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TITLE OF PRESENTATION

Digitization of Oil and Gas Industry

Oct 2018

2

Top R&D SpendersTotal Oil & Gas ER&D Spending

$ 50.2 B

Overall ER&D Intensity

4%

Region % of R&D Spend

North America 45%

Europe 49%

APAC 5%

CAGR

50.2

57.1

R&D Spending $B

2017 2021 E

3.5%

Consolidated ER&D Spending: Across the O&G space the ER&D spend is USD 50.20Bn,expected to grow at a CAGR of 3.5% till 2021

Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018

3

ER&D Spending by Top OEMs: ER&D spend is highly consolidated among the top 5 OEMs;Analytics and IIOT remain primary Digital spend segments.

Source : DRAUPNote: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0Top 5 6 - 15 16 - 30

Top 5 Companies have a combined ER&D Spendof USD 18 B and are all Oil Companies providingend to end services across Up-Stream, Down-stream andMid-Stream

The Oil and Gas Industry is fragmented with Top5 constituting ~33 percent and following 6-15spenders constituting ~27 Percent of the spend

Sl.No. Top 15 Oil & Gas companies by ER&D Spend

1 Petrochina

2 Royal Dutch Shell

3 Gazprom

4 ExxonMobil

5 Total S.A.

6 Chevron Corporation

7 Sinopec

8 British Petroleum

9 CNOOC Limited

10 Schlumberger

11 Canadian Natural Resources Ltd

12 Petróleo Brasileiro S.A.

13 Conoco-Phillips

14 Halliburton

15 Transocean

4

Houston serves as a global hotspot for oil and gas companies with its enormous domain

talent and emerging digital talents.

Note: Data curated by DRAUP Outsourcing module and updated in Sep 2018

Analysis of Top 15 oil and Gas companies and their R&D centers and Headcount Source : DRAUP

80k – 85k R&D Headcount

Oil and Gas R&D Footprint

Top Players

Hub Spoke AnalysisAmericas Europe APAC

76%

15%

9%

84%

9%

7%

72%

11%

17%

Outpost

Satellite

Hub

MEA

86%

14%

Houston, Texas

24% Europe

24%

APAC

17%

Rest of North America

12%

LATAM

14%

MEA

9%

• Top Oil and Gas giants

have setup their R&D

centres in Houston, Texas

a global hub for building

oilfield equipment

• Bangalore and Bay area

are emerging hotspots for

companies to setup digital

CoE recognizing the pool

of digital talents in these

regions

• Most of the hubs are

located in North America,

indicating that the

decision-making is still

governed from the US

5

1900-1940• Hydrocarbon• Oil Derrick • Geophones• Induced Resistivity • Richter Scale • Electrical Resistivity • Gravity/magnetics

1940-60• Reflection Seismic • 2D Magnetic Survey • Magnetotelluric• Seismic Reflection point • Analog Magnetic recording• Dual Vessel Seismic surveys

1960-80• Digital acquisition• Single vessel exploration • Seismic processing• Plate Tectonics• Hydrofracturing• 3D Seismic• Digital Marine Streamer

1980-2000• GPS• Geomodeling• VSP • Hydrocarbon indicator• 4D Seismic• Digital Marine Streamer• Sun Microsystems

2000-2020• Shale Gas• Micro-seismic• Fiber• Carbon sequestration• IoT• Automation• Big Data Analytics

Top 3 key technology focus

areas for the future

1763Bayes Theorem

1989First commercial software

1997IBM Deep Blue

2016AlphaGo beating Humans

Convergence of business needs and scientific advancements are driving key technologydisruptions in the O&G space


6

Digital Use Cases: Fleet Management, Equipment maintenance and Seismic Imaging are top use cases adopted by OEMs

Industrial Internet Of Things (IIOT)TECHNOLOGIES

BUSINESS AREAS

DIGITAL USE-CASES

Big Data/ Analytics

Automation/ Robotics

3D PrintingArtificial Intelligence

Augmented/ Virtual Reality

FRAMEWORK

Asset Lifecycle Management – Workflow Framework

Service Oriented Architecture– Design Framework

Open Platform Communications Unified Architecture- Communication Framework

Precision Direction Drilling Fleet Management Robotic Drilling

Systems

Predictive equipment

MaintenanceConnected Worker

Upstream Midstream Downstream

Seismic Imaging and surveying

Supply/Demand Balancing

Inventory Management

Field Safety and Productivity optimization

Intelligent Pipelines

Remote Maintenance

Refinery corrosion reduction

Shipping & Logistics Optimization

Well Risk Assessment

Rapid Prototyping

Current Investment FocusLow High

High Investment Focus


7

• Working with Providence Photonics to deploy an IoT enabled leak detection system. The system uses infrared images and computer vision. It provides early warning alert, even for small amount of leaks.

