Calgary has a burgeoning information and communications technology (ICT) industry. The government of Canada ranks Calgary as having the largest number of tech startups per capita. However, many of these startups often languish on the shelf due to inadequate funding and lost investment opportunities for the oil and gas (O&G) sector.
s the saying goes, if you can’t beat them, join them. O&G is one of the world’s largest, most profitable industries and presents several opportunities for ICT companies to bring new technologies to exploration and production companies, allowing these enterprises to use ICT to a greater strategic advantage.
In reality, a lot of funding is going into innovative companies that can help oil and gas companies work smarter. According to Oil & Gas Technology, new oil finds and technologies will boost investments in the oil and gas industry to USD $15 trillion over the next two decades.
O&G facilities could optimize production and significantly reduce energy consumption, operating costs, and downtime by deploying ICT solutions that can manage, measure, and track all of the data coming from all over the oilfield, providing better visibility and control.
Such technologies, coined as a “Digital Oil Field,” could increase the net present value of oil and gas assets by 25 percent according to Booz & Co.
The world is running out of easy to find oil and gas. According to MIT Technology Review, as energy companies drill deeper and hunt
in more remote regions and difficult deposits, they’re banking on ICT to boost production.
So-called “unconventional” sources, such as shale gas, coal gas, and tar sands can help meet growing demand, but they are inherently complex and increasingly controversial. They will be subject to strict permit processes and close long-term monitoring requirements that will not be possible without ICT automation.
An article in The Wall Street Journal states that wide adoption of the digital oil field could result in an additional 125 billion barrels worldwide, which is “almost equivalent to the current estimate of reserves in Iraq.”
Strategic O&G investors such as Chevron, BP, ConocoPhillips, Cenovus, etc. are looking to invest in technologies that provide them with a competitive advantage. Additionally, it is much easier to test the market and scale an ICT startup, particularly software, with small amounts of capital investment. ICT entrepreneurs should investigate different areas within O&G—i.e., production, supply chain, operations, finance, asset management, safety, etc.—to determine what pain points are front of mind and how they can be mitigated. For example, energy price volatility is a significant problem for consumers and corporations, and presents a huge opportunity for ICT entrepreneurs.
According to an article in Bain, many of these O&G strategics seek to nurture entrepreneurship and foster globally competitive businesses in energy-related sectors—and that creates an opportunity to promote new areas of competitive advantage and strengthen existing ones for their home countries. In principle, they can become powerful engines of socio-economic change—not just earning wealth, but also spreading the economic beneﬁts of a competitive oil sector.
Although bridging the gap between our current oil economy and the ICT industry might not be easy, effective collaboration between the two could certainly help accelerate the process. Some ideas for consideration include the following:
The new year will witness many such collaborative events and programs between ICT and O&G in Calgary. I’m eager to see what happens when the two worlds collide!
Lloyed Lobo is a startup evangelist and community leader – he is the Co-chair at The Cloud Factory, Global Facilitator at Startup Weekend, Instructor at NEXT, Board Member at Startup Calgary, Startup Columnist at Calgary Herald, and Contributor at The OGM and Techvibes. Lloyed is also a Partner at Boast Capital, a financial advisory firm with offices in Calgary, Vancouver and Silicon Valley specializing in Scientific Research & Experimental Development (SR&ED)/ R&D Tax Credits, and Plug and Play Canada, a subsidiary of Silicon Valley’s Plug and Play Tech Center, an accelerator and seed-stage investor. Prior to Boast Capital, Lloyed was the Head of Sales and Marketing at TicketLeap in Philadelphia and AL Systems in New Jersey. Lloyed studied Software and Electrical Engineering at Lakehead University, Marketing at New York University, and PR Management at UCLA. You can find him on twitter @boastcapital.
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