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December 29, 2016 | 11:45 | Dubai
Change continues to be the defining feature of the global energy sector in 2017. In the oil and gas industry, as well as in electric power, major internal and external forces are driving change, requiring industry leaders to revisit strategies.
In oil & gas, 2016 was a year of continued overproduction. The resulting oil inventory overhang finally had an effect in reducing U.S. shale production, but did little to spur demand that’s needed to bring the global market into balance.
In the Middle East, a prolonged period of low oil price has impacted government spending but the move toward economic diversification and reduced reliance on oil is prompting greater investment in high-potential sectors including real estate, construction, hospitality, tourism and education. There is also a greater national focus on achieving operational efficiency across sectors – and one notable area that stands to benefit immensely from embracing digitally-enabled solutions is utilities.
Booz Allen Hamilton identified the following 5 trends that will impact the energy industry in 2017:
Across the entire energy spectrum, companies are taking steps to develop the capability to conduct deep continuous analysis of their capital projects during execution, and leaders are finding ways to put the insights they gain into management action.
While analytics in the industry is nothing new, companies are only starting to scratch the surface of how data can create new value within existing businesses. Most of these companies have very limited insight into the markets into which they sell their products. Data science is changing this, creating dramatically better ability to decipher and understand trends, draw insights, and capture new opportunities.
As regulators and policy makers consider what comes next, they are increasingly moving from a standards-and-subsidy approach to one that is more market-driven. As a foundation for future markets, regulators are requiring a greater understanding of the value that distributed energy resources (DERs) bring to the grid, so owners of DERs can be fairly compensated.
With the increase in instrumentation, automation, and virtualization of operational assets – the rise of the Internet of Things – the security frontier is moving to the operational edge, and is growing in importance. Companies will increase focus on security beyond their traditional lens.
In most industries, the decision to migrate IT infrastructure from fixed, on-premises servers to cloud-enabled as-a-service models has been heavily based on cost. This was true for many corporate systems at the oil supermajors, but it’s innovation that’s driving the current wave of cloud migration in the operational business units at these companies.