The Evolution, Not Revolution, of Digital Integration in Oil and Gas

By

Michael Trevathan

MEng, Petroleum Engineering, Texas A&M University, 2012

BSc, Chemical Engineering, Texas A&M University, 2010

SUBMITTED TO THE SYSTEM AND DESIGN MANAGEMENT PROGRAM

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE DEGREE IN

MASTER OF SCIENCE IN ENGINEERING AND MANAGEMENT

AT THE
MASSACHUSETTS INSTITUTE OF TECHNOLOGY

September 2020
© 2020 Michael Trevathan. All rights reserved.

The author hereby grants to MIT permission to reproduce and to distribute publicly paper and
electronic copies of this thesis document in whole or in part in any medium now known or
hereafter created.

Signature of Author_____________________________________________________________________________________________
Michael Trevathan
MIT System and Design Management Program
August 6, 2020

Certified by_______________________________________________________________________________________________________
Donna H. Rhodes
Principal Research Scientist, Sociotechnical Systems Research Center
Thesis Supervisor

Accepted by______________________________________________________________________________________________________
Joan Rubin
Executive Director, System Design and Management Program
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 THE EVOLUTION, NOT REVOLUTION, OF DIGITAL
INTEGRATION IN OIL AND GAS

Submitted to the System and Design Management (SDM) program

On August 6, 2020 in Partial Fulfillment of the
Requirements for the Degree of

Master of Science in Engineering and Management

Abstract
High impact digital innovations present opportunities for organizations to transform their
business capabilities to adapt for future sustainability. To adopt new platforms offered by
disruptive technologies, organizations must alter or retire existing business models, create and
develop new competencies, and build an agile business culture. An organization’s failure to
respond to evolving digital initiatives will inevitably lead to a loss of competitive advantage and
even obsoletion. Undertaking and managing transformative digital solutions may seem risky, but
the alternative is riskier.

This thesis explores the opportunities associated with integrating digital technologies into
established oil and gas (O&G) organizations where transformation will be exceedingly difficult.
Investing in the right technologies that fit the organizational size, competencies, and culture is
critical for the success of adopted digital initiatives. Case studies reviewing digital investment
portfolios within the O&G industry are presented to evaluate the investment size, capabilities,
and realized value creation associated with digital integration on design and operations.

A systems approach was employed to understand the barriers and limitations to digital
integration in the following areas: data value chain and workflows, data architecture
standardization, and end-to-end lifecycle integration, with emphasis on O&G drilling and
completion operations. Additionally, a business strategy roadmap was created to recommend
realized value opportunities for a digital investment portfolio to succeed in this constantly
evolving marketplace.

Thesis Supervisor: Donna H. Rhodes

Title: Principal Research Scientist, Sociotechnical Systems Research Center

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Acknowledgements

The support and guidance from MIT professors and fellow students have made this program and
thesis an invaluable experience both academically and professionally. I want to thank my thesis
advisor, Dr. Donna Rhodes, for the time she dedicated to framing and influencing the direction
of my thesis work. Without her continued support and guidance, this thesis would not have been
possible. I want to also thank all of the MIT SDM and Sloan professors and students for creating
an incredible learning environment throughout the past year. The breadth and diversity of
education and experience within the MIT community has had a pronounced influence on my
personal and professional growth.

Additionally, I am immensely grateful to Chevron for enabling this opportunity to develop new
skills that will be instrumental to my career and future work with the company. The dedicated
support from the Chevron community throughout this program has made this a rewarding and
meaningful experience. I would also like to thank the employees at Chevron, FutureOn, Corva,
eDrilling, Seeq, Veros Systems, XMPro, ChaiOne, and Intellicess who devoted their time to share
insights into the digital space within the O&G industry through multiple interviews and
discussions. Finally, I want to thank my family for their enduring support throughout this
initiative.

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Table of Contents
ABSTRACT............................................................................................................................................ 3

ACKNOWLEDGEMENTS ........................................................................................................................ 5

EXECUTIVE SUMMARY ........................................................................................................................15

1 INTRODUCTION ..........................................................................................................................20

1.1 RESEARCH OBJECTIVE AND QUESTIONS ............................................................................................. 25

1.2 RESEARCH APPROACH AND SCOPE .................................................................................................... 26
1.3 OUTLINE OF THESIS ........................................................................................................................ 28

2 DIGITAL MARKET IN O&G ...........................................................................................................30

3 O&G DIGITAL PORTFOLIOS .........................................................................................................36

3.1 SHELL .......................................................................................................................................... 39

3.2 BP .............................................................................................................................................. 41
3.3 CHEVRON ..................................................................................................................................... 43
3.4 EXXONMOBIL ............................................................................................................................... 45
3.5 EQUINOR ..................................................................................................................................... 46
3.6 SAUDI ARAMCO ............................................................................................................................ 47
3.7 OTHER OPERATORS ....................................................................................................................... 48
3.8 DC&I DIGITAL INITIATIVES .............................................................................................................. 49
3.9 DIGITAL PARTNERSHIP CATEGORIZATION ........................................................................................... 51

4 SYSTEMS APPROACH TO A DIGITAL PORTFOLIO ..........................................................................52

4.1 SYSTEM CONTROL.......................................................................................................................... 57

4.2 CURRENT SYSTEM STATE................................................................................................................. 59
4.2.1 ENGINEERING DESIGN ................................................................................................................ 59
4.2.2 OPERATIONS ............................................................................................................................ 61
4.3 FUTURE SYSTEM STATE................................................................................................................... 68
4.3.1 ENGINEERING DESIGN ................................................................................................................ 69
4.3.2 OPERATIONS ............................................................................................................................ 78
4.4 IDENTIFIED GAPS ........................................................................................................................... 90

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 4.4.1 HUMAN TO SYSTEM INTEGRATION ............................................................................................... 91
4.4.2 SENSOR & DATA QUALITY........................................................................................................... 92
4.4.3 DATA ACCESSIBILITY................................................................................................................... 93
4.4.4 STANDARDIZATION AND INTEROPERABILITY .................................................................................... 94
4.4.5 RETURN ON INVESTMENT ........................................................................................................... 94
4.4.6 PARTNERSHIPS AND ALLIANCES .................................................................................................... 95
4.4.7 DEVOPS .................................................................................................................................. 95

5 MODEL BASED SYSTEM ENGINEERING ........................................................................................97

6 SYSTEMS APPROACH TO DIGITAL ARCHITECTURE ..................................................................... 100

6.1 O&G REAL-TIME DATA ARCHITECTURE ........................................................................................... 100

6.2 DATA STANDARDS ....................................................................................................................... 103
6.3 ENERGISTICS ............................................................................................................................... 105
6.4 ENTERPRISE ARCHITECTURE ........................................................................................................... 107

7 DATA ANALYTICS IN WELL DESIGN AND OPERATIONS............................................................... 111

7.1 DATA MINING............................................................................................................................. 114

7.2 EXAMPLE CASE STUDIES & APPLICATIONS ........................................................................................ 117

8 DIGITAL PLATFORM DESIGN ..................................................................................................... 120

8.1 DATA SCIENCE AND MACHINE LEARNING (DSML) PLATFORMS ........................................................... 120
8.2 CHALLENGES TO DIGITAL PLATFORM ADOPTION ............................................................................... 122
8.3 DIGITAL EVALUATION METHODOLOGY ............................................................................................ 127

9 ECONOMIC DESIGN FOR UNCERTAINTY .................................................................................... 132

10 COLLABORATION INITIATIVES ................................................................................................... 137

10.1 VIRTUAL ASSISTANTS.................................................................................................................... 137

10.2 SOCIO-NETWORK KNOWLEDGE GRAPH ........................................................................................... 140

11 CONCLUSION ............................................................................................................................ 144

11.1 LIMITATIONS AND FUTURE RESEARCH ............................................................................................. 148

REFERENCES ..................................................................................................................................... 150

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Figures
Figure 1: Digital Transformation with Focus on Organizational Capabilities.............................................. 16
Figure 2: EIA World Energy Outlook 2019: Oil Demand (International Energy Agency (EIA), n.d.)............ 21
Figure 3: Digital Initiatives Capital Investment vs. Realized Value (Espinoza, Thatcher, and Eldred 2019)24
Figure 4: Thesis Roadmap .......................................................................................................................... 27
Figure 5: Value-at-Stake for O&G Digital Initiatives, Adapted from (World Economic Forum 2017)......... 31
Figure 6: O&G Investments in Digital Technology, Adapted from (World Economic Forum 2017) ........... 35
Figure 7: Oil & Gas Industry Decomposition .............................................................................................. 54
Figure 8: Oil and Gas Data Pipeline ............................................................................................................ 55
Figure 9: Non-Productive Time Categorization .......................................................................................... 56
Figure 10: IHS Markit Rushmore Reviews Database US Deepwater NPT% and Well Cost, 2012-2020 ...... 57
Figure 11: ANI-95 Enterprise-Control System Model, adaption from (de Wardt 2019) ............................. 58
Figure 12: Current State Drilling Engineering Design Workflow ................................................................ 60
Figure 13: Current State Drilling Operations Workflow ............................................................................. 62
Figure 14: Example Real-Time Drilling Data ............................................................................................... 64
Figure 15: Current State Operations Data Flow Architecture .................................................................... 65
Figure 16: Drilling Data System Flow Diagram – Emphasis on Data Stakeholders ..................................... 67
Figure 17: Front End Expectations versus Back-End Reality ....................................................................... 69
Figure 18: Future System State: Digital Design Platform ........................................................................... 71
Figure 19: Operations Edge Computing Data Flow Architecture (“Oil and Gas at the Edge | Automation
World” n.d.) ................................................................................................................................................ 80
Figure 20: Digital Twin Architecture ........................................................................................................... 83
Figure 21: O&G Digital Twin Architecture .................................................................................................. 85
Figure 22: Systems Methods & Tools, Adapted from (“INCOSE: Systems Engineering Vision 2025” 2014)
.................................................................................................................................................................... 99
Figure 23: General Field-to-Office Data Flow Architecture ...................................................................... 101
Figure 24: On-Shore Production Operations Data Telecommunications Architecture ............................ 101
Figure 25: Offshore Drilling Operations Data Telecommunication Architecture ..................................... 102
Figure 26: Enterprise Data Platform Architecture, Portions of Microsoft Data Platform Reference
Architecture Image (https://docs.microsoft.com/en-us/azure/architecture/example-
scenario/dataplate2e/data-platform-end-to-end) used with permission from Microsoft. ..................... 108

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Figure 27: Data Science and Artificial Intelligence (“How To Be A Data Scientist - Quantum Computing”
n.d.) [left] and (“Part 1: Artificial Intelligence Defined | Deloitte | Technology Services” n.d.) [right] ... 112
Figure 28: Artificial Intelligent Applications in E&P Industry, derived from (Bravo et al. 2012) data ...... 113
Figure 29: 10 Years of Digital Search Trend Data on Google Trends ........................................................ 114
Figure 30: Common Algorithm Analytic Methods, Adapted from (Rexer 2017) ...................................... 116
Figure 31: Bayesian Network Feedback Loop........................................................................................... 117
Figure 32: Neural Network for Drilling Rate (Xue 2020)........................................................................... 118
Figure 33: Relative Risk Priority of Digital Barriers ................................................................................... 127
Figure 34: Example Plot of Digital Risk vs. Value for Focus on Tool Characterization .............................. 130
Figure 35: Example Digital Tool Analysis Results...................................................................................... 131
Figure 36: Oil Production Break-Even Price, Adapted from (“Rystad Energy Ranks the Cheapest Sources
of Supply in the Oil Industry” n.d.) ........................................................................................................... 132
Figure 37: Historical Chart of Crude Oil Prices, Adapted from (McNally 2017; “EIA: Petroleum & Other
Liquids | Spot Price Data,” n.d.) ............................................................................................................... 133
Figure 38: Cost Breakdown to Produce a Barrel of Oil: US Shale (MacroTrends n.d.) ............................. 134
Figure 39: Economic Model Assumptions ................................................................................................ 135
Figure 40: Monte-Carlo Economic Model of Digital Initiatives in Drilling ................................................ 136
Figure 41: Conversational Bot Architecture, Portions of Enterprise-Grade Conversational Bot Image
(https://docs.microsoft.com/en-us/azure/architecture/reference-architectures/ai/conversational-bot)
used with permission from Microsoft. ..................................................................................................... 139
Figure 42: Sociotechnical Knowledge Graph of O&G Major Capital Project, Created from (“Kumu” n.d.)
.................................................................................................................................................................. 141
Figure 43: Strategic Digital Approach ....................................................................................................... 146

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Tables
Table 1: Shell’s Digital Portfolio Initiatives 1 of 2 ....................................................................................... 39
Table 2: Shell’s Digital Portfolio Initiatives 2 of 2 ....................................................................................... 40
Table 3: BP’s Digital Portfolio Initiatives..................................................................................................... 41
Table 4: Chevron’s Digital Portfolio Initiatives 1 of 2 ................................................................................. 43
Table 5: Chevron’s Digital Portfolio Initiatives 2 of 2 ................................................................................. 44
Table 6: ExxonMobil's Digital Portfolio Initiatives ...................................................................................... 45
Table 7: Equinor’s Digital Portfolio Initiatives ............................................................................................ 46
Table 8: Saudi Aramco’s Digital Portfolio Initiatives................................................................................... 47
Table 9: Aker BP’s and Total’s Digital Portfolio Initiatives .......................................................................... 48
Table 10: Digital DC&I Initiatives ................................................................................................................ 49
Table 11: Summary of O&G Digital Initiatives ............................................................................................ 51
Table 12: Oilfield Data Transfer Speeds per Technology.......................................................................... 103
Table 13: Digital Platform Characterization Methodology ....................................................................... 121
Table 14: Barriers to Organizational Digital Adoption .............................................................................. 124
Table 15: Example of Organization Digital Risk Self-Assessment ............................................................. 128
Table 16: Example of Quantification of Digital Tool Risk and Value......................................................... 129

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Acronyms
AI Artificial Intelligence
ANN Artificial Neural Networks
ASCII American Standard Code for Information Interchange
DC&I Drilling, Completions, and Intervention
DDR Daily Drilling Report
DHP Downhole Pressure
DHT Downhole Temperature
DOF Digital Oilfield
DSATS Drilling System Automation Technical Section
ECD Equivalent Circulating Density
EIA U.S. Energy Information Administration
ER Extended Reality
ETP Energistics Transfer Protocol
HDF5 Hierarchical Data Format v5
IaaS Infrastructure as a Service
IDS Independent Data Services
IEA International Energy Agency
INCOSE International Council on Systems Engineering
IIoT Industrial Internet of Things
IoT Internet of Things
IPT Invisible Productive Time
IT Information Technology
JSON Javascript Object Notation
LEO Low Earth Orbit
MBSE Model Based Systems Engineering
ML Machine Learning
MWD Measurements While Drilling
MR Mixed Reality
NLP Natural Language Processing
NPT Non-Productive Time

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OC Organizational Capabilities
OPC Open Packaging Convention
PaaS Platform as a Service
PCA POSC Caesar Association
PLC Programmable Logic Controllers
PPDM Professional Petroleum Data Management Association
PRODML Production Markup Language
PT Productive Time
QAQC Quality Assurance Quality Control
RESQML Reservoir Q Markup Language
ROP Rate of Penetration
RPM Revolutions Per Minute
RTOC Real-Time Operations Center
RTU Remote Terminal Unit
SaaS Software as a Service
SCADA Supervisory Control and Data Acquisition
SLC Standards Leadership Council
SoS System of Systems
SPE Society of Petroleum Engineers
SysML Systems Modeling Language
T&D Torque and Drag
UML Universal Modeling Language
VSAT Very Small Aperture Terminal
VR Virtual Reality
V&V Verification and Validation
WITSML Well Information Standards Markup Language
WOB Weight on Bit
XML eXtensible Markup Language
XR Extended Reality

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Executive Summary
The Oil and Gas (O&G) industry has an opportunity to redefine its operational perspective
through digitalization and artificial intelligence (AI). The industry has experienced high
commodity volatility, increased climate change accountability, challenging geo-political and
geological environments, and disruptions in consumer and business energy selections.
Digitalization empowers the O&G industry to address these disruptive challenges and to provide
innovative solutions that create value to the industry overall. The value at stake for achieving
high-functioning digital initiatives is estimated to be $1.6 to $1.9 trillion (World Economic Forum
2017). The challenge for the O&G industry is to understand the organizational and technical
transformation required to realize the full potential value enabled by digital solutions. To be sure,
the digital roadmap to data science and machine learning (DSML) platform adoption is opaque,
and organizations are at risk for initiating long-term investments that fail to produce value.
However, an organization’s failure to respond to evolving digital initiatives will inevitably lead to
a loss of competitive advantage and even obsoletion. Without a clear digital roadmap, the
tension between digital uncertainty and the immediate call-to-action risks isolated initiatives and
siloed solutions.
Digital transformation is a journey of leveraging connectivity and analytics at an
enterprise-scale in order to drive design and operational efficiencies. The focus around platform
standardization, interoperability, and flexibility is critical to ensure that multi-disciplinary value-
chain ecosystem is integrated for both local and holistic optimizations, which emphasizes the
value for robust collaborative environments. Operational competency (OC) in digital literacy and
AI has been revealed as a bottleneck for digital growth and innovation. Developing digital
competency is essential for creating a data-driven organization that utilizes the value and
commoditization of data, and for developing innovative solutions for leveraging data to engineer
a competitive advantage. The 2020 NewVantage AI survey indicated that “over 90% of the
challenges to becoming data-driven are in the people, process, and culture – not the technology”
(“Big Data and AI Executive Survey 2020” 2020). The advancements in available technology,
including big data, internet of things (IoT), automation, augmented reality, lifecycle system
integration, machine learning, and simulation optimization have surpassed the O&G industry’s

15
current ability to leverage it – and this technology gap continues to increase. Figure 1 shows the
system integration of digital emerging technologies with an emphasis on the organization’s role
to not only connect the digital ecosystem of digital elements, but also to leverage the elements
as an integrated system for improved industrial performance. To remove the bottleneck, an
organization must develop a data-driven (versus experience driven) culture that integrates with
digital platforms and services, with a focus on realized business value.

Figure 1: Digital Transformation with Focus on Organizational Capabilities

Interviews were conducted for this thesis with innovative leaders in the oilfield digital
space. Their input and perspective were utilized to develop and understand the current and
future state of the role of digital in oilfield design and process control. The bullets below outline
the guidance and takeaways from these organizations’ journey to transform the O&G industry
into a data-driven community:
• Digital innovations and technologies are revolutionary, however the process of adopting
and integrating digital platforms into the social and technical workflows within an
organization is evolutionary.
• Digital opportunities are transforming the design and operational workflows within the
O&G industry, however, the greatest challenges to programmatically adopting
technology enterprise-wide are internal digital competency and awareness, cultural
acceptance to change and disruption, and trust with leaders, partners, and alliances.

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• The O&G industry has exhibited a historically siloed competitive ecosystem and this
isolated philosophy will no longer remain competitive. Digital platforms built to integrate
systems, partnerships, and expertise will thrive in a networked marketplace.
• A data-driven organization must fundamentally embrace the value of revitalizing,
monetizing, and democratizing organizational data, including both real-time and
historical data, as well as structured and unstructured data.
• Digital developments and services are more likely to provide value if the organizational
capabilities, capacities, and resources are aligned with the functional requirements of the
digital solution (i.e. organizations need to better understand their internal limits before
developing or buying digital solutions that exceed the abilities of the intended
stakeholders).
• Enterprise digital platforms and solutions should be developed with an integrated, open-
sourced, and standardized approach for interoperability and sustainability. Integrated
systems build integrated solutions where management of greater complexities and
optimizations is possible.
• Internal and external digital partnerships and alliances are essential for the continual
growth and development of an enterprise digital ecosystem. Organizations need to
transition to partnerships that embrace the “open” approach to shared growth
opportunities and resources. Innovations and breakthroughs are built off the incremental
improvements from predecessors (network of growth), and this theme should continue
with the system development of a digital enterprise. The objective should shift from
selecting a single system to replace all existing systems, to selecting a digital platform that
integrates and builds off the existing systems.
• Digitization is fundamentally geared toward creating faster and better business decisions
for both design and operations. Within the digital system, data quality (volume, variety,
veracity, velocity, and value) will persist as a continual challenge to analytic accuracy and
capabilities. The data lifecycle must be holistically evaluated to determine the data quality
and processing requirements to model actionable decisions for specific processes. The
data lifecycle is inclusive of data creation with sensor type, placement, and quality, to

17
 data filtering, processing, and performing analytical models. Understanding the statistical
accuracy required for a data-driven model to influence business decisions will help dictate
the system requirements to govern a specific design or operation.
• Digitization is about connection, visualization and prediction (analytics), and action
(optimization and automation). The connectivity and repeated analytics create the full
system understanding that generates value. An organization can shift significant energy
from monitoring and data mining to design and operational decision support. Ultimately,
the information and business insight availability, democratized across an entire
organization, allows the workforce to focus entirely on value.
• Notably, successful asset performance management has been achieved through the
integration of cloud enterprise systems, unified operational centers, and operational
lifecycle management, including automation, optimization, and maintenance.
The data shows that advanced software applications, infused with AI on a cloud-based
platform, are able to boost and enhance business decisions for design and operations to provide
a strong competitive advantage. However, the opportunity is advertised as a revolutionary
change, and while the potential capability improvements are immense, the rhetoric is a disservice
to the movement because it underemphasizes the actual amount of infrastructural, cultural,
competency, and workflow shift required for success. Instead, the digital adoption is proving to
be more of an evolutionary process than a single revolutionary shift.
This thesis concludes that organizations underestimate the extent of the challenges
associated with developing, scaling, adopting, executing, and maintaining a digital initiative
across a large organization. The digital literacy, awareness, inquisitiveness, and culture of most
O&G organizations are not yet fully positioned to foster an environment where digital initiatives
can succeed without heavy reliance on external resources. Organizations should consider a
holistic systems perspective when selecting digital partnerships and services. The digital
evaluation method presented in this thesis provides a robust approach to consider the
interdependencies and relationships of the digital system being analyzed with the rest of the
organization. The safe approach is to start with a business challenge, create a digital vision or
strategy, and embrace open-source collaboration and standardization. The capabilities in the

18
digital space are growing rapidly, and organizations must develop or adopt digital initiatives that
prioritize extensibility and sustainability.

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1 Introduction
Emerging digital technologies and rapid innovations are transforming the oilfield in what
is termed the Digital Oilfield (DOF) transformation. The term has been highly leveraged, both
through hype and to created value, to highlight growth and innovation to CEOs, managers, and
shareholders. The DOF has garnered attention from the entire industry, with integrated oil
companies (IOC), national oil companies (NOC), independents, and oilfield services (OFS) all
heavily investing to achieve the competitive advantage that the transformation promises. The
digital transformation can be simply defined as an organization’s adaption or journey to
restructure and strategize in order to capture the business opportunities enabled by digital
technology. The O&G industry has developed and adopted new technologies for decades,
however, not at the forecasted DOF rate or magnitude required to stay competitive in the
present marketplace. The advent of inexpensive sensors, increased bandwidth capabilities,
improved data processing power, cloud storage, and internet accessibility, combined with new
ways to source and analyze information, sparked the transition toward digital dependency. The
paradigm shift will require organizations to develop new business models, workflows, and
collaboration efforts to ultimately move from an experience-driven to a data-driven culture.
The momentum to digital in the O&G industry is not only about availability and
accessibility to digital products and services; the rapid push has also been influenced by economic
instability from reduced and volatile oil prices, political pressures to reduce environmental
impact, specifically around carbon footprint, and from competitor’s early digital adoption. Due
to the holistic, multi-disciplinary integrated approach that is aimed at enabling optimal economic
recovery, the implementation of a fully connected oilfield provides an opportunity for oil
companies to be profitable in a lower commodity price environment. O&G will be able to create
a business model that does not risk obsoletion during the boom and bust cycles of the oil
industry. Even though the IEA ‘Current Policy’ projects future oil demand to continuously increase
into 2040, oil prices can still fluctuate to uneconomic levels, as shown in Figure 2 with the Stated
Policy and Sustainable Policy demand forecast. The IEA has oil demand forecast models for three
scenarios: Current Policy, Stated Policy, and Sustainable Development – more information on
these forecast assumptions can be found in their Energy Outlook Report. By developing

20
techniques that step-change the profitability margins, companies will have more stability and
control with their business strategies.
The other strong driver for digital adoption is competition. The operational asset
performance efficiencies are now capable through data capture, data management, and data
visualization for advisory and automation algorithms. Operational experience as a core
competency no longer has the competitive advantage that it once did. The advantage is now
leveraged through linking data from thousands of wells to make informed business and
operational decisions, which is not a core competency of major oil companies. This opportunity
allows smaller and less experienced companies the ability to compete and outperform more
experienced organizations.

IEA: World Energy Outlook (WEO) 2019 Energy Demand Forecast

IEA Current Policies IEA Stated Policies IEA Sustainable Development

20,000 50
Mtoe (MillionTonnes of Oil Equivalent)

18,000 45

16,000 40

Gt (CO2 Emissions)
14,000 35

12,000 30

10,000 25

8,000 20

6,000 15

4,000 10

2,000 5

- 0
2000 2018 2030 2040 2000 2018 2030 2040 2000 2018 2030 2040

Coal Oil Natural Gas Nuclear Renewables Solid Biomass CO2 Emissions (Gt)

Figure 2: IEA World Energy Outlook 2019: Oil Demand (International Energy Agency (IEA), n.d.)

In addition to the improved return on investment (ROI) on core business, the emerging
digital technologies provide opportunities for companies to develop new growth ventures in
areas outside their core business. Familiar companies that failed to innovate and transition to the
digital model are Kodak, Blackberry, Sears, Xerox, and Blockbuster – which demonstrates the
difficulty of disrupting the core business model while at the top of an industry. Even though oil
has projected growth into 2040, other influences around carbon restrictions, renewable energy,
alternative energy (solar, wind, water, hydrogen, nuclear), as well as breakthroughs in battery
capacity and electric cars, can all have significant disruptions against the forecast. Companies are

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going to take this opportunity, and lessons learned, to explore different business models in the
digital space to ensure future sustainability.
The strategic incorporation of digital technology is critical for future sustainability in the
oilfield, however, the roadmap to successful digital adoption is opaque, where misguided
“digital” projects can lead down frustrating and unproductive paths. Understanding the core
value initiative of the digital transformation is helpful to making value-driven decisions. As a
baseline, the objective of any new initiative includes one or more of the following: reducing costs,
increasing revenue, improving safety, or reducing environmental impact. These objectives are
accomplished through digital platforms by improved machine and human connectivity, abilities
to monitor and measure, big data analytics and algorithms, automation, improved modeling
techniques, collaboration, and optimizations. These opportunities demonstrate just a few core
principles that can be referenced to understand the added value from digital initiatives. The
digital world is able to integrate into the entire O&G value-chain ecosystem to develop strong
innovations, and because of the enterprise-scale impact, the ability to integrate, connect, and
adapt become the key drivers of success.
Upstream O&G exploration and production is a complex, multi-faceted business that
requires large coordination efforts to succeed. Upstream operations is the term that defines all
stages of finding, accessing, and producing oil and gas. This thesis primarily focuses on the
integration of digital platforms in the upstream O&G sector, and specifically around the increased
value from the various service types and methodologies. It will explore the details on each of
these subsystems to explain the infrastructure and software requirements, company and service
partnerships, as well as the financial, environmental, and safety value attained. The current
trends in digital portfolios in the upstream oil and gas sector are listed below.
• Real-time operational surveillance (drilling, completions, production, and facilities);
• Real-time edge computing (field advisory and automation);
• Cloud computing and data management for accessibility, visualizations, and analytics;
• Workflow integration and knowledge platforms (relational databases and mapping);
• Remote operating centers (remote advisory, control, and automation);

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 • Predictive maintenance (combination of sensors, IoT, and algorithms for anomaly
detection);
• Operational asset performance efficiencies;
• Automation and cognitive computing (combining physics-based models with analytical
reasoning);
• Subsurface seismic modeling and characterization (big data analytics for pattern
recognition);
• Multi-disciplinary optimizations (connecting models and historical operation data across
multiple disciplines);
• Production performance forecasting;
• Connected worker (IoT); and
• Supply chain management (smart contracts, logistics, inventory optimization).
These digital initiatives listed above all appear to be investment-worthy initiatives,
however, there are foundational infrastructure and capability requirements needed before a ROI
is achieved. Digital platforms generate value from the network effect – more data and entities
connected within the framework allows the algorithmic methodologies to more effectively
optimize value. The graphic in Figure 3 shows the investment sequential order to ensure the
foundational infrastructure requirements are available to enable the next order of digital
initiative or innovation. The graphic also represents the initiatives as diminishing returns, as is
with most types of investments. However, given the current early stages of digital adoption, the
uncertainty of the realized value will most likely be increasing (potentially exponential
improvements) and not diminishing as companies begin developing in machine learning,
cognitive computing, and optimizations. As these technologies mature within the O&G industry
there will be continued growth in applications and innovation to build additional operational
efficiencies. The initial three investment phases have been leveraged in the O&G industry for
decades with SCADA systems and well log monitoring. However, the volume and variety of data
and resources in that space are going to change dramatically. The data volume and variety are
where digital platforms are able to leverage their pattern recognition and anomaly detection for

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advisory and automation control, which with increasing process complexity is increasingly more
difficult for an engineer’s mental models to recognize and take action.

