Digital technologies to shave costs for energy companies

Oil TechTechnology is set to help oil companies cut costs. (Image source: Adobe Stock)Consulting firm McKinsey said that digital technologies are set to help energy companies cut costs

Technologies such as artificial intelligence (AI), blockchain, robotics, sensor technology, machine learning, deep learning and edge computing are expected to be leveraged to lower costs, according to McKinsey's research.

The technologies are expected to cut capital expenditure by 20 per cent and operating costs in upstream by three to five per cent and by one to three per cent in downstream.

The related, resulting savings will be US$1.6 trillion over the next seven years, according to McKinsey.

Energy companies, which have had to sell assets and cut operating costs to weather low prices, are now looking at newer projects.

However, they are looking at low-risk projects with low costs for their expansion after years of cutting back.

“Digitalisation is an urgent priority for industry CEOs and business leaders, offering cost savings, operational improvements, and safety and environmental gains that will reach into every corner of the business, but the opportunities come with risks that must be understood and navigated,” said Jean-Philippe Cossé, vice-president, energy at dmg events.

“What we are seeing is a profound disruption to business-as-usual, which will have long-lasting effects. ADIPEC is responding to this with a new ‘Digitalisation in Energy zone, supporting innovation, and helping drive smart investments that will be the foundations of business success in the years ahead,” Cossé added.

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