Internet's impact on the oil and gas industry: reality vs. hype.

Stuart Diamond CSC Index Dallas

Depending on which reports you are reading about the Internet, you can draw one of two conclusions. The first is that the Internet changes everything. The second is that the Internet doesn't change anything.

This divergence is apparent in a recent issue of Wired magazine.

Amidst the enthusiastic articles heralding a new digital age, an advertisement from Lotus Development, the software company, said: "From a capitalist point of view, the Internet has had about as much impact as the $2 bill."

My firm decided to see what specific impact, if any, the Internet is having on the oil and gas industry. Our research consisted of in-person and telephone interviews at 14 companies, including diversified oil and gas compa: nies, petrochemical firms, and oil field service/supply companies.

We supplemented our interviews with data from our firm's research and advisory service, as well as extensive literature searches. In addition, we visited industry websites to analyze how oil and gas companies are creating an Internet presence.

Our main conclusion: The oil and gas industry is taking a tentative, wary stance regarding the Internet. Many executives are skeptical about the Internet's relevance to oil and gas, and those who are pursuing Web strategies are, for the most part, simply automating manual procedures or re-automating tasks over the Internet with little to show in the way of business benefits.

Stuart Diamond

The oil and gas industry is taking a tentative, wary stance regarding the Internet. Many executives are skeptical about the Internet's relevance to oil and gas, and those who are pursuing Web strategies are, for the most part, simply automating manual procedures or re-automating tasks over the Internet with little to show in the way of business benefits.

Most of the firms We interviewed have websites, but the content tends to be recycling of existing printed literature, such as annual reports and product specifications.

Industry's Internet wariness

Despite the reality and power of the Internet, few oil and gas companies are fundamentally re-thinking how they conduct business and what opportunities are available through this new medium.

On the other hand, there is wide general use of Intranet applicationsthat is, networks that operate solely within an organization--for dispensing benefits information and employee communications. While these applications are interesting, most companies are squandering their limited …