The changing landscape of the energy industry presents significant challenges to the oil and gas sector’s operational performance and profitability, requiring effective planning and project management that extends across the entire asset and project lifecycle.
Comprehensive project planning and asset management is a key way to tackle broader industry-scale challenges and can help reduce emissions, conserve and reuse water, use less toxic materials, re-use and recycle, increase equipment efficiency, and improve monitoring and maintenance. Oil and gas project management requires considerable technical skills and knowledge of production technologies and management processes, as well as the materials and chemicals used.
Various asset management technologies and software is used to support oil and gas projects through all stages of asset and project lifecycles, from planning through to decommissioning. Using real-time data generated from connected assets across an operation, managers can build informed plans around the current state of the project and better identify areas of improvement, which can be tangibly measured by defining operational benchmarks.
A recent DNV survey found that improving operational performance was a major priority for the oil and gas sector, with 62 per cent of companies planning to increase investment in energy efficiency and 78 per cent aiming to standardise tools and processes to cut costs. Notably, 82 per cent of respondents recognised that new operating models were needed to achieve meaningful operational improvements, part of the wider industry challenge of balancing profitability with strategic goals.
Using insights from nearly 450 senior oil and gas professionals, the survey revealed renewed confidence after the 2020 downturn, a result of new revenue streams from alternative energy sources such as wind, solar, hydrogen, carbon capture and storage, and biofuels. A key finding was that 68 per cent of industry leaders remained optimistic about sector growth in the upcoming year, which DNV said underscored the sector’s resilience as it sought to balance immediate energy demands with long-term environmental responsibilities.
Along with the broader recovery, the industry’s positive outlook has also been bolstered by a renewed focus on energy security due to geopolitical events such as Russia’s invasion of Ukraine. However, despite the generally positive mood, the survey showed significant concerns persisted, with a slight majority (51 per cent) of executives believing global investment in new oil and gas capacity was insufficient. This sentiment was significantly stronger in North America (70 per cent) compared to that of Europe (40 per cent).
While it is commonly acknowledged the industry needs to decarbonise to remain viable, the most cited barrier (49 per cent) impeding oil and gas companies from prioritising cleaner energy sources was its associated low financial return or profitability, while 33 per cent pointed to constraints posed by their existing business models and risk profiles, as well as unclear energy or emissions policies.
Other significant obstacles include the required capital investment (30 per cent); limitations in organisational capability, infrastructure, and technology (26 per cent); operational costs (21 per cent); organisational culture (19 per cent); and the difficulty in scaling up or growing revenue (18 per cent). Despite these challenges, the sector remains committed to reducing its environmental impact, with 61 per cent of executives planning increased investment in decarbonisation.
Remarking on the findings, Chief Executive Officer for Energy Systems at DNV Ditlev Engel said the oil and gas sector was at a critical juncture. He said: “Their dual task to invest in low-carbon and renewable energy sources to meet climate targets while meeting global demand and maintaining operational efficiency and profitability is not an easy fix.
“Our survey demonstrates that industry leaders in the sector are confident about their role in the energy transition and are actively seeking solutions to navigate this transformation. “More profitable business models and clear policies are needed to accelerate this change in the sector.”
