Digital Oilfield Outlook Report Opportunities and challenges for Digital Oilfield transformation
. G A s n e m e i S f o s k r a m e d a r t d e r e t s i g e r e r . a s o r e g d o l l o s h n e e v i t m e c i S e p e s h e r t r d i n e a h t s o n t e g m n e o i l S e . b c s n k I r e r a a m w e t c f i o v S r e t s n r e o m s e k g r a a n m a e d M a e r l t c d y e c r e f i e t L s t i c g u e r d , s o r k P r s a n m e e d m a e i r S t r 5 e 1 h 0 t o 2 l l © A
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Key insights JWN’s second annual Digital Oilfield Outlook Report , conducted with partners Siemens, Storm Telematics Telematics and GDM G DM Pipelines, has revealed a number of positive trends emerging in the implementation of digital technologies in the Canadian oil and gas industry. The survey of more than 350 industry professionals found that awareness and knowledge about the various digital technologies available has improved, and feelings about the overall benefits of Digital Oilfield implementation remain high. Emerging digital technologies are seen to be increasingly market ready an d the adoption curve has moved forward, while concerns about cyber security have subsided. But important barriers to adoption remain, both financial and organizational. Both vendors and users of the technologies need to become more proactive in making the business case for technology implementation, and measures must be taken within organizations to promote the use of the technologies if the full benefits of the Digital Oilfield are to be realized.
• Digital Oilfield technology implementation starts with
constraints. This could be alleviated as prices rebound
knowledge about the technology offerings and the po-
and the cost of Digital Oilfield technologies continues to
tential benefits they bring to an organization. The number
drop as it moves along the maturity curve. Existence of
of survey respondents who stated they had insufficient
organizational barriers was the second highest ranked
knowledge to answer questions about two specific Digital
impediment to adoption.
Oilfield use cases, Field Productivity and Fleet Manage-
• Another significant finding was the decrease in those
ment, declined six per cent and eight per cent respectively,
respondents who felt cyber security could be a deal
a positive indication the industry is becoming more in-
breaker in adoption of Digital Oilfield technologies. As a
formed about technologies available.
barrier to implementation of Digital Oilfield use cases, it fell in rank from a tie as the second biggest impediment
• In a deeper dive into the Field Productivity and Fleet Management use cases, it was found that respondents
in 2015 to the fifth-ranked barrier in this year’s report.
perceived both to have matured and moved significantly
• There is often often a disconnect between people in different
along the adoption curve. The year-over-year compari-
seniority groups and functional groups within organiza-
son shows the perception of Field Productivity and Fleet
tions as to the benefits and barriers of Digital Oilfield
Management technologies’ maturity and highly proven
technology implementation. A breakdown of organiza-
market readiness jumped by 27 percentage points. As
tional silos and a better alignment of interests among
many in the industry remain tentative about Digital Oil-
the various groups could go a long way toward toward moving
field technology maturity and uptake remains sluggish,
the adoption of Digital Oilfield technologies forward.
• There is a strong strong case to be made that the biggest
this is an important consideration going forward. • The top ranked ranked benefits of Field Productivity Productivity were increased increased
hurdle slowing adoption is not technology related, but
labour productivity, increased asset uptime and improved
rather business related. There remains a lack of a clear
safety, while those for Fleet Management were reduced
vision in many respondent’s minds as to the benefits
maintenance and repair costs, improved safety and increased
the Digital Oilfield can deliver, suggesting the need for
asset uptime. This indicates that while boosting efficiency is
a bottom-line business case to be made to move im-
paramount in today’s challenging price environment, environment, safety
plementation forward. Secondly, organizational barriers
remains a top-of-mind issue in the industry.
need to be overcome, an indication that companies lack
• The biggest perceiv perceived ed barrier to implementation is iden-
sufficient expertise or clear leadership to drive a greater
tical to last year’s across the board response: budget
level of implementation. 3
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Contents Siemens sponsor message ..........................................................................................................................................6 Storm Telematics sponsor message.........................................................................................................................7 GDM Pipelines sponsor message ..............................................................................................................................8 Executive summary ......................................................................................................................................................10 The productivity imperative................... .................... .................... ..................... .................... .................... ............... 11 The digital opportunity ..................... .................... .................... ..................... .................... .................... ..................... 12 Digital Oilfield successes ............................................................................................................................................14 What can the Digital Oilfield do? ................... .................... .................... ..................... .................... .................... .... 18 Survey
methodology...................................................................................................................................................20
Early returns: Awareness since 2015 has increased .................. .................... .................... ..................... ......... 23 Perceptions of Field Productivity technologies: The needle is moving .................... ..................... ......... 24 Key benefits of Field Productivity technology adoption: What’s not to like? .................. .................... 26 Key barriers of Field Productivity technology adoption: Not so fast .................. .................... ................ 27 Field Productivity case study: Access to data when it’s needed .................... .................... .................... ... 28 Field Productivity case study: Ending the paper chase.................... .................... .................... .................... 29 Perceptions of Fleet Management technologies: Solidifying its strong case .......................................30 Key benefits of Fleet Management technology adoption: More than fuel savings.................... ......... 32 Key barriers of Fleet Management technology adoption: Some roadblocks remain ................... ...... 33 Fleet Management case study: Driving down costs and optimizing with analyti cs.................. ......... 34 Conclusions and recommendations ..................... .................... .................... .................... ..................... ................ 35 Field Productivity case study: Virtual training................. ..................... .................... .................... .................... 36 Fleet Management case study: Model behaviour ............................................................................................40
5
Message from
I
t’s been nearly two years since global crude oil
More and more, oil and gas executives are
prices declined in response to increased global
starting to look beyond their own markets and
supply, and the industr y is still reacting to the
geographies to seek out lessons learne d from the
changes that have been imposed on it. A series
most innovative companies from other industries.
of technical innovations brought light tight oil to
At Siemens, we’ve helpe d thousands of or-
market and introduced a fundamental change to
ganizations across multiple industries gain more
the supply of crude oil that, as microeconomic
value from their data and documents by taking
theory would suggest, reduced market prices
a life cycle approach to technical information.
accordingly. If the crude oil market reacts like
In fact, connecting the digital thread from an
the natural gas market did to shale gas in the
initial idea, through its realization, to oper-
2000s, higher prices may not return anytime
ational utilization has helped organizations
soon. An appetite for innovation has arrived in
significantly improve margins and compete
the industry to react to these new conditions
more effectively on the global stage. The com-
that have not been seen in decades.
mon eleme nt was the need for rapid access to
JWN’s 2016 Digital Oilfield Outlook Report pro-
complete, correct and consistent information
vides an opportunity to examine the progress of
to become more efficient, regardless of prod-
that innovative spirit on what’s working well and
uct or process.
what isn’t, and suggests how we hold the gains
This is the essence of the Siemens Digital
made to date as well as continuously improve.
Enterprise and its application to the Digital Oilfield.
6
Message from
T
he challenges that producers and suppliers
one in value in comparison to all other GPS fle et
are experiencing within the energy sector
management systems in North America. A con-
should not come as a surprise to anyone
tributing factor to our success is our approach to
living in North America today. There are constant
view your organization as an integrated system,
downward pricing pressures being placed upon
to obtain the granularity required to measure
everyone within the value chain. This combined
the true cost of inefficiency.
with increased costs, while at the same time hav-
Storm’s proprietary efficiency algorithms are
ing to do more with less, is placing significant
used to create visualizations based upon descrip-
strain on all stakeholders. With mounting chal-
tive analytics, which focuses on the historical
lenges comes opportunity to re-engineer the way
performance and the reasons behind past success
you have managed your fleet, a ssets and mater-
or failure; diagnostic analytics, which is focused
ials in the past. The 2016 Digital Oilfield Outlook
on determining the root cause of cer tain perfor-
Report will hone in on a nd demonstrate the im-
mance outcomes; predictive analytics turns your
mense opportunity to maximize your operational
data into actionable information by determining
performance by leveraging tools and data to pro-
the probable future outcome of an event; and fi-
vide greater insight into the performance of your
nally prescriptive analytics that synthesizes the
organization to help solve the problems many or-
data and then suggests de cision options to take
ganizations are facing today. Storm Telematics
advantage of predications.
provides a holistic view over everything related
In today’s economic environment, data must
to your fleet, assets and materials by leveraging
be collected, blended from multiple sources,
and optimizing the data collected from the use
cleansed and mined in order for true fleet, asset
of enabling technologies such as GPS, radio fre-
and materials optimization to occur. An organiza-
quency tagging and analytics.
tion cannot become efficient if they do not know
Storm Telematics is extremely proud of the
where they are inefficient, and Storm Telematics
Frost & Sullivan Customer Value Leadership Award
is leading the way to bring forward best prac-
it received in 2016 that ranked Storm as number
tices in measuring the true cost of inefficiency.
7
Message from
W
ith our industry facing increasing
companies are looking to quickly and seamlessly
pressure to do more with less, now
integrate newly acquired assets into their exist-
is the time for us to redefine our
ing field programs, manage the abandonment
approach and embrace technology as a means
of inactive assets or enable field personnel to
to improve operations. The second annual Digital
make decisions in real time, these efforts may
Oilfield Outlook Report is leading the way as
be crippled or even halted without access to
organizations look to find new and better ways
proper information.
to become more efficient and improve field
As we look to the future, GDM is poised to
productivity.
help companies navigate the Digital Oilfield com-
At the heart of any successful Digital Oilfield
plexities by finding better and more efficient
implementation is access to comprehensive asset
ways to use information to minimize re-work,
intelligence. This includes accurate, consistent
maintain historical information that is critical to
information that can be used across multiple plat-
future operational success and ensure that in-
forms to gain a holistic picture of operations and
formation is readily available when and where
perform analytics to improve efficiency. Whether
it is needed most.
