How digitalisation drove sustainability and financial performance for Norwegian energy giant Equinor

Image: iStock/jjnogueron

Equinor, Norway’s energy giant formally known as Statoil, is majority-owned by the Norwegian government and has operations in thirty-six countries around the world. It offers an excellent case study for the journey of digital transformation and what it can achieve in terms of a company transformation.

Åshild Hanne Larsen, CIO and Senior Vice President Corporate IT, Statoil ASA, Ouriel Lancry Partner, Bain & Company Inc., and Mehran Gul, Project Lead, Digital Transformation of Industries at the World Economic Forum, recently wrote about Statoil’s path to digitisation in “A step-by-step guide to digital transformation”.

You can read the full digitisation report here.

They didn’t gild the lily, writing that, “transforming a company into a digital enterprise is tough. Many companies have had some success, but few have completed this metamorphosis. No comprehensive playbook, or even checklist, exists for executives to follow”.

According to Equinor, however, and the authors’ WEF case study, the transformation has been a successful one, with the company trumpeting that, “digitisation is on everyone’s lips these days—but at Equinor, it’s already part of our DNA. Our story is one of innovation and technological development”.

The company goes on to say that the technology is not an end in itself.

Rather, Equinor is investing in digitisation, “not because digitisation and innovation are goals in themselves, but because digitisation is a key enabler for our strategy. We will produce oil and gas more effectively with lower greenhouse gas emissions, be a leader within carbon capture and storage, and invest substantially in renewable energy”.

Trine Svalestad, head of digitalisation on the Johan Sverdrup field, says that digitisation is “about streamlining and being more efficient,” which, in turn, frees her up from repetitive tasks, allowing her to challenge herself and pursue innovation. She continues:

“Our job is to use digitalisation to increase safety, improve earnings and reduce carbon emissions on a field which, at peak production, will account for 25 percent of all Norwegian oil and gas production.”

That’s a theme echoed by Bjorn Otto Sverdrup, Senior Vice President of Sustainability at Equinor, who told Forbes, “we really believe that technology and digitalization will turn the industry upside down, for the better. Technology has the potential to rapidly bring down costs, make operations safer, and lower our carbon footprint. And digitalization is a key priority”.

And Equinor is using technology to be more sustainable too, he said, noting the company is using “sensors that can detect methane leaks at the wellsite and provide real-time data to understand what’s really happening”. This helps the team fix problems as fast as possible when they appear.

“It’s not just about running a smarter business, it’s also about running a more sustainable business,” Sverdrup adds.

Looking back to Larsen and her colleagues’ case study at the WEF, it’s clear that as Statoil, Equinor was asking the very same questions many companies are now asking themselves. The four questions Larsen and her co-authors said they asked were:

    1. How do we balance investment for today’s opportunities with investment for the future?
    2. How do we win the war for digital talent?
    3. How do we effectively fund digital initiatives?
    4. How do we drive digital initiatives to scale?

This is where the true value of Statoil sharing its path to digitisation becomes apparent. Larsen, Lancry, and Gul said they quickly realized those questions “centred on four building blocks”.

    1. Where your business should be going (digital strategy);
    2. How that fits what your business does (business model);
    3. What you need to get there (enablers) and;
    4. How you will manage change to reach your destination (orchestration).

You can read the full digitisation report here.

This then is how Equinor transformed itself into the digital business it is today.

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