The Oil & Gas market is among the major contributors to global pollution due to significant CO2 emissions but is also the sector most affected by the changes demanded by decarbonization projects.
Analyzing current developments allows us to delve deeper into the market's positioning in future developments related to energy transformation, as well as the contribution of technological evolution to the sector.
In the energy market, oil and natural gas play a very authoritative role in the global economy. What most interests the public opinion is the future transition towards a totally different economy: the green economy. Issues such as energy security, diversification, and decarbonization fuel question the economic positioning of the Oil & Gas sector.
In recent years, there has been discussion about the insufficiency of investments in the sector, the role, and responsibility of Oil & Gas companies. This falls among the "hard-to-abate" sectors, whose industries find it difficult to "decarbonize" because they operate through the use of fossil fuels.
However, the awareness and responsibility to drive change guide the new challenges of the sector. Industries are indeed called to actively participate in the diversification process of their energy offering. A necessary action that will allow the gradual reduction of carbon emissions and the progressive use of renewable resources.
Currently, renewal efforts include carbon storage technologies, coming from different phases of industrial activity. Mapping the ideal market positioning while the rest of the companies move in another dimension is certainly not simple.
As reported by an article published by McKinsey & Co, companies should diversify and build a portfolio resilient to prices. This involves concentrating future investments on resources more likely to bring long-term competitive advantage. The core business of companies is undergoing a gradual transformation, aligning their operations with decarbonization commitments.
It is evident, therefore, that companies need support to reinvent existing operating models and create new flexible perspectives. The phase of reinvention, or conversion, of plants concerns the Oil & Gas industry organizations supported by new solutions and technologies.
The potential of hydrogen technologies is increasingly asserting itself as a key element of the energy transition.
Regulatory aspects have gaps in legislation and technical standardization, making the start of authorization practices for investments later.
The conversion process requires the adaptation of existing structures to future resources and a significant economic effort.
The expansion of the electricity network will be necessary to support the evolution of market demands in the electrical field.
The volatility of oil prices and other economic factors make long-term investment planning uncertain.
What do we mean with the word electrification? It is the use of electricity to power services and activities instead of fossil fuels. The goal is to use renewable sources for sustainable energy consumption and contribute to the reduction of CO2 emissions. The gradual shift towards this new phase of energy renewal is defined as the energy transition.
Electric technologies can thus contribute to this process, supporting the energy transformation even in industrial processes. In extraction operations, electrification would bring significant advantages in terms of emission reduction, qualitative performance, and timing optimization.
The energy transition takes time; it is not an endpoint but a slow path that requires significant investments. For the Oil & Gas market, investments are needed for data analysis systems, Artificial Intelligence (AI) and IoT, automation, and cloud services.
The evolution of electrification is supported by the development and implementation of advanced digital technologies and systems. Smart control systems, fully automated, facilitate preventive maintenance activities and make working environments less hostile.
AI technologies monitor machines and support exploration activities, reducing costs and forecasting errors. Furthermore, digital innovation and blockchain technologies in the energy sector could be relied upon to manage consumption.
Smart sensors improve not only safety but also optimize the realization of production processes and mitigate risk factors.
The phase of plant conversion should not only concern the use of new electric technologies for the renewal of processes. It should include other digital tools useful for the total transformation of the market, starting from the criticalities connected to maintenance phases.
In this new phase of change, at Priver, we are careful to consider the difficulties that a total conversion could generate. We support companies in monitoring the efficiency conditions of machinery, to optimize resources and production capacities.