06.19.2019

Bridging the New Oil and Gas Digital Divide

Author: Javier Canon, Maana Director of Customer Solutions
Bridging the New Oil and Gas Digital Divide

For many oil and gas companies, Digital Transformation is proving to be an elusive goal requiring not only large investments in new digital products, but also a large dose of Change Management. One of the most relevant analogies applicable to our current times, corresponds to a previous transformational period, the electrification of factories that started in the mid-1880s. At the time, factories relied on line-shafting for power transmission and were designed vertically with several floors stacked on top of each other. As the electrical dynamo made its way into industries, businesses realized that no significant value came from the mere action of replacing the steam engine with the dynamo. Business value only appeared when new factories were re-designed following a more horizontal layout which emphasized the flow of materials in the production process.

In a similar manner, more oil and gas companies are now starting to recognize the need for developing a “new factory layout” as a key component of their transformation efforts. As a result, the industry is onboarding data scientists and a new generation of software developers, (native to open-source software development) at a fast pace. This new pool of talent is now interacting with incumbent petro-technical subject-matter-experts (SMEs) in different domains of the industry. While this added diversity of thought is highly needed in oil and gas, interactions between these two groups (Incumbents: petro-technical SMEs, and, Newcomers: Data Scientists and Open-Source Software Developers) pose new challenges and currently represent a new “Digital Divide” for oil and gas. Reasons for these difficulties include:

  • Differences in schools of thought (1): Incumbents come primarily from Geosciences and Engineering fields such as Chemical, Civil, Electrical, Mechanical and Petroleum Engineering. These “physical sciences” have a strong emphasis on the scientific method, and first principles modeling for understanding of physical phenomena. Newcomers from “virtual sciences” are often far removed from these fields, and instead are highly trained on inference via correlations, data mining and data science techniques.
  • Software programming as a core competency: While most Incumbents have had some experience in software development (mostly gained through college), most incumbents are not proficient enough to develop software as part of their job description. Those who are, are often unfamiliar with open-source development practices.
  • Communication styles: Incumbents and Newcomers have clearly different ways of communicating. Often times, the way of thinking and even language of one group is often undecipherable to the other.

Different oil and gas companies have opted for strategies for bringing these two groups together, including data science training for Incumbents and petro-technical training for Newcomers. Data Science Centers of Excellence and other initiatives are also pursued at present to facilitate cross-pollination, but they have proven insufficient to achieve transformation at scale.

A “Knowledge Platform” can bridge this new Digital Divide in oil and gas. At a fundamental level, this platform constitutes a collaboration environment for both Incumbents and Newcomers. It can be understood as a common ground for Incumbents to represent a business problem, through a high-level problem question, then decompose it onto more detailed questions and structure a solution to target a particular problem. This problem definition also would be specified up to a point where a “Contract” can be established, for a software developer and / or data scientist to endorse and fulfill the conditions in it. In this workflow, a common language (referred to as Knowledge) can be used between these two groups. It is here argued that this collaboration Platform can change the dynamics at the center of key functions in oil and gas and become a significant catalyst for Digital Transformation.

(1) Quote from MIT SMR, article: “The only way manufacturers can survive,” by Jeff Immelt: “An additional complication is that manufacturers must integrate the digital talent they do hire with their traditional mechanical, chemical, civil, and industrial engineers to form a new set of capabilities. That’s easier envisioned than executed, because engineers in the virtual sciences learn, think, and function very differently from those in the physical sciences.”  https://sloanreview.mit.edu/article/the-only-way-manufacturers-can-survive/
 

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