Chemicals and Petroleum

Global industry agenda


Unprecedented change confronts the chemicals and petroleum industry – and companies need to reinvent themselves.

Disruptive forces require chemicals and petroleum companies to address higher customer expectations, reshape their enterprises and transform the markets in which they compete. Innovation, knowledge augmentation and ecosystems/platforms are key differentiators.

How can chemicals and petroleum industry leaders seize opportunities today to win tomorrow?

Disruptive forces

Powerful global forces outside the control of any one company are compelling rapid change for the chemicals and petroleum industry.


Digital technologies

Redefining possibilities in the chemicals and petroleum industry, digital technologies will compound disruption and have hyper-exponential impact.


AI icon

Artificial intelligence
and analytics

AI icon

Artificial intelligence
and analytics

  • Supports staff to make decisions
  • Identifies business-critical operational improvements

Blockchain icon

Blockchain

Blockchain icon

Blockchain

  • Improves identity management and distribution
  • Facilitates transformational business model innovations

API icon

Quantum computing

API icon

Quantum computing

  • Solves complex problems
  • Models complicated chemical reactions

IoT icon

Internet of Things

IoT icon

Internet of Things

  • Equips physical assets with digital data
  • Optimizes existing operational processes

Cloud icon

Cloud

Cloud icon

Cloud

  • Allows data to be stored and accessed, and applications run, from virtually everywhere
  • Delivers cost-effective innovation quickly

Cybersecurity icon

Cybersecurity

Cybersecurity icon

Cybersecurity

  • Embeds safeguards into systems
  • Surfaces threats

Cloud icon

APIs and microservices

API icon

APIs and microservices

  • Empowers ecosystem partners to collectively innovate

Mobile icon

Mobile

Mobile icon

Mobile

  • Improves identity management and distribution
  • Facilitates transformational business model innovations

Automation icon

Automation and
advanced robotics

Automation icon

Automation and
advanced robotics

  • Enhances productivity by working autonomously or in conjunction with staff
  • Increases worker safety

Emerging consequences

Each manifestation of disruptive forces has the ability to shape a new future and affect the customer, the enterprise and the market.


Number 1 graphic

Customer impacts

B2B and B2C customer expectations evolve toward "know me – serve me"

B2B and B2C customer expectations evolve toward "know me – serve me"


  • Companies invest in fuel station retail optimization around loyalty, dry goods and services expansion
    ExxonMobil Speedpass+TM and BP BPme app provide new ways to pay for fuel 1, 2

  • Hyperlocal mobile offerings bring the fuel station to the customer
    Several startups (Booster, Yoshi, WeFuel) offer this model 3

  • Customers desire a better buying experience
    81% of B2B buyers would choose a supplier that offers a consumer-like experience over an equally priced alternative that does not 4

Number 3 graphic

Enterprise impacts

AI-assisted asset insights propel operational excellence

AI-assisted asset insights propel operational excellence


  • Digital technologies drive significant benefits
    Repsol and Woodside apply AI for seismic interpretation, prospect valuations and technical data discovery, respectively 13, 14, 15

  • Data is leveraged to improve operations
    Halliburton's global expertise in exploration and production science, software and services is set to ally with Microsoft’s data capabilities. This will help transform the abilities of oil and gas operators. Lessons learned are slated to be applied to reservoir characterization, modeling/simulation, visualization for mixed reality, interactive applications and digitalizing E&P assets 16

  • Organizations are using new operating modes
    Petronas implements enterprise-level real-time data management infrastructure, allowing operators to better manage rig-site drilling operations from remote locations 17

Number 6 graphic

Market impacts

Pure play specialization intensifies the competitive playing field across the energy value chain

Pure play specialization intensifies the competitive playing field across the energy value chain


  • New distribution channels connect suppliers and customers
    Echemi has a B2B platform focused on chemical trading 32

  • New companies offer dynamic analytics capabilities
    Quantico provides data-driven solutions to help find and develop hydrocarbon resources 33

  • New materials accelerate through biotech and manufacturing
    Zymergen uses automation, big data and software algorithms to manufacture high value chemicals 34
    NanoMech uses nanomanufacturing technologies to produce new lubricants, specialty chemicals and coatings
    35

  • Digitization of energy systems promotes new energy sources
    Tesla launches Powerwall, an automated battery that stores electricity generated by solar panels 36
    Total invests in solar power and energy storage
    37

  • Oil field services companies become operators
    Schlumberger buys oil and gas assets 38

Digital differentiation helps enable companies to exceed customer expectations in branding, sales and services

Digital differentiation helps enable companies to exceed customer expectations in branding, sales and services


  • Customers create new business models of selling together
    IBM partnerships with KBR, Weatherford, Schlumberger, Schneider Electric and Flotek expands from maker, channel to crowd, payment, exchange and asset-based models 5, 6, 7, 8, 9

  • Downstream companies enhance products with services
    Monsanto creates FieldView DriveTM, which pulls yield and positioning data dynamically off combines and tractors via sensors and aggregates with weather data 10
    This combination extracts reliable information about product quality and location at harvest time
  • Industry platform plays aim to protect “control points” and foster innovation inside their own landscape
    Schlumberger launches DELFI cognitive exploration and production (E&P) environment and ABB creates the Ability platform to connect to the IoT 11, 12

Number 4 graphic

Business services reconfigure across an expanding portfolio of functional domains (energy, assets, production, customer)

Business services reconfigure across an expanding portfolio of functional domains (energy, assets, production, customer)


