Roundtable discussion: Digitising assets and operations

RS: What does digital transformation mean to the oil and gas industry in the Middle East? And where is the current focus and priority for activity in addressing the potential for digital disruption to the industry?

DM: Every time the oil price goes down, companies come up with fantastic views of how they are going to do things differently, and then nothing changes. Rather than having these massive, ambitious targets, people need to embed a culture of digitisation within their business processes from the ground up. It will never be pushed from the top down because of the disjointed way our industry works. One owner-operator (OO) can’t do it because they can’t influence the whole supply chain enough.

MZ: I agree – culture is a big factor in this. Engineering, procurement, and construction contractors (EPCs) have been working in a very document-centric (not digital-centric) way for years, and they don’t see any real benefit from digitisation unless there is a real push from the OOs to force that. For people on the ground doing engineering design work, procurement, it needs to be demonstrated visually. It is hard to completely shake off the information delivered by documents – especially on a site.

DM: You have to have trust in the data. Data needs to be looked after and cared for over the life of the plant.

AS: The low oil prices (and the long-term ‘new normal’) may cause the cultural shift. Previously we have heard a lot of talk but not seen a lot of changes. Now I’m seeing people willing to think outside the box.

People and training

AK: Technology is running ahead of people. A lot of companies have software that their staff are not using, so management must look at training. Software is used to only 20% to 30% – maximum – of its capabilities. And I don’t know why management is not looking at this. They seem to think it is a personal responsibility of staff to develop themselves. The training the software providers give is maybe half a day or a day, but people never get to know everything about the system. They leave the room then forget about it completely. The opportunities for software are huge and we can use them in many ways – and that should help us to execute projects better, but the people who are using it are not trained.

MZ: As information managers, we are trying to push for data-centric ways of doing things. We are talking to engineers and buyers to find out about their day-to-day activities. They don’t care about the concept of digitisation, but they do face real issues in their workplaces that could be improved with data-centric methods. We need to show people what is possible and what can be done more efficiently using technology. Bringing technology into businesses is one thing; being able to maximise it is another matter. 

These products evolve so much and so quickly, but an organisation’s view of those products may fix at the time when they were first introduced, and they won’t know about additional capabilities and features that have been added. Things like virtual reality (VR) and augmented reality (AR) are becoming really useful – it is no longer just sci-fi technology. For example, for conducting site inspections for a plant in Iraq from the UAE. But many EPCs still see that as too far in advance. To support that technology we have to move from being document-centric to data-centric first.

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DM: The Industrial Internet of Things (IIoT) and Industry 4.0 initiatives [mean] lots of data will become available – vast amounts more than today, and there needs to be a way to organise and structure it. That will put more emphasis on the operational side of the business, and I think that will be what drives the agenda back down the supply chain and moves the industry from a document-centric to a digital-centric approach.

RS: It is the perfect storm – of reduced commodity prices and an explosion in the availability of data that we are gathering from IIoT, and operational technology, and sensor information. What we really need is a cultural shift to be able to make sense and make actionable intelligence from these new sources of data, at the same time driving efficiency.

Actionable intelligence

RS: The key to success of any digitalisation initiative is ‘actionable intelligence’ – the ability to make better, faster, safer, and more efficient decisions by aggregating all of the trusted information to hand. So, what is the panel’s view on the industry’s current ability to specify the operational need for information and providing a contracting arrangement that supports successfully delivering it?

MZ: Managing vendors and procurement is key from an EPC perspective, to maximise our profit. But being able to extract information from vendors and using it further down the chain in construction and commissioning, and to support handover – that aspect hasn’t been linked all the way through. The whole focus is simply to expedite purchase orders, making sure construction has the right equipment for their work packages.

AS: Some OOs have a more operations-centric approach to their projects and have operations people involved from day one. But considering the lifecycle costs of these assets, there are so many operators who don’t think about that. It is so frustrating that our industry is so focused on CAPEX.

Project people are reluctant to have operations people on the team because they assume it will slow things down and cost more money up front. But operations people should be involved in projects – they are the ones who are going to have to operate [the plant] for its lifecycle.

RS: How much of the inability to capture data from vendor information and make it part of the digital asset is a problem of the tech providers focusing too much on detailed design and not the end use? Is the focus in the right area? 

DM: Technology is running well ahead of our industry’s ability to absorb it. From an operational point of view, some vendors who sell technology into the industry don’t understand fully what the operators really need – 80% of the info an OO wants to operate a plant efficiently and safely is equipment and vendor data. Everything in design is very digital, but that doesn’t mean they are the right things to use in operations. 

AS: Bridging that gap might help operators make the cultural shift. If they think that the 3D model is not just for constructing the plant, but a canvas to later have a digital twin, then that gets projects and ops aligned and gets the back end driving what the front end is doing. It is time for that to happen. Common sense says you should be thinking about your 30 years of operations, not just your two years of construction.

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Adding value

RS: How can EPCs and OOs take best advantage of the opportunities brought about by digitising assets to reinvigorate their respective businesses? In which areas will the digital transformation add the most value?

