DIGIT’s fifth annual Digital Energy conference took place in Aberdeen this week. The two-day event captured an industry in the throes of change, where innovation, technology and data are becoming ever more critical to long-term success.
It’s fair to say that the global oil and gas industry has had a tumultuous few years. The significant and long-term downturn in global oil prices marked an end to the business-as-usual approach of many companies, who had spent decades refining their organisational and operational efficiency based on a buoyant and stable market price.
For an industry driven forward by technology’s ability to reach new reserves and access increasingly difficult areas, the oil and gas industry remains quite conservative in its approach to technology and notoriously risk-averse when it comes to disruptive innovation.
In the new global market however, the ability to utilise disruptive innovation is becoming increasingly more important to the long-term survival and success of companies within the industry. From understanding data, to embracing digital transformation, the oil and gas sector is finding that technology is no longer something for the IT department alone.
Digital Energy brought together some of the industry’s most forward-thinkers and digital pioneers to highlight the ways in which the industry is embracing the interactive world.
The first day of the event explored the value of technology within the context of digital transformation. As we’ve learned from a number of other events and case studies in the recent past, real company-wide digital transformation requires a significant cultural shift in thinking and buy-in from the whole workforce. It cannot be a shot-term ‘IT project’ and technology is merely an enabler for strategic outcomes, not an end in itself.
For an industry such as oil and gas which has built up a significant global infrastructure and in which domain expertise and decision making across a vast range of disciplines are critical for safety, as well as success, this kind of cultural shift may not come easily.
Agility, which is one of the hallmarks of the digital technology sector, is far more difficult for larger organisations with stakeholders with decades of investment in a particular modus operandi.
The opening speaker of day one, Max Rowe, the Lead Energy Partner for GlenShore pointed out, the basis for competition has changed. The best long-term strategy for companies within the sector is to create and drive the change, rather than find themselves subject to unpredictable change coming from another source.
Angus Murray, the head of IT for TAQA went further and used the company’s digital leaders project as a case study. Boldly stating that ‘we failed’, Angus admitted that his team ‘were too busy being IT’ going into the project and that the default position was ‘shields up’. However, a focus on ‘digital’ rather than ‘IT’ and by using outcomes as goals and KPIs rather than technologies, the company is making real progress in moving forward as a digitally-fluent company.
The Value of Data
Several speakers highlighted an appreciation and understanding of data of a key element for the sector as a whole. Many companies generate huge amounts of data, but few make use of it beyond improving efficiency. Chris McManaman, CGI’s Director of Commodity Trading & Risk Management called for a smarter use of data to move beyond this and start to focus on data for predictive and indeed prescriptive analytics, allowing companies to make smarter, more informed decisions about future activity.
The use of data for modelling, the creation of ‘digital twins’ and prescriptive simulation was echoed by a number of speakers across both days of the conference. The oil and gas industry has huge amount of legacy data and is generating ever greater volumes of new data as it evolves. Utilising new technologies such as cloud-hosting, sensors through the Internet of Things (IoT) and enabling global accessibility can give companies far greater opportunities to make smarter use of their data moving forward.
All the data in the world however, is useless unless it can be understood and acted upon. Professor Nirmalie Wiratunga from Robert Gordon University, outlined the methods which can be used to reason with data and discussed exactly how data can be used to generate ‘actionable knowledge’.
While handling such huge amount of data can seem intimidating, Gavin Mccance from CERN was on-hand to describe exactly how such enormous volumes of data can be handled, processed, saved, stored and actioned at one of the world’s largest science experiments. Jaw-dropping was the only way to describe the volume of data and the ways in which it utilised.
Agility and Innovation
The siloed nature of the oil and gas sector and a decision making process of 6-18 months within the industry was identified as a key challenge by Luke Johnson, the CEO and Founder of Cognitive Geology, along with possible solutions and shortcuts, including finding organisations pro-actively looking for innovation, or those with specific prototyping funds and projects.
Day two of Digital Energy picked up on day one’s focus on data and drilled down into data security and cyber resilience, enabling companies within the energy sector to see how the wider world is understanding and addressing the need to protect critical infrastructure.
Mandy Haeburn-Little the head of the Scottish Business Resilience Centre and Eamonn Keane, detective inspector from Police Scotland, provided an introduction to the rapidly-evolving threat landscape and Scotland’s position as a pioneer and leader in cyber security.
The rise of IoT devices and the ways in which they can be used and vulnerabilities secured within an industrial context was discussed by Bill Malik from Trend Micro, exploring how the ‘attack surface’ a company’s infrastructure will continue to change. The following speaker, Tim Harwood of HSandTC, took a broader view, looking at the whole security issue from a business perspective and asked how companies can align their objectives with the requirements of good security.
As Tim pointed out, cyber culture normally embraces and supports innovation, flexibility and agility, all of which will help a company which is attempting to digitally transform itself, so the two should go hand in hand more often than they seem to.
Leading With Outcomes
Several speakers also focused on the value of leading with outcomes, so that a business can identify and focus on its goals at a strategic level, making technology an enabler. Angela Mathis from Think Tank Maths also summarised a point which almost every speaker and panelist made, that siloed team and siloed data leads to isolated programs, which do not advance the company as a whole in terms of effective utilisation of data and technology. Angela gave examples from multiple industries, from aerospace and healthcare, through to smart cities.
Angela quoted Colette Cohen, the CEO of the OGTC, who said: “It takes courage to take on and recognise new ways of working. There is a need for a breed of sector leaders who are brave, courageous and committed.”
The last speaker of day two was Stephen Ashley, the Digital Transformation Solution Centre Manager for the OGTC. As an industry veteran, Stephen put the entire two days into context with a summary of the opportunities open to the industry, by engaging with technology and enabling the acceptance of new ways of working – and the challenges it faces if it fails to do so.
Digital Energy 2018 marked a sea change for the industry. The question is no longer whether technology can help the oil and gas sector, or whether innovation is important. The industry seems to have accepted change is inevitable – and valuable. The question now is how to make it happen, as quickly and effectively as possible.