As the outlook for oil is uncertain for 2021, following a turbulent 2020, companies look toward new technologies and innovation to drive the industry forward. From Houston to Scotland, we are seeing more and more firms come up with innovative solutions for the digital transformation of oil; with some unexpected companies getting involved in the $3.3 trillion global energy industry.
As thousands lost their jobs across the oil industry in 2020, it became clear that energy companies had to embrace change, to modernize oil strategies continuing into the new decade. While several have suffered the impact of the Covid-19 pandemic, Houston has been gradually branding itself as a tech hub.
The long-established oil industry, not often open to dramatic change, is slowly coming around to the idea of digitalization, the introduction of new technologies, and essentially anything that will bring it out of the 2020 rut into the future.
In a 2020 Ernst & Young Oil and Gas Digital Transformation and the Workforce Survey, around 92 percent of companies polled highlighted the need to adapt their practices in line with modern expectations. Much of this change involves digitalization of the industry, with 51 percent of companies planning to invest moderately in digital technologies and 29 percent to invest a great deal. According to the poll, two of the principal drivers of this investment were the pandemic and low oil prices.
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In Houston, several start-ups have jumped at the chance to provide innovative solutions for oil majors who before would not have given them the time of day. Tachyus, a Silicon Valley startup that transferred many staff to Houston last year, is a tech company that aims to optimize energy production. Another firm, GoExpedi, aims to procure industrial energy equipment, using a digital inventory system to track and manage all equipment. Digital services and blockchain networks have also been cropping up across the U.S. in support of the modernization of the energy sector.
The City of Houston has been supporting these startups through incubator and accelerator programs and roundtables to encourage greater innovation across the oil industry. And this effort seems to have paid off as Houston tech startups raised $466 million in funding between January and July 2020 according to a HTX Funding Review.
Similarly, in Scotland, RAB-Microfluidics – a company that created pioneering oil analysis technology, has acquired £1.24 million ($1.68 million) in funding that expects the company to double its staff and further develop the new technology.
Its ‘Lab-on-a-chip’ technology will allow energy companies to monitor the condition of oil used in heavy machinery on-site instead of needing to transfer it to a laboratory for analysis. The Aberdeen-based company, which was developed out of the Physical Science college at the University of Aberdeen, created a 22x15mm glass chip that can provide a 30x20cm portable laboratory for use on-site.
The technology is not only limited to use in oil but will also serve the gas, aerospace, transport and manufacturing industries. RAB-Microfluidics CEO, Rotimi Alabi, explained how the company is revolutionizing oil testing and analysis services “by delivering oil analysis more than one thousand times faster and around ten times cheaper than the current approach that is based on sending oil samples to laboratories.”.
While several oil companies have had to slash costs to tackle the decrease in demand and drop in oil prices over the last year, many are open to innovative money-saving solutions and new technologies that will support oil production, storage, monitoring, and analysis in the future.
As the energy sector continues to face uncertainties going into 2021, it seems that tech companies with a focus on oil could be the perfect opportunity for investment as majors look to modernize. Digitalization and the use of innovative technologies is saving the oil industry vital funds needed to keep afloat under the current volatile conditions.