8
Grow your FULL PAGE business.JWN AD OUR COMPANY JWN has been Canada’s most trusted source of information, insight and intelligence on the energy industry for over 75 years. Buyers and influencers depend on the insight delivered by our products to make informed decisions that affect Canada’s oilpatch and the construction industry in Alberta. CUSTOM REPORTS AND CONSULTANCY Need specific research? The JWN analysis team can build custom reports focused on market intelligence, company benchmarking, cost studies and more. For more information please visit us at jwnenergy.com
Executive summary The pall that settled over the oil and gas industry after
emerging industrial Internet of Things (IoT), which lever-
the global price collapse in mid-2014 has not abated—in
ages ever cheaper, ubiquitous connectivity, data storage
fact, in some ways it has only deepened over the past
in the cloud and analytics.
year. Amid the pullback in investment, the collapsing rig
If there is hope for a reinvigoration of the Canadian oil-
counts, the job losses and bankruptcies, the oversupply
patch, short of higher prices, the Digital Oilfield, in its many
overhang persists as low-cost producers continue to pump
guises, is the single most promising solution. It holds the
at near or record rates and the global economy remains
promise to bring down costs and shrink the industry’s en-
anaemic. The term lower-for-longer to describe crude
vironmental footprint, conceivably in game-changing ways.
oil prices has become the new mantra, while new clouds
But as with any potentially disruptive technological change,
form on the horizon.
it is difficult to predict which applications will come to the
While the biggest story in oil and gas this century, the
fore and have the greatest impact in the years to come.
unexpected and transformative shale gas and tight oil revo-
Hence this survey. We questioned many of the oil and
lution, has been a tremendously positive one in reviving a
gas professionals closest to the emerging technologies,
North American oil sector once considered to be at or near
and those in a position to decide if and when to invest in
its peak, its impacts have not all been positive. Initiated
Digital Oilfield technologies, in order to ascertain their feel-
by the advancement of horizontal drilling and multistage
ings about the technologies—their technological maturity,
fracturing technologies, the tight oil boom precipitated
readiness for adoption and potenti al profitability. We also
the supply glut now ravaging oil markets worldwide and
sought their thoughts about what they saw as the big-
helped deprive Canadian producers of their primary ex-
gest benefits and barriers to technology implementation
port market.
and their own level of knowledge about specific technol-
The apparent decoupling of energy demand growth
ogy use cases.
with expanding gross domestic product portends slower
As this constitutes our second annual sampling of opinion,
fossil fuel needs even when the global economy returns
we have captured some flavour of the trends in the indus-
to expansion. Declining costs for, and rapid growth in, re-
try when it comes to the Digital Oilfield, and found them
newables, along with increasing efforts to decarbonize
to be mostly posit ive ones. New this year, we have drilled
energy production in light of last year’s COP21 ag reement
more deeply into the reasons for answers from respondents
to reduce greenhouse gas emissions, foreshadow increas-
that they did not have enough knowledge about a par-
ing regulation and costs on hydrocarbon producers, and
ticular technology application to form an opinion about it.
competitive pressures favouring lower-ca rbon producers.
Based on the responses, it has become clear that in-
As a high-cost and, in some respects, high-carbon-
dustry professionals collectively hold a high opinion about
in tensity producer, all these pressures are particularly hard
the technologies and their strong potential to increase
felt in Canada’s oilpatch. Though there is little it can do to
productivity and reduce costs in the oilfield. But barriers
affect global oil prices, Canadian producers and service
to implementation, which have shifted from last year, re-
and supply companies can affect costs—through innova-
main a somewhat limiting fac tor. At the end of this report,
tion. And the greatest source of innovation today is digital.
we present some recommendations based on the survey
The dawn of the digital era has already ushered in sev-
results that could accelerate technology adoption and
eral disruptive technology advances, from the Internet and
enhance the competitiveness of the oil and gas industry
the smartphone to autonomous vehicles, social media and
in Canada. We hope they move the conversation forward
3-D printing. Digital technology has also made possible the
over the challenging year to come.
10
The productivity imperative To say that the Canadian oil and gas
sector, as voiced by some of the most
industry, and more particularly the
respected voices in the oilpatch. “Our
Alberta economy, has just gone through
costs, both capital and operating, are
one of the most tumultuous periods in
uncompetitively high. We must re-
its history would be an understatement.
duce both our capital and operating
The oilpatch was on track to see its
costs substantially, in the order of a
biggest two-year capital spending
minimum 30–50 per cent across the
decline in its 70-year history, the
board, to become sustainably com-
Canadian Association of Petroleum
petitive,” industry veteran Jim Gray,
Producers (CAPP) said in Apr il. Total
the co-founder and former head of
capital investment in the oil and natural
Canadian Hunter Exploration, said
gas sector was forecast to plummet 62
in March. “We must, as others have
per cent, falling to $31 billion in 2016
observed, innovate and adapt on an
from a record $81 billion in 2014. The
urgent schedule.”
carnage has been felt from the idled rigs
The productivity imperative grows
across western Canada—with the number
in importance as the lower-for-longer
of wells drilled forecast to plunge to just
oil price scenario stretches into its
3,500 in 2016, a 66 per cent drop from
third year and there is a growing sen-
2014—to job losses across the country—
timent that prices may never return to
an estimated 110,000 direct and indirect
the sustained levels hitherto needed
positions according to CAPP.
to make oilsands megaprojects and
“We have the third-largest petroleum resources in the world, [and] our technology and our ingenuity are the keys to our ability to sell our resources around the world.” — Greg Stringham, former vice-president of marketing and oilsands, Canadian Association of Petroleum Producers
Canada is particularly vulnerable
many conventional projects profitable.
to the oil price decline due to its high
A combination of factors—energy effi-
cost of production—among the highest
ciency measures, COP21 and growing
in the world—in part because of to its
international pressure to transition to
remote operations and relatively high-
a low-carbon economy, rapid growth
cost bitumen production. As a result,
in renewable power abetted by steeply
Canada saw the most production cur-
declining costs and progress to de-
tailed in response to low prices of any
carbonize the transportation sector
Mackenzie report found in July as prices
major oil producer, energy consultants
through higher-fuel economy vehicles
languished in the US$45/bbl range.
Wood Mackenzie noted in February.
and electric cars—is leading some ex-
Whether or not the current low-
“Canadian production from oilsands
perts to suggest the global economy
price environment represents a new
and conventional onshore is taking
may be nearing peak oil demand, at
normal, it is in the short- and long-term
the most pain due to the high costs
which point oil prices could remain in
interest of Canadian producers to pre-
and distance from marketplace,” Wood
a lower range indefinitely.
pare for such an eventuality in order
As it is, most major conventional oil
to remain competitive with lower-cost
These factors point to an increas-
projects worldwide are at risk of can-
producers and ensure the sustainable
ingly urgent productivity imperative
cellation or deferral if the price of oil
growth of an industry so pivotal to the
faced by the Canadian oil and gas
remains in the US$50/bbl range, a Wood
Canadian economy.
Mackenzie said.
11
The digital opportunity The oil and gas industry is an undisputed leader in many high-tech areas—primarily where they apply to the industry’s core functions of exploration, drilling and production of hydrocarbons. But the industry is a laggard in some other areas of technology development, like spending on research and development, and creation of new business models and products and services. Foundationally, the means by which it goes about fulfilling its core functions haven’t changed in disruptive ways. Even the development of the horizontal drilling and multistage fracturing technologies that set off the tight oil and gas production bonanza was based on technologies used in the industry for decades—but applied in new ways.
In contrast, the digital sector is trans-
vehicles, drones), travel, health care and
redefining virtually all markets and in-
forming various sectors of the economy
personal fitness and others.
dustries in fundamental ways. The past
with a business model that focuses on
The emerging IoT—the melding
five years have seen an inflection point
technology development time scales that
of connected devices, the massive
in which fragmented efforts to connect
dwarf that of the oil and gas industry.
data storage capabilities of the cloud
machines and sensors in industry-specific
It often thrives in a culture where risk-
and increasingly sophisticated big data
ways are now coalescing into a compre-
taking is high, development cycle times
analytics—is bringing digital technology
hensive vision of connectivity permeating
are short and growth can be exponential.
to another level, enabling a host of new
the global physical environment.”
Now, the digital realm is bumping up
applications to increase productivity.
With the capability to combine the
against the energy sector in ways that
The IoT represents a shift from the
deluge of data collected and analyzed
cannot be ignored. Digital technology
narrow development of new information
with machine learning and artificial
is creating disruptive new products and
and communication technology systems
intelligence, the IoT can automate com-
services that are proving to be trans-
for specific industries toward the broad
plex tasks, diagnose problems, predict
formational in other sectors, such as
view of pervasive interconnectivity of
breakdowns and reduce downtime, in-
personal communications (smartphones),
the global physical environment to pro-
telligently guide entire fleets of vehicles,
social media and gaming, transporta-
duce novel and actionable new insights,
remotely inspect, control and optimize
tion (car and bike sharing, autonomous
according to an IHS report released in
field equipment and a host of other
March. “The [IoT] is a technology con-
tasks with performance results superior
cept that is currently transforming and
to that of human operators. The technologies produced are not incremental; they are transformational,
12
Chuck Grindstaff, president and chief executive officer of Siemens, said in a keynote at the Global Leadership Conference. “There’s a confluence of transformational forces that companies are leveraging to make products that are smarter and more connected than ever—and these products
In a report released by BP last year,
are fundamentally changing markets,” he
the company said digital technologies
said. “We are on the brink of an age in
have the potential to increase pro-
which the nature of innovation itself is
duction volumes by four per cent and
dramatically changing. We have always
reduce costs by 13 per cent by 2050.
talked about better, faster, cheaper, but
“At a time of lower prices, revenues and
this goes beyond that. We’ve talked about
capital spending, digital technologies—
best practices, but we really need to think
including sensors, data analytics and
in terms of next practices.”
automated systems—stand out as the
As its applications mature, the IoT is expected to grow rapidly. Globally, it
leading contributors for reducing costs,” the report stated.
is estimated there will be 26–50 billion
The Digital Oilfield potentially offers
connected devices by 2020 and the IoT
oil and gas companies the best route
will annually contribute up to $11 trillion
forward to bolster productivity and
in value by 2025. Specific to the oil and
reduce unit costs. The most mature of
gas industry, the Digital Oilfield market
Digital Oilfield technologies, like Field
is expected to reach $30.78 billion by
Productivity and Fleet Management,
2020, with compound annual growth
have been shown to be field-proven
of 4.31 per cent from 2015, according
value creators for early adopters, as
to Research and Markets. The energy
indicated by the case studies found
sector will need some 12,000 new data
in this report. Given the enormous
analysts across North America and some
potential the Digital Oilfield offers,
90 per cent of new jobs in oil and gas will
it is incumbent on the industry to
require superior digital skills, according
seek ways to overcome the barriers
to Accenture.
to adoption and pave the way for a globally competitive oil and gas industry in Canada.
13
“We are in a global innovation race, and time is of the essence. If you look at the pace things work on the web, with crowdsourcing and the like, we want to tap into that. Effectively, when you tap into that, we are tapping into the world’s brightest minds and their network, and that I see as an exponential opportunity.” — Judy Fairburn, executive vice-president of business innovation, Cenovus Energy, and chair, Alberta Innovates
Digital Oilfield successes The Digital Oilfield leverages many of the technologies associated with the IoT, and stands to benefit from the rapid evolution of the IoT in the consumer market and other industries. Just as the consumer market is full of hype about the latest innovations related to the IoT, like autonomous vehicles, social networks and augmented reality, the oil and gas sector is developing solutions based on the same platforms. Recommendations stemming from the report included:
Digital Oilfield technologies that are under-
• BP is hoping to improve worker produc-
going testing or already implemented and
tivity and cut health expenses by creating
paying dividends span many subsectors of
a fitter workforce using wearable tech-
the oil and gas industry:
nology. The company purchased 25,000 FitBit fitness trackers for its employees
• In northern Alberta, oilsands mining com-
to encourage healthier lifestyles. Workers
panies are testing autonomous haulage
can one-up co-workers by accumulating
systems, otherwise known as driverless
more steps per day while earning points
trucks, to improve fleet efficiency and cut
toward lower health-care costs—in the
costs. The self-driving heavy haulers are al-
U.S., companies can take up to 30 per
ready in use in hard rock mines in Australia
cent off the cost of insurance premiums
and Chile. Suncor Energy announced in
when employee participation is tied to
2015 that it is piloting the vehicles in
corporate wellness plans. Points earn
Alberta’s soft rock oilsands open pit mines,
employees lower co-pays, deductibles
a more challenging environment. It entered
and out-of-pocket health-care expenses.
into a five-year agreement to purchase
BP reported its health-care costs were
175 400-tonne, autonomous-ready heavy
reduced by almost nine per cent among
haul trucks from Japanese manufacturer
participants and four per cent overall
Komatsu Ltd. Early testing of the tech-
after implementation.
nology found the driverless vehicles cut fuel consumption and maintenance costs
• Caterpillar partnered with technology
with less wear and tear. Full implemen-
company Seeing Machines to develop a
tation of autonomous operations, which
fatigue tracking application that uses fa-
could take place by 2020, would create
cial recognition software to detect driver
more savings by displacing hundreds of
drowsiness. Destined for installation in
high-paying driving jobs.
