Recent projections from the Energy Information Administration tout the long road to recovery that lies ahead for oil production. At best, the report predicts substantial recovery over the next 24 months. However, it remains unknown whether future global prices will ever recover to pre-2020 conditions.
Amid such unpredictable times, companies are seeking security by cutting costs and running leaner operations. Much of this is being achieved by leveraging innovative technology solutions to replace archaic paper-based workflows. Gone are the days of resource- and time-intensive manual processes.
Instead, what’s emerging is a rapid shift toward digital transformation. And with a price tag that reads $3.3 trillion, the global energy industry is quite the target for innovators. The road ahead for oil companies will be a process of sifting wheat from chaff; sussing out technology solutions with proven business cases, demonstrable value and clear ROI to aid the industry in driving production efficiencies and savings, and transforming operations to sustain viability in a lower cost forever environment.
Smart Contracts Will Take Integral Role
When the internet first arrived on the scene as a powerful TCP/IP protocol, there were those that eschewed it as an overhyped trend, one to be waited out. Others jumped at the changes the connectivity and new style of communication introduced. There’s an analogy that can be drawn for those that place the right bets on technology now, particularly as an aid to survive the arduous recovery process.
One safe technology route already garnering traction among major energy industry players is that of blockchain-powered smart contracts. For energy companies, the instantaneous visibility into spend and therefore financial health makes decision-making in a fraught environment clearer. By reducing errors and mitigating risk, smart contracts additionally can lower capital requirements, a highly desired attribute as industry starts the slow march toward recovery.
As numbers heralding a gradual comeback are continuously revised, oil companies must do what it takes to achieve adaptability, agility and maintain a competitive advantage. The climb out of crisis will take foresight, much like the early adopters of the internet in the enterprise decades ago, leading the way to ubiquitous use in every corner of global business.