Oil, Gas Looks to Create Value in Digital Transformation
The oil and gas industry’s digital transformation is at an inflection point.
“We’ve invested a tremendous amount of resources into the standards, the equipment and collecting the data … today, we’re at the leading edge of data, but we are not at the leading edge of data-based decision-making,” Ahmad Al-Knowaiter, Saudi Aramco’s chief technology officer, said during the CERAWeek by IHS Markit conference in Houston this week.
He said oil and gas has some of the largest data sets in the world, adding that Saudi Aramco generates 3 billion data points per day of surface data alone. Subsurface has similar numbers.
The question becomes how to integrate all the data to make better decisions.
“We have a tremendous amount of data around the health of our equipment … it just tells the operator in the field ‘you’ve got a disaster out there. Turn off the piece of equipment,’” said Al-Knowaiter. “That doesn’t help me as a corporate leader. Data can help make those decisions better. That’s the next level the industry is struggling with today.”
Need for New Skillsets
Despite oil and gas companies expressing that automation and digitalization doesn’t mean they’re ready to ditch their existing workforces, employees often fear their jobs may be at risk as more tasks become automated.
“It’s the underlying nature of change, the change management journey that any individual goes through,” Lal Karsanbhai, executive president for Emerson’s Automation Solutions, told Rigzone. “It’s a cycle of fear and uncertainty and 'we’ve done it this way for 50 years. I know this works.’”
He said depending on the degree of digital transformation the industry adopts, a mix of new skillsets will be required.
“It’s going to require a little bit of time. You’re going to have to train the workers to do something new,” Karsanbhai said. “Workers have inherent knowledge and understanding of the process and have been doing it for many years, but can be trained to do something else within this new world.”
Emerson’s Automation Solutions chief technology officer Peter Zornio added that after years of stalled projects due to the industry downturn, the buzz around the upstream sector now involves building projects.
“They are dying to find welders, pipe fitters and electricians,” said Zornio. “There’s a huge gap in skilled trade levels.”
Start Small and Scale
When it comes to successfully executing the digital transformation, Karsanbhai warns against “falling in love with big numbers and opportunities.”
“You hear all of the producers talking about millions of dollars of savings or billions of data points, but how do you monetize that,” he said. “We’re seeing many of these companies struggle with how to monetize the opportunity.”
Karsanbhai’s answer is in the approach.
He believes large amounts of data can be overwhelming.
“Start small and scale,” he said. “Start small, prove value early and then scale up. Those who we see doing that have been pretty successful. But it’s small ball. You have to be able to look at a big picture and hit singles and doubles.”
He added that he hasn’t seen any of the supermajors “taking a swing to the fences” and being successful.
“I’ve been in the room with the chief technology officers for a lot of these companies … they get stars in their eyes in terms of returns,” said Zornio. “What they’re not doing is spending enough time listening to their operations people.”
Some have even admitted they made a mistake in putting together a digital transformation team within their own company and making them responsible for coming up with the business case and rolling out the solution.
“They can’t own the business case. The operations people have to own the business case. Those are the people who are responsible to the shareholders at the end of the day,” Zornio said.
It’s important to note that not all operating folks are created equal, said Karsanbhai.
“There are those who learn forward on technology. There are some who are more innovative,” he said. “Forward leaning ops will take the swing for the single. And you realize value with those – they’re the ones who build a bridge across the chasm.”
And the other operating people are much more likely to believe in them, Zornio added.
“They’ll become an internal advocate.”
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Senior Editor | Rigzone