The Integrated Digital Oilfield OperationsEnabling Profitability During the Low Oil Prices

Click here to load reader

  • date post

    16-Dec-2015
  • Category

    Documents

  • view

    24
  • download

    3

Embed Size (px)

description

As stable sources of oil and gas are becoming a scarce commodity, companies are driven to explore new sources and new ways to extract oil and gas. Intelligent oilfield technologies can help oil companies get the most out of their existing fieldsand establish successful new fields in remote and harsh areas

Transcript of The Integrated Digital Oilfield OperationsEnabling Profitability During the Low Oil Prices

  • Stephan Klein, Vice President, SAP, Germany

    Arif Abdullah, Director, SAP, Germany

    The Integrated Digital Oilfield Operations

    Enabling Profitability During the Low Oil Prices

  • Agenda

    The Trends in the Industry

    The Oil & Gas Upstream Operations

    Introduction to Integrated Digital Oilfield Operations (IDOO)

    A Day in Production Operations

  • Clean Energy

    Price vs. Cost

    Radical changes in supply and expected changes in demand

    Sustainability

    Sarbanes Oxley

    Sanction Party compliance

    Environmental compliance

    Increased Governmental Regulation

    Resource and asset optimization

    National Oil Companies expanding

    Mergers & Acquisitions

    Global business operation models

    Global Market Dynamics

    Demand continues to grow in emerging economies

    Supply resources shift for oil and gas

    Oil price volatility

    Shifting Demand & Supply Patterns

    Operational excellence

    Digital oilfields

    Asset performance

    Maximize Reserve Recovery

    A price of $128 per barrel of oil will be needed to support development of new resources such as

    light tight oil and ultra-deep water. WEO, 2013.

    More wells, Wider Areas

    More complex accounting dealing with multiple leases

    More complex logistics to drill/produce

    More options/constraints to delivery

    Unconventional

    And Where are we with Price Now

    Unconventional

  • Shifting market >>> Technology convergence >>> Empowerment of people

    Increasing asset complexity enriches technology business

    15 Billion connected devices

    Continuous capital investment getting to the next barrel

    More data in last 5 years than entire history of humankind

    1 Billion people engaged in social networks

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    A CIO of a US $20

    billion company will

    typically have around

    1000 large enterprise

    applications to manage

    1000

    By 2020

    Of data that needs to

    be analyzed (40 billion

    terabytes of data)40 zetabytes

    of CIOs cannot respond

    timely to digital

    opportunities 451%

    Today

    Companies live in times of unprecedented pace of change

    End of 2020

    1 ScienceDaily. ScienceDaily, 22 May 2013

    2 Technology Adoption Report: Business Networks, Ardent Partners, 2014

    3 Internet of Things (IoT) 2013 to 2020 Market Analysis: Billions of Things, Trillions of Dollars, 2013

    4 Gartner, 2015

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    Cut in Capital Expenditure. Tighter scrutiny of the investments in high risk projects

    Optimize Capital

    Spend

    Optimize Production Cost / Barrel. Maximize reserve recovery from existing fields

    Optimize Production

    Management

    Increased focus on sustainable operations & Risk Management. Reduce Cost across the organization e.g. Supply Chain etc.

    Sustainable Operations

    Talent Management Contingent Workforce Management

    Optimize Workforce

    and Talent

    Mergers & Acquisitions. Economies of scale not viable for small players

    Enable Mergers &

    Acquisition

    Upstream Business imperatives in the new reality

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    The ever increasing business complexity is leading to higher cost, less

    innovation and less growth

    Higher cost

    Less

    Innovation

    and hence

    less growth

    10.2% or US$237 billion

    of profits is lost by top 200

    global companies due to

    hidden costs of complexity

    Global Simplicity Index, 2013

    Complex decision makingLarge global organizations have created so much complexity that businesses often struggle to bring good

    ideas to the marketplace profitably

    McKinsey, 2014

    Complex business processesLarge organizations can spend between 40% and 80% of their time on non-value-added activities

    BCG, Complexity Report

    Complex technology40% executives worry that their organizations will not keep pace with technology change and lose their

    competitive edge.

