How 2020 is reshaping the offshore industry

Five months into 2020, the offshore industry has seen radical changes to its everyday operations. Newbuild projects worldwide are on hold; employees are working from home; offshore assets are being monitored and managed remotely.

Adding to this upheaval, a sharp decline in oil prices is presenting energy providers with pressing questions about reducing costs, protecting assets and even early decommissioning.

To steer successfully through the next few years, asset owners will have to understand the implications of these circumstances, and adapt their business accordingly.

Developing a new perspective on technology

Remote technology has been the principal enabler of safe, continuous work during this period. As budgets are frozen and the ability to onboard new tools remains limited, offshore asset owners are turning to existing technologies to search for added value.

This means approaching digital and remote survey technologies from an optimization standpoint: how to reduce OPEX, improve environmental performance, increase safety and achieve regulatory compliance.

Numerous technologies are already at owners’ disposal, from sensors and cameras, to live streaming and digital twins. Operators can work with classification societies and independent verification bodies to develop business-specific asset management strategies using these tried and true technologies.

By maximizing the utility of existing tools, owners can reduce manpower, limit on-site work and inspections, and save millions of euros per person, per year.

Expediting offshore’s digital transformation

The offshore industry’s digital transformation is only accelerating in the face of extensive and extended remote work. Everything now depends on technology: data collection and distribution, asset management and monitoring, inspections and surveys, alignment among stakeholders, etc.

As technology becomes increasingly dominant, and a generation of digitally native engineers rises up the industry, it is difficult to imagine a post-Covid-19 return to an analog status quo.

In addition to relying on existing technologies, the offshore industry will need to push further into the use of drones, ROVs, crawlers, AI and more. Remote inspection is a key starting point for operators, further normalizing the move to minimally unmanned and unmanned platforms.

Energy providers will need to lean into this transition, improving internal digitalization, relying on remote technologies and strategically deploying 3D digital twins as predictive tools.

Accelerating the energy transition

Before 2020, the offshore industry was already reckoning with its environmental footprint and need to minimize emissions. Public opinion and regulatory pressure were pushing investors away from carbon-heavy business, and major energy providers worldwide were working to diversify their asset portfolios.

The recent collapse in oil prices has only done more to highlight the advantages of alternative energy and boost the energy transition. Between the need to reduce carbon emissions by 2050 and the uncertain timeline of an oil recovery, the offshore industry will need to urgently advance their sustainable energy strategies.

This will require serious planning, and support from a variety of offshore stakeholders: owners, operators, suppliers, manufacturers, classification societies, independent verification bodies, etc.

Where the offshore industry is headed

While the future of the offshore industry remains uncertain, the combined Covid-19 and oil price crises will certainly leave a mark on energy providers. To meeting changing conditions, oil majors are looking to move forward, improving their day-to-day operations in the short-term, while revising their digitalization and sustainability strategies.