This is a series of guest posts by author and industry-insider Jim Crompton. Crompton is an Energy Advisor for Rocky Mountain Innosphere and an independent consultant through Reflections Data Consulting LLC.
Houston, we have a problem!
While it makes great material for Dilbert cartoons, the often strained relationship between engineering and business groups with their internal IT departments can be a serious barrier to the adoption of emerging technology. This challenge is more than just a common complaint around the coffee pot at work, but a potential rift that will limit just how successful and efficient both groups can be – and in today’s market, efficiency is king.
Advances in field automation, real-time data acquisition, and earth and reservoir modeling systems suggests that the digital oilfield has become a reality. More petroleum engineering and earth science intellectual property is coming in the form of software and data, and new engineers are entering the industry with a high degree of digital literacy and comfort with web-based technology. They have high expectations of each digital tool that they use, and expect their experience in the workplace to mimic their experience with social media and smart consumer tech. Technology has been around to improve and make the rest of their life more efficient, so the expectation for corporate IT departments to do the same is at an all-time high.
But significant gaps are continuing to show up in the digital oilfield, including: lack of reuse of applications and knowledge, fragile data integration, poor data quality, cybersecurity vulnerabilities and lack of end-to-end system design. The sheer size of supermajors and large independents often require that IT departments become sources of compliance and standardization instead of what they should be: centers of innovation. Smart people are coming up with clever ideas throughout organizations of all sizes, but the current divide between the business and IT can quickly end with barriers and opponents, rather than champions.
More physical constraints = more need for innovation
Let me share my assumptions about the industry at the start. Despite the current low energy prices, most forecasters predict the world will need more energy in the future, as more people in developing countries reach for the quality of life that we enjoy. While there will be advances in alternate energy to increase their value and market share, most of the needed energy will have to come from fossil fuels. That means that there is a future in oil & gas. But while there are generous sources of hydrocarbon resources left to find and produce, these prospects are in more complex reservoirs, in more remote locations and present more difficult technical and economic challenges. Expectations for a safe industry and a more environmentally benign operational footprint will only grow and the industry must earn the social license to operate from the communities where we work. Even with the big crew change in the demographics of the industry, the industry is not running out of smart people, but it is losing a great deal of experience during this transition.
For the IT world, I expect that there will be more data, more sensors, more automation and control systems in the oil patch. But the pace of development of commercial and social IT will be greater than the pace of industrial systems, furthering the divide between expectations and the adoption of emerging technology. IT departments will have to learn how to adopt and adapt from outside the industry rather than build it all themselves and get over the not-invented-here culture that exists. There will be a growing need for analytics as companies need to understand the inefficiencies of current practices, how to produce bypassed hydrocarbon reserves and how to optimize complex processes and how to solve the technical challenges that my generation has left behind.
The digital oilfield represents advances in both information intensity and connectedness of components. As for information intensity; there will be a vast increase in the number and variety of sensors, field automation, smart equipment, increases in documents, in the size of seismic surveys and reservoir models. We will see the maturing of remote decision support and surveillance centers, remote control of some field processes and more tightly connect supply chains. The ability to cope with and leverage the amount of digital data, smart equipment and software applications will be a critical differentiator between the companies and individuals that succeed in this challenging environment and those who fail.
For any two groups to work well together they have to understand each other, and in the coming weeks I will introduce each stakeholder and then suggest ways to bridge the growing chasm. Coming up next: getting to know your IT department.