Figure 3: Digital Initiatives Capital Investment vs. Realized Value (Espinoza, Thatcher, and Eldred 2019)

Several interpretations from Figure 3 are highlighted below:

• Data quality is paramount and is the first step to enabling quality analytic techniques.
Data is the feedstock that aggregates into analytic models, and organizations should value
the data quality input as much as they value the decision output.
• Data management is about the capturing the five V’s of big data: volume, velocity, variety,
veracity, and value. Data management infrastructure is critical for data connectivity and
accessibility to algorithm methodologies and visualizations.
• Workflows are critical but are presented at a later stage because they require trust in the
technology. The ability to adopt new workflows and depend on automation techniques,
largely depends on the level of trust associated with that technology. This means that the
implemented technology needs to have a history of model accuracy before an
organization will be willing to alter their business model.
• Holistic optimization is challenging to scale to an enterprise-level. Chasing this initiative
can have diminishing returns versus investing in higher quality platforms in the previous

24
 (1-7) initiatives. However, once there is a clear path on how to manage scaled
optimizations, this will have significant savings and business improvements.
The methodologies in Figure 3 are not specific to any O&G function and they can be
applied across all sectors and disciplines for a full end-to-end digitally influenced asset lifecycle
management. It is important to recognize that digital initiatives are only an enhancement to core
business value, and unless developing a new growth venture, digital tools only enhance
performance improvements for increased profitability. The importance of this statement is that
the goal is not to be “digital,” the goal is to enhance and improve operational performance with
better data-driven decisions, more efficient workflows, and process and machine automation
(“Refueling the Oil Industry: Transforming Traditional O&G with the Oil of the 21st Century - Red
Chalk Group” n.d.). Understanding and acknowledging these benefits from digital methodologies
does not mean your company is “digital.” It takes a cultural paradigm shift to view problems and
solutions from an information technology perspective (Oil&Gas Journal n.d.). It takes investments
in data structuring, data management, and standardization. And, most of all, it takes trust to
develop and learn from the digital methodologies employed to develop these business
efficiencies (World Economic Forum 2017).
1.1 Research Objective and Questions
The objective of this thesis is to explore the tradespace of digital initiatives within large
O&G companies to develop insight into which strategic platforms and methodologies are
providing realized value. Adopting new digital platforms and workflows can be a burdensome
endeavor for large O&G organizations, considering capital required for digital infrastructure,
platform development, employee development (competency and culture), external competency
resources, administration, and temporary productivity decline during transition and rollout.
Figure 4 outlines the roadmap for this thesis from hypothesis to recommendation. The
hypothesis is aligned with the theory of the modern “productivity paradox” (Silver 2012) where
new technology, coupled with hype and misdirection, create a period of productivity decline. This
occurs during periods where technology growth outpaces the understanding of how to utilize
and process it. The transition to digital is undoubtedly complex, with cloud computing, platform
integration, sensor integration, complex algorithms, and data management. It is a challenging

25
endeavor to understand how each software algorithm or platform works, how and when to trust
the predictions, and what investments to make to lead toward bottom-line realized business
improvements. Ultimately, the hypothesis is that the O&G industry is currently mixed up in a
productivity paradox where an immense amount of energy and investments is directed toward
“getting to digital” that is leading to tangent projects that fail to achieve a return on investment
and deviate business models away from the optimal path. The approach to understanding the
breadth of digital influence in O&G is outlined below.
1.2 Research Approach and Scope
The approach of this thesis is to provide a holistic, systems approach to evaluate the
integration of digital initiatives into the O&G industry. The objective is to evaluate the
interdependencies of the organizational system shift from traditional to digital workflows. The
scope and structure of this thesis is outlined below.
• Evaluate the O&G digital market.
• Identify digital initiatives currently adopted in industry.
• Evaluate digital initiatives from a systems perspective, including:
o Market potential value creation;
o Current and future digital state comparison;
o Technical and digital infrastructure requirements; and
o Organizational capabilities.
• Identify systemic problems or barriers to digital system integration:
o Organizational – People, processes, and culture;
o Standardization – Platform and data standardization; and
o Ecosystem – Full ecosystem integration (local versus holistic optimization).
The intention is not to identify all of the digital dead-ends, which would be difficult to
achieve because most companies avoid advertising failed initiatives. Instead, this thesis highlights
the programs and initiatives that have shown promising results in the O&G industry, and
evaluates the dynamics and characteristics that contribute to that success. The approach is to
provide guidance on the general direction for portfolio and organizational investments to achieve
operational and design improvements.

26
 Figure 4: Thesis Roadmap

This thesis aims to evaluate and understand the following questions:

1. What are the current digital investments and digital trends employed in the O&G industry,
specifically to DC&I design and operations?
a. How does this current digital state compare to the future digital vision?
b. What are the critical organizational and technical system barriers to achieving the
transformation to impactful business digitization?
2. Is the O&G industry currently mixed up in a productivity paradox where investments are
directed only toward “getting to digital” and fail to contribute to added business value?
3. Is there a framework that can more effectively evaluate the business value and alignment
of a digital initiative with respect to how it integrates with an organization’s culture,
competency, capability, and vision?
The evaluation of the current digital initiatives in upstream O&G, and more specifically
around drilling, completions, and intervention (DC&I) operations, will leverage a systems
methodology to identify the systems, subsystems, interrelationships and dependencies. Systems
methodologies are best utilized for simplifying complex problems into understandable and

27
actionable entities. Emerging O&G digital technologies and organizational dynamics are
increasingly complex, and our mental models are challenged to conceptualize the full dynamics
of the system without employing systems principles (Meadows and Wright 2008). The influential
components of the integrated system are both multifaceted and relational, with tangible and
intangible dynamics, making the emergent properties unpredictable without the proper
evaluation techniques. A systems approach to this problem is necessary to visualize and
understand the underlying dynamics of the integration of disruptive technologies in an
organization.
The recommendation of this thesis is based only on the analysis performed in this
research, and as a disclaimer, the evaluation of the performance of digital initiatives are difficult
to make conclusions in absolutes. There may be methods or strategies that appear to make more
sense, but equating one company or algorithm quality to another is extremely difficult. The
general adage for models is “trash in, trash out” which would not be at the fault of the
technology, but potentially the fault of the user or the data quality. Nonetheless, despite the
uncertainties, this thesis aims to provide insight on the current digital portfolios of several O&G
companies, as well as insights into the techniques that are providing operational improvement.
The goal is to empower the investor to ask the right questions, challenge hype, and direct a digital
portfolio customized to the needs of the organization.
1.3 Outline of Thesis
Chapter 2: Digital Market in O&G
This chapter provides a background in digital and artificial intelligence applications within
the O&G industry, and aims to provide the value at stake for digital initiatives, as outlined
by published market research reports.
Chapter 3: O&G Digital Portfolios
This chapter reviews the digital portfolios for major O&G companies. The information for
the digital initiatives was captured from news, industry reports, and market research.
Chapter 4: Systems Approach to a Digital Portfolio
This chapter takes a system approach to understanding the current and future state of
digital initiatives within DC&I design and operations processes. The systems approach

28
 evaluates the people, tools, and processes involved with bridging the gap from the
current to future state.
Chapter 5: Model Based System Engineering
This chapter briefly reviews model-based systems engineering (MBSE) in order to
evaluate how traditional MBSE methods integrate with new innovative digital workflows.
Chapter 6: Systems Approach to Digital Architecture
This chapter reviews the process flow of data throughout an organization from field
sensors to office analysis. This section reviews data standardization protocols, processing
speeds, and data requirements.
Chapter 7: Data Analytics in Well Design and Operations
This chapter reviews data analytic techniques that are being leveraged for specific design
and operation applications, as described in industry literature.
Chapter 8: Digital Platform Design
This chapter reviews all the principles outlined in the previous chapters to develop a
methodology to review and compare how digital initiatives align with the value and goals
of the organization to reach the specified future digital state.
Chapter 9: Economic Design for Uncertainty
This chapter describes economic evaluation techniques to include uncertainty and
Monte-Carlo models to assess the potential value of a digital investment in DC&I
operations.
Chapter 10: Collaboration Initiatives
This chapter reviews digital collaboration initiatives for an organization, which includes
discussions around the value of removing silos and improving collaboration efforts.
Additionally, the organizational value of socially oriented digital opportunities with social
network graphs and virtual conversational chatbots are explored.
Chapter 11: Conclusion
The conclusion summarizes the findings and proposes a recommended strategy for
evaluating digital initiatives in an organization. The conclusion also discusses future
research and the path forward.

29
2 Digital Market in O&G
The World Economic Forum developed a joint White Paper with Accenture titled “Digital
Transformation Initiative – Oil and Gas Industry (2017).” The report reviews the value creation
from digital trends and themes in the Oil and Gas industry. Four themes that play a critical role
in the digital transformation were identified as (1) Digital Asset Life Cycle Management, (2)
Circular Collaborative Ecosystem, (3) Beyond the Barrel, and (4) Energizing New Energies. While
all these themes are impactful, this thesis will mostly explore the digital asset lifecycle
management in upstream O&G. The applicable technologies are mapped in Figure 5, visualized
by Industry Impact ($Billion) versus Societal Impact ($Billion). The Societal Impact is measured by
the economic impact of emissions (CO2, SO2, NOx, and CO), reduction in water usage and oil
spills, time savings, and reduction in cost to customers. The plotted relationship is an insightful
metric to understand the overall financial value of the digital initiative and the bearing for future
sustainability.
Within the digital asset lifecycle management theme, “operations optimization” has the
potential to unlock the most value for the industry (approximately $275 billion), followed by
predictive maintenance. According to the World Economic Report, within the upstream sector,
90% of the value associated with “operations optimization” is projected to be realized primarily
by optimizing extraction (DC&I) and production operations. The value is expected to accrue from
leveraging and integrating the disparate, multi-disciplinary data sources to feed advanced
analytics algorithms in order to reduce non-productive time and enhance production
performance.

30
 520
Bubble Size = Total Societal Impact + Industry Impact
510
Societal Impact represents impact of emissons,
500 Consumer Energy Choices reduction in water useage and oil spills, time savings,
and reduction in costs to consumers. The monetary
490 value of the societal impact of emissions is 1 ton of
CO2 = $97 (World Economic Forum, 2017).
480
Societal Impact ($ Billion)

70

60
Operations
50
Optimization
40 Predictive
30 Maintenance

20
Real Time Supply / Remote Operations
10 Demand Balancing Centers

0 Connected Worker

-10 Autonomous Operations

and Robots
-20
-20 30 80 130 180 230 280 330
Industry Impact ($ Billion)

Figure 5: Value-at-Stake for O&G Digital Initiatives, Adapted from (World Economic Forum 2017)

According to a new market report from BIS Research titled “Global Artificial Intelligence
(AI) in Energy Market, 2019,” the global AI market capitalization in energy is anticipated to reach
$7.79 Bn by 2024. This projection indicates that over the next 3-5 years, organizations will be
investing significantly in digital technologies. However, this also means that there will be many
new entrants into the market that will aim to capitalize on the new investment trends. Accenture
performed a global survey titled “Accenture Upstream Oil and Gas Digital Trends Survey 2019”
where they surveyed 255 upstream leaders in 47 countries regarding digital technology
investments (Holsman, n.d.). The survey identified five trends in the AI market in energy that are
summarized below with added discussion points.

1. Digital investments are a key enabler to upstream business success, and investments
will continue to increase.
The biggest drive indicated in the Accenture survey for digital investments is the fear of
losing competitive advantage. The Porter’s Five Forces method is useful for analyzing the
risk of competition of any business or industry. These forces derive the competitive
intensity and thus attractiveness of an industry in terms of profitability. Understanding

31
 these Five Forces in O&G is key to understanding the driving influences behind the digital
transformation initiative. Porter’s Five Forces are Competitive Rivalry (revenues, profits,
ROIC), Threat of New Entrants (financial, regulatory, or geographical barriers), Threat of
Substitutes (solar, nuclear, hydrogen, biofuels), Bargaining Power of Buyers (refineries,
local, international, customers), and Bargaining Power of Suppliers (global demand
patterns, OPEC, geopolitics, climate governance) (“Porter’s Five Forces Model for Oil and
Gas Industry – Energy Routes” n.d.). AI will have the largest influence in Competitive
Rivalry with analytics and automated workflows increasing revenue and profits, and in
Threat of New Entrants with experience losing weight compared to innovative design and
operation advisory algorithms, where smaller companies will be more empowered to
compete.
2. Cybersecurity leads digital investments today, followed by Cloud, Big Data Analytics,
AI/ML, and IoT, respectively.
According to a market report published by Transparency Market Research, the global oil
and gas data monetization market is expected to reach $81.6 Bn by 2026. This value is
generated from the selling and trading of large volumes of data to drive value from
advanced data analytic solutions and platforms to improve asset productivity. Operators
currently store mindboggling amounts of unused operational data in their historians.
Recognizing the value of this data for developing digital model improvements that can be
leveraged internally and within the industry, companies are fearful of losing their
intellectual property (IP) with digital platform service providers. As digital partnerships
are integrating into single platforms, IP has become a big focus topic in industry around
the property rights to data.
3. Digital helps to optimize core business with cost reductions by making faster and better
decisions.
The integration of disparate, multi-functional data sources to perform machine learning
and other algorithms for visualization, advisory, and automation are entirely focused on
improving decisions and optimizing productivity. Additionally, open-source platforms
create enhanced workflows that reduce cost and time for design and development. This

32
 value contribution over the end-to-end asset lifecycle of O&G operations must continue
to progress for the digital evolution to endure. And, although digital has aimed at
improving core business and opening up new venture opportunities, it also disrupts how
organizations perform business. Digital adoption must coincide with employee
development of skills and capabilities; there must be specific roles allocated in the
organization for digital integration, and engineers need to collaborate better with IT to
build a data-driven culture.
4. Full value from digital is not being realized due to challenges with scaling.
The reference to hype does not mean that a digital technology or machine learning
algorithms do not work per se; in fact, the opposite is true. Hype is frequently influenced
by reports, presentations, or articles that highlight the technology contributing unique
and promising functionality, but often at a small scale. The significant challenge that
industry is addressing is how to scale these AI tools to an enterprise level to validate the
proof-of-concept. The scalability beyond a skunkworks pilot is where most digital
platforms and initiatives fail to succeed. Organizations are highly complex sociotechnical
systems, and designing digital platforms and solutions to integrate with that complex
environment is critical for success.
5. External skills and partnerships are key to unlocking the value of digital.
The O&G industry has been traditionally siloed, both with operators and with oilfield
service providers (OFS). The fear of losing IP and market share has influenced the business
philosophy of developing internally, rather than externally. Operators and OFS are now
entering joint partnerships with both each other and IT companies to further develop
their digital portfolios. The most critical adaptation that has been to unlock the value of
digital are open platforms that integrate expert services from the respective provider with
standardized OpenAPI protocols. This means that digital platform providers are not
competing in the digital analytics and algorithms business model, but are instead
developing adaptable workflow platforms for AI/ML services (C3.ai, DELFI, etc.), physics-
based modeling services (Prosper, OLGA, Landmark, PIPESIM, etc.), and other modular

33
 services to create a single source of truth. This is where the impact breadth feeds into
operations, design, and workflow optimizations.
The last part of this section, before reviewing digital portfolios, will address the
pervasiveness of digital applications in O&G. Figure 6 shows the different areas of digital
presence in their respective order of industry investment. The colored bars represent the
variance from the benchmark outlined in the World Economic Forums “Digital Transformation
Initiative” as discovered by the research presented in this thesis. The key points related to this
graphic are that big data processing, management, and analytics continues to be the top
investment for O&G companies. As an overlap, cloud services have been employed to make that
process easier (Microsoft Azure being the primary partnerships with most O&G companies), and
to provide interoperability of data management services to handle the complex processing,
cleaning, and revitalizing as a third-party initiative.
As the quality improves with cloud computing and big data management, artificial
intelligence with machine learning algorithms are able to use the data to develop complex
anomaly and pattern detection for improved design and decision-making. Collaborative tools are
on the rise with companies employing virtual assistants and building shared platforms to improve
communications. Digital platforms are integrating into collaborative environments that enable
open applications and connectivity with all involved stakeholders and analytic tools in one system
of truth. Robotics and automation have always been the goal-seeking objective, however,
progression in automation is plagued with trust and standardization issues. As the evolution of
digital capabilities grow, robotics will play a critical role in optimizing and maximizing
productivity. There is still movement in the wearables and connected worker space, along with
virtual and extended realities for training, but this has largely taken a backseat to big data and
analytics investments.

34
Figure 6: O&G Investments in Digital Technology, Adapted from (World Economic Forum 2017)

35
3 O&G Digital Portfolios
The first step to understanding the current value drivers in the O&G digital market is to
identify the companies and services that are making moves and developing partnerships
throughout the industry. This section provides a brief list of the major investments and
partnerships that have been discussed in recent news. The portfolio breakdown includes
investments and integration initiatives from Shell, BP, Chevron, ExxonMobil, Equinor, and Saudi
Aramco. Because it is difficult to discover this information without access to internal strategies,
this list is not exhaustive, and is only representative of the transparency provided in the public
mediums. The portfolio analysis is followed by a review of digital investments as applied to real-
time operational data, specifically to the oil extraction phases (DC&I). The following trends were
identified during the review of the major IOC’s digital portfolios:

1. Microsoft (MS) Azure is the comprehensive cloud-based platform of choice by industry. It

is an enterprise-wide platform that facilitates the data pipeline infrastructure. MS Azure
is robust, adaptable, and scalable, with a variety of powerful digital opportunities.
Microsoft has entered into partnerships to connect with various digital service providers
to create a single source architecture solution.
2. Data management systems are being leveraged to revitalize, clean, and orchestrate data
through the Azure pipeline. Services like Databricks and SEEQ are designed to integrate
historians and develop workflows for dormant data, for use in analytic algorithms. As
discussed above, the quality and volume of data are paramount for higher-level analytics
to provide value. O&G companies are focused on generating value from their current data
repositories, but this is a challenging effort due to the lack of historical standardization
with data structuring. In the current evolutionary stage of digital in O&G, the data
management space may be critical for early market capture, because revitalizing data
versus waiting for enough new quality data to arrive from operations, will expedite the
digital journey toward actionable success.
3. Open platforms that integrate any service or analytic tool through OpenAPI specifications
for REST APIs are the current trend for future digital sustainability. OpenAPI standards

36
 allow for single truth workflow platforms that are interoperable with any software that
has developed that interface capability. This allows both digital service providers and
operators to gain flexibility with custom development and to freely leverage any new
software or algorithm packages into the platform. The trends for digital platforms and
initiatives are to enable cross-functional and cross-company collaboration and
coordination. This is the foundational principle of the FutureON platform for the subsea
workflow development, which is similar to Equinor’s Omnia. Most new services, including
real-time drilling advisor systems, have compatibility to connect via REST API’s in order to
integrate into business and data workflows.
4. Companies are exploring big data analytics in seismic and reservoir characterization,
which has the potential to unlock discoveries for new reservoir plays. This is probably the
highest data density discipline within an O&G organization, which is a perfect
environment to test big data analytic techniques. However, having enough quality data
and computational power for revolutionary reservoir characterization for oil discoveries
is likely a few years away. The current strategy is to develop characterizations and connect
geological data into workflow platforms for enhanced design and development.
Additionally, reservoir properties can be streamlined into Digital Twin models to forecast
well extraction and production performance.
5. Companies are investing in predictive maintenance to connect and analyze equipment
performance. GE Proficy is measuring electrical current data to train algorithms for
anomaly detection and for forecasting maintenance performance on rotating equipment.
Additionally, O&G companies have shown recent success in sensor connectivity combined
with machine learning to forecast, predict, and customize maintenance plans and, hence
supply chain methodologies.
6. Processing real-time data to create actionable operational decisions is influencing
significant changes within the industry. Real-time sensor data is mapped to mathematical
equations that define the state of the operation. For example, the weight-on-bit,
revolutions per minute, and torque can advise the driller on the mechanical specific
energy output of the drilling operation, and based on the bottom-hole-assembly

37
 parameters, this can advise on the optimal strategy for drilling. Companies are leveraging
offset data and lithology data to integrate into the real-time advisory platform, where
performance and drilling events can be forecasted – this starts entering the realm of a
digital drilling twin. Additionally, an advisory program is only as powerful as the trust and
discipline of the operating company to follow the recommendations. Companies are
developing ways to integrate automation into the workflow. NOV’s NOVOS is a platform
that allows for automation on repetitive tasks like drilling or tripping but has the ability to
adapt to new circumstances. Automation is a big challenge for industry to address in the
O&G operation spectrum, as each system can have different control packages and
elements associated with the equipment. The burden here is potentially on the rig
contractors to develop machine control package standardization; before then, it is an
arduous task to customize software for each rig platform.

Table 1 through Table 9 provides a detailed summary of O&G industry digital initiatives
that were identified through interviews, news articles, professional papers, and market research.
The organizations included are Shell, BP, Chevron, ExxonMobil, Equinor, Saudi Aramco, and Aker
BP. The summary provides a framework of the historical digital adoption and direction that large
O&G companies are heading with the digital transformation. The intention of this work was to
identify key players and initiatives that were already creating an impact in the O&G industry, and
with this knowledge, to be able to identify digital themes that are reported as generating realized
value. Table 10 provides a digital initiative summary with respect to DC&I operations, and Table
11 summarizes the initiatives into functional categories of data storage, processing, analytics,
and visualization. Note that in Table 11 the arrows signify potential cross-functional capabilities
as most digital initiatives perform in multiple areas, but they are listed in the table with respect
to their core functionality.

38
3.1 Shell
Table 1: Shell’s Digital Portfolio Initiatives 1 of 2

Shell
Shell has been at the forefront of digital innovation and initiatives in the oil and gas industry. Shell has developed and
incorporated a diverse amount of digital platforms into their portfolio, including machine learning, computer vision, virtual
assistants, robotics, advanced data management and workflows – all to enhance operational efficiencies.
Shell GameChanger is a program that works with start-ups and early-stage innovative ideas that have the potential to have a
future impact in the energy industry. The autonomous team within Shell invests in novel ideas throughout the globe from
ideation to proof of concept – the vision context is to provide focus on more long-term opportunities. The group has existed
since 1996.
Shell Technology Ventures (STV) is the capital venture branch of Royal Dutch Shell designed to enhance the development of
new technologies that have potential to create deployment value in Shell.
Shell TechWorks is an innovation center created in 2013 in Boston, MA to build an entrepreneurial environment to develop
advanced, short-term product development capabilities. The group consists of teams with backgrounds outside of the energy
industry to provide a unique perspective and more agile problem-solving methodologies.

Digital Initiatives
Microsoft Azure is a comprehensive cloud platform service (PaaS) that provides enterprise-
scale computation, analytics, storage, and networking opportunities. Microsoft Azure is also
extremely diverse and flexible – the platform allows the flexibility to use preferred tools and
technologies . Shell uses Azure as their cloud-based enterprise data pipeline infrastructure.

Shell partnered with C3 IoT in 2018 to develop their AI platform at a global scale by deploying
the on Microsoft Azure. C3 IoT offers a broad set of AI applications (i.e. ML, NLP, IoT, etc.) that
Shell intends to implement both upstream and downstream. C3 IoT provides analytics in
predictive maintenance, supply chain optimization, sensor networks, energy management, etc.

MAANA is a knowledge-graph based data processing platform. Shell partnered with MAANA in
2017 to (1) analyze corrosion-related concerns due to the impact of crude oil selection on
refinery equipment integrity, and (2) for HES risk applications designed to help Shell identify
operational incidents with the objective to improve understanding and prevent reoccurrences.

Shell invested in Quantico Energy Solutions in 2015 to develop innovation in horizontal shale
logging, drilling, and fracking. Quantico offers subsurface artificial intelligence with data insights
generated from their solutions: QRes, QLog, QDrill, QFrac, and QResXAI. The platform leverages
improved subsurface acquisition techniques to optimize drilling, fracking, and production.

Azure Databricks is an Apache Spark-based analytics platformed designed for Microsoft Azure.
The Databricks platform extracts landed data from multiple sources (i.e. Azure Data Lake, Azure
Data Warehouse, etc.) and feeds this data into your analytic workflow – Power BI, Deep
Learning/ML, and other applications. This is a critical application in Shell’s digital workflow.

Shell began using the analytics platform, Alteryx, in 2014. They have worked closely to develop
products like Alteryx Connect and other advanced platforms to further their digital capabilities.
Alteryx Connect is a platform for managing data with emphasis an accelerating insights within
the organization. Additionally, Alteryx created a “New Well Portal” for managing E&P data.

39
 Table 2: Shell’s Digital Portfolio Initiatives 2 of 2

Shell
Digital Initiatives
Udacity is an online education program that offers ”nano-degrees” in various data analytics
programs, including data science, artificial intelligence, cloud computing, etc. Shell has allowed
employees to volunteer for a preferred education program and to take the courses at their own
pace. This allows Shell to enroll thousands of employees to build digital competencies.

iShale
Shell initiated iShale in 2016 to develop a vision for the shale field of the future. The information below is reflective of both the
Shell iShale website home page and a Journal of Petroleum Technology (JTP) article:
Shell - iShale
• Increasing automation in drilling and frac operations to reduce human exposure and increase safety.
• Building fit-for-purpose (modular) facilities that can be scaled with production needs.
• Constructing ‘Smart’ wells with onsite wireless instruments for better monitoring.
• Putting in place surveillance that is driven by ‘exceptions’ to standard conditions for efficient operations.
• Establishing central operating centers for production data analysis and cross-portfolio learnings.
• Building a fluid ‘organization of the future’ enabled by a digitally connected and broadly skilled workforce.
JPT – “Shell’s Well Pad of the Future Is Open for Business”
• Wireless controls and process automation to reduce well pad construction and instrumentation costs
• Digital reporting to optimize vendor communications and reduce inefficient reporting during development and construction
operations
• Multiphase meters on well pads to minimize work required for routine well tests, and reduce HSE exposure
• Simplified well pad design to remove pad separators and enable separation at central processing facilities
• Multifunction central processing facility to reduce site storage requirements at central processing facilities
• Remote sensors and analytics to minimize production deferment and remotely detect incidents
• Exception-based ways of working for efficient operator routes and surveillance
• Mobile personal productivity tools for faster decision making and work efficiency
• Failure analysis and advanced analytics to enable system-wide optimization and reduce cost

References:
(“Shell’s Companywide AI Effort Shows Early Returns - C3.Ai” n.d.; “Shell Announces Plans to Deploy AI Applications at Scale - CIO Journal. - WSJ” n.d.;
“Shell Selects C3 IoT as Strategic AI Software Platform | Business Wire” n.d.; “Artificial Intelligence Has Royal Dutch Shell ‘Super Excited’ | Investor’s Business
Daily” n.d.; “The Incredible Ways Shell Uses Artificial Intelligence To Help Transform The Oil And Gas Giant” n.d.; “Pursuing Advanced Analytics at SHELL -
Alteryx Community” n.d.; “Shell, Know Thyself!” n.d.; “Maana and Shell to Co-Present on How to Accelerate Digital Transformation with the Maana
Knowledge Platform at Forrester’s Digital Transformation Forum | Business Wire” n.d.; “Shell GameChanger – A Safe Place to Get Crazy Ideas Started |
Management Innovation EXchange” n.d.; “JPT Shell’s Well Pad of the Future Is Open for Business” n.d.)

40
3.2 BP
Table 3: BP’s Digital Portfolio Initiatives

BP
BP Ventures is the VC branch of BP that identifies and invests in game-changing technology that applies to any aspect of the
energy industry. The group aims to discover enabling technology that supports the balance between reducing carbon
emissions and meeting the growing world energy demand.
BP Center for High-Performance Computing (CHPC) in Houston is one of the most powerful commercial research computers in
the world. The research center opened in 2013 and has been used for high performance seismic image processing and rock
physics research to support exploration, appraisal, and development plans. Supercomputing has also been used to perform
fluid dynamic research for refinery and pipeline optimization in the downstream business.
BP’s Field of the Future (SPE 112194) was a program from 2004-2008 that installed 1800km of fiber optic cable, enhanced
real-time tags by almost two million, and created twenty Advanced Collaborative Environments (ACE) to improve drilling and
production performance. Initiatives included advanced sand monitoring, production visualization/optimization, and remote
performance management. BP was reported to experience 1-3% improvements in all areas across the 20 fields.

