The Digital Oil Field Hype Cycle:
An Assessment of where the Oil & Gas efforts are today
Baker Hughes Innovation ForumHouston, TX
December 10, 2013
Agenda
• The Future of the Digital Oil Field• The Digital Oil Field Hype Cycle• Barriers to Adoption– The “Integration” Challenge– The “Innovation” Challenge– The “Complexity” Challenge– The “Data Foundation” Challenge
• How do you talk to a Digital Engineer? The “Knowledge Exchange” Challenge
ObservationsResistance if Futile
• The trend of field automation, real-time systems and earth & reservoir modeling suggests that the Digital Oil Field is a reality
• New engineers and earth scientists are entering the workforce with high digital literacy (from lifelong experiences with consumer IT) and with some training in programming
• More and more petroleum engineering and earth science “intellectual property” comes in the shape of software
But, Houston we have a problem• Most of the “innovation” comes from end users or consultants working on
project, the impact of central research groups are decreasing, most of the execution & support details are left to local IT
• Significant gaps continue to surface (lack of reuse, fragile integration, poor data foundation, lack of end-to-end system design)
10
T-shaped expertise
Business Models &
Processes
Science &
Technology
People&
Culture
SSMESSME
Business Models &
Processes
Science &
Technology
People&
Culture
SSMESSME
Business Models &
Processes
Science &
Technology
People&
Culture
SSMESSME
Business Models &
Processes
Science &
Technology
People&
Culture
SSMESSME
A mix of technology/science, business and management will ready future innovators for the big challenges presented by a knowledge-driven economy.
"IT professionals will need to possess expertise in multiple domains. Technical aptitude alone will no longer be enough. IT professionals must prove they can understand business realities – industry, core processes, customer bases, regulatory environment, culture and constraints. Versatility will be crucial.“ – Gartner Group IT Professional Outlook
DEEP
BROAD
The Digital Oil Field Hype Curve 2013
y6
1
23
4
5
6
7
8
910
11
12
13
1. Real-Time Drilling2. Equipt. Health Monitoring3. Heavy Oil4. Artificial Lift5. EOR6. Production Surveillance7. Reservoir Performance8. IO Center9. Big Data Analytics10. Born Smart facilities11. Logistics12. Advanced Process Control13. Remote Operations
The “Integration” Challenge
• From Field to Office• From Reservoir to Well to Facilities• Regional, between similar fields• Along the Supply Chain• Fully Integrated Operations
Types of Innovation
• “Do New Things”: Invention• “Do Things Better or Faster”: Continuous
Improvement / Lean Sigma• “Do Things Cheaper”: Frugal Innovation• “Do Things Differently”: Transformation
Where does Innovation Happen?
• Invention in the Center (R&D department)• Commercialization (productization) in the
center (economies of scale)• Adoption at the edge (business units)• Innovation could happen anywhere– Lease Innovation (external consultants)– Buy Innovation (from market suppliers)– Problem Solvers are usually at the edge where the
problems are