5,000 mining vehicles around the world,
14
the fatigue detection technology uses a camera and light system to measure signs of fatigue like eye
Digital Oilfield use cases
becoming distracted initiates an in-vehicle alarm and sends a vide o clip of the driver to a 24-hour sleep fatigue centre at Caterpillar headquarters in Illinois, where a safety adviser can verify the fatigue event
ASSET OPS Installing robots or other automated equipment to perform operating, as-
closure and head position. Signs
a driver may be nodding off or
6. AUTOMATED PRODUCTION
1. REMOTE ASSET MONITORING
sembly and maintenance tasks in 24/7
Collecting and analyzing sensor
continuous and safety-critical operat-
data related to flow, temperature,
ing environments. Machine intelligence
vibration and integrity to improve
allows the equipment to sense con-
operational safety and performance
ditions in their local environments,
related decisions (e.g. wireless vi-
recognize and solve basic problems
bration data transmitter, downhole
(e.g. self-driving mining trucks).
drilling sensors).
and contact the mine site manager.
7. FLEET MANAGEMENT
Follow-up is conducted to determine
2. REMOTE ASSET OPERATIONS
Obtaining real time data—through
the cause of the event and possible
Developing systems to operate
the use of wireless networks, sen-
remedy to prevent future events.
plants and facilities from a remote
sors and video analytics—from on
Since installation of the systems a
location. The intent is to reduce the
board sensors to improve asset
year ago, Caterpillar estimates there
on-site complement of staff, thereby
identification, tracking, utilization
has been an 80 per cent reduction
increasing operating efficiency and
and logistics operations (e.g. vehicle
in fatigue events as drivers become
personnel safety (e.g. off-site plant
telematics, GPS tracking).
much more aware of the issue due
control centres).
8. FIELD PRODUCTIVITY
to the alarm. 3. PREDICTIVE MAINTENANCE
Maximizing worker efficiency by
Utilizing predictive data analytics
providing wireless mobility that en-
and condition-based maintenance
ables on-demand access to field
approaches to improve asset
data, engineering drawings and in-
availability and reliability (e.g.
ventory and communication with
predictive maintenance of elec-
centralized operations experts (e.g.
technology allows workers to carry
tric submersible pumps, mining
field tablets and augmented reality).
out virtual activities on the rig using
truck tire failure).
• Maersk Oil is utilizing gaming technology on its offshore oil and gas projects to build efficient platforms and produce future cost savings. The
an Xbox controller from the comfort
9. BIOMETRIC MONITORING
of their onshore office. The technol-
4. PRODUCTION ASSET
Issuing wearable devices to enable
ogy places workers inside a virtual
OPTIMIZATION
continuous monitoring of field em-
model on their computer screens,
Utilizing specialized sensors to
ployee location, work status and
appearing as avatars able to move
monitor and data analytics to
health to prevent safety incidents
about within a 3-D visual depiction
identify improvements in complex
or to decrease response time for
of the physical confines of the facility.
operations (e.g. SAGD steam/pro-
emergency responders (e.g. wear-
duction optimization, optimization
ables: RFID tags, GPS trackers, H 2S
of field operations activity).
detectors).
5. REMOTE ASSET INSPECTION
10. IN-FIELD MANUFACTURING
Employing remotely controlled de-
Operating portable manufacturing
vices that use imaging (video, IR,
equipment that can be used to re-
Maersk says the technology has the potential to save millions of dollars. The company, which has created a Technology and Innovation team to allow ideas to be developed, tested and nurtured to commercial applica-
X-ray) and other sensors to complete
duce downtime from critical part
tion, is also developing augmented
inspection and detection tasks more
failure by producing specialized
reality solutions that allow onshore
efficiently and safely than conven-
components/parts on demand and
technical experts to communicate
tional field operations (e.g. pipeline
on site, eliminating need for safety
with those offshore via real-time, in-
inspection drones, unmanned au-
stock or hot shot orders (e.g. enter-
teractive devices.
tonomous vehicles).
prise 3-D printing).
15
State of the Digital Oilfield: Moving forward JWN published its first Digital Oilfield Outlook Report in 2015 to assess the state of the Digital Oilfield within 10 distinct use-case technology applications. An in-depth industry survey was conducted to quantify the industry’s level of awareness of the Digital Oilfield and what was perceived to be the most promising t echnologies based on three specific adoption dimensions: t he level of maturity of the technology; the expected return on investment; and organizational readiness to adopt the technology. The report examined key benefits and barriers to technology acceptance and provided recommendations to improve awareness and adoption. Recommendations stemming from the report included:
DEEPEN AWARENESS
IDENTIFY CHAMPIONS
ENCOURAGE
EXPAND THE
Developing a better under-
The nature of Digital
COLLABORATION
CONVERSATION
standing of Digital Oilfield
Oilfield innovations is that
A greater level of
Opportunity exists for tech-
technologies and benefits
they cross departments,
collaboration both within or-
nology vendors and oil and
among industry profession-
from IT to operations.
ganizations and among them
gas companies to share
als is a critical first step to
Leaders at all levels, includ-
is needed to take full advan-
knowledge, to better under-
ensuring those technol-
ing executive sponsorship,
tage of the transformative
stand the industry pain
ogies will be considered for
will be needed to focus ef-
opportunity offered by the
points and the innovations
adoption.
forts and deliver results.
Digital Oilfield.
available to overcome them and to jointly develop new applications for emerging digital technologies.
“Statistical evidence reveals that, while capital costs are indeed falling, this has not been entirely achieved by grinding vendors. The real driver of cost reduction is productivity.” — David Yager, Calgary oilfield services manageme nt consultant
16
This second Digital Oilfield Outlook Report focuses pri-
and virtual reality, whereby workers can become
marily on the use cases of Field Productivity and Fleet
avatars in 3-D representations of field facilities.
Management. They were deemed to be the best candi-
Onscreen digital representations of equipment links
dates for more detailed investigation due to the fact they
to the equipment’s specifications, performance
were the top ranked of the 10 use cases above from the
and maintenance history, warranty information
first report, based on their perceived return on invest-
and inventory of replacement parts. Emerging
ment, technological maturity and organizational readiness
technologies include wearables that can track
to adoption them. This report looks at the year-over-year
workers’ locations, vitals and real-time status, like
changes in perceptions about each, as well as specific
detecting accidents, and tools like smart glasses
benefits and barriers to their adoption.
for hands-free data input and output delivery.
As the use cases perceived to be closest to or already
In a world in which consumer-based mobile
in commercial use, it makes sense to take a deeper dive
connectivity has become second nature, Field
into their adoption benefits and roadblocks at a time when
Productivity technology provides employees the
oil and gas companies are in major cost-cutting mode and
kind of functionality they have come to expect in
in search for those applications that can bring about ef-
their private lives, and can help to attract young,
ficiencies and cost savings on the shortest possible time
digital-literate workers into the workforce. It can
scale. Technologies months or years away from commer-
pay dividends in short order, often with payback
cialization, like in-field manufacturing, are not of immediate
in six to 18 months.
benefit to those looking for immediate cost-cutting solu-
Fleet Management technology has been shown
tions, whereas Field Productivity and Fleet Management
to have similarly rapid payback, creating cost
represent commercial, field-proven technologies for which
savings that go well beyond the aspects of opti-
a strong business case can be made today. As technology
mized routing, fuel savings and increased driver
solutions not confined to the oil and gas sector, applic-
safety typically expected. In addition to improved
able in many cases to any industry that manages vehicle
vehicle utilization, preventative maintenance and
fleets and field workers, they also represent an oppor-
planning into such aspects as advanced staging of
tunity for technology transfer from those industries where
parts, today’s Fleet Management solutions touch
they are more established, potentially further shortening
on other aspects of a company’s operations, like
the adoption process.
inventory management, that can resolve supply
Field Productivity takes in those technologies and ser-
chain pain points.
vices that make fieldwork more efficient and lower operating
Unprecedented volumes of data from vehicles
costs over time. The replacement of paper-based workflows
as well as from other sources like historic fleet
with digital ones facilitated by mobile connected devices is
data, comparative data from other divisions and
one way Field Productivity is transforming the workplace. It
fleets and weather reports, is cleaned up, com-
is providing field workers with instant and up-to-date access
bined and analyzed to produce new levels of
to such resources as work orders and scheduling, service
actionable insights. Asset tracking, as well as
contracts and invoicing, instructional diagrams, schemat-
vehicle GPS monitoring, is leading to improved
ics and 3-D images of facilities and equipment, installation
inventory control and more customized vehicle
instructions and inspection checklists, and maps and GPS
fleet solutions.
positioning. It speeds financial transactions and reduces
Promotion of driver safety has advanced
errors typically i ntroduced through manual paper-based
beyond the reactive tracking of speeding and
data input processes.
aggressive driving behaviour to proactive mea-
Real time audio-visual communication with head office
sures to promote and reinforce good driving
or central command centres allows experts to remotely
habits through techniques like in-cab verbal
diagnose problems and walk workers through fixes. More ad-
coaching and the gamification of competition
vanced Field Productivity technologies facilitate augmented
between drivers for safest driving performance.
17
What can the Digital Oilfield do?
M A E R T S N W O D
Digital Oilfield technologies can
M er A E R pgralidty T U aci S D f I M
provide a myriad of benefits to individuals and organizations alike
M A E R g T inin S m P n U me Bitu
SAG
y cilit a f D
al &al n o i entntrionn v n e Coconvuctio unprod
FIELD TABLETS Enables field workers to have easy-to-use, hand-held ruggedized device that can display and allow manipulation of any necessary catalogues, manuals, plan drawings and 3-D imagery. Customizable apps can be downloaded to further improve worker efficiency.
