The impact to the oil and gas industry we are seeing from the COVID-19 crisis, and the continuing low oil price, has been considerable. One thing we can be sure of as we start to look at recovery and the future of the industry is that this type of impact will be felt again – albeit in a different form. We collectively have a responsibility to ensure the security of energy supply in the short-term, and deliver the energy transition in the long-term, and the only way we are going to achieve that is by being prepared for the fluctuations that may come the industry’s way.
As well as a responsibility, what we have now is an opportunity – an opportunity to change the way things have always been done, to work together and forge an alternative route ahead. An opportunity to drive home change. One way this change can be achieved is through a greater focus on digital collaboration across the industry’s entire supply chain.
There has been a lot of talk for a long time around digital and how important it is for our industry, but do we truly have a shared objective? There is no shortage of effort, but are we all pulling in different directions? And how can we make pivotal change in our business, instead of wasting time caught up in the latest technology buzzword, only to later establish it means something simple and obvious.
Digital has become lost in so many iterations of what it is for individual organisations, but as an industry it just means doing things better, without as much human intervention.
Technology companies, especially those at the bleeding edge of the spectrum keen to find real world application, may not fully understand the industry problems that they are trying to fix, and the industry is currently too closed to work with them to develop the solutions. These companies are run by entrepreneurs and we need to recognise and respect that. Equally, digital companies need to appreciate who they are selling to. What we need is a new approach and mindset, to ensure we can bring solutions into the industry in more efficient and more effective way.
The challenges we face:
1. The oil and gas industry strives for perfection, seeking solutions that must be 100% right first time and if it’s not, the approach tends to be “bin it, and start again”.
This is admirable, but when it comes to adopting and implementing the digital solutions that will improve our industry, it doesn’t work. We need to bring about a dramatic change in the attitude to problem solving to ensure the industry can benefit sooner.
Developing the right solutions requires iteration and a minimum viable product philosophy, where the solution has enough features to be successfully deployed while further enhancements are made, should be adopted.
2. Oil and gas operators have struggled to effectively engage with the digital supply chain, which differs considerably from the traditional oil and gas industry supply chain.
To engage with a start-up and scale-up community will require a pivotal change in the operators’ understanding of who they are buying from. Treating the supply chain the same as their traditional supply chain – for example, trying to put the same level of audit and compliance on a start-up as you would with a well-established SME – just won’t work.
Too often the industry tries to force standard terms and conditions for procurement to the digital supply chain when it is in no way suitable for the procurement of technology. A change in mindset should lead to new contracting principles, for software as a service and for agile development, to be put in place to allow for efficient and effective delivery.
A new “Software as a Service” version of the standard contracting principles, that have existed in the industry, for some time should be created.
3. Competitiveness wins over collaboration every time.
It has been proven in other industries – including aviation and automotive – that when the advancements in digital are rapid they have been a lever for great steps forward. They have achieved this not by pitching the digital companies against each other, but by sharing the common goal and working back from that.
The competitive and closed nature of the oil and gas industry means we never get the opportunity to pull in the same direction, to pool our collective expertise to benefit the whole industry. Roadmaps and strategic directions are not shared, which leads to overlap and people pulling in different directions rather than towards a common goal, wasting time, effort and resource.
A way ahead?
Operators can’t do this alone, and neither can the technology companies. Some compromise needs to be found – from the operators, acceptance that solutions will need iteration once they are in play; from the technology companies, acceptance that their products initially need to be more viable than those for other industries.
You don’t have to own it to do it
Within our industry we don’t have all the answers – not even within our own digital teams. It’s okay to utilise expertise from out with our industry to develop the solutions we need. What we need to have is an idea or a well thought through, well-defined problem statement and then engage with the right people to make this happen rapidly.
We need to collectively define the common goal – where do we want to get to as an industry and what is our strategic direction? It is almost like having an industry level problem statement, with recognition of where all the players fit in and how the solution is reached.
The opportunity that we are presented with just now – to change the traditional way of doing things and move ahead together – won’t last forever. We have wasted too much time and too many opportunities already – we must seize this one now. We recognise that each individual act may not change or save the industry – no single thing will – but we have to start really backing the ideas that will make a difference.
The change needs to be collective – individual heroes will not deliver this, and technology alone is not going to be the answer. We need to work together, to embrace different ways of doing things, to bring solutions into our industry faster.
Above all, what we need to recognise is that none of this is going to start happening organically – we must genuinely want this change and we have to be the change that we seek.
Sarah Moore, Executive Director, Peterson Energy Logistics, was appointed in January 2017, following Peterson’s investment in Core29 a technology diligence, strategy and delivery consultancy she founded in 2012. Moore has been actively involved with Peterson for almost 10 years and was responsible for delivering the eLogistics digital transformation as well as the integration of more than 15 international subsidiaries for SESI for consolidation purposes.