1 • Caterpillar’s asset intelligence platform uses Pentaho’s big data analytics solution to provide real-time equipment predictive intelligence, delivering ROI, growth and efficiency to customers

2

Examples of IoT adoption in the Oil & Gas sector

Use-case adoption priority[Enterprise Investment | Talent Investment | COEs Investment]

Ease

of a

dopt

ion

[Ent

erpr

ise

tech

nolo

gy re

adin

ess,

eas

e of

im

plem

enta

tion]

Improved production/

delivery

Reduced costs

(inventory, logistics)

Improved asset

uptime

Enhanced employee

performance

Compliance adherence

Enhanced service &

CX

Predictive asset maintenance ü ü ü ü ü ü

Workforce productivity ü ü ü

Logistics optimization ü ü ü

Production optimization ü ü ü üOperations risk & intelligence ü ü ü ü

Topuse-cases

Key ROI metricsOil & Gas

Predictive asset maintenance

Workforce productivity

Logistics optimization

Operations risk & intelligenceCustomer Experience

Production optimization

Energy management

Inventory management

Internet of Things (1/2): IoT has disrupted the O&G space enabling companies to address multiple workflows


8

Internet of Things (2/2): Large O&G companies are investing significantly in the IoT ecosystem

INVESTMENT AREAS INVESTMENTS & PARTNERSHIPSCOMPANY

Connectivity, Advanced Analytics, Mobility, Imaging, Monitoring, Security

Automation, Connectivity, Environment, Mobility

Artificial Intelligence, Mobility, Environment, Advanced Analytics, Automation

Analytics, Automation, Security, Connectivity

TECHNOLOGY PARTNERSHIPS


9

Automation (1/2): Oil and Gas companies are leveraging Automation to optimize processes and streamline asset management

Drivers of Automation

Process Optimization

Energy, material and time savings

Quality improvement

Reduction of waste, pollution control

Product Tracking

Safety, Increased Availability

Asset Optimization

Automation of Engineering

Commissioning and Maintenancetracking

Software Configuration

Back-up and versioning

Maintenance Support

01 02


10

Automation (2/2): Automating operations to achieve business goals

• A 360 degree real-timemonitoring center forall of Chevron’s mostcomplex wells

• Employees monitortrends and providesupport for drilling, datacollection and modelling.

Drilling & Completions Decision Support Center (DCD-SC): Power and Energy Management Group

• Remote monitoring of 1,400 pieces of rotating equipment on sixcontinents in real time

• Using predictive models to help identify and anticipate potential failures ormaintenance needs and avoid potential shutdowns.

• Offer diagnostic and engineering support to any facility

Case-in-point – Automated Activity Analysis

The Automated Activity Analysis workflow enabled the team on Chevron’sPacific Santa Ana drillship to achieve savings of more than $1 million in justthree months by reducing its tripping time – pulling the drill string from thewellbore and running it back in – while maintaining safe operating practices

Case-in-point – Remote Monitoring

The Group recently noticed a high level of turbine oil consumption in a gascompressor train at an operation in Thailand. After alerting the EDSC, aninspection revealed an issue with a pump. This led to a manual shutdown, duringwhich the pump was safely replaced. The pre-emptive action prevented earlyequipment failure and avoided lost production.

CASE STUDY : CHEVRON CORPORATION


11

Analytics (1/2): Use data driven insights to improve data transparency and drive operational efficiency

30,000

Number of sensors in an Oil Rig

4Million

Gigabytes of data generated

<5%Data Used by

operators

OIL FIELD OPERATIONS:30k+ Sensors, Temperature,Pressure, Flow, Pumps,Actuators, Valves, etc.

REMOTE COMMUNICATIONDEVICES:RTUs, PLCs, InstrumentationSystems, etc.