HIGH-RISK WEARABLES
DRIVER BEHAVIOUR
Improves the monitoring of
Improves driver safety,
employees working alone, in remote
decreases vehicle wear and
locations or high-risk workplaces to
lowers insurance costs by
detect or prevent “man down”
applying data analytics
situations by using head-mounted
algorithms and visualization
displays, wristbands and badges to
tools to driving pattern data
detect falls, test air quality, measure
to create individual driver
levels of drowsiness and heat
improvement reports.
exhaustion or to simply pinpoint the
AUGMENTED REALITY Decreases the chance of repair errors and increases worker safety by allowing them to simulate the job they are working on before physically interacting with the equipment. AR also enables users to access information relevant to a particular job digitally superimposed on the physical environment in which they’re working.
wearer’s location.
18
ASSET TRACKING Enables improved transparency of where all the
y ner fi e R
mobile assets are, where they are going and what they are being used for. The data can be used to provide utilization statistics that can help inform asset lease versus buy decisions and to find optimum opportunities to divest assets.
SMART ZONES
g n& n i t ke io Masrtribut di
Reduce possibility of asset incidents by drawing geo-fences around regions or sites to enforce customizable attributes including speed limits and hazard warnings.
MAINTENANCE Reduces the chance of unexpected asset failure and subsequent repair costs by being able to t ailor effective
sing s e c prcoility s a G fa
preventative and predictive maintenance schedules based on historical and projected usage patterns.
FUEL EFFICIENCY Minimizes how much fuel is used per day/trip by optimizing route
s ical m e h roclant t e P p
selection, regulating maximum speeds and determining acceptable idle times based on job requirements and weather systems. Additionally, total GHG emissions are lowered.
CLOUD ACCESS Provides a secure library of plan drawings, schematics, supplier part
SMART FORMS
catalogues, forms, training
Reduces paperwork and
manuals and procedures that is
transposition errors when
24/7 two-way access-enabled on
inputting field data. Provides
any type of mobile device.
accurate metrics and improved
Eliminates the need for workers to
reporting of completed fieldwork through enhanced data visualization software.
el Oilfi
d
carry physical material with them
ce offi
or return to an office location to access necessary data.
19
Survey methodology In the spring of 2016, JWN, in partnership with Siemens, Storm Telematics and GDM Pipelines, undertook a comprehensive survey of oil and gas professionals to assess their perceptions about Digital Oilfield technologies and their readiness for adoption across the Canadian oil and gas industry. Ten more in-depth interviews were also conducted in order to gain a more granular assessment of attitudes and perceptions concerning the technologies under review. The survey is a follow-up on a 2015 survey, which assessed 10 d ifferent Digital Oilfield technology use cases, and thus provides year-over-year comparisons of many aspects of the transition. In order to gain an overall industry perspective, the survey targets a broad cross-section of industry professionals, encompassing companies of various size and subsector (service and supply, exploration and production and others) and diverse demographics (from executives and senior management to technologists and front-line workers). The survey had more than double the 2015 sampling, with responses from 355 indi viduals compared to 160 last year, to provide a higher level of accuracy of the opinions and attitudes of the industry in general. As such, the results presented here provide an accurate barometer of today’s industry perspectives on the readiness and current level of adoption of Digital Oilfield technologies.
20
Digital Oilfield technology adoption dimensions, benefits and barriers The survey was broken into two sections. The
year-over-year and would provide insight as to
first section focused on asking the same adop-
how the level of awareness and adoption by the
tion dimension questions as were asked in the
industry was shifting. The second section then
first Digital Oilfield Outlook Report for each of
drilled into the adoption benefits and barriers
three use cases. This would draw out whether
for each of top two use cases to emerge from
and what type of industry trends were emerging
last year’s report.
Adoption dimensions for each use case Solution maturity
Business case of the ROI
Please provide your understanding of the maturity of this use case and readiness for in-field deployment.
Please provide your perception of the return on investment (ROI) of this use case (and associated technologies) relative to other uses of capital investment.
This use case: 1) Will not be ready for at least 18 months 2) Will be ready for testing in 18 months 3) Is ready for testing today 4) Is ready for deployment 5) Is highly proven in the market
This use case compared to other options for capital use: 1) Much weaker ROI 2) Somewhat weaker ROI 3) Comparable ROI to other uses of capital 4) Somewhat stronger ROI 5) Much stronger ROI
Organizational readiness
Please provide an assessement of your current organization’s readiness to adopt this use case and the associated people, process and technology changes.
My current organization: 1) Will not be ready for at least 1 8 months 2) Will likely be ready in the next 6 –18 months 3) Will likely be ready in the next 6 m onths 4) Has most of the capabilities today 5) Is fully capable and is ready to adopt this use case
Use case top adoption benefits
What are the biggest perceived benefits of adopting the given usecase technologies (choose up to your top three)?
• • • • • • • • •
Use case top adoption barriers
What are the top identified barriers to adoption of the given use-case technologies in your organization (choose up to top three)?
• • • • • • • •
Decreased unplanned outages Improved safety Increased asset uptime Reduced maintenance and repair costs Improved production/enhanced recoveries Increased labour productivity Optimized inventory Lowered environmental impact Reduced energy costs increased security
Budget constaints Existence of organizational barriers Cybersecurity concerns Difficulty in consolidating disparate/siloed data Poor data quality Low network capacity for data transmission High cost to collect machine data Lack of interoperability of solutions between different vendors • Poor integration with existing solutions and infrastructure • Shortage of necessary talent • Superior alternatives
21
Adoption dimensions for each use case On average, each adoption dimension question for each
year-over-year changes and trends. Respondent industry
use case in this year’s Digital Oilfield survey garnered 150
subsectors consisted of 52 per cent supply and service, 20
respondents versus last year’s average response total of
per cent exploration and production, five per cent oilsands,
126, an 11 per cent increase in participation. By asking some
three per cent engineering, procurement and construction
of the same questions as last year, the data can measure
management, two per cent midstream and 17 per cent other.
Industry knowledge: Respondents who indicated they “lacked adequate insight” to answer a use- case question were probed further with the following question
Reasons for lack of subject matter insight
• • • •
Out of scope for my role in my organizati on I do not clearly understand the benefits of adoption The currently available literature is too technical or complex I do not clearly understand who all the vendors are and what their specific solutions are • I have not seen enough applicable case study examples • I have not seen enough demonstrations/pilot projects • I do not know all of the adoption requirements (people, process, technology) for my organization
What is the main reason for your “do not have adequate insight” response to one or more of the previous questions related to the given use case?
A broad and representative cross-section of the Canadian energy industr y surveyed others
s&s
producers
5%
22%
26%
52%
3%
6%
355
4%
total respondants
12%
4% 11%
7% 8%
20% 8%
executive
management
technical
12%
front line/ support
The survey of 355 industry professionals represented a broad
The functional group category “other” is comprised of supply
cross-section of responses by seniority, including senior exec-
chain/procurement, environment, health and safety, human
utives (C-suite), vice-presidents, general managers, directors,
resources and finance.
senior technical advisers, asset managers, engineers, geologists,
By industry vertical, representation included exploration
geophysicists, accountants and instrumentation technicians.
and production, service and supply and others, comprised of
The seniority group category “front line/support” is com-
representatives from midstream, downstream, engineering,
posed of union front-line staff (foremen/supervisors), other
procurement and construction management, government
non-union regular staff and professionals (e.g. LL.Bs, C.As).
agency and consulting groups. 22
Early returns: Awareness since 2015 has increased Overall industry awareness of Digital Oilfield technolo-
YoY change in respondents’ overall awareness of Field Productivity and Fleet Management Digital Oilfield technologies 2015
gies is improving, as shown by the decline in the number of survey participants who did not complete parts of the survey due to a perceived “lack of adequate insight”
2016
about the subject matter. The increase is a positive foundational step since improved industry awareness is more likely to translate into increased industry adoption of 67%
60%
the technologies.
overall awareness
Respondent demographic breakdown: industry vertical versus seniority
out of scope for my role
2%
don’t understand vendor/solution landscape
unaware of all adoption requirements
don’t understand adoption benefits
information too technical/ complex
1% 2%
not enough case studies
2%
6%
6%
6% 1%
11%
13%
not enough pilots
66%
44%
of all respondants indicated “lack of adequate insight” to at least one survey question
2% 3%
1% 2%
23%
20% 13%
9% executive
management
technical
front line/ support
In response to the high number of respondents signalling a
adoption benefits, finding the details too complex and tech-
lack of knowledge about the technologies previously, this sur-
nical and a lack of pilots and case studies, were not cited
vey asked a supplemental question of those respondents to
as top concerns. Therefore, the task of vendors is t he more
gain insight into the reasons behind their lack of awareness.
straightforward one of pointing to the benefits of the tech-
Primarily, respondents stated they felt knowledge about the
nologies and why that should matter to them, as opposed
technology was out of the scope of their role wi thin their
to convincing them that the technology itself works.
organization—63 p er cent for Field Productivity and 68
On the other hand, the fact so many respondents felt it was outside of their roles to become knowledgeable about
per cent for Fleet Management. In one sense, the fact that a strong majority of those who
the technologies indicates they are not taking on the obli-
felt they lacked adequate insight chose the reason they felt
gation to stay informed about new technologies that could
it was out of the scope of their roles can be considered a
make their jobs or the jobs of their colleagues more pro-
good sign, since it does not reflect poorly on the technologies
ductive and safe. This reinforces organizational barriers as
themselves and their potential benefits. Other responses
workers don’t see the benefit in pursuing technological
that could have indicated that, such as not understanding
change and may view it as a burden instead.
23
Perceptions of Field Productivity technologies: The needle is moving
YoY change in perceived relative ROI of FP technologies 2015
2016 % 3 % 4 1 4
50 40 t n e c r e p
30 % % 8 6 1 1
20 10
Field Productivity was already highly ranked last year in
% 8 % 2 5 2
terms of perceived return on investment (ROI), technological maturity and organizational readiness, ranking in second place out of 10 use cases in 2015, showing the indus % 0 % 1 9
% 6 % 3
try is highly confident in its commercial appeal compared to other Digital Oilfield applications. In 2016, that perception has only improved.
0 weakest
weak
neutral
strong
strongest
As the graphs show, Field Productivity has solidified its position in particular in terms of technology maturity and readiness for adoption. A majority of those who provided a response, i.e. not including those who answered they had
YoY change in perceived maturity of FP technologies 2015
inadequate knowledge to respond, believe the technology is to some degree already ready for deployment. A particu-
2016
larly big jump was seen in those responding the technology 50 40
is highly proven in the market with an improvement of 27
% 8 3
30 t n e c r e p
20 % 1 1
10
% % 5 4 1 1
% 6 2 % 0 2
% 1 3 % 3 % 2 9 1
percentage points, from four per cent to 31 per cent year over year, and a similar fall in those suggesting maturity remains at least 18 months away. This is the biggest perception change recorded in this year’s survey, a strong indication the
% 4
% 9
Field Productivity use case has moved rapidly up the technology maturity scale in the eyes of industry professionals and pointing to the likelihood of more widespread adoption.