    McKinsey study, 2013

    Business complexity

    Innovations top performer see higher revenue

    growth

    leading to a 3-fold difference in 5 years

    Bain, 2015

    is leading to

    and needs to be tackled to ensure business success

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    More than 60% of CEOs expect 15-50% of their earnings growth in the next 5 years to

    come from technology-enabled business innovations.

    McKinsey study, 2013

    Everything in the Cloud

    Networks

    Convergence of social, business

    networks

    Platform

    Advances in in-memory computing and

    decline in hardware costs

    Applications

    Role Based, Location and Context-

    Aware, Intelligent, Predictive, mobile

    Transformational technologies will drive business

    innovation like never before

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    but most companies spend today 2/3 of their IT budget just maintaining the status quo, leaving only 1/3 for new innovations

    28%Drive business

    innovation

    72%Keep the

    lights on

    Drive

    business

    innovation

    Keep the

    lights on

    As-Is Business

    expectation

    ComplexityDecision making

    Business-process

    Technology

    InnovationCustomer experience

    Employee engagement

    Resource optimization

    Networked economy

    40% executives worry that their organizations will not keep pace

    with technology change and lose their

    competitive edge.

    McKinsey study, 2013

    Source: Forrester IT Survey, 2013

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    SAP oil&gas value map

    Capital and Spend

    Effectiveness

    Capital Planning

    Portfolio and Project Management

    Strategic Sourcing and Supplier

    Management

    Procure to Pay and Business

    Network

    Operational

    Integrity

    Risk Analysis and Governance

    Workforce Competency

    Asset Integrity

    Hydrocarbon

    Supply Chain

    Hydrocarbon Supply

    and Distribution

    Hydrocarbon Processing

    Visibility

    Commercial Sales

    and Marketing

    Secondary Distribution

    and Fuels Retailing

    Convenience Retailing

    Integrated Digital

    Oilfield Operations

    Hydrocarbon Revenue Management

    Field Logistics

    FinanceFinancial Planning

    and Analysis

    Accounting and Financial Close

    Treasury and Financial

    Risk Management

    Collaborative Finance

    Operations

    Enterprise Risk

    and Compliance

    Management

    Human

    Resources

    Core Human Resources and

    PayrollTalent Management

    Time and Attendance

    Management

    Workforce Planning

    and Analytics

    Environment, Health, and Safety

    Enterprise

    Information

    Management

    Hydrocarbon Production

    Management

    Platform and

    Technology

    Data Architecture and

    Integration

    Information

    GovernanceContent Management Information Archival

    Enterprise TechnologyAnalytics

    Technology

    Mobile

    TechnologyIn-Memory Technology

    Simplify business processes

    https://rapid.sap.com/se/executive

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    Optimize the Oil

    Supply Sources

    As stable sources of oil and gas are becoming a scarce commodity, companies are driven to explore new

    sources and new ways to extract oil and gas. Intelligent oilfield technologies can help oil companies get

    the most out of their existing fields and establish successful new fields in remote and harsh areas

    Increase

    Production, Reduce

    Costs, Increase

    Safety

    Managing an oilfield requires a balance of maximizing well life and optimizing production equipment.

    Monitoring and analyzing data can help achieve this balance, but the data validation, analysis and

    diagnosis is laborious without a system. Intelligent oilfield solutions can increase production and cut costs

    while reducing the risks for its employees

    Improve Data

    Management

    While many new oilfields contain state-of-the-art monitoring equipment, older oilfields can provide only

    limited data. In fact, some critical information is still collected on paper. Even when data is electronically

    gathered, most companies store it in isolated systems that have are not easily able to talk to one another . With the intelligent oilfield, integrated systems and advanced technologies analyze raw data from oilfields

    and turn it into meaningful information

    Manage Aging &

    Dwindling

    Workforce

    Industry sources estimate that demand for hydrocarbons will continue to increase to approx. 100 MMbpd

    and labor shortage of 1Mn by 2015 (avg oil worker is older than 50 yrs). Digital Oilfield technologies

    enable productivity to close the supply gap by accelerating employee productivity, in which a handful of

    skilled people can accomplish what required a few hundred in the past

    Digital oilfield is the umbrella term for technology-centric solutions that allow companies to leverage limited resources. It allows companies to capture more data, with greater frequency, from all parts of the u