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The Digital Oil and Gas Company: Inspire and Shape the Digital Energy Revolution
Dear Customers and Partners,
By 2050, the global population is expected to reach nearly 10 billion people1 – and all will need safe, reliable, and affordable energy. Total energy demand is universally predicted to increase due to growth in population, urbanization, and the middle class. This is undoubtedly great news for the energy industry.
However, the energy world as we know it is experiencing a revolution on both the supply and demand sides of the value chain. Hydrocarbons will continue to play a dominant supply role for some time, but we are also witnessing rapid growth of hydrocarbon alternatives, improved energy efficiency, and the adoption of less carbon-intensive lifestyle choices. At the same time, we’re experiencing a digital revolution from the technology advances of hyperconnectivity, supercomputing, cloud computing, smart technology, and cybersecurity.
This resulting digital energy revolution will transform the industry away from the traditional, vertically integrated business models dependent on control of vast resources and assets. In the digital economy, access to information is overtaking access to reserves and capital as the competitive differentiator. Success will come from leveraging these same disruptive digital technologies to capture new value beyond traditional oil and gas with three primary strategies: cost control, energy diversification, and outcome-focused services.
We envision this demand-driven value chain – focused on the ultimate energy needs of consumers – operating as a digital energy network. This network will connect ecosystems in a “network of networks” that enables both the resilience and adaptability needed to thrive within any new and developing energy market. Each network node will connect all of the required stakeholders around a specific function, such as hydrocarbon logistics, or an initiative, such as a capital project or an oil field. There will be no internal or external silos or barriers, so every worker, supplier, customer, and asset will connect seamlessly.
Leading energy companies are already starting their transformational journey and using these digitally enabled advances to:
• Reimagine business models that are focused in the development, operation, or logistics of energy and its outcomes
• Reimagine business processes using digital technology to integrate, collaborate, and automate across enterprises with a more outcome focus
• Reimagine roles and ways of working that exploit new digital technology, such as wearables, 3D printing, augmented reality, and learning technologies
At SAP, our vision is to help the world run better and simpler by digitally enabling oil and gas companies to deliver the safe, reliable, and affordable energy needed to support modern lifestyles and create opportunities for people. To realize this vision, we are providing the digital foundation needed to connect all stakeholders so they can thrive within the emerging digital energy network.
This document offers our insights into how we see the oil and gas industry revolutionizing itself and how SAP will support your success within this digital energy network.
Thank you for your interest, and I look forward to taking this journey together with you.
Global Vice President
Oil and Gas Business Solutions
1. “10 projections for the global population in 2050”, Fact Tank, Pew Research Center, February 2014 http://www.pewresearch.org/facttank/2014/02/03/10-projections-for-the-globalpopulation-in-2050/