0 ready > 18 months
ready < 18 months
in testing
deployed
highly proven
That trend is also reflected in the significant increase in companies’ readiness to adopt the technology, up from a mere six per cent last year to a meaningful 23 per cent this year. This indicates that internally, organizations are starting to put into place the necessary resources to facilitate
YoY change in perceived organizational readiness for FP techhnologies 2015
adoption. This is an important consideration given the major advances in the Industrial IoT, one of the drivers of advanced
2016
Field Productivity technologies for which it will become in-
50 40 t n e c r e p
creasingly vital for the oil and gas sector to take on. Studies
% 1 4
suggest the Industrial IoT could have a transformative im % 4 2
30 20
% 8 1
% 5 1
pact on industry, and keenness to embrace it could be an % % 2 0 2 2
% 8 % 1 4 1
% 3 2
The perceived ROI, however, has not significantly changed, % % 9 6
10
important competitive advantage going forward.
perhaps an indication respondents are waiting for a stronger business case to be made. Vendors might consider better making the case through case studies or marketing to cus-
0 > 18 months
6–18 months
barriers still exist
capable adopted but not adopted
tomers in a way more tailored to their specific needs. 24
ADOPTION DIMENSION SCORES BY SENIORITY FOR FP TECHNOLOGIES tech. maturity
ROI
org. capabilities
overall
executive
3.57
3.65
3.05
3.42
management
3.34
3.36
2.75
3.15
technical
3.41
3.26
3.23
3.30
Field Productivity adoption: Demographic breakdown Breaking down Field Productivity adoption dimensions by demographic group reveals some important insights. From
front line/ support
3.75
3.16
2.94
3.28
average
3.49
3.36
3.00
3.28
a seniority perspective, it is promising to see that executives, though further removed from the direct applications of the technologies, all scored above average on the three adoption dimensions, indicating buy-in at companies’ most senior levels. However, management was shown to be the least bullish of all seniority groups, indicating a substantial disconnect be-
ADOPTION DIMENSION SCORES BY FUNCTIONAL GROUP FOR FP TECHNOLOGIES
operations
tech. maturity
ROI
org. capabilities
overall
2.97
3.24
2.93
3.05
tween the two most senior groups. While executives appear cognizant of the big picture benefits of technology adoption, and technical and front-line staff see the immediate on-theground benefits, management is pointedly less convinced of the advantages digital technology would bring, creating
instrumentation, controls & eng.
3.85
3.62
3.88
3.78
information technology
3.55
3.33
3.25
3.38
others
3.80
3.39
3.38
3.53
a potential impediment to adoption. Among functional groups, it is also telling that one field group, the instrumentation, controls and engineering group, scored the highest in all three dimension categories, since this group would be at the front line providing the input data and
average
3.49
3.36
3.27
3.37
using that data in the field, while the operations group scored much lower (overall 3.05 versus 3.78). As operations are key decision makers in adoption, this could present a challenge for actual implementation of Field Productivity technologies. Based
ADOPTION DIMENSION SCORES BY INDUSTRY VERTICALS FOR FP TECHNOLOGIES tech. maturity
producers
on the lower scores in all adoption dimensions for the more junior staff compared to executives, there appears to be a large
ROI
org. capabilities
overall
3.16
3.29
2.85
3.10
service & supply
3.61
3.43
3.10
3.38
others
3.74
3.32
3.06
3.37
average
3.49
3.36
3.00
3.28
communication or support gap that needs to be overcome. By industry vertical, the service and supply segment, with more resources in the field, scores consistently ahead of producers. To the extent producers seek to increase the benefits of these technologies, and thereby pare per barrel production costs, it makes sense to invest in raising their organizations’ ability to adopt and use digital technologies rather than depend on the service and supply sector to move adoption forward for them.
“Little or no inn ovation was occurring at $100/bbl [price of oil]. Now, at roughly $35/bbl, everyone is innovating and working dilige ntly to reduce costs and remain relevant. In this context, $30 oil isn’t such a bad thing…. For we Canadians to be sustainable players in this increasingly complex and competitive global market, we simply have to improve our recent performance.” — Jim Gray, co-founder and former head of Canadian Hunter Exploration
25
Key benefits of Field Productivity technology adoption: What’s not to like?
Since Field Productivity applications are designed to make workers more
Weighted average rankings of respondents’ top three choices for perceived benefits of adopting FP technologies
productive, it is not surprising that increased labour productivity ranks as the
top benefit. Because Field Productivity applications focus on having the right
increased labour productivity
45% 39%
increased asset uptime
people at the right place at the right time with the right equipment, it fol-
improved safety
lows that industry would rank having
reduced maintenance and repair costs
assets running for longer and with less maintenance as top outcome benefits.
The third-ranked benefit, improved safety, is gained by the technology’s ability to provide a real-time view of the location and condition of people and mobile assets in the field. Up-todate information on demand allows
37% 34%
improved production/ enhanced recoveries
32%
decreased unplanned outages lowered environmental impact optimized inventory reduced energy costs
31% 17% 15% 14%
workers to be more aware of their surroundings by, for example, knowing where buried utilities and pipelines are via technologies like augmented
FIELD PRODUCTIVITY
are. Both front line and technical groups
reality applications that use digital
BENEFITS: BY SENIORITY AND
prioritize safety and asset uptime, the
geospatial data.
FUNCTIONAL GROUP
issues they are most impacted by and
Increasing efficiency of the field
In terms of seniority, there is alignment
have the most control over.
workforce and thus cutting costs, rather
over the perception that the major benefit
By job function, no one perceived
than bolstering oil and gas production,
Field Productivity technologies provide
benefit is universally recognized, which
a side benefit of reduced downtime, is
can increase labour productivity, but
suggests the messaging of the key
seen to be the main benefit for much
that is where the similarities end. With
benefits of these technologies is not yet
of the technology involved in Field
their eyes firmly on the bottom line, ex-
clear. Just as there was the potential for
Productivity. It is also clear how big
ecutives and senior management view
adoption roadblocks because priorities
a priority safety is in the oil and gas
decreasing unplanned outages and im-
did not align with the seniority demo-
industry, placing in the top three for
proved production and recoveries as
graphics (executives versus front line)
both use cases.
most important. This can be attributed in
here too the operations group (the deci-
When reviewing the offerings of the
part to the costs associated to shutting
sion makers) have a very different view
major technology providers and com-
down operations unexpectedly, which
as to what these technologies can pro-
paring it to this data, it is apparent that
can amount to millions of dollars in lost
vide versus the instrumentation, controls
the industry gets it, as the perceived
revenue per day, exceeding revenues
and engineering group (the key users).
benefits are aligned to the actual bene-
being brought in through steady state
Making a clear business case that ad-
fits being marketed. This is an important
operations. On the other hand, the closer
dresses both groups’ needs will be key
step in making the connection between
a person is to the physical operation of
in advancing to see more technologies
need and solution offerings.
an asset, the more safety focused they
implemented.
26
Key barriers of Field Productivity technology adoption: Not so fast
Consistently, budgetary constraint and existence of organizational barriers con-
Weighted average rankings of respondents’ top three choices for perceived barriers of adopting FP technologies
tinue to rank as the first and second biggest barriers to adoption of both Field Productivity and Fleet Management use cases. Because some of key enablers for use cases overlap, it is not surprising to see the perception of the top barriers to be similar.
budget constraints
45%
existence of organizational barriers
38%
lack of interoperability of solutions
27%
poor integration with existing solutions
24%
The second-ranked barrier, the existence of organizational barriers, indicates that some of the financial issues and pressures could be improved if Digital
high cost to collect machine data
Oilfield technology was viewed as more
low network capacity for data transmission
of a cross-functional group initiative.
poor quality data
Additionally, organizations have long indicated that they would be more interested in piloting or adopting technologies if they could be integrated with existing systems. This is a direct function
22%
cybersecurity concerns
21% 20% 19%
shortage of necessary talent
18%
difficulty in consolidating disparate/siloed data superior alternatives
14% 8%
of organizations wanting to minimize the risk of having to rely on only a few vendors or solutions and their prefer-
FIELD PRODUCTIVITY
ence for making step changes versus
BARRIERS: BY SENIORITY AND
groups that the high cost to collect
quantum leaps.
FUNCTIONAL GROUP
machine data (the IT group) and the
The fourth-ranked barrier to adoption,
By seniority, all groups indicated budget
shortage of talent (the operations
poor integration with existing solutions,
constraints as their top perceived bar-
group) appear for the first time as
supports the comments of some survey
rier, but it was the executive group, at
barriers to Field Productivity technol-
respondents that the real challenge isn’t
34 per cent, that had the largest per-
ogy adoption. It is also instructive that
the cost, ease of technology integra-
centage of respondents. Together with
it is the instrumentation, controls and
tion or getting the necessary data, but
this group’s third-highest perceived bar-
engineering group that is concerned
rather the glut of disparate data from
rier, the high costs to collect machine
about cyber security and not the IT
numerous sources that first has to be
data, representing another cost issue,
group. Since Field Productivity tech-
standardized and normalized before
it becomes obvious there is a very cost
nologies could allow the distribution
anything of value can be done with it.
conscious approach to adoption—even
and access of key electronic engineer-
With the lower ranking of concerns
more so than to functionality and in-
ing plans and schematics, the former
over low-network capacity, it is apparent
tegration/interoperability concerns
group has security concerns because
that the data management infrastruc-
with current technologies. Organiza-
of the sensitive content, whereas the
ture issue is becoming less of a limiting
tional barriers are consistently ranked
latter group is confident in the security
factor, a positive signal for Digital Oil-
as a second-place concern across
infrastructure, but rather is concerned
field implementation going forward.
the board.
about the cost to gather remote data. 27
It is among the different functional
Field Productivity case study: Access to data when it’s needed A matter as simple as access to infor-
available. Data may be stored in a fil-
historical infrastructure including asso-
mation has the potential to cost oil and
ing cabinet, on a network drive, on a
ciated production and environmental
gas companies millions of dollars per
spreadsheet or in someone’s own head,
features. Access to such information
day when it means the difference be-
making it difficult or impossible to use
at a company’s fingertips, in the office
tween operating and not operating an
the information to make decisions about
or in the field, is allowing companies
asset. When a large exploration, de-
the most efficient way to use, plan and
to avoid costly information gap delays
velopment and production company
schedule resources.
and improve efficiency.
sought to put a recently purchased
Field productivity begins with asset
GDM showed this to be the case
pipeline back into service, it had to
intelligence—access to accurate, con-
when it enabled a mid-sized western
wait two weeks to get information on
sistent information that can be used
Canadian oil producer to proactively
the originally approved maximum op-
across multiple platforms in the or-
manage the integration of new assets
erating pressure on the line before it
ganization to gain a holistic picture
by providing information to its teams
was able to proceed. It also experi-
of operations and perform analytics
in the field shortly after the transac-
enced delays related to field activity
designed to improve efficiency.
tion, rather than having to wait for
in abandoning pipelines due to lack
Asset intelligence is particularly
weeks to begin managing the new
of information about the pipeline’s
valuable in the oil and gas industry,
assets. The technology also made the
exact location, and the inability of field
where assets are copious, diverse in
submission of One Call reports more
workers to provide updates to data in
nature and geographically dispersed:
efficient by having faster access to
real-time to facilitate timely and in-
• In western Canada, there are over
accurate information about pipelines
1,400 operators managing in excess
and changes to pipelines, thus en-
Additionally, work is sometimes
of 660,000 kilometres of pipelines,
suring the safety of both company
done multiple times because people
795,000 wells and 158,000 facilities.
personnel and the public.
don’t realize it has been completed
• There are over 333,000 pipelines
In another case, a large integrated
before, or do not have access to the
that have been built in western
oil and gas producer was able to save
previous records, notes GDM Pipelines,
Canada since 1900; approximately 73
$300,000 in municipal road use taxes
a Calgary-based provider of compre-
per cent of these are still operating.
by demonstrating its actual road usage
hensive pipeline, facility, midstream
• Approximately 30 per cent of op-
based on routing to its known assets.
and transportation information to the
erating pipelines are greater than
Additionally, a provincial regulator in
Canadian oil and gas industry. Critical
20 years old.
western Canada with an identified
formed decision-making.
information about an asset’s history is
Field Productivity solutions like that
need to make historical documents
often misplaced when assets change
provided by GDM integrate and re-
more accessible is in the process of
hands, leading to time lost trying to find
late information across the complex
using GDM’s technology to make them
information or completing field activities
physical network of wells, pipelines
available, rather than adding additional
that could have been avoided if histor-
and facilities across western Canada,
staff to manually retrieve documents
ical information had been immediately
providing reporting on current and
when requested.
