14 Jan My 2019 Predictions for Digital Oil and Gas
It is my habit to make wild and outlandish projections about the upcoming year, and 2019 is no exception. Here are my 5 crazy predictions for all digerati in oil and gas.
Predictions Are Hard
As Yogi Berra once said “It’s tough to make predictions, especially about the future”. It’s especially tough to make predictions about digital oil and gas. First, the petroleum industry is in greater volatility than usual. Just consider the gyrations in OPEC’s world. This past year, Qatar pulls out of OPEC. The US pulls out of the Iran sanctions program. Russia aligns its production agenda with the Saudis. And how about the expansion of the US oil sector, adding 1.5m barrels of production per day in just one year.
Second, the digital world continues its relentless march forward. 2018 sees the first trillion dollar company (and it was Apple, in August). Crypto currency Bitcoin loses hugely, starting the year at US$13,625, and ending the year at US$3,935 (many cryptos show similar declines). Cloud computing gr0ws to $175 billion, from $145 billion, and expected to grow at the same clip again in 2019. And the media reports lots of firsts — the first fully autonomous haul train, the first full lifecycle petroleum trade on blockchain, the first royalty payment completed with the help of robots, AI and distributed ledger.
1. The Hottest Technology? Robots
Last year, I predicted that ERP technology deployment (particularly the SAP product suite) would be in high demand. Many large oil and gas companies announced projects to overhaul their big backbone systems, and frankly, this trend is going to continue. Depressed oil and gas prices have curtailed any non-essential capital spending for the past 4 years, and growing demand for petroleum products directs capital to growth projects. But half a decade on the same ERP version means pent-up demand for the new features available only on the latest versions of these key products.
For 2019, my first prediction is that the technology to experience the greatest demand will be robotic process automation, or RPA. The first use cases are in, and the results are nothing short of stellar. RPA plays mostly in the back office, particularly in Finance, production accounting and land management in the upstream, but also in product trading and HR transactions.
RPA is not new — in fact, software that mimics routine and repeated human keystrokes involving spreadsheets, document services, and databases date back a decade or more to the video gaming industry. Gamers developed bots to automate the dull tasks of purchasing weapons, collecting treasure and building armies. Bots are so powerful that they’re banned on gaming platforms, as well as on LinkedIn and Facebook.
Expect to see the emergence of the kinds of digital innovations in bot land that you see in other sectors:
- Training programs specific to bot technology
- Boutique advisory firms that specialise in bot solutions
- New job roles for humans to administer large armies of bots in the work place
- Bot exchanges where companies swap bots rather than constantly building their own
- Simpler bot technology that shifts bot development into users hands
- Bot technology user groups
2. The Hottest Jobs? Bot Wranglers
My second prediction is about jobs. If the next big wave of technology is the roll out of bot technology in the head offices, targeting Finance, Land, HR, supply chain and customer functions, then the hottest jobs will be in all areas related to bot solutions. Bots don’t just self deploy (although one day, that will likely be the case). They need human smarts to take ownership for their existence. Here’s just a few of the kinds of bot jobs coming to oil and gas.
Not every job role should be supplemented by a bot. The bot analyst figures out the business case for specific bots, which ones should be built, and how the human roles change as bots come to life. Bot analysts straddle multiple functions with their technical grasp of how bots work, their understanding of organizational structures, and their business insight in specific functions.
As bots fit into an existing business environment, they must be designed, much like a custom made shirt is designed for a specific person. The bot designer translates the work that is to be automated by the bot, and builds the bot on the platform. The bot designer has a technical understanding of the business systems and how they will interact with the bot technology.
Not all bot platforms are alike and there is no one size fits all. The architecturist has a deep understanding of the features of bot technologies, their pros and cons, their fit within other solutions architectures, and their ability to automate oil and gas functions.
As the bot platforms are updated with new features, the bot technician keeps them current, tests out new bot configurations, and plans and executes upgrades. Bot technicians keep an ongoing eye on bot performance to make sure they don’t consume too many resources or are targeted by cyber villains.
