Industry 4.0 Holds Key to Oil and Gas Industry Survival, According to RUDN University Study
A recent study conducted by economists from RUDN University has highlighted the crucial role of Industry 4.0 technologies in ensuring the survival of the oil and gas industry. The research analyzed data from Russia’s largest oil and gas companies during the economic crises of 2020 and 2022, and proposed an algorithm that would enhance the industry’s sustainability. The study was published in Resources Policy.
The COVID-19 pandemic dramatically drove down oil prices by nearly 70% in the first three months of 2020. In 2022, the industry faced yet another crisis, but contrary to expectations, energy prices increased, adversely affecting the oil and gas sector.
To better understand the performance of large oil and gas companies, the RUDN University economists examined the methods employed in the fourth industrial revolution, known as Industry 4.0. This revolution encompasses cutting-edge technologies such as artificial intelligence, the Internet of Things, and Big Data. The economists found that these advanced methods of data collection and analysis can significantly contribute to the industry’s resilience during crises, bringing order to corporate reporting and government control.
According to Elena Popkova, a Ph.D. in Economics and a professor at RUDN University, oil and gas companies prioritize presenting attractive reports on sustainable development to improve their reputation during times of crisis, rather than focusing on creating social and ecological advantages. Consequently, recent research has been aimed at identifying imperfections in the corporate reporting of oil and gas companies.
The study conducted by RUDN University economists scrutinized the reports of two major Russian oil and gas companies, Lukoil and Gazprom. The researchers utilized the trend analysis method, which compares each report position with a number of similar positions from previous periods. By identifying the main tendency of change, known as the trend, the economists evaluated the impact of Brent oil prices during the economic crises of 2020 and 2022. The obtained results were then compared with theoretical models, leading to the formulation of a methodology for sustainable development in the oil and gas sector.
The proposed algorithm by RUDN University economists consists of three key steps. The first step involves automated data collection, accomplished through the utilization of the Internet of Things and Big Data. This method enables the generation and systematization of extensive data sets. The second step entails data analysis using artificial intelligence. Finally, comprehensive reports are generated by summarizing the obtained results, with the aid of artificial intelligence as well.
The breakthrough technologies of Industry 4.0 play a significant role in enhancing the resilience of the oil sector during crises. A management method that relies on data sets automates corporate accounting and government monitoring. Sustainability reports can stimulate the sustainable growth of oil and gas companies by enabling the public and private sectors to track their activities. This will also facilitate comparisons of the contributions made by different companies towards the sustainable development of the entire sector, as stated by Elena Popkova.
The findings of this study provide valuable insights for the oil and gas industry, highlighting the importance of adopting Industry 4.0 technologies to ensure survival and resilience during times of crisis. By embracing automated data collection, data analysis using artificial intelligence, and comprehensive reporting, companies in this sector can navigate challenging economic circumstances and contribute to sustainable development.