Standardization is one of the most challenging yet potentially highest value issues facing the upstream oil and gas industry today. However, we have never been in a better position to take advantage of open standards adoption and deployment to help achieve what are still the upstream industry’s key business drivers:

  • Reserve replacement;
  • production optimization;
  • operational efficiency;
  • safety assurance;
  • legal and regulatory compliance; and
  • Crew change.

The emergence of collaborative performance and design initiatives, visualization centers and remote operations centers blurs the boundaries of technologies as they are being re-purposed and bundled with other technologies to serve new needs. In this environment of new products, hybrid technologies and collapsed barriers, the need for industry standards continues to increase. Componentization and on-demand applications require further standardization. As the market becomes ever more saturated with solutions to the point where no one technology company can dominate the market, the need for standardization becomes more critical if these technologies are to work together efficiently and effectively. Issues of technological complexity, semantic inconsistencies and architectural variations will be with us for some time to come, and the solutions require long-term strategic investment.

What has become clear over the past two years is that the real product of the Energistics community is not so much standards in isolation but “non-competitive, widely adopted and deeply deployed collaborative technologies” with relevant open standards embedded. More than simply establishing standards, the goal of these collaborative technologies is to facilitate operational efficiency by defining a common language for the exchange and use of information and data based on XML and Web services technologies. These collaborative technologies also provide an architectural context and a uniform vocabulary that can be used to design and implement operational programs with greater flexibility and with reduced cost and risk.

The identification of business value obtained from the introduction of any new element of process, technology or resources is a key element in assessing the efficacy of such an endeavor. Of course, this also applies to efforts that introduce new standards because standards are a component of process, technology or resources — often all three.

Energistics believes that it is valuable to formulate and drive standardization efforts in the context of the larger process/technology/resource improvement effort where the standards apply and also to devise means to measure or estimate the role of the standards in the overall value produced.

The future success of these collaborative technologies, though, is highly dependent on the commitment of technology companies to develop solutions that incorporate these technologies and of oil and gas operating companies to fully deploy them across their enterprises. At this point, however, among operating companies there are few, if any, long-term plans for usage and deployment based on strategic priorities of the businesses. When lacking an approach to standards development that is a reflection of each member company’s strategic priorities, combined with a commitment to develop/deploy, some or all of the following can occur:

  • Standards developed do not meet the needs of the company;
  • Intellectual property rights are lost;
  • People participating in development efforts are unaware of the strategic priorities of their company — thus their role could be misdirected;
  • Resources are spent on standards that have a low probability of being used;
  • Uncertainty around deployment creates reluctance on the part of vendors to incorporate standards;
  • Insufficient resources are deployed to achieve meaningful development;
  • Initiatives are short-lived and create a negative impression in the industry;
  • There is a loss of benefits from the investment in technologies;
  • Fewer options exist for agility in choosing and deploying solutions due to lack of interoperability;
  • There is an increased tooling of the workforce for multiple non-integrated solutions; and
  • There is a loss of organizational liquidity.

If standards are not implemented, they can never bring about the business value for which they were created. Energistics actively works with its community to promote the knowledge and use of standards and help drive the deployment of standards within the industry.

This type of proactive approach is necessary because (1) standards developed but sitting on the virtual, or any other, shelf have no business value and (2) standards developed in a collaborative fashion but not widely adopted only have potential business value, so (3) only standards developed in collaboration, widely adopted by the industry and deeply deployed in the oilfield have a chance for tangible business value.

The results are that standards will become an integral part of our business, and a common industry framework will be built to adapt and meet changing market demands. Only then can the resulting techno-business integration and optimization efforts lead to real value creation. And while a handful of companies are now using and have found success with standards-based XML and Web services technologies, the real challenge to the industry as a whole is to develop strategic standardization management policies that will guide us to optimal deployments of these collaborative technologies.

Randy Clarkis president and chief executive officer of Energistics.