28
Field Productivity case study: Ending the paper chase Tundra Process Solutions, a Calgary-
service management software com-
From there, all work performed
based instrumentation and control
pany based in California, in order
is entered onto a report on the iPad,
specialist in the oil and gas industry,
to automate and speed up the bill-
including time, parts and materials
was getting so bogged down with its
ing process, reduce non-productive
used, and when completed the report
paper-based work order processes
time and needed paperwork, provide
is relayed to the company’s office for
that delivery time for invoices after
field workers with remote access to
processing. With customer signoff,
work had been completed could
information and work orders, im-
the report is uploaded and automat-
stretch to four to six weeks. The com-
prove forecasting and cash flow
ically emailed to the customer, and
pany, which also provides service and
and provide data for analysis that
invoicing can occur the same day.
in-house custom engineered solutions,
could reduce bottlenecks and lead
serves remote locations throughout
to greater workforce productivity.
western Canada.
Tundra realized a 75-per-cent reduction in the time to send out
Tundra created a four-person task
an invoice after service was com-
The company was old-school, still
force to extensively trial the soft-
plete and a 25-per-cent reduction
employing paper and pen in the field
ware, including sandbox testing, used
in non-billable time. And there were
and using Excel-generated service
by software developers to test new
other benefits. The reporting errors
reports. Its three dozen field techni-
programming code in isolation from
of the paper era were eliminated.
cians needed to attend to company
the production environment, and a
Analysis of the data now available
offices to manually enter written
field service process before rolling
brings new transparency, enabling
work onto company computers, cre-
out the ruggedized iPad-based solu-
the company to effectively track
ating excessive non-billable hours.
tion in 2015.
aspects like billable and non-billable
Other inefficiencies seeped into the
The new process starts with cre-
hours, worker productivity and ex-
working day. The company couldn’t
ation of work orders in ServiceMax
penses, and to determine its highest
effectively track its field workers or
dispatch console, which can then be
expenses compared to revenue.
generate reports on billable time
sent electronically, along with any
The solution is also a time saver—
and had no effective way to trace
other necessary information, to techni-
technicians can file work orders
other inefficiencies and bottlenecks.
cians in the field. The job is automatically
and other documents online, largely
Tundra turned to a paperless solu-
placed into their calendar when it is
eliminating their need to come into
accepted by the field worker.
the office.
tion offered by ServiceMax, a field
29
Perceptions of Fleet Management technologies: Solidifying its strong case YoY change in perceived relative ROI of FM technologies
In terms of technology use cases, Fleet Management was and remains the darling of the Digital Oilfield. In
2015 50% 40% 30% % % 8 6 1 1
20% 10% 0%
% 3 3 % % 7 5 2 2
2016
2015, Fleet Managem ent was ranked highest overall of
% 1 4 % 7 3
the 10 Digital Oilfield use cases and in terms of technological maturity and organizational readiness (and fifth in ROI). This year, it improved in all those categories, with a particul arly strong 27 percentage point % 1 1
boost in the perception it is already highly proven in
% 5 1
the market, up from 11 to 38 per cent, among those
% % 3 0
weakest
who provided a rank. Fleet Management rose year-over-year in the perception weak
neutral
strong
strongest
that organizations are fully capable and ready to adopt the technology (from 16 to 26 per cent). Together with the sig-
YoY change in perceived maturity of FM technologies
nificant increase in recognized maturity of the technology, the results tangibly show that industry believes this tech-
2016
2015
nology is past the initial pilot stages and abundantly ready
50% % 9 3
40% % 8 2
30%
10%
% 8 % 4
% 2 3
The case for ROI is also solid, with more than half of respondents feeling it has somewhat stronger (37 per cent) or much stronger (15 per cent) ROI compared to other in-
% 9 1
% 4 1
20%
for larger scale deployment.
% 8 3
% 5 % 1 1 1
% 7
vestments. That compares to just 21 per cent ranking its adoption as somewhat weaker (18 per cent) or much weaker (three per cent) than other uses of capital. More generally, Fleet Management–type technologies
0% ready >18 months
ready <18 months
in testing
d ep lo ye d
h ig hl y proven
have become more high profile in recent years as hype about their potential grows in the consumer market, with advanced mobile-based personal navigation applications
YoY change in perceived organizational readiness for FM technologies
and monitoring technology, car sharing applications now available and both automobile and information technol-
2015
2016
ogy companies investing billions of dollars in the race
50%
to develop the driverless car. In the oil and gas industry, companies are piloting driverless trucks in oilsands
40% 30% 20%
% 6 1 % 2 1
% % 6 6 1 1
% 7 2 % 3 2
% 6 % 2 4 2
mining operations in addition to adopting more conven-
% 6 2
tional Fleet Management solutions. At a time of rapid
% % 6 5 1 1
technological innovation, Fleet Management is an area to watch with more cost-cutting applications sure to
10%
enter the marketplace in the near to midterm.
0% > 18 months
6-18 months
barriers still exist
capable but not adopted
adopted
30
Fleet Management adoption: Demographic breakdown
ADOPTION DIMENSION SCORES BY SENIORITY FOR FM TECHNOLOGIES tech. maturity
ROI
org. capabilities
overall
executive
4.36
3.45
3.27
3.70
management
3.93
3.54
3.34
3.60
technical
3.85
3.35
3.65
3.62
front line/ support
3.41
3.29
3.00
3.24
average
3.92
3.42
3.35
3.56
Perhaps surprisingly, the seniority group most driving Fleet Management’s favourable ratings was the executive group. With the front-line group having a below-average score, it’s clear the value and importance of these technologies is not making its way down the full chain of command. The real value of Fleet Management technol-
ADOPTION DIMENSION SCORES BY FUNCTIONAL GROUP FOR FM TECHNOLOGIES
ogies is the ability for operations to have data
tech. maturity
ROI
org. capabilities
overall
operations
3.53
3.06
3.15
3.25
instrumentation, controls & eng.
4.11
3.67
3.50
3.76
information technology
4.45
3.80
3.73
3.99
others
4.05
3.56
3.40
3.67
average
3.92
3.42
3.35
3.56
analyzed so it can pinpoint where it needs to change high-cost behaviour (e.g. driving patterns and style, idle times, improved routing). Yet in terms of functional groups, operations does not appear to fully understand or believe in the ROI, taking a dimmer view than the overall average score and contrasting sharply with IT’s high ratings across the board. Addressing this disconnect could be key to improving adoption. The “other” category, including midstream, downstream, engineering, procurement and construction management, government agency and consulting groups, is particularly confident
ADOPTION DIMENSION SCORES BY INDUSTRY VERTICALS FOR FM TECHNOLOGIES tech. maturity
ROI
org. capabilities
overall
producers
3.69
2.92
3.12
3.24
service & supply
4.02
3.59
3.41
3.68
others
3.96
3.65
3.52
3.71
average
3.92
3.42
3.35
3.56
about Fleet Management’s potential. This could be a reflection of the fact some of the companies in this category operate some of the largest vehicle fleets and are therefore most cognizant of the demonstrated benefits of the technology’s adoption.
“Fleet management is a solid plat form for communications providers to build additional value, beyond connectivity, for automakers, t hird-party logistics companies and the like. Autos represent the raison d’etre of IoT—things with wheels, always connected, all the time interacting with other things with wheels and their environment.” — Eric Goodness, IoT and mobile analyst, Gartner Inc.
31
Key benefits of Fleet Management technology adoption: More than fuel savings
While fuel cost savings is the most demonstrated and obvious benefit of
Weighted average rankings of respondents’ top three choices for perceived benefits of adopting FM technologies
Fleet Management solutions, survey respondents surprisingly ranked reduced
reduced maintenance and repair costs
44%
energy costs at the bottom of the list, choosing instead aspects leading to
42%
improved safety
higher efficiency. In fact, understanding behaviour, usage and wear patterns of
35%
increased asset uptime
mobile assets in order to lower maintenance and repair requirements was seven to 10 priorities spots higher than focusing on reducing fuel consumption. This could be an indication respondents are looking past the most established benefit of Fleet Management—fuel savings—to the more intangible savings that have come to the fore as the tech -
increased labour productivity
35%
improved production/ enhanced recoveries
24%
decreased unplanned outages lowered environmental impact increased security
21%
17%
16%
nology has advanced in sophistication and capabilities.
optimized inventory
14%
reduced energy costs
14%
As expected from a technology intended to monitor and improve driver behaviour, improved safety was highly ranked, second only to reduced maintenance and repair costs. The results
indicate there is a shift in industry workers’ view and comfort level in the increased visibility of their movements and operations as there is a direct safety
the responsibility on their shoulders to
mobile warehouses, this makes sense,
benefit, and this transparency isn’t just
drive down costs in light of fallin g rev-
but surprisingly that insight seems
about reprimands and job reductions.
enues. Increased asset uptime was a
to have been missed by the “other ”
top three benefit listed by all groups.
group, of which a big sub-grouping
FLEET MANAGEMENT
Among functional groups, increased
is the supply chain management and
BENEFITS: BY SENIORITY AND
asset uptime is again a consensus top
FUNCTIONAL GROUP
three choice, as is improved safety.