  • Oil and gas companies outsource nontraditional activities
    Halliburton offers well completion as a service 18
    Baker Hughes provides geoscience as a service to help evaluate subsurface properties on a basin, field or well
    19

  • Chemicals companies outsource nontraditional activities
    For pharmaceutical chemicals companies, Parchem offers research
    outsourcing services 20, 21
    Spotchemi forms sales teams with chemical industry know-how to find buyers and new markets for chemical products
    22, 23

  • New services beyond traditional back-office outsourcing become available
    Schneider Electric provides energy management as a service 24

Number 7 graphic

Technology advancements create value from new networks in R&D, exploration and production, manufacturing and supply chain

Technology advancements create value from new networks in R&D, exploration and production, manufacturing and supply chain


  • New networks reinvent process through blockchain
    BP, Shell and Statoil (now Equinor) join forces to develop a blockchain-based trading platform 39
    Maersk launches global trade digitization platform (GTD) to digitally enable shipping lanes with blockchain 40
    ING and Mercuria introduce blockchain into commodity trading
    41

  • Companies collaborate in supply-and-delivery ecosystems
    The digital supply chain could create USD 40-70 billion in value in chemicals industry 42

  • New partnerships enhance capabilities
    Evonik enters into partnerships with the University of Duisbury-Essen to focus on digital transformation skills and with IBM to benefit on the latest technologies 43

Providing a good customer experience is challenging


Number 5 graphic

The war for talent escalates with diminishing industry knowledge and increased demand for analytics skills

The war for talent escalates with diminishing industry knowledge and increased demand for analytics skills


  • Companies focus on digital skill development
    Statoil, now Equinor, sets up a Digital Academy and a data science profession that crosses industries (upstream, downstream, new energy) 25
    Evonik enters into a strategic partnership with the University of Duisburg-Essen to focus on people and skills at the center of digital transformation
    26

  • Companies harvest and capture existing knowledge with AI
    Woodside uses the power of cognitive computing to dissect and map dense, complex engineering knowledge amassed over 30 years 27, 28

  • Companies create expertise centers
    ExxonMobil builds a 10,000-employee campus that encourages employee collaboration and includes exploration, refining and chemicals personnel 29
    FMC Technologies moves 1,000+ employees into a new HQ facility, consolidating 11 Houston facilities into a single campus
    30, 31

Skillsets are not transforming fast enough


  • People skills have overtaken regulatory aspects as the key concern
    64% of CSPs think talent will be a key influencer on their enterprise in the
    next 2-3 years
    32

  • Digital talent is threatening to become the major bottleneck of digitization in the
    telecom industry
    Operators say limited employee skillsets is the second largest barrier to software-defined network (SDN) adoption 33

Pressing challenges

Acknowledge and act upon industry challenges
in the near term to stay competitive.


Customers, suppliers, partners and employees expect to deal with an attractive business

Customers, suppliers, partners and employees expect to deal with an attractive business


  • Big data analytics will be required to understand needs and tailor offerings

  • Collaboration of brands will generate stickiness

  • Technology to distribute expertise and capture IP will be the norm

  • A modernized business and workplace will cater to millennials

  • Future-ready firms will de-risk capital

Performance becomes unsustainable without an end-to-end digital operating model

Learn more

Performance becomes unsustainable without an end-to-end digital operating model


  • Seamless operations and an efficient, integrated supply chain will become essential

  • Competition will shift from economies of scale to economies of insight

  • Ecosystems will enable solutions and outcomes, not just products

The key to overcome volatile dynamics is organizational agility

Learn more

The key to overcome volatile dynamics is organizational agility


  • Ability to combine and recombine services quickly is a necessity

  • Adaptiveness to market changes will separate winners from losers

  • New revenue streams will create demand

  • Globalization and localization will coexist in supply chain, skills development and relationships

Transformational opportunities

Technology-enabled opportunities empower your organization to address pressing challenges and compete in the marketplace.


Scale business
model innovation

Learn more

Scale business model innovation


Systemically evaluate build/buy/partner/invest/incubate ”as a service” options

Combine multiple digital technologies across each business component

Drive product and new service innovation through ecosystem
digital platforms

Maniacally focus on value creation

Accelerate knowledge acquisition, capture, retention and augmentation

Learn more

Accelerate knowledge acquisition, capture, retention and augmentation


Obtain new sources of data on customers and proactively anticipate customer needs

Actively support the development, maturation and use of new methods such as AI in knowledge capture and deployment

Create learning organizations

Commit to an organizational culture
of connectivity

Learn more

Commit to an organizational culture of connectivity


Embrace risk-taking and daring by promoting sharing between customers, suppliers, partners and employees to digitally drive value creation and innovation

Build new networks and platforms using blockchain, AI and IoT

Implement digital supply chain ecosystems for real-time information exchange

Start here to assess your readiness for
the future

Critical question 1

Innovation

  • What are your distinctive capabilities – and just the nondifferentiated ones?
  • How is your organization driving innovation to create new revenue streams?
  • What is your role in ecosystem platforms?

Critical question 2

Knowledge

  • How are you harnessing the vast amount of customer data already sitting within your business and beyond?
  • What strategies do you use to attract and retain your best talent?
  • How are you leveraging technology to distribute critical expertise and capture intellectual property?

Critical question 3

Connectivity

  • How does your company meaningfully connect with customers?
  • What have you done to redefine operations and processes across your organization and your partners?
  • What networks has your organization built with IoT, AI and Blockchain?

Take action

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