Digital Evolution in Oil and Gas: Barriers, Successes, and the Future
A recent panel discussion highlighted the industry’s progress in achieving significant digital advances. Barriers remain, however, and the measurement of success is being defined in this evolving technological step change.
As the energy industry balances a traditional focus with emerging technologies and solutions during its transition into a digital ecosystem, many companies are evaluating which approach to take into the future. Oil and gas companies are employing a range of enablers, ranging from increased automation, integration, and remote monitoring to newly emerging technologies.
In a panel discussion during the ENGenious Online Symposium and Exhibition for Energy Innovation, speakers highlighted projects taking advantage of the digital ecosystem, along with hurdles they face in achieving digital transformation and how they are measuring success.
“We are going through an era known as compounded disruption, which means the oil and gas industry is being impacted by several factors,” said Satyam Priyadarshy, Halliburton’s technology fellow and chief data scientist.
“If you look at daily life, we use three technologies commonly: search, face recognition, and mobile,” said Priyadarshy. “We can’t live without them, they are very mature technologies.”
Priyadarshy said adopting technology has been slow in the industry and noted there isn’t a standard well-developed search engine for the industry such as Google and utilizing industry workflows on mobile applications remains a struggle.
The transition is further complicated as the industry moves from its current state of data comprising ownership, silos, provenance, and multiplicity, to advanced technologies consisting of Cloud-based networks, drones, robots and immersive reality.
Oil major BP recently said it aims to shed its reputation as an international oil company and construct a new one as an integrated energy company that will spend $5 billion annually on low-carbon technologies while also setting a target to reduce its overall oil and gas production by 40% by 2030.
It recently launched a partnership with Microsoft to bolster efforts to drive forward the digital transformation while also meeting their respective carbon-emission goals.
“We’re undergoing probably the biggest transformation in our 112-year history,” said Patricia Rangel, BP’s chief product owner, upstream digital.
Rangel said BP’s digital transformation is the key enabler for its plan, combining new ways of working with advanced digital solutions. Best practices that have enabled include moving to end-to-end value chains, focusing on an integrated business transformation, and finding agile ways to work.
BP introduced its Global Collaboration Centre in 2017, which enables experts with access to real-time data digital solutions to deliver value to its global operations. The global collaboration concept is being expanded to other parts of BP’s business.
From a technology perspective, BP also introduced its Apex and Vertex digital twin production solution, which has delivered significant value to the company.
Another BP digital application is Skybox, which supports materials management and work preparation, particularly for offshore work through an Amazon-like user experience. The app was developed and deployed globally to all of BP’s offshore sites in less than a year.
BP is also working with Cognite on an offset well analyzer, a digital system used to visualize offset wells data across the business.
Engineering and supply chain companies are also working on projects.
Subsea engineering and technology company Oceaneering launched its OceanSMART Cargo Logistics and Maritime Technology business in June, which aims to eliminate waste and increase transparency within the bulk commodity cargo logistics industry.
Company CEO Roderick Larson said OceanSMART collects data around port efficiency to plan trips to avoid traffic and avoid demerge cost.
Oceaneering is also working with remote piloting and autonomous vehicles to help de-man rigs and subsea resident vehicles, where a vehicle is left behind to communicate via transponder beacon.
Cognite CEO John Lervik said the world needs industrial digitalization solutions, both for environmental reasons as well as global economic development.
The artificial intelligence (AI) software-as-a-service (SaaS) provider is working on a maintenance planning project, which reduced risk and time, and a hybrid AI solution, which can help integrate production optimization.
Ananya Roy, co-founder of geoscience data company EarthPeel, said to truly be part of the digital ecosystem, the industry must be more radically open, which means learning to look beyond its industry.
EarthPeel is building a digital twin of the earth designing itself for the modern web and building on established open-source libraries. The company’s tools are open-sourced and it welcomes community contributions
Although countless projects are underway, key challenges remain.
Barriers to Transition
Oceaneering’s Larson said among the key barriers his company faces is inadequate security infrastructure/protocols on existing systems which were built without adequate security features and switching costs.
“I think there is a technology debt out there, our infrastructure is catching up to the modern uses that we want to apply,” Larson said. “So, we’ve got a lot of expense yet to be incurred to get up to where we can deploy.”
Larson adds another key challenge is a poorly articulated value proposition.
“If we all believed in the value and understood the value of reducing carbon and the value of the safety of not sending people offshore on helicopters … If we were able to articulate that well, I think we would be able to get past spending money on a security infrastructure and incurring those switching costs and the redundancy we need to get past those fears,” Larson said.
From a software perspective, EarthPeel’s Roy sees issues like closed-source software and limited data-sharing as major hurdles.
“Closed-source software is like an old castle with a moat around it, Roy said. “No one can see inside, and it keeps good people and ideas out. One difference is that the software built on smartphones uses open-source software.”
Roy added open-source software means making the same coding choices that companies such as Google make, which focuses efforts on building something new instead of duplicating what already exists. It also means more people use the software on different apps, facilitating rapid testing and community contributions for improvement. “Opening data to everyone will be key to seeing value from tools like artificial intelligence and machine learning,” she added.
Cognite sees similar issues with legacy data formats and application lock-ins. “Unfortunately, we still have lock-ins that prevent the industry from taking full advantage of digital,” said Lervik.
He added, “As a result, many operators still need to concern themselves with file formats instead of focusing on data access via modern application programming interfaces (APIs). On top of that, operators are also locked-in with the vendors’ proprietary applications which do not allow for inoperability between systems applications.”
Lervik believes the industry should focus on providing data via open APIs and open specifications, which allows for operators and suppliers to compete for best in class rather than being locked in by older applications.
Data quality and security is also a key success factor, especially when it comes to scale.
“Many people don’t really talk about scale because they talk about individual single applications where you can fix it in a spreadsheet or manually. But if you are going to scale digitalization, you also need to scale the handling of the easy.”
Lervik said the industry needs organizational maturity when to it comes to procuring and driving adoption of SaaS. He explained the industry has a focus on one-off projects that work well and deliver software, which may not deliver continuously over time. SaaS, however, is constantly being updated to deliver over time.
“We need to move from project-based to product-based software,” said Lervik.
Technology must be built to evolve, said Larson. It must be able to scale, upgrade, and adopt the latest, best-in-class methods, data services, and hardware.
Larson offered a cautionary observation about adding more technology than is needed.
“Don’t pollute the minimally viable product with low-value bells and whistles,” he said. “When we get excited about all these things we can pile on, it slows the development process, it clouds the value that you’re trying to deliver, it confuses the user. If we really wanted to be agile, we need to keep it clean to make it easy to determine the value and deliver the value quickly.”
Larvik agreed success lies with the ability to scale digital solutions across assets with minimal effort and focusing on concrete, quantifiable value. He adds success also lies with moving away from proofs of concept to operationalized solutions.
Another measure of success, said Roy, is when the industry can expect the same speed from its data that the public expects from its phones. “Can every researcher at an oil company instantly access their own seismic data? Or do they have to call people to find out what data exist and where they can find it?”