Digital Initiatives
BP Ventures invested $5MM in Belmont Tech. in 2019 to further BP’s digital portfolio. Belmont
is a cloud-based geoscience platform that includes specially designed knowledge-graphs. This
platform connects the geology, geophysics, reservoir, and historical data for unified relational
information. Nicknamed “Sandy”, this platform is expected to unlock crucial subsurface data.

Kelvin Inc. is an integrated platform for intelligent control with the vision of connectivity and
analytics around sensor control of physical systems. Kelvin Inc. outfitted BP’s wells in
Wamsutter, WY with various arrays of sensors to gather and transmit data for optimization
simulations - with realized performance improvements in venting, production, and costs.

Beyond Limits is focused on cognitive computing and how it can be applied to the oil & gas
industry. The ultimate vision is to learn cognitive decision-making logic in order to act as an
assistant to solve problems through reasoning as a team/human enhancement. This includes
logic reasoning across multiple disciplines. BP partnered with Beyond Limits in 2018.

Microsoft unveiled the Azure Machine Learning service on their cloud services platform in
2018. The goal is to provide the capability of end-to-end machine-learning pipeline to develop
predictions from any landed data set. This technology reduces the work from a data scientist as
it runs the various variable combinations that were previously manually tested.

BP has been on a cloud-first mission where the company aims to eliminate the single
datacenter strategy. BP has been steadily reduces overhead associated with database
management, where Microsoft Azure has been the solution for both cost and flexibility around
innovation, scale, and applications.

RigNet was selected to provide Intelie Live across BP’s drilling fleet in 2019. BP intents to use
Intelie Live in their Remote Collaboration Center to improve operations efficiency. The machine
learning platform will be leveraged to process and map all the real-time data elements across
multiple systems during operations.

41
References:
(“BP Technology Outlook 2018,” n.d.; “JPT: BP and Startup Beyond Limits Try To Prove That Cognitive AI Is Ready for Oil and Gas | beyond.Ai” n.d.; “BP Has
a New AI Tool for Drilling into Data – and It’s Fueling Smarter Decisions | Transform” n.d.; “BP’s New Oilfield Roughneck Is An Algorithm” n.d.; “‘Sandy’
Joins the Dots for BP” n.d.; “BP Upgrades Houston HPC, World’s Most Powerful Corporate Supercomputer - DCD” n.d.; “BP Supercomputer Now World’s
Most Powerful for Commercial Research” n.d.; “BP Invests in AI to Focus on Digital Energy|Powertech Review|” n.d.; “Microsoft Customer Stories: BP
Embraces Digital Transformation and the Cloud to Disrupt the Energy Industry” n.d.; “Microsoft Customer Stories: BP Explores Azure AI to Boost Safety,
Increase Efficiency, and Drive Business Sucess” n.d.; “Microsoft Customer Stories: BP Adopts Hybrid Cloud and Moves Applications and Datacenter
Operations to Azure” n.d.; “BP Invests in Chinese AI Energy Management Tech Specialist R&B | News and Insights | Home” n.d.; “Xpansiv Continues Its
Transformation of Commodity Value in Global Markets; Announces Strategic Investment from BP Ventures, Reflective Ventures, and S&P Global” n.d.;
“Xpansiv Completes Strategic $10M Series A Funding Round with Investments from BP Ventures, Avista, S&P Global, and Energy Innovation Capital” n.d.;
“RigNet Signs Strategic Agreement with BP for Intelie Live | RigNet” n.d.)

42
3.3 Chevron
Table 4: Chevron’s Digital Portfolio Initiatives 1 of 2

Chevron
Chevron has a robust digital transformation strategy compared to most competitors in the Oil & Gas industry. The accelerated
digital portfolio includes industry transforming collaborations, particularly a seven-year partnership with Microsoft Azure and a
new collaboration between Chevron, Microsoft, and Schlumberger (DELFI). These multi-collaboration efforts with both Silicon
Valley and key O&G service providers separate Chevron’s digital strategy from the rest. Digital initiatives have proven that
collaboration, standardization, and data accessibility are critical for impactful operational enhancements, and Chevron is
following these principles both within the organization, and within the entire O&G industry.
Chevron Technology Ventures (CTV) was created in 1999 and is Chevron’s venture capitalist branch that pursues innovations
through start-ups and technology developments that have a potential to impact the current or future oil and gas industry. CTV
has partnered with many innovation and entrepreneurial hubs to champion technology development, including Houston
Exponential, The Cannon, Chevron Innovation Lab, Fab Foundation, and the Catalyst Program.

Digital Initiatives
Chevron signed a partnership with Microsoft in 2017. Microsoft Azure is also extremely diverse
and flexible – the platform allows the flexibility to use preferred tools and technologies .
Chevron uses Azure as their cloud-based enterprise data pipeline infrastructure. This includes
opportunities with other MS services: Data Lake, Machine Learning, IoT Edge, etc.

DELFI Schlumberger is a collaboration between Schlumberger, Chevron, and Microsoft. DELFI is

a collaborative cloud-based AI platform that connects E&P lifecycle data in the Azure Cloud.
This partnership was created in 2019. The solution is to include the integrate the full E&P asset
lifecycle including exploring, design, and operations.

MAANA is a knowledge-graph based data processing platform. Chevron partnered with MAANA
to develop semantic and analytic models to support better decision making at an enterprise
scale. MAANA’s Knowledge Platform develops relationships between design / operational data
and human expertise to create knowledge representations for enhanced decision making.

SeeQ is a data processing platform that expedites the accessing, cleaning, and
modeling/reporting the massive amount of time-series data built-up and stored in historians (or
other storage platforms). SeeQ works to integrate disparate data from multiple historians to a
single source, where data analytics and even third-party customization can be developed.

Moblize is a cloud-based big data analytic platform that aims at simplifying the entire end-to-
end life-cycle process with drilling (ProACT), completions (ProFRAC), rig performance
(ProINSIGHTS), and data sharing (ProWISE). In 2016, it was reported that Chevron has utilized
ProACT on 7,000 unconventional wells. This platform aims to improve data process workflows.

In early 2020, Chevron invested in Worlds from Sensory Sciences, which builds extended reality
models for “active physical analytics (XR).” Worlds creates a 4D platform environment to
enable teams to understand automation, efficiency, and improved safety opportunities.

43
 Table 5: Chevron’s Digital Portfolio Initiatives 2 of 2

Chevron
Digital Initiatives
Panzura Freedom™ is a complete cloud solution that offers deployable, enterprise-scale data
storage and accessibility solutions that advertises “unprecedented cloud performance with
military-grade security.” Chevron has used Panzura Freedom™ to revitalize large volume
archives (specifically in seismic and geological data) for real-time data processing and analytics.

Chevron partnered with Veros Systems in 2018. Veros Systems is an artificial intelligence
company that utilizes a novel algorithm from capturing high-resolution electrical waveforms to
monitor industrial machine health, performance, and to predict failures. This platform can be
either stand-alone or embedded in a cloud platform.

References:
(“JPT Chevron, Schlumberger, Microsoft Team To Improve Digital, Petrotechnical Work Flows” n.d.; “JPT Seeq’s Focus on Time-Series Data Draws in
Chevron, Shell, and Pioneer” n.d.; “Houston-Based Chevron Technology Ventures Makes Investments in Carbon Capture and Spatial Artificial Intelligence -
InnovationMap” n.d.; “Meet Snake Arm: Robot Technology That Saves Lives — Chevron.Com” n.d.; “Chevron Finds Data Recovery as Hard as Oil Recovery
- Taps Panzura Controllers for Cloud-Based Storage Solution” n.d.; “Worlds - Hypergiant” n.d.; “Industrial AI Company, Veros Systems, Closes $4.3 Million
in Series B Funding” n.d.; “Moblize | Moblize Achieves Huge Milestone: 7,000 plus Wells - Moblize” n.d.; “Bringing AI To Data Analytics And Knowledge
Management: Startups Anodot And Maana Snag New Financing” n.d.; “Seeq Secures $23 Million Series B to Fuel IIoT Advanced Analytics Growth Strategy
| Seeq” n.d.; “The Amazing Technology Disrupting Oil and Gas (Think: AI, 3D Printing and Robotics)” n.d.)

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3.4 ExxonMobil
Table 6: ExxonMobil's Digital Portfolio Initiatives

ExxonMobil
ExxonMobil is leading the way for the oil and gas industry to develop a data-driven focus to improve the efficiencies in design
and operations. Most of the focus uncovered in this research is around the partnership with Microsoft and the enabling benefits
in the Permian Basin. The Microsoft Azure platforms offers capabilities in all aspects of the data capture, filtering, processing,
analyzing, and visualizing ecosystem. Exxon has built partnerships to support the full data-pipeline, with some focus in
revitalizing geoscience historians (similar to other operators), but they have also built data analytics platforms from within
ExxonMobil. Their Drilling Advisory System (DAS) algorithm is a rig-based drilling-surveillance program that leverages real-time
drilling data along with rock-mechanics and analytic algorithms to forecast and advise on drilling and completion operations.
ExxonMobil has demonstrated a ”build” philosophy in the strategic digital decision of “buy, build, or outsource” for innovative
platforms – it will be interesting to see how their Permian performance compares against companies with a more
“partnership/outsource” philosophy.

Digital Initiatives
ExxonMobil partnered with L&T Technology Services (LTTS) in 2018 to convert historical
geoscience data into automated utilities and applications. LLTS is an engineering services
company that has a long history in the Oil & Gas industry – they advertise building enterprise
accelerators around digital twins, robotics, worker safety, and drill automation.

ExxonMobil partnered with EON Realty Inc. in 2015 to develop 3D and 4D (VR/XR) simulations
and training for operational efficiencies and workforce safety. The commercial license was
awarded for developing immersive reality for an operator training simulator to prevent
incidents, and to practice response strategies.

SMART by GEP is a unified procurement cloud platform that creates a single integrated
structure for both parties to collaborate. This partnership was created in 2018, and includes
supplier management, bidding, terms and negotiations, as well as procurement tracking.

XTO Energy (ExxonMobil subsidiary) partnered with Microsoft Azure to enhance operation
efficiencies in the Permian Basin. The cloud platform is being utilized to collect and process
real-time operational data for improved decision making, as well as, offer them the flexibility to
incorporate third-party solutions that are already being leveraged in the Permian.

References:
(“ExxonMobil Is Optimising Oil and Gas Operations with Microsoft” n.d.; “World Oil Newsroom: ExxonMobil Awards License to EON Reality for Immersive
3D Operator Training Simulator Technology - EON Reality” n.d.; “New SMART Procurement Platform | ExxonMobil” n.d.; “Oil and Gas Engineering | L&T
Technology Services” n.d.)

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3.5 Equinor
Table 7: Equinor’s Digital Portfolio Initiatives

Equinor
Digital Initiatives
Omnia Plant Data Platform is Equinor’s platform for accessing and processing industrial data
from all Equinor’s operations. Equinor is taking an “API-first” approach and standardized their
platform sharing using OpenAPI. This platform is the backbone to their digital roadmap and
enables applied analytics to their Integrated Operations Center (IOC) and Digital Twin/AR/VR.

Equinor partnered with FutureOn in 2018. FutureOn is a cloud-based digital platform enabling
workflow visualization and next-generation project planning and collaboration. Equinor
licensed their Field Activity Planner (FieldAP) – and they have two other platforms: DigtalTwin
and SubseaAlliance. This tool is design for advanced project and engineering decision making.

Equinor partnered with GE for the Proficy SmartSignal that provides actionable warnings of
industrial equipment anomalies and diagnostics. The software tracks the historical data of
equipment to develop a normal operating model and then compares real-time sensor readings
to the current and predicted performance of the equipment.

Equinor Technology Ventures invested in Ambyint in 2017. Equinor is using Ambyint’s AI-
powered artificial lift and production optimization software in their Bakken shale assets. The
technology includes cloud-based AI and edge computing technology, along with an
”autonomous set-point management system” to optimize well performance.

Equinor entered a seven-year partnership with Microsoft cloud services in 2018 to continue to
develop new digital solutions for the oil and gas assets.

References:
(“Meet Omnia- the Statoil Data Platform That Enables Our Digital Roadmap” n.d.; “GitHub - Equinor/OmniaPlant: Documentation on How to Get Started
Building Industrial Applications and Services by Using Omnia Plant Data Platform” n.d.; “Equinor Taps FutureOn for Cloud-Based Offshore Data Visualization
Software” n.d.; “Equinor Will Broadly Implement Ambyint’s IoT Solution to Optimize Production in North Dakota - Equinor.Com” n.d.; “FutureOn for Cloud-
Based Offshore Data Visualization Software” n.d.; “GE Introduces Proficy SmartSignal Shield 4.0 | Business Wire” n.d.; “GE SmartSignal Classic” n.d.)

46
3.6 Saudi Aramco
Table 8: Saudi Aramco’s Digital Portfolio Initiatives

Saudi Aramco
Digital Initiatives
Saudi Aramco invested in the Norwegian AI software provider for Earth Science Analytics in
2019. The goal of the platform (EarthNET) is to perform rock and fluid analytics and predictions
to improve oil and gas exploration and production. This platform provides geoscience-driven
data analytics as well as also database and workflow solutions.

FogHorn is an AI developer for Edge computing technology for IIoT. They focus on real-time
onsite intelligence with Edge computing for centralized connectivity and analytics of industrial
sensors and equipment. Saudi Aramco used FogHorn solutions to monitor and reduce stack
flaring in their gas refineries, but this technology has a broad spectrum of applications.

Data Gumbo Corp. is a Houston based company that developed a Blockchain-as-a-Service

(BaaS) platform for industry Smart Contracts. Smart contracts build transparency by connecting
contract specifications with physical transactions for all the stakeholders involved. Smart
Contracts enable real-time detection of anomalies or deviations that can be quickly corrected.

SeeQ is a data processing platform that expedites the accessing, cleaning, and
modeling/reporting the massive amount of time-series data built-up and stored in historians (or
other storage platforms). SeeQ works to integrate disparate data from multiple historians to a
single source, where data analytics and even third-party customization can be developed.

References:
(“FogHorn, Stanley Black & Decker, Saudi Aramco and Linde Highlight the Value of Edge Intelligence at the ARC Industry Forum” n.d.; “How Saudi Aramco
Is Digitalising Its Operations - Products & Services, Digitalisation, Digital, Saudi Aramco, 4IR, Fourth Industrial Revolution, AI, Drones, VR, AR - Oil & Gas
Middle East” n.d.; “Corporate VC Arms of Saudi Aramco and Chevron Invest in $24M Round for Seattle Startup Seeq - GeekWire” n.d.; “Saudi Aramco
Energy Ventures Invests in Norwegian Artificial Intelligence Software Provider Earth Science Analytics | Business Wire” n.d.; “Data Gumbo Blockchain
Expands from Oil to Geothermal Drilling in Asia - Ledger Insights - Enterprise Blockchain” n.d.; “Data Gumbo Secures $6M in Series A Funding from Venture
Arms of Leading International Oil & Gas Companies | Business Wire” n.d., 44)

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3.7 Other Operators
Table 9: Aker BP’s and Total’s Digital Portfolio Initiatives

Aker BP
Formed a strategic partnership with AI SaaS firm Cognite to explore the potential for robotics in
the offshore oil and gas platform. Cognite’s cloud-based industrial data operations and
intelligence platform Cognite Data Fusion (CDF) will service as the data infrastructure for the
initiative.

SparkCognition will be used in an analytics solution platform called SparkPredict, which

monitors topside and subsea installations for more than 30 offshore structures. Uses ML to
analyze sensor data which is used as a predictive model for failures before they occur. This is
part of their ‘Cognitive Operations’ initiative.

The quadruped robot Spot has been involved in the robotics initiative with Cognite to test the
robot’s performance for autonomous inspections. The inspections will be directed at high-risk
areas and be coupled with automated report generation technology to alert and provide
insights to operators.

Total
Applying real-time predictive drilling analytics to explain their challenges associated with
“significant NPT events and performance variability.” Looking for a “finger-print” ahead of a
non-desired situation. “The predictions gives the operating team sufficient warning time to take
actions to avoid events.”

References:
(“Application of Artificial Intelligence in Oil and Gas Industry: Exploring Its Impact” n.d.; “Woodside Energy Drills for Insight with Cognitive Computing” n.d.;
“Artificial Intelligence Improves Real-Time Drilling Data Analysis | Offshore” n.d.; “Exploring the Potential of Robotics in the Oil and Gas Industry | Aker BP
ASA” n.d.)

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3.8 DC&I Digital Initiatives
Table 10: Digital DC&I Initiatives

Drilling Digital Initiatives

Precision Drilling developed a technology suite called Alpha™ in 2019, which includes
AlphaAutomation™, AlphaApps™, and AlphaAnalytics™. AlphaAutomation™ was previously
referred to as Process Automation Control (PAC).

Corva is an all-in-one drilling and completion AI platform. Corva integrates disparate data
sources to perform analytics and visualizations for operational performance optimization. The
algorithms learn from both historic well data and physics-based models to provide real-time
guidance during operations.

AI Driller is focused on automating the drilling process to build the drilling system of the future.
AI Drilling currently provides self-drilling applications for rotary and slide drilling operations.
The system is available on NOV’s NOVOS Reflexive Drilling Platform.

Baker Hughes, C3.ai, and Microsoft Corp. entered an alliance in 2019 to develop enterprise-
scale AI solutions into the energy industry. This initiative will be rolled out on Microsoft’s Azure
platform and is tailored to address predictive maintenance, process and equipment reliability,
energy/production management, and inventory optimization.

Provides a software called wellAhead™ for automated monitoring and real time optimization of
drilling operations. This software is designed to be used on the rig and remote operating
centers. The full suite from eDrilling includes automated drilling control, drilling plan
optimization, drill well in simulator, dynamic well control, and real-time MPD.

Petro.AI is a cloud-based platform (PaaS) that can clean, process, and store operational data
without requiring a need to share with third party vendors. Petro.AI uses machine leaning on
real-time and historic data to understand the state of the rig and to advise/predict operational
performance.

Intellicess provides two products, Sentinel™ and RigDAP™. Sentinel™ is a real-time drilling data
analysis engine that works as a backend program to combine sensor data with physics-based
models to develop rig state, drilling anomalies, and drilling advisory. RigDAP™ is an open SCADA
platform to perform data analytics and enables the transition to drilling automation.

NOV’s NOVOS Reflexive Drilling System is an open drilling advisory and drilling automation
platform to enhance drilling performance. The platform provides the capabilities to automate
repetitive processes (i.e. drilling, tripping, rotating, etc.) and to perform real-time drilling
optimization (custom and open-source algorithms).

Intelie Live is a stream analytics platform to collect, filter, aggregate, and visualize data from
any source. Petrobras is utilizing Intelie to address real-time well issues at their drilling remote-
operating center. The platform leverages Intelie Pipes, an advanced real-time query language.
Intelie is a RigNet company and their algorithms can be applied in a function with source data.

Moblize is a cloud-based big data analytic platform that aims at simplifying the entire end-to-
end life-cycle process with drilling (ProACT), completions (ProFRAC), rig performance
(ProINSIGHTS), and data sharing (ProWISE).

49
References:
(“Precision Drilling Corporation - Alpha” n.d.; “Homepage - Corva” n.d.; “Directional Drilling Automation” n.d.; “Baker Hughes & C3.Ai Release BHC3
Production OptimizationTM | Baker Hughes” n.d.; “Products - EDrilling” n.d.; “Applications of Machine Learning in Drilling with Petro.Ai — Data Shop Talk”
n.d.; “Services | Intellicess” n.d.; “NOVOS Reflexive Drilling System” n.d.; “Intelie Live Machine Learning Analytics - RigNet” n.d.)

50
3.9 Digital Partnership Categorization
Table 11: Summary of O&G Digital Initiatives

Data Storage

Data Processing

OMNIA

Data Analytics

Data Visualization

51
4 Systems Approach to a Digital Portfolio
Adopting and integrating emerging digital technologies into an organization is a daunting
task, and so is embracing a new way of thinking. ‘Systems thinking’ methodology approaches a
problem from a holistic life-cycle point-of-view. The interdisciplinary approach views the entire
system as a hierarchy of interconnected subsystems. Instead of the traditional method of a direct
mindset from problem to solution, the systems method evaluates the entire system of
interactions and controls for discovery. The systems belief is that everything in some way is
interconnected and understanding those control and feedback relationships is the key to solving
complex problems. The central considerations employed in a systems analysis includes system
decomposition (hierarchical structure), relationship mapping (control and feedback loops), and
system function or emergence.
The hierarchical decomposition of a system breaks down the system into its foundational
elements. At this level of abstraction, a system can be understood by the organization of the
individual parts or entities. Although seemingly simple, the process of creating a representative
decomposition assists with visually understanding where a component fits within a system.
Relationship mapping is utilized to identify the control mechanisms of the system. Control and
feedback loops can be both physically and informationally driven. The value created from a
control structure depends on how well all the relevant stakeholders and components are mapped
relationally within the system. The system components should be represented at the appropriate
abstraction level for the problem being evaluated. The architecture of the system form (i.e. the
physical or cyber construct) and the respective relationships generate emergent functional
properties. The most valuable discovery from systems engineering is uncovering the resulting
emergent properties of a system, and how different architectures and respective relationships
impact the resulting system function.
Emerging digital innovations are tools that are adopted and integrated into a system to
improve performance. The systems approach can be leveraged to evaluate a holistic view of the
current system, to forecast the future state of an ideal system, and to synthesize how to
effectively bridge the gap. This type of analysis includes the existing tools, processes, procedures,
and people that are involved with the operation or system today and compares this current state

52
to the ideal future state. This path of discovery helps to identify where entities (tools, process,
procedures, or people) are broken or need improvements to reach the goal of the new state.
Bridging the gap, or mapping the transient state between current and ideal, assists with creating
a roadmap of tools that create positive momentum and contribution in the intended direction.
This thesis takes a systems approach to the integration of digital technologies with respect
to drilling systems within the oil and gas industry. The approach starts with the holistic view of
the drilling sector within the oil and gas industry and progresses into more granular detail around
the digital evolution of drilling systems. This analysis reviews the current state and future ideal
state of drilling systems, as well as the oil and gas industry as a whole. This provides a framework
around where the digital platforms, outlined in Chapter 3, contribute to the evolution of digital
integration into the oil and gas industry.
To start, the oil and gas industry is decomposed in Figure 7 to show where drilling is
positioned within the hierarchical structure of the system. Although this structure does not
represent the associated relationships, for example, the drilling design, location, and target depth
are largely influenced by the geologic discovery and future production operations. However, it is
important to understand that Midstream capabilities and Downstream economics play a large
role in the strategic decisions around exploration budget and asset investment decisions. So, in
terms of systems theory, there is some type of connection from drilling to all the elements
represented in the decomposition.

53
 Oil & Gas Industry

Upstream Midstream Downstream

Exploration Production Processing Transport Refining Distribution

Geologic Field Oil & Gas

Completion Pipelines Transport
Discovery Processing Refining

Production Gas Trucks & Petrochemical Marketing &

Drilling
Operations Processing Shipping Plants Retail

Workover &
Storage
Interventions

Supply &
Trading

Figure 7: Oil & Gas Industry Decomposition

The focus of this thesis is around digital integration, and more specifically, how that
relates to the improved design and operation in DC&I design and operations. The objective of
this systems review is to understand what type of data availability and analytics would assist to
improve the productivity of operations, and the graphics should be viewed with that type of data-
driven lens. On a macroscale of digital connectivity, Figure 8 shows an ideal data pipeline where
all real-time and historic data is accessible across the organization. This figure is over-simplistic,
to say the least, but it provides a broad idea of the level of data and collaborative connectivity
that is being pursued with digital platforms. This ideal endeavor, shown as a state-shift
revolutionary change, is an unfeasibly expensive and disruptive challenge to perform in a singular
fashion. The challenge that the systems approach undertakes to resolve is determining how to
implement O&G subsystem projects, over time, that can eventually interconnect into an ideal
infrastructure of the future. And, more importantly, the systems approach aims to demonstrate
which investment steps to take that provides immediate benefit and prepares the organization
for future digital synergies.

54
 CLOUD
DRILLSHIP DATABASE
PLATFORM
DOWNSTREAM
DRILLING INFORMATION
COMPLETIONS REFINERY DATA PROCESSING
PRODUCTION
INTERVENTIONS PETROCHEMICALS DATA VISUALIZATION
INTERVENTIONS

DATA CONNECTIVITY DATA ACCESSIBILITY STANDARDIZATION DATA PIPELINE VALUE CHAIN ECOSYSTEM INTELLECTUAL PROPERTY SECURITY

OFFICE DIGITAL
APPLICATIONS
MIDSTREAM
PUMP JACK OPERATIONS OPTIMIZATION
LAND RIG
FACILITIES DESIGN MODELS PREDICTIVE MAINTENANCE
HORIZONTAL DRILLING REMOTE OPS CENTERS
PIPELINE STANDARD OPERATING PROCEDURES
HYDRAULIC FRACTURING POWERPOINTS, PDF, WORD DOCS CONNECTED WORKER
STORAGE
PRODUCTION

Figure 8: Oil and Gas Data Pipeline

The system problem statement for the adoption and integration of digital technology is
to increase productivity, improve safety, and decrease environmental impact. For this thesis, we
will assume that increasing the efficiency and productivity of an operation with digital and
automation techniques will produce an environment that reduces the environmental impact per
barrel extracted and reduces the worker exposure to high-risk scenarios. Therefore, the
discussion will be mainly driven around productivity improvements, with the understanding that
this has resulting impacts in the other areas of focus. Improving productivity in operations can be
defined as an objective to extract oil reserves at a bottom-line cheaper cost per barrel. This can
be accomplished by many mechanisms that can be leveraged:
• Discovering larger, more accessible, and more productive oil reservoirs (seismic
processing with data analytics and visualization)
• Optimized well placement to exhibit improved reservoir production performance
(interdisciplinary physical model optimizations)
• Improved well design techniques for both drilling and completions – this contributes to
both cost of operations and to reduced administrative design overhead (data mining,
case-based modelling, physics-based modeling, interdisciplinary optimizations, improved
workflows)

55
 • Reduced cost of operations for both CapEx and OpEx (data analytics for enhanced
decision making and process or machine automation)
• Reduced organizational overhead (improved workflows and collaboration)
The problem statement addressed in this systems analysis focuses on reducing
operational costs for drilling or any rig-based operation, and the role that digital initiatives
contribute to this objective and help maintain an interoperable approach for future
sustainability. The main objective with reducing operational costs is by reducing non-productive
time. Figure 9 shows the breakdown in operational time by three categories: Technical Limit Well
Time, Invisible Lost Time (ILT), and Conventional Non-Productive Time (NPT). The graph
demonstrates that digital enhancements and automation can reduce well time more than
industry believes is currently possible with the employed drilling techniques. The reduction of
both the ILT and NPT represents the value at stake for operational efficiency through the use of
digital enhancements.

Figure 9: Non-Productive Time Categorization

As a reference for the value at stake in relation to the non-production time, Figure 10
displays a quartile plot of US deepwater drilling (DRL) and completions (COM) from 2012 to 2020,
as recorded by IHS Markit Rushmore Reviews Database. The conventional NPT for drilling
operations has a P50 (i.e., probability of 50%) of 27% and, for completions operations, a P50 of
21%. The total median cost of a new deepwater drill and completion is $144 million and $61
million, respectively. The total cost of a new U.S. Land well is between $6 million and $8 million,
with some variation between the Eagle Ford, Bakken, Marcellus, Permian, and Delaware basins
(“Trends in U.S. Oil and Natural Gas Upstream Costs” 2016). Data retrieved from Statista reports
that the United States is manufacturing +/-20,000 wells per year (US Land plus US Offshore), with
a small percentage as deepwater wells (Garside, n.d.). The extrapolated savings are substantial

56
and can be realized through efficiency improvements, technology innovations, and automation
to reduce conventional NPT and ILT.

Figure 10: IHS Markit Rushmore Reviews Database US Deepwater NPT% and Well Cost, 2012-2020

With this objective at the core of the analysis, the rest of the system and subsystems can
be analyzed in the perspective of associated contribution for reaching this goal. Other goals and
objectives can be added to the analysis thereby creating a weighted contribution function.
However, the steps for achieving operational improvements will have inadvertent positive
influences on the other objectives, as noted in the analysis. Now that the system has been
decomposed and the objective function defined, the next step is to understand the controls and
feedback loops of the system. This step is critical for understanding the influence behaviors have
on system performance.