DATA LINK

CORP SYSTEMS / HADOOP:Data Management, Records,Analytics Platforms

ANALYTICS:Real-time data analytics,Monitoring Systems,

CHALLENGES

Lack of data integrity and storagelimitations

Lack of data standards to enablecondition based monitoring,diagnostics, prognostics and productlife cycle management

Data Quality – how to clean data,reduce the noise & clutter

Data not used in decision making


12

Analytics (2/2): Analytics for improving fleet management

Year 3Year 2

Year 1

• Capture & Publish data• Improve data quality & detail• RCA

Uptime improvement

Performance improvement

Other Opeximprovements

• Improve maintenance/ engineering design Centralize & Standardize troubleshooting

• Digitize troubleshooting• Automate troubleshooting process

• Capture performance data• Benchmark fleet to understand

outliers

• Standardize operations to ensure consistent performance

• Commercialize Data Analytics• Expand & commercialize data

analytics

• Identify missing data• Analyze/ attempt to analyze

existing data

• Fix data & analyze data• Implement constraints/data

governance to improve data• Identify & implement opportunities for

improvement

• Continue to improve data quality• Implement new initiatives as dictated

by data

Case –In-Point : One of the largest O&G drilling contractors has started on a initiative for three year horizon period to improve fleet uptime and centralize troubleshooting mechanism


13

Oil and Gas Ecosystem is expanding beyond the traditional companies: Tech Giants,Start-ups, and Service Providers are at the forefront of building digital-first solutions

Technology Giants such as Google, Microsoft and IBM are heavily investing in their cloud and analytics platform to develop software-based use cases for Oil and Gas

Technology Giants: Exploring newer use cases in cognitive computing and AI

Start-ups: Rapidly maturing Ecosystem in Houston and Bay Area2

Analytics, IoT and Clean energy are major focus areas gaining investments among startups

Service Providers: Service Providers are building in-house platforms or partnering with technology companies to develop IoT platforms 3

Service Providers can provide capability in emerging areas such as ML, AI, IoT talent. Companies can orchestrate partnership strategies such as engaging in a staffing, GDC, and outcome-based model to develop emerging capabilities

Disrupting Incumbents by focusing on Digital Components in the value chain

1

Source : DRAUPNote: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018

14

Tech giants: Companies like Microsoft and IBM have built advanced analytics and AI

toolsets into their cloud products to develop digital use cases across the value chain

Tech Giants are leveraging

software expertise in AI, IOT, Vison, and Connected Cloudto identify emerging use cases

Working closely with OEMs &

startups for building domain-

specific use cases such as

Equipment health monitoring, Cognitive exploration etc.

Focus Area

Tech Giants Start-ups Service Providers

Source : DRAUPNote: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018

Upstream

Midstream

Downstream

Accelerate deeper geological insights to improve decision making in exploration and production, and yield more productive oil extraction.E.g: Precision Drilling, Reservoir simulation

Help midstream pipeline operators increase operational efficiency and compliance in areas such as LNG and gas transportation, pipeline integrity management, and workforce management.

Help refineries, petroleum delivery operators, gas retailers, and other downstream oil and gas companies improve cost and operational efficiencies and improve profitability. E.g: Trade optimization

Google Cloud Platform provides differentiated infrastructural components to develop equipment health monitoring systems.

Google’s cloud-based AI to speed up the long cycle times involved with interpreting the subsurface information

Using Google Cloud customers can supercharge their applications, whether it’s training machine learning models on infrastructure, or easier software development and deployment

Microsoft is working to develop a coherent reference architecture that will enable better integration of upstream applications through the composition of common application components

Applying deep learning to reservoir characterization, modeling and simulation, building domain-specific visualization for mixed reality, midstream logistics and marketing operations.

• Asset Track and Trace• Predictive equipment

maintenance• Cognitive Exploration

• Enterprise and Predictive Asset Management

• Supply Chain Optimization• Connected Workers

• Smarter Manufacturing

15

Tech-Giants: Seismic imaging and surveying, Field productivity, production asset optimization and predictive maintenance are top use cases built around cloud-based platforms

Field Exploration &Acquisition

Analytics

AI based subsurface image interpretation

Upstream Digitization

Oil Field Optimization

Key Activities and workloads

Developing two prototype cognitive applications specifically designed to augment Repsol’s strategic decision making in the optimization of oil reservoir production and in the acquisition of new oil fields.

