18 September 2020
Los Angeles, CA
In response to a recent McKinsey & Company Article
“Reinventing upstream oil and gas operations after the COVID-19 crisis”
This year has thrust the energy industry into a complicated corner. While all industries, businesses, and companies are facing new struggles, the crisis created by this pandemic has hit oil and gas especially hard. This is the subject matter of a recent article published by McKinsey & Company in which they discuss the many supply challenges now being faced along with how “the COVID-19 pandemic has cut global demand sharply.” The article continues with a narrative centered on the future of upstream and what the industry will need to adjust in order to recover and move forward into a changing world, post Covid-19.
Beyond Limits’ key takeaways and central boiling points from the article:
+ There exists a critical need for advanced digitalization solutions in upstream.
+ The oil and gas industry must prioritize exploration while moving their assets from an Improve-centric approach to more of a Promote-focused strategy.
+ The key to successfully carrying out a transition is to reduce the break-even price per barrel for specific classes of assets.
For clarification purposes, this article describes the aforementioned assets as such:
+ Promote: “These are assets with low break-even prices and high potential to increase reserves. Operators will want to concentrate on developing the field, changing the asset footprint, and finding more low-cost reserves in the same basin.”
+ Improve: “This can describe two kinds of assets. The first has high break-even prices and good potential in terms of reserves. The other has low break-even prices but low potential in terms of reserves. For this group, the priorities are to improve operational efficiency and optimize production.”
Evolution in Upstream
The path forward for the evolution of upstream can be found in optimization and digitalization solutions that deliver greater visibility across an organization and its assets. The industry requires solutions that provide stakeholders with a more complete viewpoint from the big picture down to the smallest detail to best optimize entire operations.
Exhibit 4 within the McKinsey article seeks to provide a management roadmap in list form that describes what companies could do, “To reduce costs, enhance development opportunities, and reduce the carbon intensity of assets.” Two items listed in this exhibit focus on the need for data-driven production optimization to apply advanced analytics for improved maintenance purposes and more effective well and reservoir management.
A Solution in Revolutionary AI
Beyond Limits is already making progress in this area with a lot of experience in the oil and gas industry, offering a variety of solutions that support predictive maintenance efforts alongside asset, reservoir, and well management initiatives. Other significant proposals listed within Exhibit 4 include rationalizing/centralizing activities, simplifying workflows, and transitioning to a more agile environment.
All of these objectives resonate with Beyond Limits. Advanced Cognitive AI features a comprehensive and complete approach to artificial intelligence – providing a solution that has the ability to focus on a global view of large and complex operations. Cognitive AI provides optimized recommendations, driven by data and expert knowledge while still keeping humans in the loop to make decisions; explainable solutions that are managed by the oil and gas executives, managers, engineers, and operators they support.
Beyond Limits Cognitive AI appears an ideal match for helping upstream achieve the ambitions laid out by this McKinsey article and come out of the crisis more efficient than ever. This advanced form of artificial intelligence is already providing stakeholders with a holistic view over assets, from the big picture down to the smallest detail, ultimately elevating entire operations for the energy sector and several other high-value industries currently facing tough transitional periods.