Finally, it is apparent that the focus
While most groups see improved safety
The outlier is the optimization of in-
of vendors on the potential fuel and op-
as the biggest upside to Fleet Manage-
ventory seen as the chief benefit of
erating cost savings do not align with
ment by a wide margin, the biggest
Fleet Management in the IT group. This
the top benefits listed by survey re-
misalignment among seniority levels
suggests the IT group believes having
spondents. This could be a case where
is seen in management’s greater focus
more insight into the whereabouts of
the vendors needs to better educate
on cost factors, likely a reflection of to-
mobile assets translates into optimizing
the user or adapt their offerings to bet-
day’s challenging price environment and
inventory. As trucks are often seen as
ter correspond with user perceptions.
32
procurement teams.
Key barriers of Fleet Management technology adoption: Some roadblocks remain
Aside from the current state of the industry, battling the deepest bust
Weighted average rankings of respondents’ top three choices for perceived barriers of adopting FM technologies
cycle in a generation, the fact budget constraints is ranked as the top perceived barrier to Fleet Management adoption is not helped by the fact that the technology is for the most part cutting edge and thus has yet to come down the cost curve. It could also be hypothesized that budget constraints is a default answer in the absence of
48%
budget constraints existence of organizational barriers
44%
difficulty in consolidating disparate/siloed data
24%
poor integration with existing solutions
22%
cybersecurity concerns
22%
a strong business case and a history of proven pilots and integrations. As time goes on and more pilots and case studies prove their value, this barrier should be easier to overcome and more
specific concerns, such as integration with existing solutions, will come to the forefront. Most positive in the rankings for both use cases is the marked decrease
poor data quality
18%
high cost to collect machine data
18%
lack of interoperability of solutions
17%
shortage of necessary talent
14%
low network capacity for data transmission superior alternatives
12% 7%
in concerns about cybersecurity, a potential deal breaker that was tied
for the second-highest barrier to adoption of Digital Oilfield technologies in 2015. In percentage terms, it was ranked
FLEET MANAGEMENT
At the functional level, cyberse-
as a top barrier less than half as often
BARRIERS: BY SENIORITY AND
curity pops back onto the agenda
as budget constraint for both use
FUNCTIONAL GROUP
with three out of the four groups
cases. While it remains an issue that
When broken down by seniority group,
making this their third-highest
needs to be prudently dealt with, it is
there is a distinction whereby the closer
concern, though at relatively low
promising in that what was perceived
groups are to the technology, the more
percentage levels compared to the
as a major infrastructure, behavioural
concerned they are with cybersecurity.
top two barriers cited. Oddly enough,
and perception-based barrier can be
This may be a function of having a better
it is not the IT group that ranks it in
overcome to that degree in a relatively
understanding of the technical consider-
the top three. Instead, that group
short period of time. Since much of the
ations of implementation, whereas the
is more focused on the cost to col-
technology applications rely heavily
groups making specific purchasing deci-
lect the machine data that could be
on wireless mobile access and cloud
sions at the management level are more
generated. This could indicate the
computing, it is a positive step forward
focused on the overall picture and how
concerns of the other groups are
to see cybersecurity concerns fall to
implementation fits in with the different
speculative and based more on per-
the middle of the grouping.
applications already in place.
ception than reality.
33
Fleet Management case study: Driving down costs and optimizing with analytics Canadian Natural Resources Limited,
a GPS, RFID and analytics offering
Pro fleet tracking technology provides
one of the largest independent oil and
into an organization’s operations. The
more advanced mapping features,
gas producers in the world, faced a
telematics data (SMART-vu Pro) and
including integrated Patchmaps, in ad-
fleet management challenge recently.
radio frequency identification (RFID)
dition to detailed and comprehensive
In order to reduce vehicle fleet costs
(SMART-vu TagNet) data collected is
reporting, allowing Canadian Natural
and enhance the health and safety of
used to establish a baseline (SMART-vu
to obtain critical fleet performance
its workers, it wanted to take a more
Analytics), which is in turn used to trend
data within three clicks.
proactive approach to reducing ex-
the metrics measured by leveraging pro-
Storm continues to provide
posure to safety incidents by curbing
prietary efficiency algorithms in the areas
Canadian Natural with a dedicated
negative actions like speeding. It also
of descriptive analytics (what happened),
Implementation Specialist to assist all
wanted to obtain Diagnostic Trouble
diagnostic analytics (why did it happen),
11 districts in optimizing fleet assets,
Codes from on-board vehicle com-
predictive analytics (what will happen)
including training and support by way
puters reporting on various metrics, like
and prescriptive analytics (what is the
of configuring scheduled reports for
seatbelt usage, and reduce exposure
best outcome and how it can be made
various Canadian Natural stakeholders
to theft of its ATVs. And it needed to
to happen).
and setting up escalation procedures
replace the CDMA communications
Storm integrates telematics data
network it used that was in the pro-
and RFID technology into an algo-
The technology allowed Canadian
cess of being discontinued.
rithm-based analytics engine to analyze
Natural to establish a solid baseline for
The Calgary-based company,
the massive volumes of data coming
ongoing trending analysis and to begin
which manages a fleet of more than
in from multiple sources and formats
measuring reliably specific metrics such
800 vehicles in 11 operating districts,
and turns it into clear, highly granular
as speeding, idling and off-hour usage
approached the challenge as an oppor-
information that is converted into ac-
of fleet assets. Within the first quarter
tunity to upgrade to the latest in Fleet
tionable intelligence able to deliver
of deployment, one of the divisions was
Management solutions, which leverage
quantifiable savings—and ultimately
able to determine that $4,179 in fuel
digital platforms to maximize fleet ef-
measuring the cost of inefficiency.
was used as a direct result of excessive
using a flexible alerting engine.
ficiencies. It chose the SMART-vu Pro
Storm seamlessly transitioned
speeding (29 assets) and 3,850 litres
solution offered by Storm Telematics.
Canadian Natural’s hardware that was
of fuel was used during 2,485 hours
SMART-vu Pro is a powerful GPS dis-
installed into its fleet to the SMART-vu
of idling (based on 30-plus minutes).
patching tool that also functions as a
Pro platform, replacing the necessary
The first division deployment achieved
comprehensive reporting system and
legacy CDMA modems with HSPA mo-
a 24-per-cent return on investment
can be configured according to specific
dems and deployed satellite tracking
in year one and a 152-per-cent return
customer needs. Storm Telematics, an
devices, providing ubiquitous coverage
on investment in year two. Increased
Edmonton-based company, optimizes
using the Globalstar satellite network,
safety is achieved for employee and
fleets by building business impact mod-
onto the company’s ATV fleet to re-
contractor workers by providing visi-
els to validate the value of implementing
duce exposure to theft. The SMART-vu
bility over driver behaviour.
34
Conclusions and recommendations Present a robust business case Budget constraint has rated at the top of the barriers to adoption of Digital Oilfield technologies every time the question has been asked. But what does that mean? While the oil and gas industry has been subsumed in a ruthless cost-cutting spiral since prices collapsed two years ago, that doesn’t mean companies are not investing in activities that will save money. Indeed, as cost cutting becomes paramount, it makes more sense to spend on measures to reduce expenses, not less. That suggests proponents of Digital Oilfield technologies are not making a convincing enough business case for implementation to pay for itself and actually add value to the enterprise—budget constraint becomes a default answer in the absence of strong business cases and a history of proven implementations. The ability to make a strong business case, including a robust cost-benefit
“Focusing on the quantitative benefits of your idea is the most effective way of removing your biggest hurdle when dealing with key decision makers—their personal biases.” —Bob Phillips, chairman of the board, Precision Drilling
analysis and evidence of successful implementation through pilot projects, case studies and testimonials, can go a long way to de-risking the decision to invest in any new technology.
Building an effective business case The role of a business case is that of
with existing systems, training require-
is to be able to work deeper through the
a communication tool, composed in a
ments). Once these two elements have
tree to identify the specific examples of
language that the target audience under-
been determined, a proper cost-benefit
how a given technology could benefit
stands and with enough detail to facilitate
analysis can be performed to allow a
a user or the organization and then roll
decision making. Using a business case
logic- and fact-based decision on adop-
back up and assign specific values (fac-
approach to sell technology adoption
tion to be made.
tors, multipliers, absolute values) to all
opportunities is first about moving away
the micro and macro benefit levers that
from simple qualitative benefit expression
NAVIGATING A BUSINESS C ASE
would change from the baseline oper-
(e.g. this application will make your work-
DECISION TREE FRAMEWORK
ating scenario.
ers more efficient and safe) to providing
The framework example below is de-
At the end of th e exercise, a com-
quantifiable rigour around the potential
signed to assist in visualizing all the cost
prehensive benefits value should be
benefits (e.g. this application will decrease
levers adopting a new Digital Oilfield
generated that can be then compared
the volume of work by X, increase pro-
technology could affect. After estab-
against the costs, including all the im-
ductive time by Y and lower operating
lishing a proper baseline scenario, a user
plementation considerations—cost
costs by Z over a specific timeframe).
trying to make a business case would
to purchase, maintenance, integra-
After benefits have been effectively
identify all the relevant solution bene-
tion with other systems and training,
categorized and quantified, implementa-
fits that match the application need
to ensure the benefits will outweigh
tion considerations need to be addressed
and work through the framework, left
the costs by the amount and within
and also quantified (e.g. cost to purchase
to right, highlighting all the applicable
the timeframe required for capital
and maintain a solution, integration costs
macro and micro benefit levers. The goal
investment.
35
Business case decision tree framework for adoption of Field Productivity technologies PLANNED OPERATIONS
UNITS OF WORK (e.g. number of truck rolls)
UNPLANNED OPERATIONS
PRODUCTIVE TIME
TIME FIELD PRODUCTIVITY
(e.g. hours spent completing a job start to finish)
UNPRODUCTIVE TIME
Use case
COST (e.g. the average labour rate being
OPEX
incurred)
Macro benefit levers
Micro benefit levers
Field Productivity case study: Virtual training Using Siemens’ advanced simulation software—which gen-
Using Siemens’ COMOS facility management software pro-
erates precise, 3-D virtual representations of technologically
gram, and its COMOS Walkinside 3-D virtual reality model-building
complex industrial facilities, including detailed information
system, technicians can see themselves depicted as an avatar
and the complete history of associated components—a com-
in a virtual model of a facility, which they are training to use
pany operating an offshore oil processing platform in Africa
or required to inspect. Safety is enhanced and the need for
was able to begin its training on a virtual model while its fu-
paperwork, like training manuals, component diagrams and
ture workplace was still under construction. By reducing the
inspection reports, is reduced or eliminated. Companies can
time needed for training sessions on board, the oil platform
also use the technology to complete planning and virtual com-
entered service two months earlier than planned.
missioning of a facility before a single bolt had been tightened.
36
MAINTENANCE: Servicing assets
Reduce frequency of site visits by performing trouble ticket analytics on
routinely/scheduled to maintain
asset usage versus planned work and maintenance schedules to determine
normal operations
which activities can pushed up or back to align with other site visits.
INSPECTIONS: Assessing the
Reduce number of site visits by monitoring infrastructure and complet-
operational health/status of
ing asset inspection remotely and combining actual site visits through
an asset
optimizing inspection schedules.
