The downstream and oil and gas industry is rushing headlong into the digital era. And the transformation that is underway is one that will eventually affect all aspects of the industry’s global supply chain.
This was one of many exciting themes to emerge at the first day of Cavendish Group’s 2nd annual Future Downstream conference in London.
Welcoming 120 delegates to the first day’s opening session, Cavendish Group Managing Director Adam Soroka said, “It is important to understand that while digitalisation might mean different things to different people, change itself is inevitable.”
Keynote speaker Claudia Zuluaga, Principal Digital Product Manager at Shell said “The industry is going through a double transformation. One is decarbonisation, the other is digital transformation.
“Even as the oil and gas industry goes through one of its most dynamic periods of technology transformation in history, the responsibility is now for the industry to prepare the workforce for a future that is in effect already here,” she said.
She outlined Shell’s global strategy for predictive maintenance based on machine learning, as part of a deliberate strategy to use artificial intelligence (AI) right across Shell’s entire operation.
“AI can compute vast amounts of data in a matter of seconds when compared to the human mind. But business owns digital, and the human being is at the centre of the outcomes and insights produced by digital transformation,” she said.
Chairing the morning panel on digital disruption, Stuart Broadley, CEO of the Energy Industry Council pointed to the various landmarks that have in their various ways shaped the oil and gas industry.
“In 2014 it was all about the ‘oil crash’. In response to this crash, 2015 and 2016 was about cost reduction. Then, in 2017 it was about decommissioning. In 2018, digitalisation became the buzzword. However, in 2019 it is all about energy transition. And the opportunity for digitalisation in the low carbon energy future is where the action is now.”
This transition will require the oil and gas industry to move away from a situation where it is answerable to its shareholders to one where it is answerable to its stakeholders.
“And that means all of us,” said Dorothee Arns, Director General of FECC, the European Association of Chemical Distributors. “Profitability is the prerequisite but it is not sufficient enough anymore. Society is measuring us on our contribution to sustainability, because we are moving from mere shareholder value to stakeholder value in this new low carbon, circular economy".
Digitalisation though is not an end in itself, but the means to achieve more value throughout the chain. “It is about changing the way people work with respect to productivity and adaptability” said Raahil Burhaani, Chief Information Officer of Essar Oil (UK) Ltd.
Marcos Abech, Head of Digital Change Management at Braskem said “The chemicals industry can learn a lot from other sectors.” He revealed the success factors behind the creation of Braskem’s digital strategy as “capabilities, an innovative mindset, senior leaders' commitment, agile ways of working and next generation IT/OT infrastructure.”
There is no shortage of data. A large refinery can generate up to 1 terrabyte of data per day. But the key to improving productivity is ensuring the best possible use of the data that is being generated.
Elena Cinquegrana, Director of Digital Products and Partnerships, BP Downstream Digital said: “Data should be used as a decision-making tool, not as a transactional tool. Our motto is to make decisions at the greatest point of knowledge – this means you have the right data at the right time to deliver value.”
Meanwhile, synergies are increasingly created with data-rich companies like Amazon. “They are moving on to the oil and gas industry space as they are enablers with more mature tech platforms,” said Dr. Satyam Priyadarshy, Technology Fellow and Chief Data Scientist, Halliburton.
But movement between the data companies and the oil and gas companies is not a one-way street. Indeed, delegates debated whether oil and gas companies could now be considered ‘data’ companies in their own right.
So the digital future is already at hand. And the opportunity this brings for low carbon energy companies is creating a real buzz of excitement in the oil and gas sector.
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