Despite the increasing speed of technology and innovation that is pressuring the industry, oil and gas CEOs consider technological disruption as more of an opportunity, 2018 KPMG CEO Outlook: Oil & Gas, reported.
Namely, oil and gas CEOs see technological disruption as an opportunity, and not as a threat, to acquire more knowledge and to improve their more work.
Specifically, CEOs see technological disruption as an opportunity as:
- 85% are piloting testing AI or have implemented AI;
- 59% feel their organization is an active disruptor in their sector.
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Commenting on the report, Regina Mayor, Global Sector Head, Energy and Natural Resources, KPMG in the US, said that AI and robotic solutions can create models to predict behavior or results more accurately. This will in turn improve rig safety, dispatch crews faster, and identify systems failures before they happen.
When asked about the biggest long-term benefits of AI:
- 39% answered that this is increased agility;
- 39% pointed to improved risk management;
- 46% indicated the acceleration of revenue growth.
What is more, CEOs expect job growth, as 58% feel that AI and robotics will create more jobs, while 93% expect an increase in industry-wide headcount.
Moreover, as oil prices remain high, industry confidence is also up and CEOs are setting their sights on growth opportunities. In fact:
- 85% are very confident on industry growth;
- 88% are very confident on company growth prospects.
Regarding, their growth strategies, 83% anticipate a moderate to high demand for M&A activity over the next three years. This will be largely driven by the need to cut costs through synergies/economies of scale; a rapid transformation of business models; increased market share; and low interest rates.
Anton Oussov, Global Oil and Gas Leader, KPMG in Russia, stated:
Executives are really honing in on ways they can improve internal efficiencies through strategic M&A moves and the use of robotics, AI and other means of digitalization across the industry
However, there are still concerns and threats to achieving growth. Among the biggest threats, 23% of CEOs pointed out to emerging/disruptive technology risk, 20% say environmental and climate change risks, and 18% answered that a return to territorialism is most concerning.
See more in the following PDF