4.1 System Control

The ANSI/ISA-95 is an international standard from the International Society of
Automation that developed a hierarchical control structure from enterprise to operations.
Control structures are fundamental to understanding the system levers that can be leveraged to
influence system performance. The ISA-95 enterprise-control interface hierarchy was adapted to
show the control mechanisms from enterprise to operations for Drilling operations in Figure 11.
The adapted ISA-95 graphic shows how asset business strategy, well design, operation

57
surveillance, and physical and automated manipulation influence the operational results. Digital
techniques can be initiated in any of these control categories, and it is important to recognize the
impact and propagation that is realized on the system is dependent on the level from where the
system is influenced.
Level 4: Business Planning & Logistics ISA 95
Business Systems, Governance, and Planning
Asset Selection [Asset Field Construction, Field Location, Well
Location, Cost & Schedule, AFE, Execution Strategy] • Strategic-based corporate
decisions
Level 3: Manufacturing Operations Management • Economic Models & Forecasts
• Case Driven Comparisons (Data
Process Management Mining & Analytics)
Operating Procedures [Well Design & Construction, Standard Operating
Hierarchy of Control

Procedures, Well Procedure, Risk & Uncertainty Management]

• Physics-Based Model
Simulations
Level 2: Monitoring & Supervising • Case Driven Comparisons (Data
Mining and Analytics)
Equipment and Process Control
Operations State Identification & Control [Well Condition, Well
Parameters, Well Procedures, Well Operations]
• Real-Time Analytic Algorithms
Level 1: Sensing & Manipulating • Model & Case Comparisons
• Manual Observations
Sensors, Instrumentation, and Data Collection
Controlling Equipment [Top Drive, Pumps, Drawworks for Torque & Drag,
Hydraulics, and Rate of Penetration]
• Real-Time Advisory Algorithms
• Visual Observation
Level 0: Production Process • Manual Manipulation
• Machine Automation
Production Assets
Physical Process [Drilling, Completions, Intervention]

Figure 11: ANI-95 Enterprise-Control System Model, adaption from (de Wardt 2019)

While enterprise initiatives are the overarching governance of the organizational system,
this area will not necessarily achieve the most value-creating initiatives with respect to the
system problem statement. Additionally, the objective here is not to single out a specific area for
improved control, but to identify how added measures in all the categories can be combined to
create the most cost-effective solutions. It is also important to note that from Level 4 to Level 0,
information is the controlling force. Digital initiatives are geared to leverage data to develop
enhanced informational insights, and understanding that this impacts control from enterprise to
operation provides perspective on why the digital journey is so influential on productivity
improvements. These initiatives, with progression, will change the way the entire system is

58
fundamentally controlled. The next chapter will decompose the current digital state with an
emphasis on the control and feedback loops that are governing the current process.
4.2 Current System State
The current state of the drill system will act as the benchmark for comparison against the
future, digitally enhanced state. The current state is split into two categories for analysis: design
and operations. The design phase reviews the data aggregation and workflow processes required
to design a drilling or completions program, and the operations phase reviews the data flow and
actionable response that influences real-time operations. Referring back to Figure 11, this
approach expands across all Levels of control.
The purpose of developing a system state is to understand the processes, procedures,
and tools that are currently being utilized in the control workflow. This step maps the interactions
of the systems to evaluate interconnectedness and relationships that can be structured more
efficiently, or to leverage new technology for improvements.
4.2.1 Engineering Design
Engineering design relates to the entire socio-technical workflow involved with creating
an end-to-end engineering solution for the objective or problem. The workflow consists of three
components: input, process, and output. The input is defined by external data and sources
required to feed the internal system to perform the function’s work. The processing refers to the
physics-based modeling and design requirements. And, the output refers to final product
generated from the internal processing, which can also be the inputs to feed other functions’
workflows. The design system for an end-to-end oilfield development is highly interrelated and
iterative, but this diagram provides a framework that defines the immediately relevant
stakeholders to the system process. Figure 12 shows the workflow for the drilling engineering
design, along with the specified medium with which data is traditionally transferred.

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 Figure 12: Current State Drilling Engineering Design Workflow

The drilling design system has more dimensionality than what is conveyed in Figure 12, as
input sources, processing, and output products all have different time and quality requirements.
That said, the figure provides a baseline framework to better understand current communication
patterns within the industry. The following assumptions were derived from the current drilling
design process:
• Data is sourced from multiple functions as inputs for the drilling design process.
• Functions can communicate critical information through various channels.
• Drilling design progress is dependent on the quality and speed at which data inputs are
provided.
• Data can be sourced from multiple individuals, even within the same function.
• Any change in an individual function’s input can result in rework for the drilling design.
• Functions operate in silos and communicate information as progress or project dictates.
• Data communication through multiple channels are susceptible to inconsistencies or
errors that result in potential rework or redesign.
• Data communicated through the channels specified are accessibility limited (i.e. email
archived, or files saved in a specific folder).

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 • Individual functions perform their own expert physics-based modeling and data-driven
case-base modeling (quality subject to engineer) from individual desktop or network
application.
Engineering design workflows suffer from communication silos, data accessibility,
coordination inefficiencies, error-prone manual entries, data mining abilities, individual
competency dependencies, and other time-consuming repetitive tasks. The process workflow
should be viewed as an entire socio-technical system that follows an iterative path of interrelated
dependencies that ultimately develop an end-to-end project proposal. From the system
perspective, there is an enormous amount of complexity built into the traditional design and
collaboration methods that cause delays, unnecessary iterations and rework, and productivity
inefficiencies. These key issues will be addressed with the evolution of a more digitally
collaborate workspace as described in the Future State and Identified Gaps section of this thesis.
4.2.2 Operations
Operations relate to the execution of a project and, in this specific example, the process
of drilling an oil well. The operation control workflow consists of three components (similar to
the design phase): input, process, and output. The input is defined by external data and sources
required to feed the field or office workers information about the operation. The processing
refers to the physics-based modeling, case-based modeling, or experience cognition that
determines what manipulations to make to control the operations. And, the output refers to
actual manipulation of the physical operation, which can be executed with either manual
intervention or automation. The operations phase of drilling an oil well is represented as a
workflow in Figure 13. The objective is to understand what data is produced and consumed by
the system, both to drive informed operational decisions and to understand how action is taken
on those decisions to improve performance.

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 Figure 13: Current State Drilling Operations Workflow

Innovations in operations have evolved more quickly than that of the office design
workflows. Productivity impacts to operations have immediate and quantifiable return on
investment, if successful. Even small improvements in operations can accumulate to large CapEx
and OpEx savings. The objective is to understand the key procedural and data points that are
leveraged to make operational decisions. The following assumptions can be derived from current
operational workflow:
• Well Programs provides the governance and strategy for well execution, and are
communicated as a digital document, i.e., Word or Adobe PDF, but are subject to multiple
revisions and manual entry errors.
• Physics-based model outputs to twin well operations and to guide operation
specifications are provided as digital attachments or as an Appendix to the Well Program.
In the current state, this requires manual observation for Well Programs to match and for
manual comparison during execution for assurance validation.
• Data streaming is the primary source of well state and well data. Technology innovations
have evolved in this area with improved transfer speeds and enhanced data analytics. See
Figure 14 and Figure 15 for additional information regarding the type of operational data
being streamed, and with the general data flow from rig to office.

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 • In the operation optimization space, the trend is pushing toward data analytic monitoring
with manual manipulation and control. The gap to an automated system is further
discussed in the Automation section of this thesis. However, the limit to monitoring and
advising will always be with the abilities of the human interface to correctly manipulate
the well operation as per the recommended response.
• Data analytics for monitoring and advising for improved productivity is generally being
developed from optimization of efficiency through mathematical equations (i.e.
mechanical specific energy for improving rate of penetration) and through offset
performance analysis.
• As mentioned in the Portfolio chapter, organizations have deployed Real-Time Remote
Operating Centers to deploy advanced analytics and monitoring techniques across assets
that are then communicated back to the rig site to improve productivity.
• Daily rig reports are still being managed manually, but companies like RigNet are pursuing
automation techniques to drastically reduce the man-hours required to complete daily
reporting. This also improves the data structuring and consistency of reporting, which can
then be leveraged with data analytics.
Figure 14 shows a decomposition of some of the drilling data points that are aggregated,
visualized, and streamed to be further analyzed. These instrument data points are visualized real-
time at the rig-site and remotely for analysis and operational decision-making. Instrument data
points can be either at the surface where the system state is defined by a surface electric signal,
or downhole where the data is transferred via hydraulic telemetry through the mud system. The
latency transfer time will be different due to the respective flow medium. Additionally, drilling
operations is a dynamic system, which would typically suggest that high- quality and high-
frequency data are required for accurate process or machine control. However, understanding
the required reaction time for both safety and processes efficiency is critical to understanding
the potential solutions for improvement.

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 Figure 14: Example Real-Time Drilling Data

A high-level, real-time data path and feedback loop is shown in Figure 15 to demonstrate
how real-time data is being leveraged with the design and operations system. The WITSML and
PRODML are data standardizations from Energistics that will be discussed in the Data
Architecture section of this thesis. However, understanding the high-level abstraction of the on-
site and off-site data feedback loops for operational control can help to identify where digital
solutions will have the highest impact. Additionally, the interfaces shown in the graphic can help
direct attention to how digital platform interoperability can better connect data sources, even
from the design phase, to provide better guidance for operational efficiencies.

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 Figure 15: Current State Operations Data Flow Architecture

As per the systems methodology, the control and feedback loops are fundamental to
understanding the emergent properties of a system. Figure 16 shows a detailed diagram that
identifies the stakeholders involved with leveraging real-time data to improve operations. The
diagram provides perspective of the data flow paths and data users that are leveraged to provide
feedback for the drilling system control. This diagram also provides insights on the stakeholders
at a higher level, emphasizing that the need for improving efficiency is driven from high levels
within the organization, industry, and government. The arrows that connect each entity are
labeled with descriptions that provide detail on the type of feedback or information is being
transferred in the control structure. This diagram demonstrates the ubiquity of data flow and
need for accessibility throughout an organization to drive further efficiencies. Traditional limited-
accessibility data flows like email, PowerPoint, and Excel Spreadsheets are no longer sufficient to
provide the accessible and collaborative environments needed for optimal feedback control for
operations. The current trends are gearing toward single systems of truth that allow accessibility
for all stakeholders involved with both design and operations. This is only a step in the digital
evolution toward full automation, where comprehensive operation optimization can be realized.
However, as we discuss automation in a later section, the models, processing speed, accuracy,
and, most importantly, trust needed for automation are not yet being employed in industry.

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 The next section, Future State, will provide an idealized system to address the limitations
that were discovered in mapping the system control structures. The purpose of this section is to
set the benchmark where new innovations can be measured on how well they align with the ideal
direction. This allows clear scope definition on whether a new technology or innovation should
be adopted as part of the organization’s digital portfolio.

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Figure 16: Drilling Data System Flow Diagram – Emphasis on Data Stakeholders
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4.3 Future System State
The future systems state for the drilling design and operation has been derived from the
projection of digital initiatives as outlined in the digital portfolio research in Chapter 3. The
purpose of this section is to create a regression of the digital evolution resulting from the trends
of both the adopted industry digital initiatives and from industry interviews. Developing an end
vision to direct a digital roadmap is critical for ensuring that implemented initiatives contribute
to adding value toward the overall organization’s objective.
The systems approach to the future state will review both the visualization and
functionality of the frontend of the digital architecture, as well as the interdependencies and
platform architecture of the backend. The frontend functionality of the future state is typically
more intuitive to understand – i.e. knowing what you want is easier than knowing how to build
it. This is an important recognition, as digital initiatives often suffer from development and
scalability issues due to the miscalculation of backend requirements. Figure 17 demonstrates the
relationship of the frontend versus the backend development of a digital platform with respect
to an iceberg model. The infrastructure and architecture developments contribute to the largest
portion of the project and are often not well understood in terms of required effort for feasibility
or for effective scalability. The companies listed below the “water level” are employed specifically
to develop the infrastructure and architecture needed to build the connectivity that develops the
backend for business productivity initiatives.
The iceberg model is mentioned early in this chapter to underscore the holistic mindset
needed to analyze the proposed future system state. The consensus through industry interviews
is that the predominant barrier between engineers and IT developers is the misunderstanding of
software platform backend requirements. Digital initiatives fail to deliver when expectations are
high, but the required allocated resources and investments are not met. Frontend functionality
is the exciting topic for business and engineering intelligence, but without the corresponding
development of the backend infrastructure, the system benefits and competitive advantage will
not be realized.

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 Visualization
Frontend

DevOps
Backend

Figure 17: Front End Expectations versus Back-End Reality

With the recognition and focus on the importance of the backend software architecture,
the next section of this thesis will discuss the future trends of design workflow and operational
digital initiatives. The discussion is largely driven by the frontend functionality because that is the
interface where the value is realized, however, with the systems approach, the backend
dependency and feasibility will always be in consideration.
4.3.1 Engineering Design
The engineering design system consists of a socio-technical system of multiple disciplines
coordinating together to develop a cohesive project design for implementation. However, all of
the individual functional work is mostly performed in silos with the impacting interfaces
communicated through various means, as outlined in Figure 12. The digital trends are directed
toward the democratization and monetization of information, which translates to the need for
accessible data to the entire organization and digital tools that develop reliable business
decisions. The idea is to also reduce the amount of siloed processing and to create collaborative
environments that create transparent interactions across all disciplines. Additionally, an iterative
system though slow communication mediums is difficult to optimize; providing real-time design

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connectivity through core work processes can enable workflow optimization that can create
substantial project savings.
There are two types of design workflows in drilling: factory and custom. Factory type
design usually describes highly repetitive wells in more predictable environments, like with shale
land assets. And, custom wells are usually found in complex and unique environments, like
deepwater assets. Both types of design workflows have a high potential for improvement with
digital innovations, but factory type wells are better suited for more automated processes, and
custom wells benefit better from more collaborative working environments. With either
direction, they can both be improved through process standardization on a single digital platform
where data aggregation and automation can be leveraged and adapted to both approaches as
needed. Creating a single-source digital workflow that adopts consistent standardization will not
only improve the design efficiency, optimization potential, and profitability, but consistent
automated workflows can be developed and scaled to the entire organization. This next section
will discuss possibilities and recommendations around digital platforms that connect the entire
end-to-end design process. Also note that these design models, if developed correctly, can then
act as the Digital Twin or model reference to the operations phase when being implemented.
4.3.1.1 Digital Workflows
The idea of a cohesive digital platform for design workflow is to have a single source of
truth that can be accessible by any engineers involved in the project. A single platform
democratizes the design phase data across functions where real-time design decisions can be
adjusted to optimize the entire project. Figure 18 represents the digital design “sandbox” that is
developed from multiple design layers to create the collaborative environment. This specific
scenario outlines the use-case for subsurface, drilling, subsea, production, and facilities
development to be performed in a single system. The idea is not to replace or cannibalize the
existing systems, but to create standardized protocols that connect each system into the same
working environment. Inputs and outputs can be relationally mapped from each expert system
that is connected into the workflow. Design changes from one end could potentially
automatically preliminarily update propagating changes throughout the system. However, this
initiative would need support from participating expert systems. Physics-based, case-based, and

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analytic-based models would need to develop standard protocols that would integrate into an
interoperable environment. Details regarding the different platform layers are explained below
Figure 18.
Software Platform Design “Sandbox”

Reservoir Design Well Design Facility Design Field Optimization

Single Source Design Platform

OpenAPI Standard Protocol Connectivity

Expert Physics-Based Model Integration

Graphic Visualization Layer

Economic Integration Layer

Data Analytic Layer

Design Governance & Specification Layer

Figure 18: Future System State: Digital Design Platform

Single-Source Design Platform

The single-source cloud-based platform approach offers a working environment that
creates design continuity through cross-functional connectivity and collaboration. The
visualization platform is a frontend development that enables integration with other backend
systems or tools. This digital initiative enables visualized workflows that incorporate design layers
to provide immediate cross-functional feedback, ranging from design and cost impacts from
suggested changes. The idea is to develop a digital representation of the entire development field
by leveraging visualization mapping with currently used expert systems to process the flow of
model inputs and outputs to generate real-time design results. Backend systems that can be
integrated into a design platform are physics-based modeling systems, rule-based governance,
case-based or data analytic models, and economic models.

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 The evolutionary change toward this type of single source of truth system will significantly
increase the transparency, competency, and speed at which work is performed. However, this
change will be challenging because the transformation toward a collaborative environment
cannot be pursued alone but must be developed through cooperation and partnerships.
Organizations will have a difficult time transitioning away from traditional software systems and
companies that refuse to develop in collaboration. But, it will be necessary to create new
alliances with organizations that are pursing the same digitally innovative initiatives due to the
standardization and product commitment involved to produce successful results.
If the process flow of model inputs and outputs are mapped correctly within a single
design platform, then the entire end-to-end workflow can be performed automatically. The
intention is for the automation to provide preliminary, invalidated design results that would then
be checked and processed through an engineer. An analytic layer can provide additional insight
to offset design and selection criteria. For example, a preliminary well design can be developed
through offset generated inputs from the nearest geographically or environmentally similar wells
with a location and mechanical earth model as inputs into the design platform. These results
would then be verified and validated by a drilling engineer to ensure they are in compliance with
design standards. Any changes on the subsurface data would trigger an automatic redesign – this
real-time feedback would enhance attention and competency cross-functionally. This
methodology can be repeated down the value chain with subsea infrastructure, pipeline design,
and facility design for a deepwater or land environment.
OpenAPI Standardization
For sustainable development and innovation with a single system, there must be strict
standardization for unified system interoperability. The current trend in the digital platform
connectivity space is the adoption of the OpenAPI Specification (OAS) standard. This standard is
a programming language agnostic interface for REST APIs, which allows for the understanding
and interaction of a service with minimal additional knowledge or logic (“OpenAPI Initiative”
n.d.). It provides the foundation for any system to be integrated into the single platform system
as a service. OpenAPI not only creates a layer for all software services and data sources to
connect, but it allows for third-party application support and development to drive further

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system customization. API standardization inclusivity is mandatory for selecting digital
partnerships to ensure sustainable integration into the designed workflow. Physics-based expert
systems that drive the design process in oil and gas development need to design their software
services for API connectivity.
Innovative software-as-a-service (SaaS) or platform-as-a-service (PaaS) opportunities are
providing new ways to enhance productivity across the entire spectrum in O&G. Digital
methodologies gain exponential value from the network effect, where increasing the
interoperability (e.g. connectedness) with other services greatly enhance the possibilities.
Industry is starting to focus on end-to-end workflows by integrating all software services onto a
single platform using OpenAPI standardization. The research data suggests that this is the
direction in which the industry is heading in order to create value from innovations in digital
technology. The API standardization is a necessary step that provides the building block for
creating a cohesive digital platform for information democratization and process efficiencies that
creates value within an organization.
Physics-Based Model Integration
The evolution of the digital roadmap requires cooperation of physics-based modeling
software providers to develop software services that can integrate with digital workflows.
Notably, FutureOn created a Subsea Digital Alliance that includes the expert systems RagnaRock
Geo (geoscience AI), Oliasoft (well design), Entail (engineering), and WINS (operations)
integrating through Microsoft Azure to develop a single workflow platform. In fact, FutureOn’s
FieldAp™ provides a cloud-based platform and rapid visualizations to integrate, in collaboration
with other physics-based software modeling systems for improved end-to-end workflows.
FutureOn’s PaaS creates a connective platform through OpenAPI that integrates all the expert
design systems to enhance design speed with real-time collaboration. This platform can leverage
offset well or field information to develop preliminary designs and cost forecasts, and allow the
user to run any of the expert design software from within the platform (“Subsea Digital Alliance
- FutureOn” n.d.).
Equinor has developed the digital platform Omnia that is entirely built from OpenAPI
standardization for connecting resources. The platform is advertised on GitHub with specific

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standardization protocols to instruct developers on how to build and integrate applications into
their platform (“GitHub - Equinor/OmniaPlant: Documentation on How to Get Started Building
Industrial Applications and Services by Using Omnia Plant Data Platform” n.d.; “Meet Omnia- the
Statoil Data Platform That Enables Our Digital Roadmap” n.d.).
The current software services that are leveraged in the design process should be analyzed
to determine if there is alignment with future innovations. Adopting new design software will be
a challenging transition for organizations, but failure to build the right competencies early on will
result in a loss of innovation potential and competitive advantage. The pursuit for platform
connectivity between all design software in the oilfield development value chain can be realized
with strategic organizational decisions regarding digital partnerships and alliances.
Visualization Layer
The visualization layer, or more commonly referred to as the user interface and user
experience (UIUX), is one of the most critical elements for a successful digital platform. The
usability and satisfaction from the customer are heavy influences on whether a digital platform
or software is readily adopted by an organization. The amount of training and competency
required is largely driven by the UIUX, including whether coding or a programming language is
required to navigate the offered capabilities. The failure to select software that does not focus
heavily on the UIUX can be a challenging barrier to overcome as the initiative diffuses through
the organization.
The UIUX for a PaaS that connects to various expert and analytic systems must have both
a field layout visualization and a UIUX to interface with each software application. The idea is to
be able to perform all of the work within one development interface. Integrated visualization will
help develop new insights and cross-functional transparencies that have not been robustly
explored within the oil and gas industry. As an example, well designs and casing structures
developed within the 3D lithology layers can help visualize potential execution issues that need
to be mitigated. Additionally, well designs imposed on seafloor bathymetry, along with the
subsea infrastructure, will develop enhanced visualized relationships with the operation. Oil and
gas design and operations suffer from the lack of visibility, due to operations occurring below the
earth’s surface. Therefore, any type of enhanced visualization will build stronger competencies

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and improve operation efficiencies. Entire companies are dedicated to developing extended
reality and visualization discovery to improve operator performance. The visualization layer
should be a key focus when selecting a PaaS to drive efficient workflows. The usability of the
software will influence the preference and acceptance of employees’ transition and adoption
from their old design and workflow tools. The importance of the UIUX quality cannot be
overstated to ensure the success of scaling a new workflow to the entire organization.
Economic Layer
The economic layer ties the holistic optimization together. The purpose is to have mapped
economic assumptions for each function that integrate together for transparency on the total
project cost and forecast. The idea is to have both real-time updates on project economics, and
to also understand cross-functional impacts from change propagation. Preliminary economic
assumptions can be driven from the data analytic layer from offset well developments in SAP or
other financial data sources. The preliminary economic evaluation can be updated with quotes
(potentially real-time, if service providers have application access to specific entries) to provide
validated costs. The economic layer can be tied together with the decision analysts’ probabilistic
Monte-Carlo models for economic assessment. This holistic approach develops the financial
acumen of all participating engineers with the project – employees receive immediate project
economic feedback from suggested local changes. This type of transparency builds capital
stewardships within the organization and helps to guide enhanced decision making with not only
an engineering perspective, but at a holistic project value perspective.
Data Analytic Layer
Visualization (UIUX), economic relationships, and transparency of holistic
interdependencies are all essential, but what sparked the digital evolution is the advent of robust
data analytics that democratizes and monetizes the immense amount of server-stored stagnant
data. Data analytics provides anomaly detection and relationship mapping that promotes
enhanced design and operations decision making. The value driver for the digital transition has
been largely focused on the innovative capabilities of the artificial intelligence technique,
machine learning, and how these algorithms, with current computational power, are able to
leverage available data to provide operational efficiencies. The momentum for a digital workflow

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connectivity is largely centered on the ability to aggregate disparate data sources to perform
actionable data analytics. The idea is to create a higher level of understanding and insights with
design and operational decisions. The analytic layer provides tremendous value by connecting
offset performance data, offset design data, and recorded lessons learned to build a robust
design plan where realized value is achieved.
The data mining that once took engineers weeks to perform can now be aggregated into
a single platform where not only the historic data is readily available, but also performance
curves, design selections, and recommendations, depending on the functionality of the
algorithms. Yet, having a single-source platform with OpenAPI standardization allows for third-
party participation to develop data analytic algorithms that can be integrated within the
platform.
From this perspective, data sources can be pulled from anywhere to develop more robust
design workflows. For example, IHS Rushmore data for drilling performance can be pulled from
any participating operator. The dashboard can be compared against other offset data sources to
understand the appropriate design decisions – this is an immediate feedback response on how a
design proposal compares against industry, which will expedite the design process. Finally, these
same methodologies can be applied to the respective geology, where any current or past
operations performance issues can be linked to specific lithology layers or with specific casing
equipment to provide an alert within the platform as a potential risk. The power behind data
analytics greatly reduces the experience required to develop complex engineering designs and
allows organizations to build more resilient trust with proposed designs in order to vastly improve
both the quality and design lifecycle of project developments.
Governance Layer
The idea of the governance layer is to build objective reasoning around internal and
regulatory standards for the design criteria. Dependence on either a single or group of engineers
to review all the governing design standards and specifications is an unnecessarily time-
consuming and high-risk prone endeavor. Having the criteria coded into a reasoning algorithm
that can identify potential issues is a more robust strategy. These types of assurances can then
be automated and streamlined to provide verification and validation on the design specification

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of a well or field development, enabling engineers to spend more time focusing on innovating
ideas instead of reviewing documentation to ensure design criteria is met. Ontological semantics
language (OWL) can be leveraged to build relationship mapping between structured design
reasoning and regulatory standard specifications. This layer will alleviate the inherent risk an
organization accepts with mechanical processes and assurances to catch design and operational
issues. Verification and validation (V&V) will still need to be performed by a group of expert
engineers, but the focus may be redirected to unique issues and circumstances requiring the
attention of engineers, thereby saving needless time spent on mundane assurance requirements
and checklists.
4.3.1.2 Design Workflow Automation
The previous section analyzed improved design opportunities through knowledge
democratization and enhanced data analytics, but there are other inefficiencies within design
workflows that absorb time and energy away from important engineering decisions. These
inefficiencies are generated from coordination and communication requirements within a
project system. Reports, presentations, emails, meetings, and other communication mediums for
updates and phase gates consume a substantial amount of time. The other objective of a cloud-
based, single-platform system is to build accessibility and transparency to reduce coordination
efforts and provide an opportunity for information output standards to be automated. The
journey towards workflow optimization obligates that all repetitive tasks become automated –
this not only reduces the time spent on each task, but also greatly reduces the likelihood of
communication and coordination errors. Each progress update communicated via presentation,
report, meeting, or email consumes time, and when this is repeated across a large organization
and across multiple functions, this can accumulate to a significant portion of the project cost.
The idea of having a single platform for a digital workflow means that digital applications
may be connected to develop structured communication reports. Project phase presentations
can be automated to include required model and offset outputs that provide the V&V for project
decisions. Automated design and economic reports provide cross-functional accessibility to
reflect the current position of the project at any point in time during development. This means
leaders will be able to access these files and stay up-to-speed without engineers creating updated

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presentations and communication reports to keep leaders informed about project decisions and
forecasts.
Automated communication workflows provide significant savings for an organization.
With the aggregation of all the project design data into a single-system, workflows may now
adopt outputs that can be generated through API applications within the system. Additionally, all
engineers will have accessibility to cross-functional documentation that has traditionally been
communicated formally through structured meetings and emails. This presents a notable
opportunity for large organizations that utilize formal workflow milestones, reports, and
presentations. This initiative offers significant time reductions thereby enabling substantial
economic advantages by bringing projects to delivery much earlier than previously thought
possible. This digital initiative provides organizations with a huge competitive advantage when
considering discount rates required for project selections. Big deepwater projects can become
more competitive to short-term land projects by reducing the design and development durations.
4.3.2 Operations
The future operations state relates to the digital techniques that offer advances in
performance during the execution phase of the oil and gas project. These initiatives impact the
physical control of the operation by either machine or human interface as described as Level 0-2
in Figure 11. Digital enhancements in operations can be separated into three increasingly more
complex categories with monitoring, advisory, and automation, respectively. First, monitoring
systems aggregate instrument data into a visual interface to trend, evaluate, and understand
system state. Second, advisory systems further utilize the same aggregated instrument data to
perform mathematical, case-based, or physical model comparisons in order to advise on
operational decisions for improved efficiencies. Advisory systems can be as simple as alerts on
process trends or as complicated as predictive cognition for evaluating the likelihood of future
events with recommended mitigation strategies. Finally, automation systems can be used either
for either machine automation with repetitive tasks (i.e. tripping in hole with pipe) or for process
automation (i.e. pump or other parameter control in response to operational changes), with
some gray area in between, which will be discussed in a later chapter. Machine and process
automation are not new – both techniques have been leveraged in many industries – but due to

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the dynamic nature of drilling operations, this is a new area of application. For the purpose of
this thesis, most of the discussion around automation innovations is focused on process
automation in light of the advent of data modeling and data analytical techniques that are
enabling reliable real-time control of drilling or process operation enabled by low enough
processing latency.
The instrument sensor data quality, availability, and process latency requirements are
significantly different for each operational control hierarchy. Most of the current trends and
adopted innovations have focused on the advisory control, as this provides significant efficiency
gains with minimal operational disruptions. Instrument sensor data are processed and analyzed
in real-time, both on-site and at remote operating centers, as shown in Figure 19. The real-time
processing becomes increasingly powerful with respect to the volume of quality data and with
the speed at which data is able to be analyzed. The value of data-driven insights diminishes with
increasing control response delay, and with the reliability of the control response itself from
insufficient quality data. Data quality issues can originate from either the operations with the
sensors or with the analytic algorithms, which may include other external data for processing.
The objective of the advisory system is to ingest real-time data, offset performance data,
and/or modeling data to develop enhanced insights through relationship mapping and anomaly
detection that far surpass the ability of a human observer. Drilling, completions, and intervention
operations are extremely dynamic processes, where it is sometimes difficult to understand the
current operational state and to optimize accordingly. Organizations are leveraging these new
analytic techniques to deliver wells more safely and more efficiently than before. And, these
techniques can be linked with the design processes and expert modeling platforms to provide
more robust insights on operations. It is the interoperability of systems that provides the highest
value; the more high-quality information available, the better the performance of the machine
learning algorithms. For this reason, it is always important to focus on the interoperability and
connectivity of these systems within a digital portfolio. This section of the thesis will review
operational innovations and how these systems can be linked with the future state of the design
workflow processes.

