The BBC reported a while ago that for the first time in 50 years the UK government incurred a loss  of £24million, compared with a 2bn profit in 2014/15, from North Sea oil and gas production. The government sees these figures as ‘particularly concerning’ because 5 years ago the revenue realised was close to 11bn. Current figures are the lowest since the 1960’s.

The price of Brent crude halved in 2015 and as a consequence Oil and Gas UK reported that in 2015 21 fields ceased production with another 80 planned to cease by 2020. In its activity survey Oil and gas UK concluded that a coherent approach by industry, regulators, and government is needed to ‘boost competitiveness and confidence.’

Up and downstream operators must embrace innovation because by modelling, and simulating oil and gas operations in 3D it is possible to produce and deliver oil and gas more cleanly and safely at lower cost. Decommissioning can become part of a fully controlled interconnection comprising, assets, labour and capital. When everyone is able to interact with all enterprise data, rather than it being held in local silos, management can optimise discovery, exploration, production, distribution, safety, training, spares intelligence, construction and decommissioning.

When for example maintenance, shut down planning, training, and safety are integrated onto a unified, enterprise wide platform, decisions based on real time data have a more accurate foundation. This is because viewing the big picture and all of its details in real time leads to operational efficiencies as departmental divisions are replaced by universal access to the data that matters.

Innovation is boosted when all stakeholders communicate in the universal language of 3D. By modelling and simulating physical assets and processes, and adding data to them, a complete picture emerges with no hidden information. Strategies can be developed based on shared knowledge across different disciplines. These can include optimized plant construction, integrated plant engineering and efficient plant operation.

The challenge the oil and gas industry faces is to prosper in a time of slashed revenues and demand uncertainty. The industry therefore needs to look around at the most efficient businesses to emulate their best in class innovation strategies.

According to analysts Gartner the oil and gas industry is prioritising increased productivity, efficiency and cost savings.  However, its uniquely complex geotechnical, engineering, ecological, political and financial challenges have led it into business fragmentation. The cushioning effect of historically large profits has also shrouded and de-prioritised some inefficiencies, many of which have now been revealed.

The oil and gas industry and its supply chain supports around 375,00 jobs in the UK. In a bid to see this number rise through new levels of business and operations efficiency we have joined forces with industry technology facilitator ITF. Its chief executive Patrick O’Brien said “Crossing technologies over from other industries is a proven way to get solutions to market in a cost-effective and efficient way as can be seen from the success of drone technology from the military sector and robotics from medical and aerospace.”

With uncertain times ahead the industry is innovating fast. The spur to that action has been the shock of a more than 50% price drop. In the new reality of oil and gas there is no longer a place for inefficiency caused by non-optimised processes. Collaborative innovation suits the oil and gas industry because its introduction brings together people from different disciplines in exciting and challenging ways to learn and discover how to re-invent their industry.

The rewards of introducing a unified business platform are higher tax revenues, better energy security, and more employment investment not just in the UK but throughout the world.