HOUSTON—As oil and gas companies ride the digital wave, working to find solutions for challenges in the field and gain efficiency, one app is giving Chesapeake Energy Corp. (NYSE: CHK) a competitive advantage, according to its CEO.
The in-house generated app is called Well Tender, and Chesapeake’s Doug Lawler described it as the best example of how digital technology is changing business for the company.
“An operator in the field can take out his phone and see if a well is down…how long it’s been offline and can reprioritize his or her route to go to the well that has the greatest value,” Lawler said Oct. 30 during Deloitte’s Oil & Gas Conference. “Rather than waiting for scada transmission where an operator can be in a distant part of the field or a remote area and not being able to react,” the app gives personnel in the field the ability to prioritize and respond accordingly to minimize downtime.
The app can also prove beneficial when it comes to detecting leaks quicker or situations when something unexpected has occurred, Lawler said. “It’s a great example and we’re seeing greater uptime, greater production and greater value in our business.”
His thoughts on how digital technologies are transforming the business were shared as technology's role in the oil patch grows. The industry has shed its reputation of being slow to take up new technology and has turned into one that embraces it.
Still, that comes with challenges such as determining which technologies are the best ones to use to add value, as panelists speaking on digitalization of the industry later pointed out.
Understanding where the value is has importance, according to Jennifer Hartsock, CIO for Baker Hughes, a GE company (NYSE: BHGE). Prioritize by understanding where the opportunities are and where performance is falling below expectations, she said. This could be external such as effectively managing costs in the supply chain like during the market downturn or looking at internal productivity to become more effective whether it’s developing solutions faster or improving existing parts, she said.
BHGE has seen the most significant value in instances where it has partnered with other companies, looked for specific business opportunities where the outcome mattered and brought technology and people to work together in a collaborative and effective way, Hartsock said.
When deciding where to concentrate efforts, Hartsock said BHGE looks through four lenses: marrying technology applications with digital and other capabilities to drive more productive customer outcomes, looking internally to understand behavior and find ways to become more productive, driving innovation such as drone technology for inspections and offering digital solutions to customers looking to reduce nonproductive time, field and production optimization and other goals.
“When we think about transformation we [as an industry] underplay some of the value that can come from optimizing what we already have in play,” Hartsock said. “We sometimes expect technology to solve earth-shattering problems in fundamentally different ways, and what we find is that if we actually concentrate on the problem sets we can use technology and capabilities and culture to bring together a different outcome in ways that we perhaps didn’t think were possible.”
Collaboration and partnership are also keys to making digital initiatives work, panelists said. This is especially true for blockchain, a shared ledger or platform for recording the history of transactions.
“The idea of having a shared ledger is that after a transaction is done you and your counterparty have one space to track that whole transaction,” including shipping and inspection data and invoices, said Lyon Hardgrave, vice president of business and product development for VAKT. If an issue arises, those involved can access information to find the source.
VAKT is building an industrywide post-trade processing platform for commodities through blockchain to “digitize the global commodities trading industry,” according to its website. Its goal is to create a “secure, trusted ecosystem for counterparty interaction, with anticipated gains in cybersecurity, operational efficiency and trade finance.” The North Sea crude oil market is among the areas where the platform is used, and the company has plans to expand into other markets.
A survey released Oct. 30 by Deloitte showed two-thirds of executives surveyed described the digital maturity of the overall industry as relative moderate.
“With growth and recovery top of mind, digital technologies could become critically important for productivity and profitability and should serve as a lever to help mitigate rising costs brought about by rising oil prices,” John England, partner, oil, gas and chemicals for Deloitte, said in a news release about the survey.
Nearly half of the oil and gas executives surveyed saw artificial intelligence, machine learning and advanced analytics as technologies having the largest impact on the industry due to their early ROI and proven role in meeting business objectives, Deloitte said.
Velda Addison can be reached at firstname.lastname@example.org.