Digital oilfield takes root as collaboration push brings parties together

While the “digital oilfield” has been talked about for decades, digital penetration into the industry has tended to lag other sectors. But if a new openness to collaboration and a number of deals struck over the past year between oil and gas and big tech companies, tech startups and local organizations are any indication, that could be about to change.

In September, Imperial Oil Limited and the Alberta Machine Intelligence Institute (Amii) announced a two-year agreement to collaborate on the development of Imperial’s in-house machine learning capabilities, which will enable a range of applied artificial intelligence (AI) projects.

“Amii is not only a leader in the AI space globally, but based locally in Alberta. We believe the institute is a perfect partner to help us showcase Alberta’s leadership in technology and digital solutions for responsibly-produced oil and gas,” said John Whelan, Imperial’s senior vice-president, upstream.

In November, Suncor Energy Inc. announced a multi-year strategic alliance with Microsoft Canada as a part of the company’s effort to further accelerate its digital transformation journey. Suncor said it would take advantage of Microsoft’s full range of cloud solutions as it moves toward a cloud-based computing platform. The deal is expected to enable the rapid deployment of new technologies to improve safety and productivity through artificial intelligence, machine learning, enhanced automation, and Industrial IoT and visualization.

“Although we are an industry leader in many respects, we still have much to learn in the digital space, which is why we’re working with a number of organizations including Microsoft to challenge us,” said Mark Little, Suncor president and chief executive officer.

And last fall Cenovus Energy Inc. said it would turn to Amazon Web Services and IBM to help modernize its business processes, advance its overall digital transformation and provide a foundation for applying innovations and technologies like AI.

“Digital transformation and modernization are imperative to our business strategy,” said Charity Elder, ERP program director, Cenovus Energy. IBM said it would provide talent and engagement resources to guide Cenovus through the digital change process, and work to drive leadership and cultural change throughout the organization.

“This kind of high level engagement between oil and gas producers and the enterprise-scale technology suppliers, like the Microsofts and the Amazons of the world, seems to be happening fairly frequently right now,” said Jeff LaFrenz, president of Calgary-based VizworX Inc.

“What I’m seeing at a high level is that there is a trending toward digitalization right now. A significant number of the organizations are recognizing that a digital technology process within their organizations, including a problem identification, evaluation and adoption process, is something that they critically need to do,” said LaFrenz, who is also Digital Technology in Oil and Gas theme lead with the Clean Resource Innovation Network (CRIN), which works to help make connections between digital tech providers and the energy industry.

“I’m seeing just about all the major oil and gas producers put together something that I would broadly consider an innovation group, and a really major focus of those groups is examining digital technologies and how they can be effectively utilized within their organizations.”

Making connections

One of the challenges is that leading digital tech innovators are often smaller, more agile businesses, making it potentially difficult to find the right provider or solution to a major corporation’s challenges. Matching a digital solution to the sometimes difficult to pin down challenges facing a large corporation can be a challenge in itself. They are challenges CRIN aims to solve, said LaFrenz.

“One of the mandates of CRIN is to help large organizations, like a major oilsands producer, identify and disseminate the business problems that they have for which they need solutions. These are large organizations that are, in many cases, fairly siloed. And the business problems they are running into frequently cross more than one silo, which means that they’re more difficult to identify.

“And once they have a problem identified, then how do we help find the companies that can provide those kinds of solutions and make the connection between the two? A lot of those solutions should be coming from the small businesses that are creating them.”

CRIN is a network of networks, LaFrenz explains. “It’s not intended to be a solution service itself — it’s intended to facilitate engagements. As such, it’s heavily engaged in work with a number of other organizations,” including Canada’s Oil Sands Innovation Alliance (COSIA) and Petroleum Technology Alliance Canada (PTAC). As a network, its mandate is not to duplicate the efforts that are already underway, but “really to help bring those to a higher level,” he said.

Actively engaging digital

Partnerships and collaboration with organizations like CRIN are accelerating digitalization efforts, said Heather Wilcott, Imperial Upstream Digital Manager . “What I’ve noticed in the last year in this role is a dramatic increase in collaborative innovation and networking in Calgary and Alberta. Never before have I seen so much appetite for innovation as I see now.

“I believe networks like CRIN, PTAC and COSIA are enablers of this collaboration and networking, helping to connect industry peers with common challenges with each other and with innovative solution providers that are rapidly developing technology solutions,” she said.

Imperial’s digital initiatives are focused on solving business problems and adding value in the areas of production optimization, maintenance and reliability improvements, worker productivity and time on tools, and safety, said Wilcott.

“The core of our digital technology focus is on artificial intelligence and we have built up our data science ecosystem to enable that skill growth on our team. We have a local internal data science team as well as access to our global resources in Exxon Mobil [Corporation].”