Note: Analysis is based on the DRAUP’s proprietary engineering database

Chevron’s efforts to digitize its oil fields and accelerate deployment of new technologies that can increase revenues, reduce costs and improve the safety and reliability of operations

Development of AI programs that will make it possible to interpret subsurface images, notably from seismic studies (using Computer Vision) and automate the analysis of technical documents (using Natural Language Processing)

Digitize the upstream industry and improve exploration results by applying things like deep learning and augmented reality to reserve estimations, modeling and simulation, which would result in highly interactive applications

Optimizing the water-flooding process at mature Gazprom Neft fields, with the aim of increasing the ORF and reducing injection volumes, has been identified as a pilot project.

Use-Cases PartnershipTech Giants Start-ups Service Providers

16

• Start-ups in Oil & Gas industry are working mostly on Clean Tech, Analytics, And The Internet Of Things.

• Uptake is a the only Unicorn in the Oil & Gas Industry, which is an Industrial IOT platform that analyses data to predict and prevent failures

• Maana has investments from global players like Shell, Saudi Aramco and Chevron. They provide a knowledge platform to turn human expertise and data into Digital Knowledge.

Startups like WellAware use connected devices to help O&G companies boost productionand predict equipment maintenance needs

Source : DRAUP


Note: Data curated by DRAUP Start-up module and updated in Feb 2018Note: The list above is non-exhaustive

Total Start-Up Talent

poolPredictive Analytics

Automation

AdvancedTech

Top Verticals/Tech focus Key Start-ups

Total Number of Start-ups

200+

Total Funding (Till 2018)

~$1.5 Bn

Key Workloads

Clean Tech

Focus

Digital Knowledge Platform

Enables companies to create models at scale by encoding the expertise of their employees and combining that with data from silos

Industrial IoT Platform

Ingest and analyze sensor and enterprise data, transforming it into actionable insights and immediate outcomes

Solves complex problems using the collective intelligence of human observation and sensor information to improve critical decisions.

Intelligent operational control

Spectral Imaging

Offers the only spectral imaging camera in the world that can both identify and quantify gas releases in real time to detect leaks faster

Industrial IoT

Helps E&P, Midstream and Chemical Service companies to collect reliable data and actionable analytics.

17

Houston and Bay area are key hotspots of US that drive start-up innovations in oil and gasindustry

Source : DRAUP

Oil & Gas Start-up Hotbeds

USA

48% Rest of Europe

17%

APAC

9%Rest of America

15%

UK

7%

MEA

4%

Oil and Gas Marketplace

Full Data Analytics Solutions

USA

High Performance Composite subsea pipeEnd-to-end drone based inspection services

UKUltrasound 3D imaging of Oil & Gas wells

Unmanned Aerial Vehicles for capturing data

Canada

Produce fuel from CO2

Produce biocatalyst substitutes for Biodiesel

Israel

Focus Areasq Operational Improvement

§ IoT§ Analytics Platforms§ M2M communication§ Wireless Sensors§ Artificial Intelligence§ Cloud Computing§ Robotics

q Clean Tech § Alternative Energy§ Alternative Materials§ Environmental Impact-

Technologies with the potential to mitigate the environmental impact

Advanced Data Analytics & Decision making

Waste Management

France

IndiaRemotely Operated Vehicles

Energy Storage


Note: Analysis is based on the DRAUP’s global talent hotspots module, updated in July, 2018

18

Alternate Energy AI / AnalyticsIndustrial

IOTNetwork & Security Platform Investment Analysis

AI company for transforming upstream exploration to

search for oil reserves Beyond Limits

Develops novel sensor technology for management of oil and gas

reservoirsSilicon Microgravity

Advanced charging solutions for drivers of electric vehicles (EV)

NewMotion

Analyses data generated by industrial operations

Maana

Develop 3D-imaging industrial process measurement solutions

through tomographic technology

Rocsole

Provides software and business solutions to design, automate & manage energy storage systems

Geli

Organizes energy data and employs big data analytics to

generate real-time predictions

Autogrid

Deep-tech company that designs, produces and deploys embedded

Industrial sensors

Avenisense

Operates a cellular network dedicated to low-energy

communication for connected objects(IOT)

Sigfox

Provides wireless seismic recording systems with real-time data for

exploration & production industry.Wireless Seismic

Automated vehicle technology safety/efficiency in trucking industry

Peleton Technology

Pioneer in cybersecurity & compliance for cloud & on-

premise ERP & business-critical applications

Onapsis Inc.

