Canada’s oil and gas industry says investing in digital oilfield technologies can generate a strong return on investment even in today’s difficult market, according to a survey of industry professionals conducted as part of the Daily Oil Bulletin’s 2020 Digital Oilfield Outlook Report.

The survey asked respondents to evaluate 11 key digital applications along three dimensions: return on investment, technology maturity, and the readiness for their organizations to adopt the technology. The applications represent how organizations use technology to deliver value.

At a time when many companies are in survival mode as they attempt to hang on until the pandemic-inspired collapse in demand for their products abates, return on investment takes on particular significance.

Evaporating cash flows have left many companies in no condition to make any investments, let alone those that don’t virtually guarantee positive short-term returns. Many survey respondents said the sense of risk-taking on new technologies — with the attitude they could fail fast and move on — has withered.

However, there was widespread recognition and consensus across industry groups (producers, midstream, OFS) and levels (CEO to analyst) that digital technologies in general have high return on investment with all 11 technology use cases believed to represent a return on investment comparable to or higher than other uses of capital in the organization. This bodes well for digital oilfield technologies vying against other investment opportunities in difficult times — an indication they will pay for themselves more quickly than other forms of investment.

The use cases felt to deliver the greatest return on investment — Production Asset Optimization, Automated Production Asset Operations and Predictive Maintenance — play into that narrative for their ability to reliably cut costs and deliver efficiencies. As quickly maturing technologies, they can be delivered for relatively affordable investment with low risk.

Also of note was that Fleet Management, Remote Asset Monitoring and Field Productivity are amongst the most mature and best known, and have a return on investment that is closest to other comparable uses of capital. They may have already produced considerable gains in recent years and be perceived to have reached a level of saturation that is more difficult to improve on. Conversely, Biometric Monitoring, at the bottom of the list, maybe seen as one of the least mature use cases from an industrial perspective and therefore considered a high investment risk in difficult times.

Attitudes toward the return on investment have shifted in the five years since the Daily Oil Bulletin’s first survey was conducted. In comparison to the results of the 2015 survey (in which some applications were not polled), there is much more confidence in return on investment from optimizing field workforces, with “remote” applications having seen the biggest jump in perceived return on investment. Of the eight comparable use cases, those that climbed the most in rank over the past five years were Remote Asset Operations, Remote Asset Inspection and Remote Asset Monitoring.

Note: In terms of ROI, a score of three represents a return on investment comparable to other uses of capital, four is higher than other uses of capital, and five is much higher

While it is a sign of shrinking workforces in the midst of a major downturn in the industry, it could also be an early indication of more to come as companies are forced to deal with the secondary crisis of the pandemic and the physical distancing that entails for employees. Indeed, “remote” has become a watchword in all sectors of the economy as workers have been forced to adjust to the new COVID-19 reality. The ability to remotely operate, inspect and monitor assets simplifies the physical distancing aspect of these activities even as it trims costs.

For more information, the Daily Oil Bulletin’s 2020 Digital Oilfield Outlook Report, sponsored by Amazon Web Services and Rackspace Technology, is available for download here: https://www2.jwnenergy.com/DigitalTransformation_2020