Intelligent energy technologies and solutions have come through a tumultuous "incubation phase" over the past decade to the point where they are now embedded in many aspects of E&P operations.

However, there is still a spectrum of maturity levels across the industry, from those still wrestling with adoption to others who are exploring true business innovation in this space. At present, even its most devout advocates would admit there are still very few official standards that have emerged, that the learning curve for adoption has not plateaued, and that infrastructure and cultural inertia are still present – while the technology itself continues to race ahead.

Many believe the oil and gas industry is at an inflection point in the cycle where decisions need to be made on what defines the identity of intelligent energy, what catalysts can propel it to a much wider scale adoption, and whether it has reached a plateau or the start of a much broader journey.

These are key questions as the industry moves forward and as company leaders have very practical reasons for deploying intelligent energy concepts, technologies, and operations on oil and gas assets to address specific operational issues and capture identified opportunities. There have been many intelligent energy successes achieved, for example, a growing and documented number of projects benefitting from increased production, improved safety performance, and reduced manpower.

But most agree that more needs to be done so that intelligent energy concepts can help to maintain performance levels in the face of today's significant operational pressures and assist in the development of deepwater, harsh environment, and remote resources that would otherwise be technically or economically unfeasible.

This must be done at a time when the industry also is dealing with skills shortages and the demographic change to the next generation of its workforce as well as the increased importance of cyber security in a digital world and increasing regulatory scrutiny and requirements.

Digital enablement

According to Edwin Verdonk, vice president, Subsurface Expertise and Technology Deployment at Shell, the industry has a unique opportunity. "While it is clear that our industry has started along a path of transformation, it is also clear that we do not yet share a common direction or charter," he said. "Operating and service companies developing the world's resources today are all at very different stages of digital enablement.

"Many see digital enablement as an intrinsic part of their technological future but still struggle to articulate the business benefits and make a case for investment and transformation. In this environment, we have a unique window of opportunity to transform the way we conduct and represent our business – before public opinion or government regulations make those decisions for us."

Verdonk said he wants the industry to further explore what the evolving digital hydrocarbon industry will look like and how it can accelerate the pace of implementation of intelligent solutions, topics he will be raising in his role as co-chair of the SPE Intelligent Energy International conference and exhibition to be held March 27-29, 2012, in Jaarbeurs, Utrecht, the Netherlands.

The event is well timed. Today the industry is in the midst of another up cycle, albeit volatile, simultaneously wrestling with a changing geopolitical landscape and significant shifts in the regulatory environment. It also is in an era of unprecedented change in technology – especially in the areas of computing, telecommunications, information, and social media. These changes are profoundly affecting the choices of where and how the industry conducts its business, allowing it to introduce business models and workflows that can reduce human involvement and accelerate automation of many critical activities. But many fundamental challenges still remain:

Maintaining the safety and operational integrity of facilities in ever harsher environments;

Pushing the frontiers of exploration and development into deeper water, higher pressure environments, more viscous oil plays, and sensitive areas such as arctic developments;

Grappling with skills shortages and the demographic change to the next generation;

Dealing with emerging economies such as China and the increasing role of national oil companies versus international oil companies;

Managing security in a digital world and coping with cyber attacks;

Handling increasing regulatory scrutiny and requirements; and

Balancing manual control versus full automation. Schlumberger's Sanjay Kanvinde is the chairman of SPE Intelligent Energy International's program committee. He described the industry as currently transforming itself through three maturity stages:

Innovation. Companies start small-scale innovative implementations in an individual asset or region, usually driven by local leadership. In many cases, technology or service companies contribute to these specific successes. These initial successes catch the attention of senior management, and companies get organized to move to the next stage. Often the leading asset or region continues to innovate with technology, processes, people management, and business models and feeds experiences into the overall corporate program.

Adoption at Scale. In this stage, companies formulate the corporate vision, align the initiatives with the business strategy, and raise awareness about the programs. Executive leadership and support play a huge role in committing the organization to this transformative process. The proper organization structure, change management, and orchestration mechanisms are put in place. Employees are trained and several large-scale pilots are conducted to develop the standards and guidelines for company-wide implementation. New internal and external business models are developed to support the implementations. The technology and service sector gains confidence in the business potential and begins to invest and proactively engage operators.

Sustainability. In this stage, companies create value at scale through wide implementation of their intelligent energy initiatives. Assets work in a highly integrated manner, and intelligent energy practices become "business as usual," delivering a new level of performance. Business models and organization capabilities continually improve to deliver sustained value. Various companies, regions, and industry segments are at different levels of maturity and are striving toward the sustainability stage of making intelligent energy "business as usual," Kanvinde said. He also highlighted three challenges to be met as the industry goes forward: "The accelerating decline rate of existing reservoirs and the smaller size and complexity of newer ones require increased technology intensity and integration to enhance reservoir understanding, improve production management, and increase recovery," he said.

"Secondly, operations are ever more challenging as the industry continues to move to deeper, harsher, or more remote locations. Thirdly, to address the demographic challenges in our industry, a large and more diverse number of employees will be hired into our industry and will need to be trained, deployed, and supported.

"The industry is constantly looking for means to improve drilling operations; enhance production management and recovery rates; mitigate risks; and improve safety, quality, and efficiency. In addition, the industry needs to accelerate the development of people while leveraging knowledge and expertise across the breadth of oil and gas operations."

E&P is the official media partner for the SPE Intelligent Energy International conference and exhibition to be held March 27-29, 2012, in Utrecht, the Netherlands.