#Digitaltransformation In The Energy Industry- Past, Present, And The Forseeable Future
When thinking about #DigitalTransformation for the energy industry, one might question its genesis— where did it all begin? What is its current state, and what might we envision as its future?
Determining the exact time when it all began might be a challenge. Still, many of us would agree that three multinational energy companies—Shell, BP, and Chevron—shared a vision for what we now know as the #DigitalTransformation of the energy industry.
Let’s travel back in time to the late 90’s when these three ‘majors’ articulated their digital programs by giving birth to the smart field, which took on different monikers—the ‘field of the future,’ the ‘digital oil field’ or DOF, and ‘intelligent fields’ or IFs. Witnessing the technological advances these past few decades has been fascinating, to say the least, along with experiencing first-hand the challenges these smart fields have encountered. I believe it is incumbent upon us, as practitioners in this digital age, to step in, contribute and co-create the future of this #DigitalTransformation.
Three decades of hard work, ingenuity, and technological advances have resulted in a kind of layered foundation for intelligent systems; automation, process optimization, and preventive maintenance. These are key enablers for any digital oil field. Defining the DOF’s current state for the energy industry is challenging. It is anything but static, and it evolves continuously, especially when viewed from an asset or company perspective.
These days, some companies have moved on to developing their fields using semi-automated rigs. Others operate some of their production facilities remotely, still wondering about the economic merits of embracing the #DigitalTransformation agenda. Today, we can find “pockets” of early examples of DOF across the industry. However, one would be hard-pressed to find one company, much less an entire industry, that can claim a holistic deployment of a DOF-enabled strategy and operational philosophy. Before moving on to describing what the future of the DOF might look like, we can benefit from pausing and reflecting on some key learning from the past few decades. Listing the mall would fill an entire book, including case studies to better understand the root causes and consequences of adopting one technology or design over another. Instead, let’s focus on some of the obstacles our industry has encountered along the way to better crystallize the DOF vision.
One key roadblock revolves around leadership. Research has identified that C-suite leaders, depending on sector origin, understand the vision of DOF differently as well as the benefits it can yield. This has resulted in seasonal and localized programs as opposed to a continuous, holistic approach across all activities a company might carry out. So, while one can find great examples of DOF valve creation led by individual champions and SMEs in some local teams and assets, they still fall short of becoming the ‘new way of working’ for the organization.
Another obstacle is the belief that technology practitioners should lead to DOF initiatives. This ignores the fact that logic, analytics, and algorithms can only be effective in solving complex problems when they are crafted by the savviest (but unfortunately scarce) of SMEs. This lesson-learned is still causing a lot of internal tension in organizations and calls for the integration of SMEs with digital technologies and successful, physics-based, but not-yet-fully- automated processes.
Last but not least is the ‘overconfidence trap’ among decision-makers, which runs deep in the energy industry. This has prevented leaders from recognizing and accepting that other industries have moved faster and shown a greater understanding of the benefits provided by embracing a true #DigitalTransformation strategy.
Although we could delve deeper into what has hindered DOF from becoming a widely accepted norm today, it would be more productive to try and envision the future state. I propose an infographic resembling an atom, with key axes circling a nucleus—a kind of non-biological ecosystem with artificial intelligence (AI) at the very center. Think of it as a kind of perpetual collection of the most intelligent minds, fed with the smartest ideas, old and new, a master of physics, math, logic, and philosophy, capable of discerning the best, most economical, and technically elegant approaches while factoring in such issues as ethics, the environment, and social responsibility. The possibilities are endless for a foreseeable #AutonomousEnterprise.
I hope you’ve found the above points thought-provoking, and I would invite you to explore how we can collaborate to co-create an energy industry that leverages #DigitalTransformation and embraces #EnergyTransition practices (aka ESG metrics) to deliver a smarter, more sustainable world!