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 Figure 19: Operations Edge Computing Data Flow Architecture (“Oil and Gas at the Edge | Automation World” n.d.)

4.3.2.1 Monitor and Advisory

Monitoring and advisory systems are connected to real-time instrument data to develop
actionable operational insights. These insights currently leverage mathematical equations to
optimize performance efficiencies, and the algorithms can be integrated into an onsite
computational system (Edge Computing), cloud-based system, or at remote operating centers.
Figure 19 shows the data flow process for Edge Computing and for office or RTOC advisory
computing. These techniques are taking speed within the oil and gas industry as they are proving
to exhibit “10x return” (Reference: Research Interview) on investment, and they are minimally
invasive to the operation. Many digital companies advertise these monitoring and advisory
capabilities, however from a holistic perspective, few are creating alliances and partnerships to
integrate into more powerful and sustainable systems.
The future state of advisory systems is to integrate operations with design platforms and
expert modeling systems for descriptive and predictive analytics. The caveat is that most current
digital infrastructures and modeling techniques have latency times that are insufficient to
support real-time operational control. And, this becomes even more of a challenge with transient
models that are required for process automation – this will be discussed in the Closed-Loop

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Automation section of this thesis. The physics-based mathematical models leveraged to optimize
energy efficiency for improved drilling performance have proven to be an effective technique.
These efficiency calculations hold true in most environments with the respective updated system
parameters. The evolution of advisory systems is to have integrated physics-based modeling
systems that allow the entire system state to be better understood. The drilling environment is
both dynamic and complex with varying lithologies, pressures, temperatures, hole size,
inclination, depth, etc. This operational environment is difficult to truly optimize without the
incorporation of advanced physical modelling into the data analytics layer of advisory control.
Other interoperability suggestions are to incorporate the aggregation of performance
data into real-time monitoring services. The connectivity of advisory platforms to design or
performance data allows the capability of optimization applications for suggested tool and
parameter selection. There are so many capabilities that can be leveraged if the systems are able
to integrate together, but the vision needs to be understood and communicated early in the
selection processes to ensure alignment on future innovation growth.
The suggested roadmap for integrating advisory tools into an operational environment is
as follows:
1. Incorporate real-time analytic algorithm services into operations via Edge-based or Cloud-
based.
• The system should leverage physics-based mathematical algorithms to measure
system state.
• Focus on algorithm accuracy and historical return on investment.
• Evaluate sensor data quality and pre-processing algorithms for data ingestion into
the descriptive model.
• Focus on usability with user interface and user experience.
• Align with objectives to integrate offset performance data for visual comparison
during operations (define cause of performance deviations).
• Align on future objectives of incorporating expert modeling systems to provide
real-time comparison against a full system physical model (this can be referred to
as a Digital Twin).

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 2. Incorporate optimization applications into the digital platform to provide tool and
parameter advisory based on analytic offset performance data
• Connect design, tools, and operational decisions to performance.
• Develop optimization algorithms for operational advisory recommendations.
3. Connect with physics-based modeling systems to evaluate current state and predict
future state of operations
• Connect directly to physics-based models through real-time inputs or develop
proxy models with machine learning.
4.3.2.2 Digital Twin
A digital twin is a representation of a physical entity within a digital model. The digital
twin is not exactly the model itself, but more the specific representation of the process, product,
or asset. The representation can describe the characteristics, attributes, and behaviors of the
physical system (van Schalkwyk 2019). The specificity of that instance is driven from the sensor
connectivity that defines an individual model to represent the current state of that entity. The
advent of digital twins has been driven by more economically available sensors and by improved
data computational power. The aggregation of industry instrument sensors connected into a
cloud-based environment is referred to as the Industry Internet of Things (IIoT). The processing
of time-series and real-time IIoT data into physics-based or analytic-based models create the
holistic view of the modeled asset – this modeled instance is the digital twin (“The Promise of a
Digital Twin Strategy,” n.d.). Industry has leveraged IIoT cloud-based connectivity to develop
digital twin platforms to create visualizations and cognitive insights that provide advanced
business intelligence for operation management. The general architecture of a digital twin is
represented in Figure 20, which consists of a feedback loop between assets, data, models,
visualization, and response.

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 Figure 20: Digital Twin Architecture

Smart, connected equipment and products provide aggregated sensor data for advanced
predictive analytics. Machine learning can be applied to the large volume of data to determine
pattern recognition and anomaly detection that provides business insights for predictive
maintenance, performance information, and design and operation mitigation strategies. Unique
relationships between operations and equipment can now be discovered through advanced
mathematical algorithms. The operation fingerprint (time-series) and accumulation of pressure
cycles, temperature cycles, actuations, revolutions, stresses, and strains can be correlated to
performance data to provide actionable insights to improve efficiencies. These time-series
correlations have been leveraged in analytical models for predictive maintenance where a model
instance for a specific piece of equipment or system will have a probability of overall health
comparative to the accumulative operational exposure. Companies like Veros Systems Inc. are
applying machine learning to current and voltage waveform to identify performance patterns of
rotating pumps and equipment.

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 Analytic models are not the only data application that creates digital twins. Physics-based
models can be utilized to represent system state through real-time data input from IIoT. Physics-
based models can represent system’s physical interactions with mechanical models,
thermodynamic models, or hydraulics models. The mechano-, thermo-, or hydro- representation
of a process or system can provide valuable insights on the current state, as well as, predict future
state. The advantage of a physics-based model is that parameter trending, as an extrapolation,
can be inputted into the model as a time-series. This methodology can predict, at current
operating trends, where a system state is heading, and what actions are needed to mitigate the
trending state, if needed. Physics-based digital twin models can be used for understanding
dynamic systems, like drilling operations. The digital twin initiative ties together with the future
design platform as a connectivity to expert, physics-based modeling systems, and to the cloud-
based advisory system as a source for aggregated data and to combine analytic-based and
physics-based models to evaluate system state.
The digital twin initiative in oil and gas has been heavily driven by opportunities within
facilities and topsides equipment. Analytical models are used on historical data, real-time IIoT
data, and time-series IIoT data for business and operational insights. Equipment monitoring
algorithms can be repeated within a single system or across multiple systems to generate unique
representations of all operating assets. Figure 21 shows a generic O&G analytic digital twin data
flow architecture from IIoT data generation to insight analytics, and to actionable business
visualization and response. Different machine learning techniques can be applied to the sensor
data as shown in the Insights hub.

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 Figure 21: O&G Digital Twin Architecture

The future state of digital twins within well operations is application analytics on topside
and downhole equipment for predictive failure, but also with system or operational state
algorithms with physics-based models. Well operations are dynamic, and traditional control
structures are to follow parameters outlined on model outputs in Word documents or PDFs. This
creates a manual comparison protocol during operations without any guidance on how or when
to alter operations if deviations are experienced. The inclusion of physics-based models on a
monitoring and advisory platform to determine operation state will enhance the operator’s
ability to identify and address issues. Data analytic applications can be included to determine
similar trends in offset scenarios with a list of potential mitigation actions. However, there are
some limitations with steady-state physics-based model as they can only describe specific steady-
state points in an operation and not the transient, or in between, state. Transient models have
not been readily used within Well operations or design environments, but they provide the
means necessary to understand the full dynamics of the system. The idea of this section is to
understand the future use and connectivity of the systems, and how they will interrelate to
develop advanced business insights.
Aggregating physics-based models and analytic-based models into an ensemble model
can lead the way to process automation. Closed-loop process automation, or system automation
without human intervention, requires processing speeds faster than operational changes. For

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monitoring and advisory systems, steady-state models are sufficient, but as further control
mechanisms (process automation) are pursued, transient models will be necessary. For
automation opportunities the system needs to know more than just point A and B for an
operational state – the control system will need the pathway from A and B to ensure accurate
and optimized decision-making. This will be discussed further in the next section.
4.3.2.3 Automation
Well operations are challenged with increasingly complex environments with narrow geo-
operating windows and higher temperatures and pressures. The challenge further extends to the
economic viability of all types of wells provided the current commodity pricing conditions. And,
whether the strategy is to pioneer difficult environments or to reduce the well cycle-time, the
common denominator is to improve operational efficiencies and capabilities to become
profitable. Drilling automation or semi-automation provides the means to construct wells into an
optimized state. Referring back to Figure 9, process and machine automation principles provide
the only solution that has a theoretic capability of reaching the Technical Limit Well Time.
Monitoring and advisory systems allow for performance efficiencies to relieve some of the
Invisible Lost Time (ILT), but due to the information, knowledge, and reaction-time gap between
the human versus machine interface with the process control, complete optimization will never
be achieved.
For the purpose of this section, repetitive machine automation will not be discussed as an
integrative solution. Machine repetition only requires spatial and functional recognition to
complete the programmed task, and although dynamic responses are programmed conditionally
to mitigate against hazards, this type of automation does not require interoperability with the
physics-based models for control dependency like process automation. Repetitive machine
automation can be deployed in many areas of Well operations to improve efficiencies, such as
picking up pipe from the deck or making up bottom-hole assemblies. This is an important
initiative to improve operating time and reduce human exposure to lifting heavy equipment.
Machine automation still has dependencies on sensor quality, similar to the other digital
initiatives, but the focus for this section is on closed-loop or semi-autonomous drilling
automation. Drilling automation encompasses the dynamic control and response with respect to

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surface equipment (top drive, rotatory, and pumps), and with downhole equipment (directional,
telemetry, and activation) as a complete system.
Automation initiatives have been applied across many facets of Well operations with
varying levels of success. Most applications have been directed toward surface control, but
innovations are now trending toward downhole automation. Successful examples in Well
operations include: rotary steering technologies, auto-drilling for WOB or ROP control, managed
pressure drilling (MPD) control systems, top drive control for pipe and casing tripping, safety
control, and monitoring (“Automated Drilling Gains Momentum in Offshore Operations |
Offshore” n.d.). Automation has gained momentum with high repetition, low dynamic tasks, with
the goal of providing safety reflexes, task efficiencies, and enhanced decision support in the wake
of a distraction-polluted environment. As automation initiatives are challenged with increasingly
complex tasks, the limitations with data quality and standardization are becoming more evident;
this discovery to advance the core-supporting infrastructure for automation is driving the
evolution toward closed-loop automation opportunities.
The value of integrating automation into DC&I operations is realized through reducing non-
productive time (NPT), improving the precision and speed of tasks, managing operating
envelopes, and maximizing performance through entity and system optimizations. Note that
automation has the potential to reduce both NPT and productive time (PT) of the operation. NPT
is reduced by operating equipment within strict boundaries for actuation sequences and normal
operations – this level of precision greatly reduces the strain on equipment and can prevent
downtime. Additionally, NPT is reduced by early recognition and quicker reactionary times to
deviations in the process. Automation can help mitigate trends that are deviating toward a
hazardous environment. PT is reduced by improving the efficiencies of task execution and
maximizing operating speeds with pipe tripping and with drilling operations. Automated drilling
can respond to different lithologies and downhole environments to maximize the mechanical
specific energy for improved rate of penetration. Automation of trajectory control can improve
the homogeneity of the well curvature which reduces potential for stuck pipe, and due to
minimum curvature calculations, continuous closed-loop directional control can help with hitting
targets more accurately. Employment of automation techniques in other industries have

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produced 20-30% operational improvements (de Wardt 2019), which is a substantial amount
when extrapolated to the entire industry. Another value driver of automation is that these
opportunities reduce human exposure to machinery and hazardous environments. This includes
both removing human presence and reducing the likelihood of equipment either exceeding
specified operational boundaries or from operating out of pre-determined sequences, which
holistically reduces the overall system risk.
Process automation aims to address four focal points for successful deployment: detection
of state (physic-based and analytic-based models), equipment mechanical boundaries (safe
operating conditions), process operational windows (the boundaries of the safe system state),
and with response sequences (safely and effectively control response variables to account for
either planned or unplanned deviations) (Cayeux et al., n.d.). These opportunities create realized
value and deliver a competitive advantage to the organization. However, due to the complexity
around standardization, interoperability, and organizational competency, if automation is an
objective for your digital portfolio, these objectives and subsequent innovations must be aligned
with business partners. It is important to note that NPT due to operations is not solely caused by
issues associated with rig performance, as equipment can exhibit poor design quality and suffer
from lacking V&V oversight. Automation and enhanced data analytics can assist with developing
robust equipment and tools that are utilized during operations. This is why selecting business
partners and alliances is so important – operations are only as strong as the weakest link in the
process. Developing these partnerships and alliances for the pursuit of the intermediate goal of
automating repetitive tasks and creating semi-autonomous processes will help pave the way to
understanding the infrastructure and standardization requirements to develop a fully
autonomous system. There are three major barriers to employing automation opportunities that
will be discussed in this thesis, they are system architecture standardization and interoperability,
sensor data quality and accessibility, and physics-based modeling techniques.
Standardization for efficient and effective software connectivity for data exchange is critical
for developing automation opportunities. Interoperability is the term used to specify the ability
of software systems to work in conjunction and exchange data. OPC-UA is an interoperability
standard in the automation space and promotes platform independency, enhanced security,

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simplified architectures, scalability, future-proof, and easy deployment (“What Is OPC? - OPC
Foundation” n.d.) (see Software Architecture section for more details). The complexity associated
with aggregated software systems and connecting to entire rig control systems for process
automation dictate the need for an open industry approach with standardization. The evolution
to system automation would be far too expensive and time consuming if each rig system and
subsequently upgraded system model had their own operability protocols. Standards
commonality creates the building blocks for innovation to thrive into an industry realized value.
The initiative needs to make economic sense for both the operator and for the service providers.
If software and connectivity development to control systems for process automation required
extensive programming and testing for each individual mechanical system, no one would have
the economic means to develop it to the full potential. However, the value at stake for
automation is high enough that competitors are influenced to continue working in silos – this is
an example of the Prisoner’s Dilemma (Game Theory) where individual parties would rather work
for their own self-interests to protect themselves rather than produce an optimal outcome.
Therefore, standardization and interoperability initiatives need to be created through
partnerships and alliances that make it worthwhile for companies to work together. Committing
to standardization, or as an O&G operator, requiring a specific standard will not only influence
service providers to contribute on that domain, but it will allow their efforts to achieve higher
economic feasibility due to the shared network of applicability.
Data quality standards increase as control trends toward semi-autonomous or closed-loop
automation. The tolerance for data accuracy and quality issues diminishes as the human interface
is removed from the system control. The objective is to understand the control requirements
necessary and operational tolerance for errors. Sensor model and quality standards can be
adopted through industry automation suggestions, or through improved data ingestion V&V
filtering techniques. It is important to note in the specific case of a drilling system, data transfer
and control to downhole equipment is transferred through mud-pulsing telemetry. That data
quality and communication latency could be the weakest link that needs to be addressed before
assuming further autonomous control of the system process. The systems approach is to
understand the holistic view of the problem and to develop solutions to start bridging the gap to

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the ideal state. Sensor quality and data accuracy is an evolutionary gap that will take time to
upgrade but communicating the objectives to vendors to influence sensor selection and higher
quality data telemetry will drive energy in the right direction towards achieving innovation and
value for digital initiatives.
The last concept to discuss with automation initiatives for process control is the physics-
based modeling. The aggregation of sensor data, like temperature, pressure, depth, flow rate,
etc. does not necessarily provide an understanding of system state without the integration of
physics-based modelling. And, without an understanding of system state, there can be only
limited process automated control. As discussed earlier, for a system to assume full control, the
control system needs to understand both the steady-state and transient state of the system. And
model processing, either directly or indirectly through proxy analytic models, is required to
exhibit latency speeds that allow for operational control against process changes. The challenge
within industry is to shift design and operational competency from utilizing only steady-state
models for the DC&I design, to services that offer transient capabilities. Additionally, efforts
towards improving the integration (refer to the single-platform design workflow) and reducing
the latency processing and running speeds of models are needed to match the level of desired
process control.
Complete closed-loop automation is the only avenue to achieve true system optimization.
This endeavor may or may not be worth the investment, depending on the economic advantages
from development and adoption for the specific system. As standardization and interoperability
initiatives trend toward open industry alliances, the economic advantages become more
apparent. DC&I operations are a complex and highly dynamic environment that can realize
substantial efficiency benefits from automation, but these same environmental conditions
contribute to the barriers that challenge innovation breakthroughs. The next chapter will discuss
the identified gaps to achieving realized value in the transitional shift to the future state of
digitization.
4.4 Identified Gaps
The systems methodology employs a holistic approach to identifying the barriers and
associated gaps to achieve the determined ideal future state. The process of mapping the

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interconnectivity and feedback relationships between systems, tools, and stakeholders provides
objective insights and opportunities to create robust and innovative solutions. This section of the
thesis will categorically explain the identified barriers to achieving realized value with
organizational digital initiatives for DC&I design and operations. These categories should be
reviewed as specific areas to challenge and question when selecting partnerships and alliances
with digital services.
4.4.1 Human to System Integration
Human capabilities and organizational competencies are one of the largest barriers to
deploying successful digital initiatives. The organizational requirements to scale transformative
digital initiatives across the enterprise is both challenging on the frontend architecture for
employee’s ability and preferences toward the usability and on the backend architecture for
infrastructure and integration development. Each type of software and digital system possesses
different levels of required digital competencies to become a power user. Key questions to
brainstorm and understand when selecting a digital service are as follows:
• Do you currently have the core competency to effectively use the selected software?
• What is the intended relationship of your employees with the software interface?
• Do you currently have the required talent for successful development, deployment, and
maintenance of transforming digital initiatives?
• Are you able to afford or attract the talent necessary to be successful?
• Has this digital platform been leveraged for the same function and scale as intended? Or,
will the organization have to further develop to scale and to full functionality?
These are just some of the questions that may be asked. Ultimately, though, recognition
of these barriers is understanding the current organizational capabilities and undertaking
mitigation measures to not over commit to digital platforms that exceed those capabilities.
Capabilities are all relative to the expectations of the human interface requirements within the
organization. Expectations of IT, engineers, or operators, as well as the support structure from
the service provider should each be evaluated separately.
Another topic that has been discussed is how to develop a culture that is data driven.
Traditional engineering is derived from physics-based models that define the specifications and

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boundaries of designed systems. Changes to designs are influenced by experience, events, or
novel ideas, however, with the integration of data analytics, new discoveries with pattern
recognition and anomaly detection technology will provide a more enhanced understanding of
the system. What is critical about data collection is the utilization of statistics with respect to
statistical significance, data biases, causation, and correlation. These principles need to be
properly understood to ensure appropriate decisions are being implemented into operations that
add value to productivity. Engineers must both understand the capabilities and the limitations of
the data analytic tools before they are able to apply the discoveries effectively in the design and
operations process.
Addressing the usability of the software services, whether it is for the design engineer or
the operator in the field, is critical for successful deployment within the organization.
Understanding and addressing the usability and capabilities early in the software’s deployment
will dictate how well it will be adopted and scaled across the organization. Asking an employee
to adopt new tools and processes is disruptive to their workflow and will produce resistance and
rejection if the new tool or process does not add equivalent realized value to the employee or
project.
The last point with respect to employee competency is training. For IT and engineers to
have productive discussions that influence transformation, they need to speak the same
language. IT professionals must have a better understanding of the process engineering and
workflows, and the engineers must have a better understanding of the data system infrastructure
and capabilities. When the holistic system is understood by all stakeholders, realistic
expectations are set, and higher productivity is achieved. And, due to the evolutionary trend of
digital progression, early deficiencies in the required digital competencies can lead to poor
decision and error propagation throughout new designs and workflows.
4.4.2 Sensor & Data Quality
The accuracy necessary to monitor and control a system is determined by the acceptable
tolerance for error. Highly dynamic systems require higher frequency and higher quality data to
have effective control of the process. However, simple and slower system processes require a
lower data frequency and can potentially tolerate higher deviations because of the delayed

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reaction response. Additionally, higher control techniques, like advisory versus automation, also
require higher quality and higher frequency data. These levels of model error tolerance need to
match the level of control instilled into the digital system or platform. All data quality issues
associated with the holistic process should be managed with intent, from sensor selection in
equipment and tools to incomplete data sets leveraged in historians (Cayeux et al., n.d.). To be
sure, this thesis does not recommend a revolutionary change; it suggests the creation of a
roadmap that defines the data limitations to the process control objectives, and that
organizations work with service providers and IT professionals to invest in equipment and
software infrastructure that is designed to meet the digital strategies of the organization.
4.4.3 Data Accessibility
Digital investments should focus on organizational data accessibility. The latency time
required for an engineer to perform data mining and data processing to find and develop robust
engineering decisions should be a major organizational concern. The accessibility of quality data
can rapidly advance both design and operational decision making. The barrier to data accessibility
is the lack of quality backend platform infrastructure and standardization. The end goal,
holistically, is understanding how to get the right data to the right people to make business driven
decisions. If that goal is well understood and communicated, then the direction of digital
investments and digital functionality should align with achieving the desired organizational data
accessibility. This means that the organization will have to accept standardization across
disciplines and functions to allow for the shared connectivity of data and digital platforms.
The pursuit for data accessibility calls for innovative ways to store, share, and
communicate data, where accessibility is intuitive and maximizes productivity efforts. The O&G
industry has been notoriously siloed to protect competitive advantages, but innovations in open
platforms have demonstrated that collaboration efforts are creating more powerful and efficient
solutions. Opening the barriers and inviting others to review working data (versus final results)
and data repositories are a necessary vulnerability and discomfort to spark holistic thought and
innovation. This initiative is as much of a technology shift as it is a cultural shift.

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4.4.4 Standardization and Interoperability
Interoperability gaps refer to developing digital solutions as partnerships and as alliances,
both internally and externally. This references the need for organizations to design digital
solutions as a cross-functional effort to ensure that data transfer and data integration
opportunities are preserved for future sustainability. Interoperability efforts include creating
standardization protocols across the organization to ensure developed applications are able to
connect together for synergistic benefits. Standardization should be pursued as an industry as a
whole, to create an environment where service organizations can create solutions that are
applicable to all operations and working platforms.
Innovative breakthroughs to difficult problems are developed through incremental
improvements over the work of predecessors provided the situational combination of
circumstance, character, education, and intelligence (Chollet, n.d.). If we accept that great
innovations are derived from the efforts and momentum of others, then we can conclude that
collaborative environments expedite the development of technological advancements. The
recent explosion of data analytic capabilities and applications were founded off the development
of increased computational processing, improved internet capabilities, and cost efficient IoTs –
all of which were not specifically developed from data analytic providers. Understanding that
collaborative environments are creating a new benchmark for speed of development and
innovation, then remaining in a siloed operation will quickly result in a suppressed competitive
environment for engineering design and operations.
4.4.5 Return on Investment
The hypothesis of digital initiatives entering a phase of a modern “productivity paradox”
suggests that organization’s efforts and direction are not producing optimal realized value. The
commitment to “digital” without the thorough benchmarking and evaluation of system value
emergence can contribute to the sanctioning of ineffective projects. This includes a potential lack
of understanding in the time, headcount, competencies, and culture required to develop and
deploy digital initiatives to scale. The holistic focus needs to be value driven and not digitally
driven, with the philosophy of value creation through digital tools and platforms. The future state

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of digital goals should be generated in collaboration with each digital investment related to its
value and capability contribution to the roadmap.
Project management metrics, KPIs, and dashboards are critical for understanding the
evolution of performance with the adoption of digital initiatives. Detailed tracking and
benchmarking will help to understand the value and gaps associated with developing and scaling
of changes throughout an organization. Analytics on these details will sharpen the expectations
for sanctioning future projects and help to avoid investing in projects that show historic difficulty
in implementation. This thesis suggests approaching the digital evolution with strict adherence
to value creation. Leveraging digital initiatives that have a clear contribution to the future goals
and a proven track record of success are clear ways to avoid ineffective programs.
4.4.6 Partnerships and Alliances
Discussions through interviews and market research suggest that partnerships and
alliances are critical for success. Organizations will have to reevaluate their partnerships for
software, equipment, and tool services to select providers that will innovate and contribute to
organizations’ future digital goals. The digital evolution exponentially improves with the network
effect of connected partnerships, and organizations that are resistant to change will fall behind
in achieving competitive advantage in the design and operational space.
Service providers are taking the initiative to create alliances among themselves to provide
single-platform services that include needed design and operational workflow systems. These
alliances are pioneering the way for new workflows and processes that improve collaboration,
reduce design cycle-time, and increase operational efficiencies through optimizations and
analytics applied across the aggregated data. This thesis recommends developing a culture that
is agile and open for change through adoption of new tools and techniques. Although change can
initially be burdensome, the process efficiencies gained through collaborative partnerships that
share the same values can be a game-changer for creating a sustainable competitive advantage.
4.4.7 DevOps
As described in Figure 17, the lack of understanding of the backend complexities to digital
developments poses a significant gap for creating realistic expectations between engineers and
IT professionals. This gap can be bridged by integrating engineers with IT professionals in

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collaboration groups to ensure stakeholders, needs, and expectations are better understood.
Additionally, digital training can be employed to develop the digital acumen and competency of
engineers to provide insight on the capabilities and complexities required to develop specific
functionalities. The development operations space is rapidly changing with the integration of
cloud computing and the subsequent transformation of digital workflows and partnerships.
Companies are dedicated to restructuring these developments to increase data accessibility and
interoperability of software platforms. This is another area where developing partnerships and
selecting organizations that understand how to design for future capabilities will provide
immense financial benefits.
The next chapter briefly reviews model-based systems engineering (MBSE) in order to
evaluate how traditional MBSE methods integrate with the new innovative digital workflows that
were presented in this chapter. Integrated engineering design and operational workflows have
been utilized for many years in other industries through system modeling techniques, but these
methods required in-depth programming skills to master. However, these principles can be used
to develop design governance and verification layers to incorporate effective MBSE values into
digital initiative developments.

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5 Model Based System Engineering
Model-based systems engineering (MBSE) is a methodology for systematically managing
the design, analysis, verification, and validation through modeling applications (Hause and
Ashfield 2018). System models are built to represent systems and subsystems or components to
digitally map the behavior, performance, structural, and other engineering dependencies and
requirements. System models are an accepted and utilized practice in the aerospace and defense
industry and is gaining interest in other industries as increasing complexity becomes more
difficult to manage. The International Council on Systems Engineering (INCOSE) is a professional
society that promotes and advances systems engineering, and is most recognized for their
published Systems Engineering Handbook (INCOSE 2015). The Object Management Group (OMG)
is an organization that develops standardization and specifications, most notably their Unified
Modeling Language (UML) for system design visualization and the extension or subset language
System Modeling Language (SysML) (Hause 2013). These two professional and standards
organizations account for many of the solution concepts that are currently employed in the MBSE
space.
The objective of this section of the thesis is to provide an understanding of the vision of
MBSE and how it relates to the digital initiatives in DC&I design and operations. INCOSE published
a Systems Engineering Vision 2025 (“INCOSE: Systems Engineering Vision 2025” 2014) to guide
the direction and evolution of systems engineering in response to rapid advancements in
technology across a diverse set of industry domains. The vision incorporates the extension
Systems of Systems (SoS) modeling to integrate the interconnection of other independent
systems and devices (IoT). The vision further suggests the integration into a “single, consistent,
[and] unambiguous” (“INCOSE: Systems Engineering Vision 2025” 2014) representation of the
system that provides transparencies and accessibility to all stakeholders over the full end-to-end
lifecycle of a system process. The integrated, digital engineering model enables rapid knowledge
representation of concept and designs. The INCOSE 2025 Vision aligns with the single platform,
multi-functional integration as outlined in the Future Digital State section and provides clear
guidance and considerations at the system level on how to effectively implement.