One of three centres of excellence in Canada’s national AI Strategy, Amii performs advanced research in the fields of machine learning and AI and assists businesses as they grow their AI capabilities. Imperial will leverage Amii as a strategic partner to connect it to the local data science community, cutting-edge research in machine learning and to help it build its internal expertise through education, mentoring and eventually an upskilling program for its engineers and scientists, she said.

“We hope to add machine learning and analytics to their skillsets to truly transform our company. Our goal is to have analytics and data science be prolific, not just used by one specialized team. If data is the ‘new oil,’ data science and analytics are the ‘new pipelines.’”

As an enabler of business results, digital technology is actually a low capital way to maximize the worth of investments, assets and data that a company already owns and people they already employ, she said.

“Artificial intelligence, and especially machine learning, allows us to make faster, better, data-driven decisions. It frees up our people from mundane data processing and gathering to using their human brain power to assess machine made predictions and make rapid decisions.”

Imperial already has several projects underway leveraging machine learning and optimization techniques. It has completed and deployed a steamflood optimization model to Cold Lake where it uses both machine learning models and a mathematical optimization model to help put limited steam to the best locations to maximize production. It is now deploying this model to all of Cold Lake steamflood areas and seeing very promising results, said Wilcott.

It is also field-testing a haul truck predictive maintenance model that uses machine learning to predict haul truck component failures far in advance in order to avoid unplanned downtime. “We are already in progress working a similar model for our slurry pumps at Kearl and we plan to develop many more predictive maintenance models — we see this as a big opportunity space to transform our maintenance and reliability into the predictive realm.”

Another big opportunity area is optimizing maintenance processes. Imperial has completed an optimization model for maintenance scheduling that helps it to optimize resources and minimize risk for the 50,000 tasks that it schedules weekly at its Kearl oilsands facility, said Wilcott.

But its digital program is broader than machine learning, she added. It will leverage other AI facets, such as computer vision and natural language processing, as well as other exponential technologies to help accelerate business results, including technologies such as unmanned autonomous vehicles, or drones.

“We see a lot of potential in this type of technology, especially for the purpose of removing people from hazardous locations. We’ve leveraged drones in several areas such as field survey quantity verifications, mine face imaging, wildlife monitoring and radio tower inspections.”

Tech startups also benefit

LaFrenz heads one local digital company that has successfully penetrated into the oil and gas sector. VizworX has won numerous awards for its innovation and is growing rapidly as it moves into other sectors leveraging the technology capabilities and solutions developed for the oilpatch.

The technology it uses depends on the client and the problem at hand, LaFrenz said. “We’re about solving problems, and the technology is an enabler to solve problems — we are not about selling tech for its own sake. VizworX is really focused on how to engage people better with the data that should be but isn’t always driving their decisions.”

An example is its Panoptica platform, an augmented and virtual reality-based engineering model review application that allows teams to intuitively walk through full-scale infrastructure models to identify design errors and correct them before the shovel ever hits the ground. Panoptica allows companies to save on costly construction rework, and leads to better, safer projects.

Globally it is estimated over a trillion dollars is spent every year on unnecessary construction rework. “Anywhere between five to 30 per cent of the cost of a typical construction project is in rework, most of which is due to design issues that are noticed only during the construction or post-construction time period.”

In one case study with Worley and a major oilsands producer, Panoptica’s augmented reality capabilities turned out to be the best technology, he said. Using immersive technologies, including visualizations on the Microsoft HoloLens, VizworX enabled a to-scale 3D digital model review of the facility “to give people the same experience that they would get in doing a site visit to a construction or post-construction location,” said LaFrenz.

The process enabled them to find problems with the design that typically get overlooked during the classical design phase and model review process. “We were able to save them hundreds of thousands of dollars just in material costs, in addition to all the related engineering and rework costs, so the total would be in the multimillion-dollar range.”

This example highlights the benefits that can come to large organizations from working with innovative small businesses and the fact is that collaborating with tech giants doesn’t have to leave local tech startups out of the picture. There can be a “risk perception that large organizations have in working with small businesses,” he said. But an openness to such collaborations can actually be facilitated through relationships with tech majors.

In some cases, for example, oilsands producers are “really pushing [the tech majors] to engage with local tech companies — the small businesses that are doing the innovative tech solutions — and have the major tech company as the engagement path, if you like, for some of these small businesses to work with the oilsands producer.”

Such arrangements not only show the producers “want to be a good community partner and support the local tech ecosystem,” but by helping take the risk out of engaging with local tech companies by having a tech major “as a main engagement point, it reduces the barriers to acceptance within those producers,” said LaFrenz.

The Clean Resource Innovation Network (CRIN) is an industry-led network that leverages the oil and gas industry's strengths in a large-scale industrial collaboration by aligning research and technology priorities, addressing gaps, and incenting innovation. With a collaborative and inclusive approach to the energy innovation ecosystem, CRIN creates efficiencies to accelerate and deliver transformative solutions both within Alberta and across Canada.

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