AS: In sour gas plants in particular the stakes are so high if you were to have an HSE (health, safety, and environment) event. So, if you had a 3D model with H2S (hydrogen sulfide) release simulation and VR, you could simulate events and do training on these things. People spend a lot of money on that – you could save money and be more effective in your HSE programme. 

DM: From an OO standpoint, RoI (return on investment) is not just financial. It can be a safety issue as well. So if you can tag this as a driver from a safety standpoint, that brings you benefits – for example lowering lost-time incidents – and that’s another type of RoI.

AS: Also, process simulation of plants is used to design the plant. But never do you compare actual operational data with the simulated data – but if you could do real-time benchmarking compared to what you designed for, then you could start to pre-emptively detect failures. The predictive elements of this have so much value, for example identifying product failures before they happen. Or what if you had information that says you don’t have to do a turnaround, and don’t have to shut down for another two years? 

It would allow you to run longer, or tell you that you are going to have a failure before you have it, so you can prevent it or make it less severe, and avoid the surprise. There is a real opportunity for an EPC who is willing to offer guaranteed performance for a longer period of time than just getting past the performance acceptance test, like what Rolls Royce has done with aeroplanes, when you pay by the hour of running at full capacity. If someone could develop that model, it could really disrupt the industry. It would change the approach towards EPC and connect things throughout the entire value chain.

DM: If you try to sell [software] just for inspection, you probably can’t get an RoI on it. But with safety, and training, and inspection, and work permits, and shift handover… You just have to join those things up.

RS: So digitisation must support multiple processes to derive RoI – take a more holistic view rather than being discipline centric. But with the amount of data that is now being generated, our capacity to make decisions on all those sources of data becomes ever more difficult. We need to simplify the representation of that information in a technical sense, but also in a procedural sense, to get these efficiencies and improve safety.

DM: You have to marry the technology with the business process. Who will look at the technology available and meld it with the business process? That doesn’t happen in the OO environment because operations don’t have these people. Lots of people don’t know how to start. 

AS: The people who know how to operate a 3D model don’t know anything about the plant. Marrying the business with the technology is critical, and you do that by starting from the ground up with the operating plant. Start with the brownfield asset and measure these things first, show the value, and then drive it backwards through the value chain.

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Information standards

RS: What is the panel’s view of the desire in the industry to fully embrace a standardisation of information exchange and a commonality of approach in specifying the information we need to fuel a digital twin or transformation strategy, and what prevents them powering the digital opportunity?

DM: Standards are a vital building block of any digital strategy. But at the moment they are divorced from reality. 

AS: We need more non-technical engineers in the business to give us that vision, otherwise you just get into the weeds and details of specification. 

DM: We could learn a lot from building information modelling (BIM). They had a vision and they marketed that vision. They don’t just talk about information standards, they talk about a common data environment, an information plan, briefing and qualifying your supply chain on information management. And that is being driven from the bottom up and top down. The BIM guys have engaged with a vision to sell into their industry and talk in a common language – which is easier to market. We need a BIM for plant. 

MZ: In oil and gas, everyone sees their own standards as their world. And that depends on geographic region. Some information may be more important in the Middle East than in the Western World.

RS: Why, when most capital projects are JVs (joint ventures), can’t we enforce new ways of working and digitisation strategies? Each time they come together, they are setting new standards.

DM: Because there are too many vested interests.

RS: So we have all the opportunities, but too many contracting parties to decide.

DM: If it was driven to the EPCs by the OOs that this is how we want data handed over, this is how we expect to receive information, then you would have greater control of it.

Accelerating change

RS: What is the most desired change, and what does the panel believe will ultimately remain the same? What role can vendors play in accelerating change rather than it being about internal, process-driven improvements?

AS: This industry has a particular challenge in that area, because there are very few people who understand the oil and gas business and also data and the digital world. You need to find a way to marry up the people who [would benefit from digitisation] and those who know how to implement these things. This part of the world is ripe for change because it has been so dependent on oil and gas revenues. And because [local] projects are much more expensive than other gas projects around the world because of all the impurities, the H2S and CO2 (carbon dioxide). So they are looking for ways to diversify and be more efficient. And if they can do that through digitisation, they will have more opportunities to attract foreign investment.

MZ: There are always a few of us in OOs and EPCs who want to drive digitisation. But we need help from technology providers. We see great demos – 3D laser scans, 3D modelling technology, VR and AR, et cetera, and we get excited about it and want to introduce it into our own company. But we have to spend US $300,000 a year just to see if it fits our process. And that makes driving change within the organisation difficult. There needs to be a way to prove the real benefit of technology first, without a big upfront cost.

RS: So should technology vendors be driven more by consumption models and risk versus reward? Take a percentage of the improvement rather than an upfront cost – more of a partnership and sharing the risk of digitisation.

AS: That trend would drive the marrying of business needs with digitisation. And it would incentivise software vendors to meet those business needs. They would have to put themselves in the shoes of the operator to understand what they need.

RS: Well, that has created a perfect circle for this panel discussion – we came here asking what would disrupt the oil and gas industry with elements from software, and we have ended up with what from this industry is going to disrupt software vendors.