3. The Busiest Sector? Equipment Suppliers
My third prediction is that equipment suppliers embrace digital. If 2018 was the year that the downstream came to grips with the impending arrival of a wave of electric cars (Tesla’s Model 3 swept the market of luxury sedans, beating BMW, Mercedes, Audi and Lexus), 2019 will be the year the equipment sector comes to terms with digital innovation.
I struggled to find any digital content on display at the supplier booths at the Global Petroleum Show last year. Yes, there was a tiny area set aside for pure digital innovators, as much as to suggest digital was a novelty. The vast majority of the suppliers (I walked every aisle looking for signs of microchips), continue to peddle gear that is oblivious to the internet of things, mobile networks, cloud computing, and analytics. This should come to an end.
The cost to add digital smarts to most gear has fallen to where it is in reach of most suppliers, and more and more will make the move. They’ll be forced to, since the large US supplier market has discovered digital, and will move the bar higher for all. Increasingly, customers will want to deploy artificial intelligence solutions, particularly at the edge (ie, highly localised solutions that control remote devices), and they will favour suppliers with a view to a digital future.
4. The Sleeper? Measurement
My fourth prediction is about data. Digital technologies involving data are easier to deploy in head offices. There’s no operating equipment in an office tower. Few engineering standards apply to office work, and there’s no heavy-duty management of change process. There are fewer moving parts (save for the people who are in constant meetings).
But the earliest digital solutions have run headlong into huge data quality problems. By the time field data reaches head office, it’s been filtered, massaged, aggregated, blended and cleansed. Head office teams then interpret the field data slightly differently one from the other, in their organizational silos and bespoke systems, using customised spreadsheets and graphics.
Digital solutions that depend on quality data (and I’m thinking here about finance, land and trading), cannot achieve their potential with unreliable field data.
My prediction is that in 2019 oil and gas will recommit to data measurement. Some improvement clearly needs to happen — standards need to be further refined, meta data definitions need to be sharpened, and protocols for capturing and manipulating field data need to be agreed. Equipment suppliers need to tighten their conformance. Measurement tolerances need to shrink (as they have in manufacturing). Regulators need to enforce the standards and sanction those who game the systems.
Don’t get me wrong. Oil and gas measurement is already highly sophisticated and standardised. Authorities and agencies are in place. To play, you need to pay with compliance. But the digital world is taking measurement to a whole new level. The era of spreadsheet fudge compensating for poor quality data is giving way to high quality data feeding artificial intelligence and autonomous technology.
5. Not Ready Yet? Voice Interface
My fifth prediction is about voice technology. Voice is on the march, thanks to voice translation of text messages, the voice assistant technologies from Amazon (Alexa), Apple (Siri), IBM (Watson), Microsoft (Cortana), Samsung (Bixby), Tencent (Xiaowei), and Google (Google), and voice activation services in cars and other appliances. I’ve used the voice technology from both Google and Apple, and the quality of voice translation has progressed hugely in just two years (comedians used to joke that voice assistants were profoundly stupid). But is voice ready for the work world?
Voice technology neatly illustrates how artificial intelligence solutions work. They need a massive supply of voice samples that the engine learns to interpret, spanning multiple pronunciations, voices (young, older, male, female), dialects, accents, and grammar choices. A recent news story described how a parrot has been engaging with Alexa to purchase snacks, raisins, watermelon, ice cream, strawberries and broccoli.
Put voice technology on enough devices and make it easy to use, and the technology advances. The challenge of the work world is to mobilise enough range of voices using work terminology to teach these digital assistants the lexicon of work settings. Only IBM seems to have targeted the work world with its Watson system, and the company is keen to support any start up that wants to build with the Watson platform. This makes sense—IBM is one of the technologies of choice in business (the B in IBM stands for Business).
Until the other big digital assistant technologies move beyond serving the consumer world, and focus on the work world, voice technology will remain in the home and the car.
There you have it. By the end of the year, we’ll all be overwhelmed with equipment providers who have extended their products with voice activated bot technology.
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