networks that connect the core network to small subnetworks surrounding its edge. Users are connected to their service providers or, in the case of the oil and gas industry, to the backhaul via access technologies. Many of these technologies are already in use and are fast improving in terms of reliability and cost.
These technological advancements will enable a slew of new capabilities in a variety of industries. Near-global coverage will enable the expansion of use cases to even the most remote regions, as well as ubiquitous connectivity. As new technologies allow for higher device densities, massive IoT advancements will be possible, and mission-critical services will benefit from ultra-low latency, very dependable, and highly secure connectivity.