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 MBSE has been leveraged in complex engineering environments for many years using
OMG UML SysML modeling languages to represent system architectures and components. As
MBSE continues to evolve with increasing system complexity and with improving digital
technologies, the question remains as to whether new modeling languages or more intuitive and
user-friendly platforms will replace the traditional methods. The Department of Defense has
archives of Architecture Framework utilizing SysML that provides a comprehensive workflow for
developing system models (“The DoDAF Architecture Framework Version 2.02” n.d.). This
framework and methodology have a historical track record of critical engineering experience and
have been adapted to changes associated with lessons learned and efficiency improvement that
provides a level of system reliability. Deviating away from these proven methods does impose
some inherent risk, but from a competency perspective, requiring organizations to adopt a new
programming language might be a difficult barrier to overcome for widespread adoption and
scalability.
Systems engineering can be adapted to support many types of applications, and perhaps
the oil and gas industry needs to adopt a fit-for-purpose methodology. The principles promoted
by INCOSE and OMG, as well as the lessons learned and best practices from NASA and DoD,
should be considered and integrated into the new oil and gas system. INCOSE has created an Oil
and Gas Working Group (“Oil and Gas Working Group” n.d.) to advance systems engineering
within the Oil and Gas industry. The steering committee is composed of representatives from
major oil and gas companies that are seeking to define the best practices and strategy for
integrating systems engineering into the oil and gas industry. The principles are similar to the
integrated design approach that creates a cross-functional collaborative digital environment that
hosts and visualizes the interdependencies across the full scope of a project system. The intent
of the platform is to create a standardized protocol where additional applications can be
integrated – included design, analysis, verification, and validation standards mapping as outlined
by INCOSE. As these new system platforms are being developed, referencing the systems
experience from INCOSE will be a valuable resource to shape the functionality requirements for
robust engineering design.

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 The INCOSE Systems Engineering Vision 2025 provided a figure that represents the full
spectrum of the systems engineering methodology. Figure 22 shows the integration of concepts
that develop and contribute to the holistic approach for project engineering management.
Systems engineering is designed to ensure all system components and interdependencies are
designed to work together to achieve the objective of the whole system.
SYSTEMS METHODS & TOOLS

Define System Design Structure Tradespace Risks &

System Safety
Value Matrix (DSM) Modeling Uncertainties

Stakeholder System Tensions & Interface Simulation &

Analysis Architecting Tradeoffs Management Optimization

System System Model Composable & Project

V&V (V-Model)
Decomposition (OPD) Platform Design Management

PROBLEM SYSTEMS SYSTEMS SYSTEMS SYSTEMS

DEFINITION SYNTHESIS ANALYSIS VERIFICATION VALIDATION

Figure 22: Systems Methods & Tools, Adapted from (“INCOSE: Systems Engineering Vision 2025” 2014)

The vision of the future model-based approach will encompass visualizations, designs,
requirements, architectures, reasonings, optimizations, and other pertinent design and
operational data. The model will allow for transparent knowledge communication through
unified navigation portals, both cross-functionally (horizontally) and within systems hierarchies
(vertically). This enables complex design insights and system emergent properties to be rapidly
evaluated and identified for efficient workflows and robust design changes. This integration will
shift the communication medium from siloed document dependency to transparent and
accessible virtualization.

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6 Systems Approach to Digital Architecture
This chapter reviews the process flow of data throughout an organization from field
sensors to office analysis. This section reviews data standardization protocols, processing speeds,
and data requirements. The intention of this chapter is to provide the details of the system
architectural diagrams and standardization requirements that are fundamental to the core digital
design attributes and decisions.
6.1 O&G Real-Time Data Architecture
The oil and gas data system architecture is the core enabler for digital innovation. As
sensor technology continue to become more economic and the data processing opportunities
(e.g. machine learning) are greatly improving, the oil and gas industry is transitioning to a digital
oilfield (DOF). Understanding the process flow of data from field to office, where information can
be collected, processed, and analyzed, will help to improve capabilities with respect to
operational efficiencies. These operational efficiencies include automating workflows, remote
operations, improved operational transparency for better decision making, reduced downtime,
etc. SCADA systems (Supervisory Control and Data Acquisition) have commonly been used for
decades in the oil and gas industry to gather instrumentation data of producing assets and
communicate to a server for processing. Figure 23 represents a simple data flow architecture
where operational data is processed through programmable logic controllers (PLC) to a remote
terminal unit (RTU) or SCADA system, where the data can be transmitted via satellite or cellular
to local servers or databases. The sensor data options described in Figure 23 is not limited to
those examples, as there are a multitude of different instrumentation from different
manufacturers that can be transmitted. Further discussion will be presented regarding the
number of stakeholders that can leverage the data for improved process efficiencies, where the
case for data and data protocol standardization becomes more apparent.

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 DRILLSHIP

Sensor Data Satellite

Torque
Drag
ROP
LAND RIG PUMP JACK MWD
HORIZONTAL DRILLING Depth
HYDRAULIC FRACTURING
PRODUCTION Pressure PLC-RTU
Temperature
Flow Rate
Volumes SCADA
MIDSTREAM Water-Cut Historian
FACILITIES Sand Database
PIPELINE
STORAGE
Vibrations
Tank Levels
Field

Cellular

Figure 23: General Field-to-Office Data Flow Architecture

Figure 24 further expands on the details of data communications, as well as some typical
sensors that are being monitored with respect to oil and gas production operations. This is a
specific case where sensor data can be routed to a PLC-RTU (either wired or wirelessly) and
communicated to a central server or database. As described earlier, this list for sensor types is
limited, as it could include any equipment that is run downhole or any other additional sensors
installed in the operations process.

Land Communications

Cellular telecommunication solutions can only be

Cellular used if available. Some locations close to shore have
THP this capability, specifically in US Gulf of Mexico.

Choke Very small aperture terminal (VSAT) is most widely

used for vessels in remote locations. This is
VSAT broadband satellite communications that as higher
latency and smaller bandwidth than other options.
Program Logic
Controller
THT
Remote Sensor Types
Terminal Unit
Production
CHP Tubing Head Tubing Head Casing Head
Well Pressure Temperature Pressure

Flowline
Choke Position Flowline Pressure
Temperature

Tank Meter
Flow Meter Testing System
[Separation]

Figure 24: On-Shore Production Operations Data Telecommunications Architecture

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 Offshore operations are unique for data transfer opportunities, given that offshore
operations can either be in extremely remote environments or among existing facilities or
infrastructure. Figure 25 depicts an offshore drill ship communicating operational drilling and/or
completion data. The most common form of data transfer from an offshore drilling vessel is via
satellite or VSAT. This allows for data to be transferred in remote locations but has limitations
with bandwidth and data transfer rates. Microwave technology is usually only used if a vessel is
within a short range of an existing facility where the data can be relayed to land/office locations.
Existing facilities and infrastructures are typically wired with fiber optics, which is the optical
technology for data transfer. Offshore operations that are nearshore (Gulf of Mexico Shelf) can
maybe use cellar technology is their operation is within range.

Offshore Communications

Very small aperture terminal (VSAT) is most widely

used for vessels in remote locations. This is
VSAT broadband satellite communications that as higher
Drillship latency and smaller bandwidth than other options.

Sea Level Microwave telecommunication solutions are typically

used when a vessel is in close proximity to other
Microwave vessels, facilities, or infrastructures. This broadband
has higher bandwidth, but limited distance.
Riser
Cellular telecommunication solutions can only be
Cellular used if available. Some locations close to shore have
this capability, specifically in US Gulf of Mexico.
Blow Out Preventer
(BOP) Fiber telecommunications is the optimal solution, but
requires cables to be run from point A to B. This
Mudline Fiber
option is typically used from a supporting facility in
conjunction with microwave from the rig.

Well Low Earth Orbit (LEO) satellites are planned to be

launched in the next few years by SpaceX called
LEO
StarLink. This technology has the potential to rival or
even exceed fiber optic speeds.

Figure 25: Offshore Drilling Operations Data Telecommunication Architecture

Now that the general operational flow of data has been reviewed, the next step is to
review the data standardization (i.e., the format of the data as it is being transferred). The value
creation generated from the combination of high-volume, high-quality data, plus advanced
analytic algorithms is creating a large competitive advantage to early adopters. The critical
component of the digital journey is to create a foundation that is both value-capturing and
flexible toward breakthrough technology. Data standardization is a steppingstone to digitalizing
the oil field, where initial investments lead an organization to a vast amount of operationally
improving opportunities.

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 Table 12: Oilfield Data Transfer Speeds per Technology

Technology Typical Data Transfer Rate Typical Latency Range Characteristics

VSAT Satellite 1-6 Mbit/s 500-650 ms Global High Cost

3G Cellular 0.1-8 Mbit/s 0.1 s Regional Lowest Cost

4G Cellular 15-90 Mbit/s 0.05 s
5G Cellular 150-200 Mbit/s 0.001 s
Microwave 70 Mbit/s 50 ms Regional Low Cost
(WiMAX) [~30 miles]
Fiber 2.5 Gbit/s 5 µs per km Regional Highest Cost
[120 miles]
LEO Satellite 100-120 Mbit/s 30-50 ms Global 35x closer to Earth than
[proven – Kepler] GEO orbit satellite
Average Rig Data Collection – 1-2 TB per day

References:
(“What Is the Latency for Satellite Connectivity? - DTP” n.d.; “Download Speeds: Comparing 2G, 3G, 4G & 5G Mobile Networks” n.d.; “Microwave Link -
Gigabit Microwave Connectivity” n.d.; “Optical Fiber’s Gigabit Bandwidth, 200 Km Range Attractive for Subsea Work | Offshore” n.d.; “Real-Time Latency:
Rethink Possibilities with Remote Networks” n.d.; “Satellite Broadband Internet and Megaconstellations | Deloitte Insights” n.d.; “WiMAX Coverage and
Speed | HowStuffWorks” n.d.; “Beyond the Barrel: How Data and Analytics Will Become the New Currency in Oil and Gas” n.d.; “The Maritime VSAT
Advantage” n.d.)

6.2 Data Standards

Data standardization across the multi-disciplinary value chain is critical for workflow
connectivity. The Standards Leadership Council (SLC) is a group of 11 members who work
together to build data standardization in a collaborative environment that promotes the
adoption of data standards in order to (1) avoid conflicting standards, (2) build synergy, (3) deliver
maximum value, and (4) harmonize workflows and semantics. The below list encompasses all of
the participating members in SLC, however, the focus of real-time data streaming is with
Energistics. As the industry becomes increasingly collaborative, it is important to be aware of the
other Standards Organizations. Software development around strict data standardization will
ensure more reliable deployment and modularity with the integrated systems. Four of the critical
data standards organizations are described below.

SLC Standards Leadership Council

Website: http://www.oilandgasstandards.org/about
Energistics Energistics is responsible for developing standards for the transmittal of data
related to upstream oil and gas operations and activities. This includes

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 interoperability requirements for both data transfer standards and data transfer
protocols. The common technical architecture for Energistics data standards that
allow for cross-functional workflows are WITSML (drilling), PRODML
(production), and RESQML (reservoir).
Website: https://www.energistics.org/
OPC The Open Platform Communications (OPC) Foundation creates and maintains
data transfer standards for industrial automation. The organization creates
specifications, certifies, and collaborates with industry to manage secure and
reliable, multi-vendor, multi-platform automation data transfer protocols.
Future collaboration efforts are in works with DSATS (Drilling System Automation
Technical Section) of the Society of Petroleum Engineers (SPE) to build guidelines
around rig controls systems and a roadmap for Drilling Systems Automation.
OPC also works in collaboration with Energistics to build integration of real-time
data with drilling system automation and process controls. The drilling industry
is becoming more automated, and it is critical to build standardization and
connectivity between real-time data and automation.
Website: https://opcfoundation.org/.
PCA POSC Caesar Association (PCA) is an organization that develops and promotes
[ISO 15926] data interoperability standards with special focus on ISO 15926 and Web
services. ISO 15926 is an International Standard that facilitates data interface
representation among all domains within the lifecycle (i.e., engineering,
construction, and operation) of oil and gas processing plants. ISO 15926 provides
an information semantic model (ontology) for enterprise applications to
facilitate the interoperability of system engineering design, construction,
commissioning, and operation.
Website: https://www.posccaesar.org/.
PPDM The Professional Petroleum Data Management (PPDM) Association developed
data management standards for Exploration and Production (E&P) data. PPDM
created the PPDM Data Model to provide a standard data management solution

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 for data representation for all acquired data in E&P. Data management and
metadata standardization has become increasingly important with the explosion
in volume and sophistication of E&P operational data.
Website: https://ppdm.org/ppdm.
6.3 Energistics
The oil and gas data transfer standards created from Energistics provide a true data
interoperability capability to improve multidisciplinary communications between the rig site,
service companies, and office-based professionals (Hollingsworth 2015). The idea of a single
software architecture standard is to provide a common interface to transmit, exchange, and
receive data. This allows for consistency across the workflow value chain, which drives efficiency
and performance (“Khudiri et al. - Open Standard Protocol Can Improve Real-Time Drill.Pdf” n.d.).
The Energetics portfolio can be summarized by the following standards: WITSML, PRODML,
RESQML, and ETP.

WITSML – Wellsite Information Standards Markup Language is an industry initiative to provide

consistent interfaces for all instrumentation and software in the digital oilfield (DOF) to
optimize operations. The current capabilities are related to wellsite-to-office data
transfers for all operational and equipment data. The initiative drives the importance for
all technologies to work together to provide a highly innovative platform that can lead to
advanced process and operation optimization. Utilizing this standardization with the ETP
provides near real-time data to office engineers for improved efficiencies or decision
making and/or even to Third-Party analytic software packages. (“Adopting Data
Standards: Cheapest Way to Survive Downturn | Rigzone” n.d.)
PRODML – Production Markup Language is a standard focused on the transfer of data from the
reservoir-wellbore boundary. This initiative is consistent with the evolving transformation
for smart/intelligence fields. The current capabilities include production volumes, well
tests, fiber optic distributed temperature surveys (DTS) and distributed acoustic sensing
(DAS), and PVT analysis. The data transfer standard applies to the full inventory of
downhole equipment and operations performed on a producing well.

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RESQML – Reservoir Q Markup Language is an XML- and HDF5- based data exchange standard
that facilitates reliable, automated exchange of data among software packages used in
subsurface workflows. This standard addresses the complications associated with the
multiple software packages required to interpret, model, and simulate subsurface
environments. The intent is to build a data transfer environment that allows for flexible
workflows, productivity improvement, and clear data sharing paths for improved
efficiency.
ETP – Energistics Transfer Protocol – is a data exchange specification that enables the data
transfer between applications, including the full family of data standards – WITSML,
PRODML, and RESQML. This transfer protocol was specifically designed for the oil and gas
industry and supports both real-time transfers and historical data queries. This protocol
uses Web-Socket, Avro, and JSON to transfer both real-time and static data from server
to client (Hollingsworth 2015).
CASE STUDY 1: “WITSML is the Key Data Source for Automated Daily Drilling Reports”
Independent Data Services (IDS) developed an automated Daily Drilling Report (DDR)
application, DrillNet, to auto-populate daily activities, saving 1 to 3 hours of work each day. The
IDS DDR application leverages WITSML data to improve reporting accuracy and consistency,
which frees up personnel for other important responsibilities. IDS has termed the reporting
technique as Lean Automated Reporting (LAR). LAR can access data from a WITSML data store to
capture contextual and numeric data – this includes the ability to categorize state of operation
(OSD – operation state detection) in order to populate relevant parameters. IDS is reporting that
more than 80% of the DDR is able to be automatically populated.

Standardization with reporting has multiple benefits:

• Reduction in inconsistencies and errors from reporting;
• Improvement in data quality for enhanced data analytics;
• Provision of real-time, natural language operation updates to office engineers; and
• Saving time and money by allowing highly paid personnel on the rig to focus on current
operations.

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 As service companies are developing software architectures based on real-time sensor
data from WITSML (Energistics) Protocols, digital solutions can become more plug-and-play
versus customized. This standardization incentivizes operators to adopt this framework to
improve capabilities for more cost-effective digital solutions (Energistics and Independent Data
Services n.d.).
CASE STUDY 2: “Maximizing the Benefits of Wellsite Data using WITSML”
Murphy Oil Company was challenged with the amount, variety, and velocity of data
created from the wellsite, and managing non-standardized data was time consuming, error-
prone, and costly to the organization. Murphy leveraged WITSML to standardize wherever
possible to build a consistent, streamlined digital platform for their wellsite. The WITSML system
integration is shown below. This standard data transfer protocol allows Murphy to (1) automate
data entry and reporting, (2) reduce QA/QC processes on data, (3) perform reliable and effective
data analytics for better decision making, and (4) open integration opportunities for Third-Party
service providers. Murphy projects that this initiative saved the company 10 to 15 hours per week
from the original data management processes. This initiative also provides Murphy with a digital
software architecture where service providers are capable of connecting and running detailed
analytics on real-time operations data. These opportunities provide significant value to
operational efficiency by vastly speeding up deployment time of new digital initiatives. And, this
type of digital solution prevents Murphy from expending resources to develop in-house, which
can sometimes be beneficial, but also challenging to compete with the analytic capabilities of
Silicon Valley.
6.4 Enterprise Architecture
The enterprise system architecture is the information technology (IT) foundation that
manages all evolving IT systems. The architecture manages data flow, accessibility, storage,
processing, and visualization, and is thus a fundamental contributor to business operations. The
systems methodology outlines the importance of understanding the dynamics and
interdependencies of all contributing systems and subsystems associated with the objective as a
whole. The primary focus of engineering innovations and improvements have been on the
physical operation; however, with the capabilities associated with the developing analytic and

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visualization techniques, directing new attention to IT infrastructure will create a greater
economic advantage. The purpose of this section is to outline the enterprise architecture
platform with the available tools in order to develop an understanding of the capabilities and
stakeholders involved to create digital opportunities within an organization.
As identified in the O&G Portfolio section above, many O&G companies are adopting
Microsoft (MS) Azure as the cloud-based system architecture for their organization. MS Azure
provides the data ingestion, filtering, processing, storage, and visualization capabilities within the
available suite package, but also allows for the opportunity to host other data applications
through an API Gateway. Figure 26 shows a high abstraction diagram of an enterprise
architecture for connecting and processing disparate data sources to develop visualized business
insights (“Azure Architecture Center | Microsoft Docs” n.d.). The intent of this thesis is not to
analyze the specifics of the system architecture to develop a recommendation, but, rather to
offer MS Azure as an example of the system components and interdependencies of an IT
architecture that must be managed and considered when developing and adopting new digital
initiatives within an organization.

Load & Ingest Process Serve

Hot Path Business User

Stream
[IoT, Sensors, Instrumentation]
Cold Path
Real-Time Stream Real-Time Analytics Power Applications
Analytics
Databricks
Non-Structured Storage [Big Data Processing &
[Images, video, Word docs, Preparation]
Power Point, PDF, email]
Applications

Semi-Structured Data Factory Data Lake Database

[Spreadsheets, logs,
Visualizations
[Scheduled or Manual Ingestion] [Raw Data, Use Undefined] [Cosmos, SQL Data
metadata, csv, xml] Warehouse]

Relational Database
[Structured Information]
Cognitive Services
[Analytic Applications &
Machine Learning]

Figure 26: Enterprise Data Platform Architecture, Portions of Microsoft Data Platform Reference Architecture Image
(https://docs.microsoft.com/en-us/azure/architecture/example-scenario/dataplate2e/data-platform-end-to-end) used with
permission from Microsoft.

The MS Azure data platform architecture can be leveraged to understand the different
steps or applications required for data to flow from creation or storage to visualization and

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business insights. The example architecture has two paths: Hot Path and Cold Path. These two
avenues are specific to the type of data being processed and to the type of processing
capabilities. The Hot Path originates from real-time streaming data where reduced latency speed
for direct visualization is the priority. The MS Azure architecture shows that the real-time
streaming data is processed as streamlined as possible to the end-user through Power BI.
However, the data is also directed to the Cold Path, where it is combined with disparate data
sources of structured, semi-structured, and unstructured data. The structured, semi-structured,
and unstructured data is ingested by the Data Factory, which acts as the pipeline and engine to
organize data into acceptable inputs for data analytics. Through the workflow enablement and
capabilities of Databricks, the data can then be processed for data analytics and machine learning
to provide enhanced business insights.
Other service providers might provide similar applications that are fit-for-purpose or
prove to have higher capabilities than what are currently offered with the MS Azure suite. And,
due to the flexibility of the cloud-based host, these applications can be connection and integrated
into the MS Azure platform to provide these beneficial services, as needed. Understanding the
platform architecture helps with three fundamental questions: (1) What are current system
capabilities that can be leveraged to advance business insights? (2) How do new digital
applications integrate or replace current services for improved functionality? And, (3) what are
the identified functionality gaps that are specific to the needs of the organization or industry?
The importance of the systems approach is to understand the comprehensive system and its
interdependencies to challenge the effectiveness and integration of capabilities proposed by new
digital solutions.
As it relates to artificial intelligence specifically, different applications and algorithms can
be hosted on the Azure or other cloud-based platform to contribute to the business insight
discovery process. This application is specifically called out in the MS Azure architecture as
Cognitive Services (machine learning). Different data models can be leveraged side-by-side for
comparison purposes, or in series as an ensemble approach, to achieve additional accuracy in the
model predictability.

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 The next section below will discuss different artificial intelligent techniques that are being
utilized to generate pattern recognition and causation discovery within the oil and gas industry.
This will provide an idea of the mathematical algorithms that have demonstrated proof-of-
concept and realized value in industry.

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7 Data Analytics in Well Design and Operations
Data analytics and artificial intelligence have been integrated into O&G Exploration and
Production (E&P) design and operations workflows for many years, by employing methods like
regressions, forecasting, and optimizations (Bravo et al. 2012). However, the resurgence of the
term artificial intelligence for business applications has been sparked by the growing capabilities
of machine learning (ML). With the increasing volume of digital connectivity and digital abilities
within industrial applications, AI provides a means to “sense, reason, engage, and learn” from
the immense amount of data being produced (“Part 1: Artificial Intelligence Defined | Deloitte |
Technology Services” n.d.). To understand the value and functionality of digital platforms and
digital initiatives, it is necessary to be familiar with the tools and algorithms being leveraged in
those applications.
The science of AI is often misunderstood due to the broad range of capabilities
encompassed within the term. The umbrella of AI includes both the future breakthrough
associated with the digital singularity, where computation technology exceeds the intelligence of
human intellect, and the classical technique of linear or logistic regression. The term AI has been
hyped to such a high degree that it is the only description used to advertise any new digital
capabilities, even though the range of algorithmic capabilities is extremely broad. Therefore, the
advertised rhetoric of these emerging digital technologies contributes to the misunderstanding
of the science. Figure 27 shows the breakdown of data science and AI technology to provide a
more holistic view of where these terms fit into the discussion. To effectively evaluate a digital
initiative, one must be able to speak the digital language associated with the techniques a
company is employing to produce their advertised benefits. Artificial intelligence is more
commonly integrated into industrial applications than most people recognize, and the
information included in this chapter aims to equip the reader with the knowledge and tools to
challenge and discuss the techniques being utilized in order to improve business insights.

111
Figure 27: Data Science and Artificial Intelligence (“How To Be A Data Scientist - Quantum Computing” n.d.) [left] and (“Part 1:
Artificial Intelligence Defined | Deloitte | Technology Services” n.d.) [right]

The former, current, and future data analytic and AI methods were evaluated to provide
a recommendation for developing infrastructure, competencies, and tools for digital adoption.
In 2012, a survey was conducted among professional members of the Society of Petroleum
Engineers (SPE) to capture the business integration of artificial intelligence in oil and gas
Exploration and Production (E&P). The survey received 612 responses to general AI questions
regarding applications, value, and techniques (Bravo et al. 2012). Figure 28 shows both the
relative E&P applications where AI was integrated into the workflow (left) and the type of AI that
was leveraged (right). Although the data is dated, it shows that data science has been integral to
the design and operational workflow in O&G for many years. This data provides some perspective
to the former and current state because oil and gas has been historically slow to adopt new digital
innovations.
The top five areas of AI and data analytic integration in E&P were production optimization,
reservoir modeling, data management, production management, and process control (Bravo et
al. 2012). And the top five AI or data analytic techniques utilized were data mining, workflow
automation, neural networks, expert systems, and automatic process control. These areas and
techniques are similar to the orientation and direction that are still being pursuing today (Future
Digital State), with the exception of the business disruption from the more advanced ML

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techniques – note that ML was only a small portion of the applications in 2012 E&P. Data mining
continues to dominate at the forefront of innovation, with both the backend infrastructure and
the frontend visualization developed to efficiently deliver to the user the right information to
make enhanced business decisions. The development and application for each of these available
analytical techniques in O&G could be a thesis on its own, but the intent here is to show the
analytic approach as a whole system, in order to connect the technique and application in
proportion to its contribution in industry.

Percentage of E&P Percentage of Data

Applications Using Data Analytics in E&P by
Analytics [2012] Category [2012]

Figure 28: Artificial Intelligent Applications in E&P Industry, derived from (Bravo et al. 2012) data

As noted, the current state of effective AI integration into O&G is relatively similar to the
state, or described proportionality, from 2012. However, the term “effective” is used because
the industry is currently in a transitory state, where large digital investments and initiatives are
starting to fundamentally disrupt the design and operational workflows, but they are yet to be
holistically effective. This thesis has already discussed the enabling of cloud-based platforms that
improve data aggregation, visualization, collaboration, and communication effectiveness. But, in
terms of data analytic techniques, the most disruptive innovation has been caused by
applications of machine learning. To visualize and understand the explosion of the application of
machine learning, Figure 29 shows the Google Trends of Web Searches for different AI and
analytical methods. This graph, provided by Google Trends, shows Web Searches relative to a

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peak total – the relative peak is represented as 100 for the most searched topic in a given time
frame. The duration for the graph is over the last ten years of internet searches through Google.
The Trends show that the interest in machine learning was sparked in 2015, and has surpassed
that of AI, Data Analytics, Data Mining, and Digital Transformation. This provides a relative
visualization and perspective of the evolution of interest into the applications of machine
learning.

Figure 29: 10 Years of Digital Search Trend Data on Google Trends

The advent of machine learning has sparked capabilities and promises for pattern
recognition, business insight discovery, and efficiency improvements. This is especially attractive
in the O&G industry, where there are immense volumes of archived design and operational data,
as well as daily real-time data acquisition, that are not currently monetized to the optimal extent.
However, with the growing platform technologies providing integrated systems for data
aggregation, all analytic methods can be more easily applied to learn, forecast, and take action.
The next sections in this chapter will review key analytical methods with their current and future
applications within the O&G industry.
7.1 Data Mining
Data democratization and monetization can yield significant value for O&G organizations.
Significant opportunities can be extracted from tapping into large data reservoirs and applying
advanced data mining techniques to develop descriptive, predictive, and optimization models

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(“Demystifying Data Mining,” n.d.) for enhanced business decisions. Quantitative algorithms
explore data to discover patterns, anomalies, and historical trends to develop useful business
models. Data mining techniques can filter, cleanse, and aggregate disparate data sources that
enable advanced algorithms, like machine learning applications, to further process and analyze
data.
The value associated with monetizing data will force engineers to embrace news way of
thinking and problem solving – physics-based modeling is the current core competency, but data
cleansing, data analytics, and data forecasting is the competency of the future. Engineers will
need training in statistical inference and thought to be able to understand both the power and
limitations associated with data-driven models. Data mining techniques provide the capability of
understanding massive reservoirs of data in short time frames, which can significantly improve
decision-making efficiencies.
Data aggregation and preparation are critical aspects of the data mining process that
arrange data appropriately for the specific problem. This data can further be utilized with other
analytical and AI techniques for discovery. Cloud-based systems are paving the way for
collaborative and connected environments where data can be easily accessed and processed
from data lakes or enterprise data warehouses through API enabled analytic applications. Data
mining returns value to organizations by developing business insights and operational efficiencies
that can create compounded savings across thousands of wells and assets. Accessing, organizing,
and preparing data is traditionally a time-consuming task for an engineer, however, with the
inclusion of cloud-based data accessibility and data processing applications through API
connectivity, specific data models can be created by an engineer in minutes instead of weeks.
Data mining opportunities are ubiquitous within the O&G sector; techniques can be
applied to exploration, reservoir, drilling, production, pipeline/transport, refinery, and sales.
Models can be built for seismic interpretation to increase probability of oil discovery, reservoir
characterization to better evaluate oil-in-place for economic viability and extraction strategies,
drilling design and performance to reduce costs and exposure, production trends for completion
and facility designs for efficiencies (Mohammadpoor and Torabi 2019).

