Researchers from Rossiiskii Universitet Druzhby Narodov (RUDN) University unveiled an algorithm to enhance economic sustainability in the tumultuous industry. The study analysed data from Russia’s largest oil and gas companies between 2020 and 2022 and leveraged the integration of 4.0 technologies like artificial intelligence (AI), Internet of Things (IoT), and Big data. 

The study, published in Resources Policy, was prompted first by the crash of oil prices in the initial months of the global pandemic, when prices fell by nearly 70%. 

Following the pandemic, there was a global surge in demand which caused energy prices to soar – a trends which continues to this day. This shift has paradoxically had an adverse effect on the industry as well, according to the researchers. 

“Oil and gas companies aim not to create social and ecological advantage, but to issue attractive reports on sustainable development to improve their reputation in times of crisis. Therefore, recently the attention of researchers has been directed to imperfections in the corporate reporting of oil and gas companies,” said Elena Popkova, Ph.D. in Economics, and professor at RUDN University as reported by Techxplore.

Popkova found that adoption of methods from Industry 4.0 could significantly bolster resilience in times of crisis. Further, the methods for data collection and analysis could bring order to corporate reporting and government oversight. 

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The algorithm devised by RUDN University economists has three main steps. First is an automated collection of data using IoT tools and big data, generating extensive data sets. After this, AI is used to analyse the data, and finally, generate comprehensive reports based on its findings. 

“The breakthrough technologies of Industry 4.0 significantly increase resilience to crises in the oil sector. A management method based on data sets will automate corporate accounting and government monitoring. Sustainability reports can stimulate the sustainable growth of oil and gas companies by tracking their activities by the public and private sectors, and will also allow comparing the contribution of different companies to the sustainable development of the entire sector,” said Popkova.