Digital transformation prospects for the offshore project supply chain in the Russian Arctic

Abstract

The article provides a comparative digital maturity assessment of two leading petroleum companies licensed for Arctic offshore exploration and production (PAO Gazprom Neft and PAO Rosneft) in a ‘hardware-software-hardware’ succession as well as a comparative analysis with leading practices in offshore project logistics. It identifies approximate cost-cutting limits of digital transformation in Arctic projects and factors limiting cost efficiency of offshore projects in the Russian Arctic. The goal of the study is to identify a potential increase in digital maturity and scope of digital transformation in the Arctic project supply chain in Russia. The study is based on modern approaches to sustainable supply chain management in oil industry and supply chain streamlining for offshore projects. The article identifies a group of factors limiting cost efficiency of Arctic projects, specific to the Russian Arctic. Conclusions and recommendations: the study has shown that the main factor limiting digital transformation of offshore projects in the Russian Arctic is the increasing technological underperformance of oil service companies. To build capacity in digital maturity of the offshore project supply chain, it is necessary to focus on disruptive technologies that could significantly lower the cost of oil production in the Arctic area.