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 As a reference for the perspective of analytic tool utilization, Rexer Analytics periodically
surveys analytic professionals to better evaluate analytics usage in the corporate, consultant,
academic, and government workforce. The Rexer 2017 survey consisted of 1,123 analytic
professionals from 91 countries. Figure 30 shows the results of the analytic algorithms that are
most utilized in the respondent’s field. Rexer Analytic has also identified Regressions, Decision
Trees, and Cluster Analysis as the top three primary analytic algorithms since 2007. While
complex machine learning algorithms have generated much of the attention, the foundational
algorithms continue to dominate in application and usage. Although it is important to recognize
that the machine learning tools are deemed more transformational, there is still significant value
to be gained by robust applications of older methods. From a systems perspective, recognizing
and understanding the key contributing algorithms for data analytics is necessary to evaluate the
functionality of digital tools. There is potentially inherent risk associated with applications that
promote lesser used analytic tools, as they do not have the benefit of experience-driven best
practices and proven results. This information can assist with challenging the track-record and
competency regarding the advertised tool, which will provide insight on value versus hype.
Additionally, the Rexer survey identified the top skills of a data scientist as Data Preparation and
Management Skills and Specific Domain Knowledge (Rexer 2017), which aligns with this thesis’
points about standardization and an approach for single system of truth.
Most of the time Often Sometimes Rarely

REGRESSION 30% 37% 17% 4%

DECISION TREES 15% 28% 21% 11%

CLUSTER ANALYSIS 13% 32% 24% 10%

TIME SERIES 9% 23% 24% 15%

RANDOM FORESTS 9% 19% 16% 12%

ENSEMBLE METHODS 9% 14% 16% 11%

FACTOR ANALYSIS 7% 19% 23% 14%

TEXT MINING 6% 18% 18% 16%

ANOMALY DETECTION 6% 13% 18% 12%

BAYESIAN METHODS 5% 14% 22% 17%

NEURAL NETS 5% 12% 19% 16%

ASSOCIATION RULES 4% 13% 18% 16%

MONTE CARLO METHODS 4% 9% 18% 18%

SUPPORT VECTOR MACHINES (SVM) 4% 12% 14% 15%

SURVIVAL ANALYSIS 4% 8% 13% 17%

SOCIAL NETWORK ANALYSIS 4% 6% 15% 14%

RULE INDUCTION 3% 9% 11% 12%

DEEP LEARNING 3% 5% 12% 13%

Figure 30: Common Algorithm Analytic Methods, Adapted from (Rexer 2017)

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7.2 Example Case Studies & Applications
After covering the different types of data analytics and with the proportionality in which
they are leveraged in O&G, this chapter provides several examples of how the different analytic
algorithms have been applied to specific applications in O&G.
Reduce Drilling Nonproductive Time
A detection and alerting system was created using Bayesian Networks to define event
conditional probabilities to indicate drilling, equipment, or sensor failures. The belief or reasoning
system is built from selected nodes of conditions that would be used to define an event logic.
Values can be discrete or continuous, and the model probabilities are conditioned with training
data sets. For example, a belief system for a drilling washout would consist of rig activity, pump
rate, flow-out rate, pump pressure trend, and other details as desired. The defined nodes would
be linked to an “unplanned state” that can then be trained with actual washout events to
determine appropriate probabilities. When this model is run in real-time, the aggregated sensor
data can determine a response on the probability associated with a washout (Ashok and
Behounek 2018). These types of models can be leveraged for many different “unplanned states,”
where alert systems are built to define likelihood of potential issues. Early detection of process
or mechanical issues can provide significant value to the operation. Even with the likelihood
forecast of events, the reasoning associated with logic can be addressed if there is a sudden
change in one of the defining variables.

SENSE

Top Drive

Derrick
DRILLING
COMPLETIONS REASON
INTERVENTIONS

Rig

BOP Mud Pit

Drill Pipe
ENGAGE

Drill Bit

Figure 31: Bayesian Network Feedback Loop

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Improve Drilling Performance
The drilling rate is dictated by several factors, including lithology (one aspect is
compression strength), bit model, bit type, weight on bit, rotary speed, and mud weight. A neural
network was utilized to develop a predictive model for mechanical drilling rate (Xue 2020). This
model can be trained with a large volume of drilling data to assist with bit selection, duration
forecasting, and optimization. Performance models can be integrated together to create proxy
models for an entire system. Figure 32 shows the conceptualization of a neural network with a
single hidden layer. The neural network is a collection of neurons (nodes) and connections that
work by processing input data through the weighted connections and nodes to produce an
output response. The network learns by traversing forward- and back- propagation through the
network to develop node activations and weights that produce the correct final result (“Machine
Learning for Everyone” n.d.).

Figure 32: Neural Network for Drilling Rate (Xue 2020)

Anomaly Detection
Operational anomaly detection was achieved through the use of regression and
classification models for drilling and workovers (Alotaibi, Aman, and Nefai 2019). Machine
learning models were constructed to identify abnormal behaviors and alerts during a well
operation. The method employed suggested a continuously looped train and predict model in a
predetermined moving time window – this prevents the decay of the model validity with

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increasing time. These types of anomaly detection models can quickly identify abnormal trends
and monitor the health of the operation.
Data analytics and artificial intelligence are powerful tools for understanding complex
systems. There are a multitude of proven methods and tools that can be incorporated into
monitoring, performance, and design models. However, as with any data-driven model, an
understanding of the statistical accuracy and limitations should be properly evaluated before
taking action. As noted in the data mining section, the majority of the work is directed toward
aggregating, filtering, cleaning, and preparing data for processing. Most of these analytical
models are relatively simple to run once the right variables, volume, and quality of data are
available. This chapter demonstrated the value associated with applying machine learning
techniques to large data sets. Organizations can sense, learn, and respond to operational
anomalies and abnormal conditions before nonproductive events occurs. Additionally,
correlative discoveries and optimizations can be leveraged in the design stage to develop more
robust programs. It is extremely important for an engineer to understand both the power and
limitations of analytic tools that can be leveraged to develop enhanced knowledge of the design
and operational system. These techniques show that when organizations invest in developing
platforms that aggregate and connect disparate data sources and real-time operational sensors,
valuable opportunities are available to take action.

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8 Digital Platform Design
Integrating digital tools and platforms into an organization’s workflow takes a substantial
amount of effort and resources. The industry interviews, market research, and professional
industry papers reviewed for this thesis have all recognized that the effort and resources are
commonly underestimated to develop and manage a digital initiative for sustainable use and
scalability. This thesis hypothesizes that this is due to the lack of understanding of the holistic
system view of the platform integration process. This chapter reviews a proposed methodology
to question, understand, and rank different digital platforms and initiatives. This methodology is
applied to several of the digital initiatives as outlined in the Digital Portfolio chapter. Note that
the questions presented offer perspective on beneficial attributes to successful digital
development, however, the importance and ranking of each characterization are subjective and
should be customized to the specific needs of an organization. The objective is to build a visual
understanding with respect to the holistic questions of whether a digital initiative is building your
competitive advantage within a digital ecosystem for faster and better decision making across
the entire organizational value chain.
8.1 Data Science and Machine Learning (DSML) Platforms
Gartner, a global research and advisory firm, developed a “Magic Quadrant” to rank data
science and machine learning platforms (DSML) with respect to capability and vision (Krensky et
al. 2020). Some of these principles, along with others from research articles and professional
papers, were leveraged to develop the Platform Characterization in Table 13. The
Characterization reviews 16 critical categories that this thesis recommends being thoroughly
questioned, reviewed, and relatively ranked prior to digital adoption in any organization. The
method starts with data management principles, like accessibility, preparation, and visualization,
and ends with the consideration of the business strategy. This promotes conversations around
standardization, interoperability, collaboration, user interface, required competencies, required
resources, scalability, security, automation, and business value. Additionally, the platform
characterization is linked with potential organizational barriers, as outlined in the next chapter,
which are Digital Infrastructure, Organizational Capabilities, Working Environment, External
Ecosystem, Process & Governance, and Measures of Success. The idea behind linking the

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organizational risks to the platform characteristics is to emphasize their dependency on one
another to ensure that organizations are selecting initiatives that are aligned with their current
capabilities and business strategy.
Table 13: Digital Platform Characterization Methodology

Platform Characterization Risk Type

Digital Infrastucture
1 Data Accessibility How well does a platform access and manage different data types and data sources?
Process & Governance

Digital Infrastructure
2 Data Preparation How well does a platform filter and clean ingested data?
Process & Governance

Digital Infrastructure
3 Data Visualization How well can data be visualized and explored?
Organizational Capabilities

Digital Infrastructure
What analytic applications are available?
4 Advanced Analytics Organizational Capabilities
How well is an analytic suite packaged together?
Measures of Success

Does the product have an intuitive and coherent UIUX?

Organizational Capabilities
What is the rated customer experience?
5 User Interface Working Environment
How well has the user experience been recorded, tracked, and integrated?
External Ecosystem
What is the competency required to operate or use platform or digital tool?

How well does the platform integrate with the data infrastructure (i.e. cloud-based Digital Infrastructure
host)? Organizational Capabilities
Interoperability &
6 How well does the platform or tool integrate or connect with other systems via APIs External Ecosystem
Standardization
(i.e. does it contribute to the data pipe ecosystem)? Process & Governance
Does theh platform or tool offer 3rd-party applications or open-source capabilities? Measures of Success

Digital Infrastructure
7 Scalability How well can the platform be deployed at a large scale, and what is the track-record? Organizational Capabilities
Working Environment

Organizational Capabilities
How well can the platform be managed internally and externally? What are the
8 Platform Management Working Environment
resources required?
External Ecosystem
Organizational Capabilities
9 Model Management How are models monitored and managed? What are the resources required? Working Environment
External Ecosystem

Working Environment
Collaboration & How does this platform link or connect with other functions and workflows?
10 External Ecosystem
Partnerships Does the company have any partnerships or alliances with other tools or services?
Process & Governance

Digital Infrastructure
11 Automation How well can automated processes and procedures be integrated into the platform? Organizational Capabilities
Process & Governance

What is the historical performance of the platform with other adopters? Organizational Capabilities
12 Operational Value
What is the predicted value-added of adoption and integration? Measures of Success

Organizational Capabilities
13 Pricing What is the cost to develop and/or integrate platform?
Measures of Success

How has the consideration for business security been integrated into the design and
Process & Governance
15 Security architecture of the platform or tool?
Measures of Success
Does the platform present any cybersecurity issues?

Digital Infrastructure
What is the future vision of platform or digital tool?
Organizational Capabilities
How well does it integrate and align with the business strategy?
Working Environment
16 Business Strategy What is the competitive advantage with adopting? Build versus buy?
External Ecosystem
What is the extensibility of the digital platform? How easily can it adapt to future
Process & Governance
changes?
Measures of Success

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 Chapter 8.2 reviews the internal organizational risks associated with enterprise-scale
digital adoption. The Risk Type from Figure 12 is decomposed into more specificity to understand
the considerations associated with each risk category. The critical questions and evaluation
strategy outlined in Chapter 8.1 and Chapter 8.2 are combined in Chapter 8.3 to create a ranking
method that aligns both organizational limits and digital tool attributes. This step-by-step ranking
methodology helps to ensure that the holistic system view is considered when selecting a digital
initiative.
8.2 Challenges to Digital Platform Adoption
Risk recognition and analysis is important for understanding the dynamic influencers
within a system. Recognizing potential issues provides the opportunity to develop mitigation
strategies that help reduce the likelihood of unintended events. The barriers and challenges
associated with organizational digital development and adoption were recorded throughout the
research process. This section presents barriers and challenges to digital platform design and
organizational adoption. The design challenges reference architectural decisions that are in
tension with one another – the difficulty is selecting the right design attributes that contribute
most to the business value. The barriers to organizational digital adoption reference the
infrastructure, competencies, and cultural limitations – the difficulty is shaping the organization
to adapt to the required disruption. These risks are not exhaustive, but they have been identified
as a common theme presented throughout the research process.
The utility attributes of a digital initiative can be quantified or measured to define the
quality of the system. Utility attributes are commonly in tension, or have negative influence on
one another, and requires architectural design decisions to define the system’s functionality that
meets the business needs of the end user. For example, system performance exhibits design
tension around latency, capacity, and accuracy, where latency is the response speed, capacity is
the volume handled, and accuracy is the margin of error in the response. The system needs of
these requirements can be substantially different depending on the type of system and control
expectations. Additionally, scalability presents sacrifices depending on the size and diversity of
users required to share the platform. Customizations or fit-for-purpose design characterizations
would be at tension with the ability for the system to be compatible for many different

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applications and use cases. The availability of the platform with respect to accessibility and
usability would be at tension with system infrastructure and design costs. Platform extensibility,
or the ability to adapt to future changes (sustainable design), would be in design tension with
cost and schedule constraints (“Architecting For The -Ilities - Towards Data Science” n.d.). These
design tensions are aligned with the Iron Triangle where Cost, Scope, and Schedule are in
constant tension with one another. It is important to recognize what trade-offs are necessary for
your operation within a specific use context. These principles will guide the design and overall
functionality of the platform, so it is necessary to design or select digital tools with the trade-offs
thoroughly understood. Design tensions can be a major barrier for organizations, as there is
uncertainty to desired system emergence to achieve optimal business value. It would be a grave
mistake to ignore the architectural design tensions, where all beneficial utility attributes are
pursued or commissioned without accepting trade-offs, which leads to excessive overages in cost
and schedule on digital project development and implementation.
The digital transformation is a disruptive effort that requires a shift change within the
organization to improve collaboration, agility, inquisitiveness, competency, and leadership to be
successful. Table 14 summarizes a selective list of critical barriers to organizational adoption with
consideration for digital infrastructure, organizational capabilities, working environment,
external ecosystem, process and governance, and measures of success (Thajudeen 2018). The
challenges highlighted in bold were influenced by a PETRONAS Offshore Technology Conference
(OTC) paper, OTC-28591-MS.

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 Table 14: Barriers to Organizational Digital Adoption

Table 14 highlights a theme of challenged connectedness, knowledge, trust, and

transparency, where the digital bottleneck is driven by the complex dynamics of the social and
technical organizational system. The Digital Infrastructure limitations suggest persistent issues
with data management and data accessibility. The transition toward a cloud-native platform (i.e.,
Microsoft Azure or AWS) alleviates many of these concerns by developing a unified system for
data and workflow connectivity. The opportunities and scalability enabled by a single cloud-
based platform promotes collaboration and standardization efforts across working groups. The
challenges associated with Organizational Capabilities (OC) suggest a lack of core digital
competency and awareness. Issues around minimal or scattered digital resources, as well as low
digital literacy or inquisitiveness can be mitigated with clear digital leadership and transparency.
Low digital OC can also be managed by selecting initiatives that have a higher dependency on

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external resources. An organization needs to conduct an honest OC self-evaluation to determine
the right investment balance to ensure successful development, deployment, and maintenance
of a digital system.
The Working Environment challenges show an inherent lack of trust and ownership for
the pursuit of a digital transition. Digital capabilities are an entirely new field of knowledge that
are exponentially dominating changes in design and operational workflows. Leaders who fully
understand the capabilities, opportunities, and value of the digital transformation can sometimes
drastically underestimate how the disruptive changes can make the workforce feel. The
complexity, black-box nature, and ambiguous rhetoric regarding digital and AI may invoke a
feeling of fear and intimidation for the job security of many employees. Trust and intentional
transparency are thus required to facilitate the shift to a data- and digitally-driven culture. The
digital evolution is not an individual effort, but a collaborative effort, which requires all
employees to understand, align, and take charge toward achieving a sustainable competitive
advantage, or, otherwise, risk obsoletion. The perception that “IT = Digital” further isolates
design engineers and operations from collaborating with IT for engineering solutions. A digital
organization should have IT integrated with the base business, where they no longer act as strictly
a cost center, but are responsible for profit and losses.
The challenges associated with the External Ecosystem suggest a lack of understanding of
both the overall capabilities of the digital transformation and the synergistic value of combining
collaborative efforts. Organizations risk building systems and tools with the “this works for us”
attitude, without the recognition of the immense opportunities of connecting with open-source
resources to take advantage of multiple application types and digital tool offerings. The internal,
isolated approach risks forgoing [neglecting/ignoring/disregarding] extensible growth
opportunities related to the combined network effect of external digital development. The
approach involving industry partnerships, alliances, standardization, and open-source
opportunities aligns with the digital perspective of full industrial connectivity. It is important to
recognize the value gained by having the ability to build and contribute to previous innovations
and accomplishments – this is the source of exponential growth opportunities.

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 The Process and Governance barriers are related to the lack of trust and leadership with
respect to the digital changes. A top-down approach is difficult when the organization is resistant
to recognize or realize the value of digitization, whereas a bottom-up approach is much more
contagious as the value is exhibited on the frontlines of the operation. The goal is to develop an
organization that is continuously seeking to optimize operations through a digital-first approach,
where valuable innovations will rapidly diffuse through the organization for adoption. Finally, the
challenges with Measures of Success are associated with not having a clear vision of the future
digital state. The difficulty lies in defining the realized value and creating an intuitive roadmap
where digital initiatives are able to progressively advance the organization toward the end goal.
Even though digitization is going to play an immense role in the optimization and efficiency
improvements of the future work environment, it is still critical to focus on value-adding
initiatives that enhance the competitive advantage of the organization.
The top 10 risks are plotted on a risk map in Figure 33. The relative risk ranking is
subjective and based on conversations, technology articles, and professional papers explored
during this thesis. The highest risk is characterized as the ability to scale a tool or platform to an
enterprise level, which encompasses infrastructure, standardization, collaboration, competency,
and trust. The next diagonal (orange) row of similar risks is characterized as infrastructure issues,
which highlight capabilities, standardization, and collaboration. And the next diagonal risk row
(yellow) is characterized as organizational competency and trust.

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 Figure 33: Relative Risk Priority of Digital Barriers

8.3 Digital Evaluation Methodology

This methodology was applied to several of the DC&I oriented digital initiatives outlined
in the Digital Portfolio chapter. Ranking evaluation methods not only help to characterize and
order a preferred digital tool, but it can also help provide a signature to define and record
experienced barriers and challenges during the integration process. These lessons learned can be
used to adapt a new method that highlights newly identified gaps that were not previously
understood.
The method employs an organizational self-assessment to the digital barriers outlined in
the previous chapter. The self-assessment ranks each risk category for an organization as low,
medium, or high, depending on how well an organization can handle a deficiency in a specific
digital tool characteristic. Notional quantitative values were applied to each qualitative ranking,
with a “low” importance characteristic contributing 33%, a “medium” importance characteristic
contributing a 66%, and a “high” importance characteristic contributing 100% to the overall
cumulative ranking. This creates a custom beneficiary utility attribute for an organization to
evaluate a digital initiative on whether or not it is right for them. For example, a high performing

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tool that requires advanced programming or complex inputs might not be the best fit for an
organization that lacks the required functional competencies. Whereas a lower performing, but
high usability tool may have better benefits due to the network and higher organizational
adoption rate. The next step is to evaluate the digital initiative with a simple 1-10 ranking of the
ability to achieve sufficiency toward the objectives outlined in the respective category (Table 13),
with 1 as the lowest score and 10 as the highest. Additionally, the sum-product of the self-
assessment risk ranking, and the platform characteristic ranking is calculated to determine the
overall total ranking of the digital tool for the organization.
An example analysis is shown in Table 15, Table 16, and Figure 34 which steps through
the evaluation method. This was performed over three of the companies and digital tools
identified in the Digital Portfolio chapter, but the company names have been removed for
anonymity. The ranking of the importance of platform characteristics is based on a medium-to-
large sized integrated oil and gas (IOC) corporation that primarily has core competency in the
core business design and operations, but minimal capabilities to deploy programming intensive
initiatives. Table 15 shows the relative risk ranking of an IOC with respect to the organizational
barriers.
Table 15: Example of Organization Digital Risk Self-Assessment

BARRIERS TO DIGITAL
Medium- to- Large Integrated Oil & Gas Company
[Includes OTC-28591-MS: PETRONAS Journey Toward a Data Driven Organization in BOLD]

LEVEL 0 LEVEL 1 LEVEL 2 Risk Comments

Digital initiatives are siloed
Data storage and management lack standardization Most IOC's have adopted a cloud enterprise platform with Microsoft
Digital
Large amount of disparate data sources Low Azure or Amazon Web Services. This provides the hosting environment
Infrastructure
Limited analytic capabilities with available data structure to layer cloud-based digital applications for connectivity and scalability.
No single data repository
Low organizational digital literacy
Scattered digital resources Digital resources and digital compentency is a high risk area for large
Lack of digital inquisitiveness IOC's, where the core competency has historically been with operations
Organizational
Difficulty attracting digital resources High and physics-based modeling (design). The data-driven culture requires a
Capabilities (OC)
Insufficient data scientists new set of skills around data management, statistics, analytics, and
Insufficient design/software architects software acumen for solutions.
Lack of understanding of OC to determine digital build vs. buy
Fear of digital initiatves and innovation The work environment still tends to separate the digital space from the
Lack of agile mindset and structure P&L centers with an organization. This can be viewed by how IT
Working Digital = IT departments are positioned within companies - do they act as a cost
Medium
Environment Lack of digital collaboration center or is IT integrated into the business to have P&L responsibilities?
Lack of understanding of digital capabilities and value The lack of integration with base business still creates a divide between
KEY DIGITAL CHALLENGES
Digital = Black Box traditional design/operations and digital.
Difficulty scaling to enterprise level This risk is a medium during the initial adoption phase where
Lack of standardization among providers organizations are still transitioning to a cloud-based enterprise service.
External
Difficulty in understanding realized value vs hype High However, partnering with SaaS companies that develop through multi-
Ecosystem
Requires high level of commitment to adopt new external platform service, integrated alliances will ultimately create the competitive
Unaware of internal steps to make external partnerships more compatible advantage need to sustain continual efficiencies.
Unclear vision and direction Most large organizations are challenged with breaking the silos
Difficulty developing trust to adopt new workflows associated with different satelites within the organization.
Process &
Resistance to sharing data Medium Customization is still viewed as more advantages than making sacrifices
Governance
Cybersecurity and IP barriers for the connected environment. IT is still positioned to protect the
Difficulty with skunkworks development and scaling security (which is valuable), but not to take P&L responsibility.
Difficulty with understanding how to measure digital
Most organizations have a created a digital roadmap and, on a corporate
Digital value vs IT costs
level, understand the value associated with the digital transition. The
Measures of Difficulty understanding realized performance improvements
Medium risks in this area are associated with how digital initatives are being
Success Lack of focus on realized value vs digital initiative measured for success, especially with the design and collaboration
oriented tools.
Lack of connectivity between short-term and long-term goals

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 Table 16 demonstrates how the organizational barrier risk ranking can be linked to the
benefit utility of a digital platform that is being reviewed. The Risk Type and Risk Ranking values
are averaged together over the associated Risk Types for that Characterization, as shown in the
Example, to create an overall contribution to the total risk alignment that a digital solution has
for a specific organization. The method is focused on linking an organization with the benefit
attributes that provide the highest value for the organization.
Table 16: Example of Quantification of Digital Tool Risk and Value
Risk Quantified Quantified
Platform Characterization Risk Type Value Risk x Value
Ranking Avg. Risk Value

Digital Infrastucture Low

1 Data Accessibility How well does a platform access and manage different data types and data sources? 50% High 100% 50%
Process & Governance Medium

2 Data Preparation How well does a platform filter and clean ingested data?
Digital Infrastructure Low
50% Low 33% 16%
Risk Type:
Process & Governance Medium

Digital Infrastructure Low Link associated risk with digital platform

3 Data Visualization How well can data be visualized and explored? 67% Medium 66% 44%
Organizational Capabilities High characterization
Digital Infrastructure Low
What analytic applications are available?
4 Advanced Analytics Organizational Capabilities High 66% High 100% 66%
How well is an analytic suite packaged together?

Example:
Measures of Success Medium

Does the product have an intuitive and coherent UIUX?

Digital Infrastructure Low
What is the rated customer experience?
5 User Interface Organizational Capabilities High 77% High 100% 77%
How well has the user experience been recorded, tracked, and integrated?
What is the competency required to operate or use platform or digital tool?
Working Environment Medium Data Accessibility
How well does the platform integrate with the data infrastructure (i.e. cloud-based Digital Infrastructure Low
Average Rank =
host)? Organizational Capabilities High
Interoperability &
6
Standardization
How well does the platform or tool integrate or connect with other systems via APIs
(i.e. does it contribute to the data pipe ecosystem)?
External Ecosystem
Process & Governance
High
Medium
73% High 100% 73%
= Low*0.5 + Medium*0.5
Does theh platform or tool offer 3rd-party applications or open-source capabilities? Measures of Success Medium = 0.33*0.5 + 0.66*0.5
Digital Infrastructure Low = 50%
7 Scalability How well can the platform be deployed at a large scale, and what is the track-record? Organizational Capabilities High 78% High 100% 78%
Working Environment High

Organizational Capabilities High

How well can the platform be managed internally and externally? What are the
8 Platform Management Working Environment Medium 77% Low 33% 26%
resources required?
External Ecosystem Medium

9 Model Management How are models monitored and managed? What are the resources required?
Organizational Capabilities
Working Environment
High
Medium 77% Medium 66% 51%
Value:
External Ecosystem Medium

Working Environment Medium Determined value-added performance of a

Collaboration & How does this platform link or connect with other functions and workflows?
10
Partnerships Does the company have any partnerships or alliances with other tools or services?
External Ecosystem
Process & Governance
High
Medium
77% Medium 66% 51%
digital tool characteristic to develop within
a medium to large IOC
Digital Infrastructure Low
11 Automation How well can automated processes and procedures be integrated into the platform? Organizational Capabilities High 66% High 100% 66%
Process & Governance Medium

What is the historical performance of the platform with other adopters? Organizational Capabilities High
12 Operational Value 83% High 100% 83%
What is the predicted value-added of adoption and integration? Measures of Success Medium

Organizational Capabilities High

13 Pricing What is the cost to develop and/or integrate platform? Process & Governance Medium 77% Medium 66% 51%
Measures of Success Medium

How has the consideration for business security been integrated into the design and
Process & Governance Medium
15 Security architecture of the platform or tool? 66% High 100% 66%
Measures of Success Medium
Does the platform present any cybersecurity issues?

Digital Infrastructure Low

What is the future vision of platform or digital tool?
Organizational Capabilities High
How well does it integrate and align with the business strategy?
Working Environment Medium
16 Business Strategy What is the competitive advantage with adopting? Build versus buy? 72% High 100% 72%
External Ecosystem High
What is the extensibility of the digital platform? How easily can it adapt to future
Process & Governance Medium
changes?
Measures of Success Medium

Figure 34 shows the overall risk versus value diagram that provides a customized
approach to understanding the important focus attributes for digital characterization. This
diagram shows that large O&G corporations are at high risk for achieving (1) operational value,
(2) scalability, (3) user interface for enterprise usability, (4) business strategy, and (5)
standardization and interoperability. These items have been identified as high value areas that
should provide some insight to what characteristics are required for a digital tool to be successful.
This method suggests that digital tools need to be strong in these characterization areas for them
to be a feasible solution at a medium-to-large O&G corporation. The other high value attributes
are important, but they are not a key focus, largely because the organization is not necessarily at
risk for being able to manage or mitigate the deficiencies in those areas.

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 High Attention, Lower Value High Attention, Higher Value
Operational Value
High Model Management
Platform Management Pricing Scalability
User Interface
Collaboration &
Partnerships Business Strategy
Interoperability &
Standardization

Data Visualization Advanced Analytics

Automation
RISK

Security

Low Data Preparation Data Accessibility

Low Attention, Lower Value Low Attention, Higher Value

Low VALUE High

Figure 34: Example Plot of Digital Risk vs. Value for Focus on Tool Characterization

The Platform Characteristics were organized in descending order as per the prioritization
of the Risk x Value number, as shown in Figure 35. Three digital tools were ranked in the
respective categories from a 1-10 value and this number was multiplied by the Risk x Value to
achieve a cumulative score or ranking. This evaluation exercise helped to identify and prioritize
characteristics that are critical for the organization.
Ultimately, there are many available digital tools that perform the same functional
analytical tasks, however, as demonstrated by the prioritization list, the historically achieved
value, scalability, user interface, interoperability, and business strategy are the dominating
factors that separate where a digital tool aligns with the cultural and digital acumen of an
organization. The conclusion from this assessment is that the objective is not necessarily to find
the most technologically advanced tool, but to invest into a digital culture and ecosystem that is
part of a more holistic system integration. These digital tools often have similar capabilities, but
the growth opportunity is related more so to the cumulative contributions of an entire network
of systems that build an integrated digital system. Also note that the method outlined in Figure
35 is a relative value for comparison for tools that serve similar purposes, as different digital tools
that serve different purposes will not have meaningful comparable overall scores.

