Fireside Interview: Putting-toe-in-first or Cannonball approach to digitalization?

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These are indeed defining times for industry. We sat down with eDrilling’s VP Product Management and Strategy, Morten Svendsen, to hear his views on one of those items often put forward to secure a bright future for us all – namely digitalization.

Digitalization – hot or not?

– Definitely hot. There is a wind of change blowing in the industry, and it has digitalization written all over it. For us in the software world this is just a new name for something we have done all along, but we observe that the general awareness and acknowledgement of the value digitalization brings is at a whole new level among our customers and partners.

Is there a “recipe” for digitalization?

– Not one – the shoe that fits one person pinches another. Some are putting their toes in, and others are doing the cannonball. Although there are variations as to how different companies are approaching it, they all have in common that this is now a board level priority. Indeed, oil and gas CEOs are preaching “digitizing of the industry” as the only way forward.

We can also learn from history. When Hitec, our ancestor if you like, introduced cyber drilling, it was all focused on technology, and too little on people, work processes, and legacy workflows. Today, when we are working together with our next-door neighbour Statoil on “next generation well delivery,” which is one of their digitalization pillars, we have an all-encompassing approach.

Do the industry need «digitalization»?

– Yes, and I speak for the drilling side of things. Whether you call it digitalization or something else, application and intelligent use of real time drilling data, is a game-changer.
Many of the important workflows are still carried out with technologies that are at, or, I think, beyond end-of-life. Training on generic Drilling Simulators was introduced in the early 90s (by Hitec), and improving drilling decision-making by looking at “squiggly lines” in real time operations centers was all the rage as early as the turn of the century. There are huge savings to be made, as well as safety and efficiency gains, by putting these technologies in a museum, and move on.

A couple of years ago we introduced “training on your own well”, revolutionising the impact on safety and efficiency. And, we are currently working with a number of E&P companies with software to help them get value out of their real time centers and roles. A logical next step from that is to work right from the platform, the technology is already here, it’s rather legacy processes, workflows and business models holding back.

We have had ups and downs in this industry since forever – and we often fail to learn, and go back to the old ways as soon as the upswing occurs – will it be different this time?

– Well, we do not know for sure, but from what we see, companies are trying to make their cost reductions be sustainable. There’s no consensus this time around industry outlook or future oil price levels, and this uncertainty leads to focus on balancing cost and profitability in a way we have not seen before.

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Interview eDrilling COO on Digital Twin and Platform January 2017

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Interview eDrilling COO on Digital Twin and Platform January 2017

Digital this and digital that.  These are indeed exciting times for the oil and gas industry.  It is early days yet in 2018, but there’s growing optimism around.  Especially for those involved in digitalisation of the industry.  We sat down with eDrilling’s COO, Sven Inge Odegaard, to hear his view on the topics of digital twin and platform.

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As one of the co-founders of eDrilling, 2018 is a special year for you?

–  I guess so. This year our technologies turn 25, and our company 10 years.  And since our first digital twin back in 2008, we have now passed 100 digital twins.

Digital Twin –  Doesn’t everybody have one?

–  Unfortunately, for the oil and gas industry, yet not. Introduced by Michael Grieves at the University of Michigan in 2003, in oil and gas drilling it means the digital representation of the physical downhole reality.  Most service companies say they offer it, but, as for now, it is seldom more than a rebranding of what they’ve already had for a while.

What are the benefits?

– I often refer to Formula 1 racing to explain, especially at the CXO level.  A Formula 1 team uses data from hundreds of sensors wired in the car, harnessing data and using algorithms to make projections about what’s ahead, and apply complex computer models to relay optimal race strategies back to the driver. Ultimately, to drive faster and safer.

In our industry, having a digital twin of your well, pairing digital and physical data combined with predictive analytics and diagnostics, improves accuracy in decision making and results in real, and lasting, safety and efficiency gains.

With obvious benefits like these – how come it is not yet implemented industry-wide?

–  Well, I guess several factors.  For one, some are mistaking digitization for digitalization.  Whereas digitization is the process of converting information into a digital format, digitalization is about using new technologies to plan, prepare for, and drill smarter for better and cheaper operations and do things that was not possible before. The former is a tech project, and the ladder is a change project.

Moreover, on the boards and drill floors of E&P companies, there is still a majority of digital immigrants.  Digitalization is a company-wide transformation – you need everyone from the board to the drill floor – and anyone in between – onboard to be successful.

In your view, what characterizes those successful employing a digital twin in their drilling operations?

–  Two things, really.  Firstly, they think about the well life cycle as one continuous process – and adopt and adapt technologies and workstreams accordingly.  Secondly, they tear down the silos.  Internal silos, but also the various “islands” of service companies, involved in drilling operations.  From planning, through preparation and training, to actual drilling of the well.

In short, they are thinking platform.  Think of it as Windows, or an Amazon Marketplace, of drilling.  By incentivizing, or forcing, the ecosystem to create and integrate Application Programming Interfaces (APIs).  In stark contrast with the “old” world, where both software and hardware were designed as “black boxes”, intended to lock customers in, and keep competitors and new entrants out.

In layman terms, in a platform world, all members of the ecosystem expose its data and/or capabilities through a programmatically consumable service or an API to other members of the ecosystem.

Indeed, now every service company has launched their platform?

–  Again, I wish it was that easy.  The same way making your data available in the cloud, just creates a big data graveyard in the cloud, if nothing is done with the data, just providing access to the code does not create a platform.

That said, the E&P companies ahead of the curve on digitalization are creating application networks – plug-and-play infrastructures if you like – embracing the next step of applying the company’s wealth of data to optimize the process of drilling a well. Leaving spreadsheets, proprietary software programs, and excess email in their wake.

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