Technology used in oil and gas operations has made leaps and bounds since its inception. According to the Society of Petroleum Engineers, the world’s first oil well, drilled in 1848 in Baku, Azerbaijan, used a primitive cable-tool technique to reach the reserves below. When offshore drilling started nearly 100 years later, the first platform offshore Louisiana was erected in only 20 feet of water.

These days, operators are exploring high-pressure and deepwater environments that reach down to more than 8,000 feet. If anyone had told these early explorers that one day pieces of oilfield equipment would have the brainpower to communicate with each other and feed back to operators on land when they would need maintenance checks without the use of manual inspection, no doubt they would have had trouble believing it.

Oil and gas technology is advancing at a rapid pace and though some may argue that old-school thinking still exists within the industry, the equipment being used is anything but.

A recent survey of global C-level executives from Accenture found that respondents in the energy sector were more likely than those in other industries to have invested in mobile technologies, showing a willingness to embrace new ideals and bring digital solutions to a historically conservative industry to recover the last drops of remaining reserves in the North Sea and beyond.

The Industrial Internet is a term gaining rapid significance in the oil industry. Coined by GE Oil & Gas (client), it combines machines and intelligent data to provide analysis and prognostic data to enable preventative maintenance. Simply put, a pipeline will be able to report on when it would have the potential to rupture months before an incident could take place.

GE is adding to its predictive technology with a step into big data and analytics, entering the Cloud space with its Predix Cloud technology that will capture and analyze data from machinery across its operations – from aviation and energy to healthcare and transport – to use data faster and more efficiently with the potential to save billions in industries including oil and gas.

The offshore sector is also adapting more widespread trends including wearable technology.

Though Google Glass may not have taken off as a mainstream accessory in civilian wear, the same product can provide huge cost savings to the offshore industry, where transporting and housing personnel to oil rigs proves pricey. Using this technology on a platform allows onshore-based staff to be there virtually and coach offshore workers through projects from the confines of their offices, sending one staff member where many would have gone before.

The industry is also investigating drone technology to examine remote locations as new frontiers for oil and gas exploration, with BP planning to deploy them to inspect pipelines in remote areas of Alaska.

From employing primitive manual technology in the first well and pioneering offshore drilling in water only a few feet deeper than a swimming pool to exploring new high pressure/high temperature frontiers with drones, the oil industry is expanding, with technology leading the charge.

Rachel Kelly is a Senior Account Manager at Hill+Knowlton Strategies UK
More from our H+K UK Energy+Industrials team.

Imagine you’re the chief executive of an energy company. During the past six months, oil and natural gas commodity prices – the lifeblood of your revenue stream and/or customer base – have plunged more than 50 percent and there is no clear view as to when prices will rebound – or for that matter, whether they've even hit bottom yet.

It is said that the market can remain unreasonable longer than you can remain solvent. That’s not an acceptable risk. If you’re like most other chief executives, you’ve already made some tough decisions to reduce capital investments and lay off contractors, field crews and perhaps a small portion of your headquarters staff. In fact, well over 100,000 workers in oil and gas exploration, production, services and transportation worldwide have lost their jobs since January. And many companies are reported to be looking seriously at another round of cuts.

Job one is to maintain the financial health of your organization. As you scrutinize each budget line item, looking for places to cut, your pencil pauses as you reach the communications budget. You consider it. “Do we really need communications at a time like this?”

Three decades ago, when I was starting my career, the conventional wisdom dictated that communications was among the first budgets to be slashed – and often mercilessly. At the time, communications was synonymous with advertising and marketing. Energy executives in particular figured that the legal, finance and operations groups were crucial to their organization but communications was just “nice to have.”

In today’s socially connected global environment, the way the C-suite views the necessity of a strong communications function, both internally and externally has changed dramatically. Here’s why:

Within companies some departments maintain records, some maintain regulatory compliance and some maintain cash investments. If you’re an energy company, your communications department maintains your corporate reputation and social license to operate on three critical levels:

  • Public – Broad social acceptance is important, particularly in open societies, local communities and countries where understanding measures taken to safeguard communities and protect the environment are of crucial importance.
  • Economic — Understanding and appreciation of economic benefits—given energy development’s operational scale and impacts—is important to provide the economic rationale for acceptance, particularly at a time of weakened economic wellbeing.
  • Political – Broad political support is critical for sustaining energy industries, stable regulatory environments and predictable growth.

In the past, some in the energy industry have ignored these crucial components of their operations, thinking that a government permit would give them all the authority they needed to go to work. Now, local stakeholders expect a seat at the table – and they want a vote.

There are additional social currents that make “treading water” a poor communications strategy. Environmental campaigners opposed to oil and gas drilling, fracking and infrastructure projects won’t stand down just because the industry is reeling from low commodity prices – quite the opposite. Activists could take this opportunity to double down by telling stakeholders that the jobs promised aren't materializing and that companies short of funds will be cutting corners on safety.

Your company needs a strong team of communicators to maintain an external focus on your business goals and objectives, to keep open the lines of communication with the media and the communities where you’re operating and to communicate your commitment to safe and responsible operations continuously and authentically to stakeholders and public officials. The reputation you protect, the trust you build and the relationship you cultivate with the public could save you millions.

While it is not advisable to cut corporate communications or community relations, there could be opportunities for cost savings from advertising and marketing. But, as CEO, you still have a responsibility to drive sales revenue for your company. How do you get the most out of your remaining sales and marketing force?

You need a force multiplier. Effective media relations (earned media) and self-published digital content (owned media) are efficient ways to provide it. In fact, amidst the oil price downturn, one Hill+Knowlton Strategies client, WellDog, introduced a new technical product/service for locating natural gas and natural gas liquids in shale formations and saw a 96 percent increase in 1Q15 revenue over the same period in 2014. In a letter describing this “contrarian-to-the-market uptake trend” to investors, CEO John Pope stated:

“One driver of our WatchDog revenue growth is a media blitz that we began in late 2014. That communications strategy has resulted in high profile coverage of the company and its products and services – and of WatchDog in particular.”

Still, you’ll have threats from other directions. The Wall Street birds of prey will be circling your company, speculating that your financial health isn’t what you say. Maybe a hedge fund manager has decided to short your company’s equity and is spreading rumors about you.

This is a real problem because as your stock price declines your cost of capital is effectively going up. Sophisticated financial communications can help meet these rumors head on and drive a counter-narrative of fiscal prudence, operational efficiency and innovation.

Perhaps most importantly, as the leader of the company you must be able to maintain the morale and the trust of employees. Severe price drops create a scary and distracting environment for employees, particularly those of younger generations who haven’t experienced down cycles before.

Your employees need to understand your strategy to get through this period of uncertainty and you need to secure their focused commitment to execute it. One email from the top will not get the job done (although that is about the extent of employee communications at many companies). In a period of high stress, research shows that attention spans are reduced and people are less able to absorb new information. That is why you need a team of capable communicators who can draft the messages that will resonate with your internal audience and design a plan to deliver and reinforce those messages through different communications vehicles set on regular cadences. Done right, your internal communications will improve productivity and encourage employees to help you identify new ways to increase efficiencies and cut costs – while instilling hope for the future.

So, put the pencil down. Better yet, give your communications function the same kind of personal and financial investment you would give to manage a Level Three crisis incident. If the investment will help you maintain your license to operate, increase sales, reassure Wall Street and win the hearts of your employees – then there really aren’t many ways that money would be better spent.

Michael Kehs is EVP and Global Energy Practice Leader for Hill+Knowlton Strategies

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