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 Risk Quantified Quantified Company Company Company
Platform Characterization Risk Type Value Risk x Value
Ranking Avg. Risk Value #1 #2 #3
What is the historical performance of the platform with other adopters? Organizational Capabilities High
1 Operational Value
What is the predicted value-added of adoption and integration? Measures of Success Medium
83% High 100% 83% 7 8 8
Digital Infrastructure Low
2 Scalability How well can the platform be deployed at a large scale, and what is the track-record? Organizational Capabilities High 78% High 100% 78% 8 7 7
Working Environment High

Does the product have an intuitive and coherent UIUX?

Digital Infrastructure Low
What is the rated customer experience?
3 User Interface
How well has the user experience been recorded, tracked, and integrated?
Organizational Capabilities High 77% High 100% 77% 7 8 8
Working Environment Medium
What is the competency required to operate or use platform or digital tool?

How well does the platform integrate with the data infrastructure (i.e. cloud-based Digital Infrastructure Low
host)? Organizational Capabilities High
Interoperability &
4
Standardization
How well does the platform or tool integrate or connect with other systems via APIs External Ecosystem High 73% High 100% 73% 9 7 8
(i.e. does it contribute to the data pipe ecosystem)? Process & Governance Medium
Does theh platform or tool offer 3rd-party applications or open-source capabilities? Measures of Success Medium

Digital Infrastructure Low

What is the future vision of platform or digital tool?
Organizational Capabilities High
How well does it integrate and align with the business strategy?
Working Environment Medium
5 Business Strategy What is the competitive advantage with adopting? Build versus buy?
External Ecosystem High
72% High 100% 72% 9 7 8
What is the extensibility of the digital platform? How easily can it adapt to future
Process & Governance Medium
changes?
Measures of Success Medium

Digital Infrastructure Low

What analytic applications are available?
6 Advanced Analytics
How well is an analytic suite packaged together?
Organizational Capabilities High 66% High 100% 66% 8 8 8
Measures of Success Medium

Digital Infrastructure Low

7 Automation How well can automated processes and procedures be integrated into the platform? Organizational Capabilities High 66% High 100% 66% 8 6 7
Process & Governance Medium

How has the consideration for business security been integrated into the design and
Process & Governance Medium
8 Security architecture of the platform or tool?
Measures of Success Medium
66% High 100% 66% 7 7 7
Does the platform present any cybersecurity issues?
Organizational Capabilities High
9 Model Management How are models monitored and managed? What are the resources required? Working Environment Medium 77% Medium 66% 51% 7 7 7
External Ecosystem Medium

Working Environment Medium

Collaboration & How does this platform link or connect with other functions and workflows?
10
Partnerships Does the company have any partnerships or alliances with other tools or services?
External Ecosystem High 77% Medium 66% 51% 10 6 7
Process & Governance Medium

Organizational Capabilities High

11 Pricing What is the cost to develop and/or integrate platform? Process & Governance Medium 77% Medium 66% 51% 7 7 7
Measures of Success Medium

Digital Infrastucture Low

12 Data Accessibility How well does a platform access and manage different data types and data sources?
Process & Governance Medium
50% High 100% 50% 7 7 7

Digital Infrastructure Low

13 Data Visualization How well can data be visualized and explored?
Organizational Capabilities High
67% Medium 66% 44% 8 7 7

Organizational Capabilities High

How well can the platform be managed internally and externally? What are the
14 Platform Management
resources required?
Working Environment Medium 77% Low 33% 26% 7 7 7
External Ecosystem Medium

Digital Infrastructure Low

15 Data Preparation How well does a platform filter and clean ingested data?
Process & Governance Medium
50% Low 33% 16% 6 6 6

68 62 64
TOTAL

Figure 35: Example Digital Tool Analysis Results

With the digital tool properties and characteristics aligned with an organization’s
capabilities, the next chapter describes an economic evaluation technique to incorporate
uncertainties into financial models in order to assess the potential operational value of a digital
investment in DC&I operations.

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9 Economic Design for Uncertainty
To evaluate the realized value of a digital initiative for an investment decision, the return
on investment must be part of the conversation. It is important to recognize that value does not
necessarily need to be defined strictly as financial benefit, because improvements in safety and
environmental provide significant value to an organization as well. However, the scope of the
desirable value for success should be well defined before evaluating digital solutions. This section
will provide a brief overview of how to evaluate financial value with the inclusion of uncertainty
in a simple Monte-Carlo model. This methodology provides a complete range of outcomes for
the net present value (NPV), represented as a cumulative distribution function (CDF). The
uncertainties (although not exhaustive) developed into this model focus on oil price, initial
production, production volatility, well CapEx, digital initiative CapEx, and digital performance.
The intention of this economic model is not to provide a perfect evaluation of any specific digital
technology, but, instead, to provide a workflow in order to properly understand and evaluate a
digital decision that recognizes uncertainty in costs and performance.
The financial driver for digital initiatives is to reduce operating costs. This will enable O&G
companies to be competitive in any oil price environment. Figure 36 provides the estimated
break-even oil price for global and field type assets from the market research group Rystad
Energy. Compare this graph to Figure 37 to understand different assets’ risk and vulnerability to
oil price volatility.
BRENT BREAK-EVEN PRICE, USD/BBL [RYSTAD ENERGY UCUBE, 2019]
$120

= 60% Confidence Interval

$100

$83
$80

$60 $59 $59 $60

$58

$49
$46
$40 $42

$26
$20

$-
PRODUCING ONSHORE NA TIGHT SHELF DEEPWATER RUSSIA EXTRA HEAVY REST OF WORLD OIL SANDS
FIELDS MIDDLE EAST LIQUIDS ONSHORE OIL ONSHORE

Figure 36: Oil Production Break-Even Price, Adapted from (“Rystad Energy Ranks the Cheapest Sources of Supply in the Oil
Industry” n.d.)

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 There are significant challenges associated with evaluating long-term digital
developments due to clearly defining baselines and measuring improvement with removing all
other influencing variables. Enterprise-wide digital platforms are more complex to evaluate than
the presented methodology, but the general principle of understanding uncertainty in both the
business model and digital performance is applicable for any evaluation.
There are many different methods to evaluate and predict the price of oil, and the
intention of this thesis is not to perfect that model. The economic model fit-curves a Beta
distribution to best match the price of oil over the last three years in order to develop the
probability distribution function (PDF) – this is more for a measure of volatility than for achieving
a high accuracy on oil price.

WTI & Brent Spot Price, Dollars per Barrel, EIA

[Noted Highlights from "Crude Volatility" by Robert McNally]
WTI Brent Spread

OPEC Era Boom-Bust III

$150.00

Great Recession
$130.00
Saudi Arabia
$110.00 refuses to swing
Chinese demand and production
weak non-OPEC supply
$90.00

$70.00

$50.00 Gulf War

Asian Financial
$30.00 Crisis

$10.00

$(10.00)

$(30.00)
1987 1992 1997 2002 2007 2012 2017

Figure 37: Historical Chart of Crude Oil Prices, Adapted from (McNally 2017; “EIA: Petroleum & Other Liquids | Spot Price Data,”
n.d.)

The break-even price per barrel was further broken down by Rystad Energy into four
different categories: administration, production costs, capital spending, and taxes. Figure 38
shows the Rystad Energy estimates for U.S. Shale. These values were leveraged as the baseline
in the economic model to evaluate the digital improvements with respect to the size, scope, and
variability of the asset.

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 Figure 38: Cost Breakdown to Produce a Barrel of Oil: US Shale (MacroTrends n.d.)

The economic model looks at three use cases, with

• Economic Model Assumptions:
o Well Pad Count: 4 wells
o Well Cost ($MM): 7.5
o Well IP (BOEPD): 2,000
o Production Period: 1 year
• Case 1:
o No digital initiatives incorporated (digital CapEx=$0)
• Case 2:
o $3M investment in digital CapEx with impacts reducing well CapEx, CapEx
cost variability, and OpEx (operation efficiency)
• Case 3:
o $5M pad investment in digital CapEx with impacts reducing well CapEx,
CapEx cost variability, OpEx (operation efficiency), administration costs
(workflow efficiencies), and increase in initial production (seismic and well
placement optimizations)

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 Figure 39: Economic Model Assumptions

The Data Tables function was used in Excel to generate a 3,000 run Monte-Carlo model
with a Beta fit-curve PDF to define the variability in the assumed asset performance and
productivity. Figure 40 shows the output cumulative distribution functions of the three cases to
show the variability of potential outputs based on the uncertainties imbedded into the economic
model. The model demonstrates that operational efficiencies at the P50 distribution created
about $1M per 4 well increase ($250k per well) in NPV, and the additional digital investment in
seismic and subsurface collaboration efforts created another $1M per 4 well increase ($250k per
well). The calculations here are not meant to depict an actual digital initiative, as these savings
are company confidential. However, this presents a methodology to understand levels of
investment as it pertains to initiating digital integration into the operation program.

135
 Digital Initiative NPV - 4 Well Pad - US Shale - Cumulative Density
Function
NPV1 - No Digital NPV2 - Di gital - Reduction in OpEx & CapEx NPV3 - Di gital - Reduction in OpEx, CapEx, and G&A; Increased Recov ery

100.00%

90.00%

80.00%

70.00%

60.00%
PROBABILITY

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
-15.000 -10.000 -5.000 0.000 5.000 10.000 15.000 20.000 25.000 30.000 35.000
NET PRESENT VALUE, $MILLIONS

Figure 40: Monte-Carlo Economic Model of Digital Initiatives in Drilling

Understanding the holistic economics and the respective uncertainties associated with a
digital initiative is critical in the selection and development process. Inclusion of the uncertainty
for system variables with respect to operational and organizational challenges will help to build
a more robust economic model to understand the forecasted realized value of the initiative. The
next chapter will outline two ancillary collaborative initiatives that were discovered during the
research process that provide additional insight to the valuable business efficiencies achieved
through relationships and data connectivity.

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10 Collaboration Initiatives
Removing silos and improving collaboration efforts are the cornerstone to the digital
evolution. Innovation rates rapidly increase with the catalyst of community knowledge sharing.
Breakthroughs are derived from incremental improvements compounded over the work of
predecessors. With business knowledge recognized as the key to design and operations
improvements, efforts directed toward streamlining knowledge to the end user possess
significant value. Organizations have high dependencies on the experience of their workforce,
and that poses a risk for the reliability and sustainability of success. This thesis explores two
additional types of collaboration efforts, outside specific design platforms and operational
workflows. The two areas are (1) virtual conversational chatbots, and (2) social network graphs.
Conversational chatbots or virtual assistance aggregate and deliver pertinent information to a
user request to streamline knowledge share across an organization. Social network graphs are
developed to connect a user with the right people and resources that can be associated with
many different dynamics, like a specific project or specific competency. These two areas will be
analyzed to understand the capabilities, value, and integration opportunities associated with
these new collaboration initiatives.
10.1 Virtual Assistants
The O&G industry operates in extremely dynamic environments, where unique
techniques and operation standards are custom to specific areas. Even DC&I operations that are
a few feet apart can experience completely different operational or geological challenges. This
has historically created a siloed work environment given that information and protocols from one
asset are not typically applicable to another asset. However, as history has proven, there are
more similarities between assets that are able to be leveraged in the pursuit of optimizations
that were previously not recognized. Offshore assets are adopting land techniques to create a
pseudo-factory design and execution programs to improve efficiencies, and land operations are
adopting advanced downhole tools that were originally developed for complex offshore
operations.
Three chatbots that have been designed for the oil and gas industry are Sandy (Belmont
Technology), Nesh, and Ralphie (Earth-Index) (Jacobs 2019). Think Siri, Alexa, and Cortana, but

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specific to O&G engineering. Chatbots leverage artificial intelligence in the form of natural-
language processing (NLP), machine learning (ML), and deep learning to imitate human
conversations and provide intelligent responses based on available data (“Ultimate Guide to
Artificial Intelligence Chatbots | Smartsheet” n.d.). Due to the infeasibility of programing
accurate responses to every possible input prompt or question, the employment of powerful
chatbots has become possible due to the learning and language processing of artificial
intelligence innovations.
Machine learning uses neural networks that calculate an output from provided inputs
using weighted connections from a multi-layer (hidden layers) algorithm. These networks are
iteratively trained, adjusting node weights, to create an output. The number of hidden layers and
the amount of training data can be adjusted to reach a specified or required accuracy. These
responses, or patterns, are used as references to evaluate an input prompt to deliver the best
response. The input prompt can be a question or any type of sentence, and the chatbot can
leverage the neural network algorithm to search and develop the appropriate response. Due to
the learning aspect of the artificial intelligence, the sentence or question is weighted based on
how the algorithm was trained. This means that sentences and requests do not have to be exact,
as would be needed if each request and response was manually programmed into the algorithm.
The ML technique provides the flexibility needed for large scale deployment of an algorithm that
is capable of searching through large volumes of accuracy and returning a useful response (“How
Do Chatbots Work? A Guide to the Chatbot Architecture” n.d.).
Natural language processing provides the synthesis of the human language. NLP is used
to convert the input sentence into structured data that can be further processed in the ML
algorithm. NLP can provide context, sentiment, name recognition, and other capabilities to
breakdown the meaning of a request. Human language is extremely dynamic and complex, and
there are subtleties that complicate meaning and make computational understanding a
challenge. NLP is the bridge from linguistics to computer science, and innovations in this branch
of study are growing rapidly, with specific attention from Google, Amazon, IBM, and others all
contributing to its advancement. The current capabilities in NLP have made powerful chatbots a
possibility to implement and scale through an organization.

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 The details on the specifics of artificial intelligence associated with conversational virtual
bots are endless, especially with the technology continuing to advance each day. The intent of
the systems approach is to understand the available technology, where it can add value, and how
it will integrate into the current system. An example chatbot platform architecture, adapted from
a Microsoft architecture in Figure 41, shows the feedback loops and interdependencies of the
data flow from user prompt to system response (“Azure Architecture Center | Microsoft Docs”
n.d.).
Security &
Governance

Raw Data
Data Extract,
Transform, & Load

Non-Structured
Bot Cognition & [Images, video, Word docs,
Bot UIUX Intelligence Power Point, PDF, email]
ETL Hub
Request Queries

Semi-Structured
Business Response Web App [Spreadsheets, logs,
Input Results metadata, csv, xml]
User Output Search Index Logic Apps
Authentication Knowledge Base (FAQ)
Intent & Entities

Relational Database
Logging, Monitoring, [Structured Information]

& Reporting Data Lake

Quality Assurance
[Retraining, testing, debugging,
feedback analysis]

Figure 41: Conversational Bot Architecture, Portions of Enterprise-Grade Conversational Bot Image
(https://docs.microsoft.com/en-us/azure/architecture/reference-architectures/ai/conversational-bot) used with permission
from Microsoft.

The MS architecture provides the inclusion and connectivity from the user prompt to Bot
Logic and UX, Security and Governance, Bot Cognition and Intelligence, Quality Assurance,
Logging and Monitoring, and Databases. The required or suggested system components to
achieve a successful virtual assistance can be further broken down into subsystem components
and analyzed to understand the dependencies. Additionally, communicating these dependencies
to stakeholders for data managers, ML algorithm applications, monitoring and reporting
applications can help to achieve participation and input from the impacting parties to ensure that
the chatbot development is addressing the needs of the entire system.

139
 Virtual chatbots in O&G can provide capabilities to data mine well logs, reservoir data,
seismic data, standards, lessons learned, best practices, and other pertinent information from
either aggregated or disconnected sources. The chatbot platform can connect with both internal
or external resources, depending on the architecture, with external data sources for O&G being
regulatory agencies, energy or industry news, or even industry academic repositories.
The value of a chatbot is derived from the increased worker efficiency to find and process
useful information – this is the more intuitive solution. However, value can also be created by
providing relevant information unsolicited – meaning that a virtual assistant can be trained to act
as a new age “spell check” for engineering design and operations. If integrated into an
engineering design platform, a virtual assistant can recognize deviations in design patterns and
suggest revisiting or validating that specific design decision. For an easy example, if a subsea
engineer installs a 10-inch seafloor pipeline in the project design, but all offset assets have a 12-
inch pipeline, then an alert can be presented with the statistics of previous design decisions along
with the asset locations.
These capabilities are determined based on the technology readiness and on the current
software platform architecture. These potential capabilities, along with the MS architecture,
show that information connectivity becomes more seamless as systems are designed with
interoperability standards. The vision for creating a single, collaborative design platform has its
advantages with digital opportunities to further improve the capabilities, just like the integration
of a virtual chatbot for data accessibility and verification/validation purposes.

10.2 Socio-Network Knowledge Graph

Socio-network knowledge graphs provide an intuitive means to build transparency
between the organization, employees, projects, and documents. The knowledge graph works by
mapping relationships between multi-variate nodes to establish a visualized framework of
connections within an organization. These graphs provide quick searchability, which can identify
organizational connections and resources for a user’s request. Note that these platforms provide
the flexibility to include almost any type of node and defined relationship to fit a specific purpose,
for example, stakeholder mapping, system mapping, social network mapping, and concept

140
mapping (“Kumu” n.d.). This type of platform is included in this thesis because of the connectivity
and collaboration opportunities that it creates.
This thesis provides an example graph of an entire major capital project group linked
through their perspective functions. This is only a small subset of the potential capabilities, but it
provides insight on the visual interface that is used for relationship discovery. Figure 42 is
composed of three images, with the top left representing the relationship and search
functionality, the middle showing the full platform visualization, and the bottom right showing
the search output when querying for all Drilling, Completion, and Intervention (DC&I) employees
on the project.

Figure 42: Sociotechnical Knowledge Graph of O&G Major Capital Project, Created from (“Kumu” n.d.)

The intent was to further the example knowledge graph with the inclusion of project
documents and project outputs linked to the employees responsible for the work. This would
then create a project ecosystem where information on employee-to-group-to-document
matching can help understand required resources and direct questions to the right people.
Additionally, metadata can be included into node profiles, meaning that specific competencies
or experiences can be searched to communicate and collaborate any information. The metadata
would need some standardization to be effective, but essentially the future state would be to
provide the relationship of any node holistically mapped to the entire organization. This

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availability of relationships would greatly assist with breaking silos and seamlessly connecting
resources. These opportunities can ultimately contribute to improving productivity,
relationships, and culture within an organization.

Here are some possible use cases for organizational knowledge graphs:
Use Case 1:
Engineer assigned to work on a specific project document. The relationship graph
provides a platform to immediately discover all individuals responsible and accountable
for each project document.
Use Case 2:
A technology venture group within the organization is working with a start-up to develop
technology that impacts your specific function. If a relationship is mapped from that
project to your function within the platform, this venture becomes transparent to the
organization and it can leverage multiple resources that would otherwise have no idea
that project was being pursued.
Use Case 3:
An engineer needs a subject matter expert’s (SME’s) support in something specific, which
he or she would normally have to track through several layers of recommendations. The
knowledge graph allows employees to “tag” themselves as an expert or knowledgeable
in a specific area. If they needed someone in optimization, they can search “tag =
optimization SME” and all of the optimization SMEs will show up on the graph or in a table
in a query.

Virtual assistants and knowledge graphs seek to produce the same holistic objective – to
act as a pipeline to feed reliable information to the end-user for improved organizational
productivity. The digital space allows for capabilities to connect an entire organization through a
single, intuitive UIUX. And, if the infrastructure and architecture are designed for agile integration
of new initiatives, then opportunities, once the platform system is connected, are endless. The

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systems approach places value, opportunities, stakeholders, and sustainability at the forefront
of concept design.

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11 Conclusion
The O&G industry has a major opportunity to redefine its organizational and operational
perspective through digitalization and artificial intelligence. Several challenges face the industry,
including commodity volatility, social pressures, geo-political uncertainty, and increased
geological complexity. These disruptions pose an existential threat to the O&G industry, where
drastic improvements with design efficiencies, operational performance, safety, and the
environmental footprint are necessary for sustainable survival. The digital transformation
empowers companies to address these disruptive challenges by creating efficiencies and
optimizations across the entire value chain to create a monumental shift in the industry’s
competitive advantage. This thesis recognizes the opportunities and capabilities of current digital
advancements and innovations but also identifies significant organizational and technical barriers
to achieving successful digital integration.
The hypothesis of this thesis was to evaluate the presence of a “productivity paradox”
with respect to digital developments in the O&G industry. The theory makes the claim that the
current pursuit of digitization has not yet achieved ideal realized value in engineering design or
operations. That is to say, that the high level of digital investments are not equitable to the
achieved organizational and operational performance efficiencies. This thesis analyzed this
hypothesis with a systems-based approach to provide a unique holistic perspective of the entire
digital upstream O&G ecosystem. The digital system analyzed included O&G operators, O&G
service providers, and digital software and platform service providers. The analysis suggests that
digital capabilities, specifically with respect to Cloud and AI initiatives, are providing enhanced
capabilities to transform the capacity and capabilities of an organization. Cloud services can be
leveraged to unify the data management layer of an organization, where the scalability and
connectivity provides a step-change in workflow collaboration efficiencies. And, with integration
of a single source of data accessibility, AI and ML techniques can be applied to optimize and
automate many critical functions and workflows across the asset life cycle. However, the
opportunity is advertised as a revolutionary change, and while potential capability improvements
are immense, this rhetoric is a disservice to the movement insofar as it underemphasizes the
actual amount of infrastructural, cultural, competency, and workflow shift required for success.

144
Instead, digital adoption is proving to be more of an evolutionary process. The revolutionary shift-
change is an infeasibly expensive and disruptive challenge to perform in a singular fashion. The
challenge addressed by the systems approach is determining how to implement O&G subsystem
projects over time that can eventually interconnect into an ideal infrastructure of the future. And,
more importantly, which investment steps to take that both provide immediate benefit and
prepare the organization for future digital synergies.
The data shows that advanced software applications, infused with AI on a cloud-based
platform, are able to boost and enhance business decisions for design and operations to provide
a strong competitive advantage. To put it simply, the entire digital movement is driven by the
need to make faster and better business decisions – this is a decision economy that is
benchmarked by the quality and speed of the business insight. And with digital connectivity to
assets and process control systems, this can be further enhanced with automation methods.
However, the Challenges to Adoption chapter of this thesis demonstrates the presence of
significant barriers limiting the adoption and diffusion of digital techniques.
This thesis concludes that organizations underestimate the extent of the challenges
associated with developing, scaling, adopting, executing, and maintaining a digital initiative
across a large organization. The digital literacy and culture of most O&G organizations are not yet
positioned to foster an environment where digital initiatives can succeed without a high
dependency on external resources. Even with the recognition that the digital space is not a core
competency, O&G organizations are still electing to build digital systems internally, where these
systems are isolated from external support and development. All digital techniques and
technologies have been developed from incremental innovations founded from the
achievements of others – open-source, innovative collaboration created this possibility of digital
transformation. This collaborative and open-source theme must be continued to achieve the
network synergies of combined and connected innovative initiatives. Ignorance is not bliss when
it comes to overlooking business opportunities that put an organization at risk during difficult
times.

145
 This thesis recommends that organizations consider the holistic systems perspective
when selecting digital partnerships and services. The digital evaluation method presented
provides a robust approach to consider the interdependencies and relationships of the digital
system being analyzed with the rest of the organization. The safe approach is to start with a
business challenge, create a digital vision or strategy, and to embrace open-source collaboration
and standardization. A top-down approach is difficult when the organization is resistant to
recognize or realize the value of digitization, whereas a bottom-up approach is more contagious
as the value is exhibited on the frontlines of the operation. The capabilities in the digital space
are growing rapidly, and organizations should develop or adopt digital initiatives with
extensibility and sustainability at the forefront of the requirements, with strict adherence to
value creation.

Figure 43: Strategic Digital Approach

The bullets below outline the recommendations and takeaways from the research and
interviews performed for this thesis:
• Digital innovations and technologies are revolutionary, however the process of adopting
and integrating digital platforms into the social and technical workflows within an
organization is evolutionary.
• Digital opportunities are transforming the design and operational workflows within the
O&G industry, however, the greatest challenges to programmatically adopting
technology enterprise-wide are internal digital competency and awareness, cultural
acceptance to change and disruption, and trust with leaders, partners, and alliances.
• The O&G industry has exhibited a historically siloed competitive ecosystem and this
isolated philosophy will no longer remain competitive. Digital platforms built to integrate
systems, partnerships, and expertise will thrive in a networked marketplace.

146
• A data-driven organization must fundamentally embrace the value of revitalizing,
monetizing, and democratizing organizational data, including both real-time and
historical data, as well as structured and unstructured data.
• Digital developments and services are more likely to provide value if the organizational
capabilities, capacities, and resources are aligned with the functional requirements of the
digital solution (i.e. organizations need to better understand their internal limits before
developing or buying digital solutions that exceed the abilities of the intended
stakeholders).
• Enterprise digital platforms and solutions should be developed with an integrated, open-
sourced, and standardized approach for interoperability and sustainability. Integrated
systems build integrated solutions where management of greater complexities and
optimizations is possible.
• Internal and external digital partnerships and alliances are essential for the continual
growth and development of an enterprise digital ecosystem. Organizations need to
transition to partnerships that embrace the “open” approach to shared growth
opportunities and resources. Innovations and breakthroughs are built off the incremental
improvements from predecessors (network of growth), and this theme should continue
with the system development of a digital enterprise. The objective should shift from
selecting a single system to replace all existing systems, to selecting a digital platform that
integrates and builds off the existing systems.
• Digitization is fundamentally geared toward creating faster and better business decisions
for both design and operations. Within the digital system, data quality (volume, variety,
veracity, velocity, and value) will persist as a continual challenge to analytic accuracy and
capabilities. The data lifecycle must be holistically evaluated to determine the data quality
and processing requirements to model actionable decisions for specific processes. The
data lifecycle is inclusive of data creation with sensor type, placement, and quality, to
data filtering, processing, and performing analytical models. Understanding the statistical
accuracy required for a data-driven model to influence business decisions will help dictate
the system requirements to govern a specific design or operation.

147
 • Digitization is about connection, visualization and prediction (analytics), and action
(optimization and automation). The connectivity and repeated analytics create the full
system understanding that generates value. An organization can shift significant energy
from monitoring and data mining to design and operational decision support. Ultimately,
the information and business insight availability, democratized across an entire
organization, allows the workforce to focus entirely on value.
• Notably, successful asset performance management has been achieved through the
integration of cloud enterprise systems, unified operational centers, and operational
lifecycle management, including automation, optimization, and maintenance.
In conclusion, it is important to recognize that digital initiatives are only an enhancement
to core business value, and unless developing a new growth venture, digital tools only serve to
enhance operations and profitability. The goal is not to be “digital,” but, rather, to enhance and
improve operational performance with better data-driven decisions, more efficient workflows,
and process and machine automation (“Refueling the Oil Industry: Transforming Traditional O&G
with the Oil of the 21st Century - Red Chalk Group” n.d.). Understanding and acknowledging
these benefits from digital methodologies does not mean your company is “digital.” It takes a
cultural paradigm shift to view problems and solutions from an information technology
perspective (Oil&Gas Journal n.d.). It takes investments in data structuring, data management,
and standardization. And, most of all, it takes trust to develop and learn from the digital
methodologies employed to develop these business efficiencies (World Economic Forum 2017).

11.1 Limitations and Future Research

The work performed in this thesis addressed the O&G digital transformation from a high-
level systems perspective, with a focus on drilling and completion design and operations. Digital
success and connectivity create a powerful competitive advantage for organizations and, thus,
financial information for integration and resulting realized value was difficult to uncover.
Information was gathered through the outward lens of news outlets, interviews, and available
industry articles, where it was sometimes difficult to differentiate the advertised rhetoric and the
actual value. Additionally, there was no hands-on involvement or experience with the managing

148
or integration of digital platforms in an O&G organization. Future research should be focused on
disclosing the financial value associated with the adoption of different digital techniques across
the O&G value chain. The financial value can be compared with the presented ranking
methodology with respect to buy versus build, alliances, partnerships, standardization, and open-
source approaches. Developing a profitability correlation to the different benefit attributes of a
digital platform would be a powerful tool to help guide how organizations invest in their digital
transformation. The proposed methodology can be applied to digital initiatives that have
adopted within organizations to determine how well the organization’s digital strategy aligns
with the initiative, and this can be tracked with resulting successes or failures. The methodology
can be used to rank digital tools, but a limitation is that it has not been thoroughly evaluated with
in-depth analysis over a sufficiently large sample of digital initiatives.
Finally, future research should be directed to performing a more detailed review of the
available O&G digital tools and applications. This thesis approached the problem from a holistic
systems perspective with a broad boundary of investigation. However, additional research into
the specific details of the digital platforms and tool offerings with respect to the attributes
outlined in the ranking method would provide more insight on the value-added functionalities.
This information can help to create a more accurate O&G digital roadmap with the inclusion of
critical benefit attributes. Digital tools, attributes, and the respective performance can be
correlated to better understand the trends and the direction in which the industry is heading.

149
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