Helps industrial companies by replacing paper workflows with

collaboration technology for industrial work

Parsable

Processing system to produce renewable liquid fuels from wood

and agricultural residues.

Ensyn

Web-based predictive intelligence platform which

helps to increase energy efficiency

Veros systems

Deliver robust, highly sensitive chemical monitoring technologies for both offshore and onshore use

LUX Assure

Recognized globally as the most trusted source for independent, fact-based cybersecurity guidance

NSS Labs

Design, qualification & production of Thermoplastic Composite Pipe (TCP) solutions for offshore Oil &

Gas industry.

Airborne Oil & Gas

Startup investments and acquisitions: Startups developing use-cases around Clean Tech and Operational improvement are prime investment targets of OEMs

Acquisition Investment

Note: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018

Enables the production of chemicals and fuels from

cellulosic biomass.

.

Renmatix

FreeWire Technologies

Create intelligent energy delivery systems and brings clean power to applications.

70%

13%

17%

Clean Tech

Operations

Othe rs

45%

32%

21%

6%

Clean Tech

Operations

Energy

Othe rs

77%

19%

2%

2%

Clean Tech

Operations

Energy

Othe rs

26%

69%

5%

Clean Tech

Operations

Othe rs

66%

34%

Operations

Othe rs


19

“Manage the old” “Renew the old ; Build the new”• 2D/ 3D data conversion/ Migration • Design Standardization • Structural drawings

• Converting current assets into a fleet of connected assets in an integrated environment

• Obsolescence Management and Component Engineering

• Skid Design & Modularization• Test Engineering support • Modular tool design with enhanced safety

features

• Management of drilling data from remote rigsites to base location of Upstream Oil& G

as Operators.

• Stack –up Analysis • Firmware migration to new

Hardware/Software • Testing of various equipment

• IOT Controller & Gateway for Oil refinery• Building of Automation platforms for

extracting, analysing data across the entire O&G value chain

Service Providers: Digital disruption is leading to sizeable opportunities for service providers in two key areas



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Key Engagements executed by Service Providers

“Manage the old” “Build the new”

Design a modular skid for Gas Separation process containing of individual multiple skids

Project Overview

Project Overview

• The scope of work for Modular design is to design the individual skids based on the Process P&IDs, Vendor Equipment GA drawings inline with Client requirements of each Skid size.

• Based on the skid sizes, designing the structural part of the skid frames, fabrication details extraction from 3D Model like Isometrics, Piping Layouts, structural layouts & BOQ etc.,

• Key deliverables: 3D Model ; Isometrics ; Structural drawings; Piping Layouts; BOM

Customer Multinational energy corporation Customer

IOT Controller & Gateway for Oil refinery

Project Overview

One of the world's largest oil field service company

Project Overview

• Bi-directional valves in the pipeline shall be enabled with IOT Controller & Gateway.

• The existing valves shall have multiple sensors which shall then be pushed to the cloud via the selected gateway interface.

• The controller is having support for Modbus, TCP/IP, Profibus and Ethernet Industrial protocols.

• This also includes - Data Logging, Event Logging, Historical trending and historical dashboard.



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End to End IoT/ Connectivity platforms: Service Providers are building in-house platforms or partnering with technology companies to develop IoT platforms with the following functionalities:

• Connected Systems• Multi Protocol• Multi cloud platforms• Devise Provisioning and Onboarding

IoT Solution/Platform

Platform/Frameworks which enable the following services:• Wireless Communication • Remote Monitoring• Remote Control, Control operations and alarm management • N/W configuration

Remote Monitoring &

Control

Unified Analytics platforms

Service Providers are offering data driven solutions and are working on “ End to End” platforms for

• Data Management and Visualization Suite• KPI Analytics• Well and Equipment health• Rig and well automation • Asset, Fleet management

In addition to the above key areas, Service Providers are also investing in area of1. Augmented reality – New Product launch, User guide, Catalogue2. Building element and security access management

Service Providers are developing Platforms/ Frameworks in key areas to address the newer requirements



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