End-to-end digitization in the oil and gas industry presents several challenges as the operations and nature of business is itself complex. Moreover with regulatory requirements, and the scale of the industry with varying degree of digital maturity levels of various facilities even within the same organization, plug and play solutions and one size fits all for end to end digitization is not an option in the oil & gas, chemicals and petrochemicals industry.

Digital transformation is not just required for maximal gains but it could also be a way to survive with global energy transition likely to lead to the closure of marginal assets across the oil and gas value chain in the coming decades. To remain competitive, oil and gas assets strive to transform operations, by improving yield, energy, throughput, reliability and availability while reducing costs

The main challenges, barrier and impediments faced in end to end digitization in manufacturing space, particularly in oil and gas, chemicals and petrochemical installations as following

Legacy Infrastructure: Though there are various state-of-the-art facilities in the industry, at the same time we have extensive legacy infrastructure, including outdated equipment, systems, and processes. Integrating digital technologies with these legacy systems can be complex and costly. Moreover with varying degrees of digital maturity it becomes a problem to execute projects efficiently, economically and uniformly. For example, one facility has all smart plant drawings and documentation while other has them only in physical hard copy form, that too not complete at times and with low legibility. Overcoming these infrastructure limitations requires investment in bringing infrastructure to the level that digital solutions can be implemented.

Therefore, a particular Proof of Concept (POC) which could be very successful at one place with better Return on Investment (ROI) would not be an ideal fit for another place.

Though difficult, it pays off rather to carry out digitization at the place where presently there is dearth of digitization and documentation and where the gap is huge to cover, while it becomes easier to test any new technology at the place where doing and implementing a pilot is easy.

Data Integration from several platforms: Oil and gas operations generate vast amounts of data from various sources such as sensors, equipment, and personnel. Integrating and analyzing this disparate data efficiently to gain actionable insights can be challenging.

Taking a data to a single platform, reconciliation and to create a single source of truth itself is a challenge, and there poses another challenge that to create single source of truth we should integrate the systems which do not talk with each other, are not compatible, have come up at difference epoch thus use different technology and may not have latest versions compatible with latest digital solutions on offer.

Sabotage Risks: The digitization of operations increases the risk of cybersecurity threats such as data breaches, ransomware attacks, and sabotage. With end to end digitization is thought of to create value through transparency, end-to-end view and faster and informed decision making, the risk is to protecting critical infrastructure and sensitive data from cyber threats, sabotage, leakage of sensitive information. When we think of a digital journey, we should also see the armoury needed to defend against the bandits on the journey.

Regulatory Compliance: Oil and gas industry is subject to stringent regulations regarding fire, safety, environmental protection, and various specific standards based on service and facilities nature and region. Ensuring compliance with these regulations while implementing digital technologies requires careful planning and adherence to industry standards. For example : Implementing a video analytics solution inside unit battery limits of refinery or petrochemical installations all equipment needs to be ATEX certified, compliant to fire standards/area zone, this requirement increases the cost times 10X as compared to may be in a mall or sports complex or retail installation.

Legacy Workforce: Oil & gas talent pool is trained in conventional knowledge, experienced in operating process facilities. While those trained in data analytics and digital technologies have limited or no understanding of oil and gas facilities and processes. There is no talent pool with expertise in both oil and gas operations and digital technologies such as data analytics, AI/ML. While organizations recruit, train and invest in people to bridge this gap, retaining such trained talent with the necessary dual skills can be a challenge for companies seeking to digitize their operations.

Cultural Resistance to Change: Implementing digital transformation requires changes in organizational culture, processes, and workflows. Resistance to change from accustomed/conventional traditional ways of working to digital ways is a challenge in oil and gas industry with several processes having checks and balances, robust conventional system this adoption of digital technologies and end-to-end digitization first requires changes in processes and systems and ‘way we work’ then comes adoption of digital technologies.

Perception Silos: Even if digitization related departments of organizations are enthusiastic about digitization, this doesn’t mean that people working on the ground in manufacturing will be. It’s important to know what the user needs and not what Industry 4.0 technologies are offering. If we create new platforms which increase rather than decrease the work of people on the ground, the platform will be Digital Dodo which will soon be extinct and find no user, however good it might be. Unless user buy-in is there, right support to users is provided digital adoption remains a challenge. To succeed at scale, however, any new digital solution must integrate seamlessly with the organization’s culture, ways of working, infrastructure and available skill level.

Cost and ROI Concerns: While digitization offers potential cost savings and operational efficiencies in the long term, the initial investment required can be substantial. Demonstrating a clear return on investment (ROI) and securing funding for digital initiatives can be challenging, especially in periods of low oil prices.

Stall at POC and infinite wait for Scale up: While there are plenty of things at POC, 90% percent don’t go beyond the pilot phase, and here the ROI or technology isn’t the problem. Though pilots are successful, exceeding their technical goals, they face roadblock in the form of cultural resistance and resistance to change. It is easy to move POC as the application area is limited and things are cohesive, the user group is small, decision making swift and change management easy to communicate. But, things change when POC is scaled up as group dynamics of large scale tears apart all agility and swiftness of small groups.

Secondly, at POC, the technologies and use cases don’t always generate clear value, POC at times don’t demonstrate solving a problem convincingly and bringing a clear financial gain to the table. With project teams not able to clearly demonstrate the impact of POC. Management can’t see clear cost benefits and thus are not willing to invest for scale up.

Addressing these challenges requires a strategic approach, collaboration across the industry, and a commitment to innovation and continuous improvement. Despite the challenges, the benefits of end-to-end digitization in terms of improved safety, efficiency, and competitiveness make it a worthwhile endeavour for oil and gas companies. To overcome these barriers, digital transformation should focus on value creation, incorporate systems to track progress and benefit impact at every step and cultural transformations.