INSTALLATION: Putting new assets into service or adding functionality to existing assets
REPAIR: Fixing an asset that has failed unexpectedly or correcting previous work done incorrectly
JOB ASSESSMENT: Scoping job requests to identify all possible required resources
Decrease the number of follow-up trips required to complete installations by providing 24/7 access to centrally located troubleshooting experts, installation guides and video tutorials to ensure the job can be done correctly the first time.
Reduce the need for site assessment visits by analyzing historical maintenance and repair logs to best determine cause of failure and dispatching properly trained crews with the ri ght parts/equipment the first time.
Reduce the amount of time a call out could take by conducting outcome probability and risk-based impact analysis on trouble tickets so that the optimally trained technician/crew can be dispatched rather than using a first-available, first-out approach.
JOB COMPLETION: Conducting
Decrease time to completion by providing instant around-the-clock ac-
work on the asset at site and time
cess to centrally located experts, manuals, procedures and engineering
required to finish the job
schematics.
TRAINING: Providing resources
Maximize output from crews by optimizing how crew downtime is
with new skills needed to improve
spent by scheduling skills and safety training during expected down-
their safety and output
times or off peak hours.
SEARCH: Expending effort
Reduce resources spent on searching for parts and equipment by having
looking for parts and equipment
real-time overview of inventory at fixed and mobile warehouses so that
needed for the job
parts can be available without delay for routine and emergency jobs.
TRAVEL: Travelling to and from the worksite
Decrease distance crews travel through intelligent routing of trouble calls that balances impact of asset failure versus likelihood of failure versus crew availability and time for crew to respond.
Reduce average labour costs by organizing crews based on frequency WORKFORCE PLANNING:
of call outs versus required response time versus total overtime wages
Optimizing how crews are staffed
(e.g. standby or on-call model, 24/7 ops). Additionally, optimize the
and deployed
mix of skillse t and seniority of crews using predictive workload models based on historical call-out data.
Micro benefit categories
Examples of application benefits 37
Business case decision tree framework for adoption of Fleet Management technologies UNITS OF WORK (e.g. number of truck rolls)
OPERATIONS
FLEET MANAGEMENT
Use case OPEX COST (e.g. the average costs associated with a truck roll or km traveled) CAPEX
Macro benefit levers Micro benefit levers
38
UTILIZATION: Optimizing how mobile assets are used
Increase transparency of fleet location and usa ge to improve their utilization and decrease total distance traveled through intelligent routing, and optimizing the number of mobile assets required to be owned/rented in the fleet.
MAINTENANCE: Servicing assets
Reduce frequency of required shop visits by performing trouble ticket an-
routinely/scheduled to ma intain
alytics on asset usage versus planned work and maintenance schedules
normal operations
to determine which jobs can pushed up or back to align with shop visits.
Reduce potential for re-work or the need for additional resources to be REPAIR: Fixing an asset that has
dispatched by properly analyzing the information received on the origi-
failed unexpectedly or correcting
nal trouble ticket and calculating possibilities, probabilities and impact of
previous work done incorrectly
additional issue and dispatching crews accordingly rather than using a firstavailable, first-out approach.
SAFETY: Minimizing incidents
Decrease chances of lost time to injury due to driver incidents by monitoring
through safe operations of mobile
driver patterns and conditions and providing real-time (e.g. in-cab) coaching
assets
and creating safe zones (e.g. virtual GPS zones regulating maximum speeds).
FUEL: Determine strategies to save on amount of fuel used in operations
INSURANCE: Paying premiums for asset operation and accident claims
ENVIRONMENT: Lowering environmental impact due to operations
FLEET: Managing the purchase, lease and divestiture of assets
Micro benefit categories
Improve driver behaviour through operations monitoring and coaching so that mobile assets are used in an optimum fashion (e.g. no speeding, limit idling). Decrease fuel usage by following proper maintenance schedules and operating guidelines (e.g. tire pressure). Reduce overall insurance rates of mobile assets by being able to quantifiably demonstrate statistics of driver behaviour and provide factual information
to correctly determine at-fault parties in accident situations, thereby reducing claim and litigation costs. Reduce overall carbon emissions and subsequent car bon taxes by following proper maintenance schedules, driving less aggressively and travelling fewer kilometers due to route optimization. Lower other environment costs associated with fees for automotive parts by reducing wear through excessive use.
Increase the time between purchases of assets and increase recovery of assets to be divested as a result of reduced wear due to improved operator usage patterns and proper maintenance programs.
Examples of application benefits
39
Fleet Management case study: Model behaviour A Calgary-based service and supply company that
engagement, with a $295,000 payback on the com-
operates a total fleet size of 2,100 assets sought out
pany’s 110 vehicles. It projected over $150,000 in annual
an assessment for entering into a pilot for 110 heavy-
savings based on reductions in fuel consumption and
duty vehicles (including vacuum trucks, water-hauling
asset deterioration based on a projected five-per-cent
trucks and assorted vehicles serving the needs of the
reduction in aggressive driving behaviour, over $26,000
oil and gas, petrochemical and mining industries) to
in fuel savings by reducing idling by 15 per cent, an
determine the savings a Fleet Management solution
additional $120,000 revenue based on improved utiliza-
could provide. Storm Telematics undertook a detailed
tion and over $176,000 in annual maintenance savings
audit of the fleet to determine possible efficiencies to
based on improved preventative maintenance and re-
reduce costs and improve safety. It used an existing
duced vehicle wear and tear.
methodology that tracks savings in driver behaviour
Based on these projected savings, it was estimated
by moving the worst driving offenders in a fleet in line
that breakeven would occur before six months. Storm
with the best drivers, using in-house benchmarked
projected a 408-per-cent, five-year return on invest-
data revised based on the specific nature of the com-
ment. Additional savings could be realized if some
pany’s fleet. The estimate assumed no use of Storm’s
assets are shown to be saleable without impacting
analytical engine or ongoing fleet optimization ser-
operations. There were also significant potential cost
vices, but was solely focused on using SMART-vu Pro
avoidance and soft benefits with high-potential value
to measure specific metrics related to driver beh aviour
that were not included in the ROI projection.
improvements, idling reduction, asset utilization im-
Some of the direct benefits associated with this
provements and maintenance savings.
case study can be plotted in the business case deci-
Working in collaboration with the organization,
sion tree above, such as vehicle maintenance, driver
Storm’s business impact model found there would
safety, fuel consumption and divestiture of assets, for
be a positive net present value in the first year of the
assessment through the framework.
40
Engage technology champions Survey responses indicate there is a high level of confidence in many Digital Oilfield technologies’ readiness for adoption and ability to pay dividends, but the internal workings of organizations themselves are perceived to be one of the biggest barriers to getting them implemented, second only to budget constraints. This is not entirely unexpected, since the kind of sweeping technology transformation that adoption of Digital Oilfield technologies can entail often requires a cultural shift and re-engineering of process throughout the organization, the breaking down of functional silos and embracing of collaborative business models, overcoming knowledge gaps and perseverance to see the transformation through. Given the enormity of the chal lenge, a lack of clearly defined ownership of the task of driving technology selection and implementation forward can become an impediment. One way to move implementation up the agenda is to appoint a leader or team tasked solely with spearheadin g the transition, including rigorously assessing new technologies, testing and piloting the best candidates, quantifying the value of implementation and moving to scale those technologies determined to be cost effective. Moreover,
“Identifying, testing and implementing new technologies that are critical to helping solve an organization’s or the industry’s most pressing issues can’t be another line item to someone’s existing job description, but has to be their only responsibility and built right into their job title if you want to experience change of any consequence.”
an effective leader or team should be able to overcome employee resistance to change and convince colleagues that implementation is indeed within the scope of their roles and within their abilities to execute.
— Amit Varma, chief executive officer, True Site View
Engage with suppliers The product-as-a-service model increasingly used in the software and other industries changes the nature of the relationship between the customer and the vendor from that of a one-time purchase to that of an ongoing relationship, with the vendor promoting customer satisfaction over the life of the product. This benefits both sides in the transaction. Tracking of customer usage of a software or product creates valuable feedback to the vendor that can be analyzed and used for ongoing product improvement, while the customer’s ongoing relationship with the vendor ensures it receives the most benefit from the technology. Some vendors now use customer engagement teams, or implementation specialists, specifically tasked with maximizing customers’ value from their technology. Implementation specialists are engaged with managing the onboard implementation, system configurations, troubleshooting and addressing the training needs of its customers. With the ability to make its technology on board easy to understand for end users and to showcase the value proposition of a company’s products, customer engagement teams can play a critical role i n the success of a technology in the marketplace. Additionally, suppliers can often bring experience from other oil and gas companies and from other industries. Those best practices will help drive more value.
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“Innovation is as much about new technologies as it is about change management. The sooner vendors and buyers trust and see each other as strategic partners rather than transactional groups, the sooner they will get to move at web speed.” — Kevin Frankowski, executive director, Kinetica Ventures
Break down the silos Part of the reason for the existence of organizational barriers is the presence of entirely separate disciplines within organizations that have customarily not interacted. If information technology is not considered a full business partner in the process, a gap will remain between IT systems and operational technology systems. Enterprise software development and embedded control systems development have traditionally operated in their own silos, employing different tools, platforms, professional skills sets and corporate cultures. Yet Digital Oilfield technology implementation usually requires some degree of melding of the two. Remote sensors need to be programmed for the task for which they are installed as well as to provide data for analysis and potential actions. Much of the value from Field Productivity and Fleet Management come from IT integration—IT needs to be more closely aligned in order to gain full value. Companies must accelerate behavioural change across
“However, the true realization of the [Digital Oilfield] vision comes not in the field, but in head office, and how producers change their business processes to leverage analytics and to integrate the silos that can exist, for example, between the exploration and production sides of the business. Unlocking this potential is as much about people and process as it is about technology.”
the organization by reinforcing teamwork and promoting collaborative engagement among diverse working groups that are all essential to the
— James Freeman, chief technology officer, Zedi
success of Digital Oilfield technology implementation.
Maintain cybersecurity vigilance Concerns about cybersecurity have fallen, from second place among barriers to the Digital Oilfield to fifth—that’s the good news. But as more companies install more sensors and devices, and collect and transmit exponentially more sensitive data, the security of th at data will always be a worry—and the threat will always remain. As the IoT penetrates the oilfield, now is no time to let the guard down—and see it return to security being a major barrier to implementation. Companies need to reach the same sort of widespread level of understanding and enforcement around cybersecurity that they have today with protecting their people (safety), the environment and their physical assets (reliable operating and maintenance practices). That means ca refully designing security into IoT systems from the beginning and exercising continued vigilance throughout the implementation and lifespan of the system.
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“The attackers are already doing a great job sharing information between groups, and in order for security providers to keep up, we will need to get better at sharing information as well.” — Nate Kube, chief technology officer, Wurldtech
Maximize Operational Efficiency With Real Asset Intelligence GDM helps companies navigate the complexities of the modern digital oilfield, by finding more efficient ways to use real-time oilfield asset data. We aim to minimize re-work, maintain critical historical information for future operational success,
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