The New Year had started, and it's time to take an objective look at lessons learned in 2018, and the new opportunities ahead in 2019.
Every December I summarize the past year for myself: where did I start, what did I learn, and how I want to move forward. 2018 went by surprisingly fast, even in a slow Oil and Gas consulting market. Once again, I learned of the importance of the people I am working with in a small company. An organization is people, and without mutual support and dedication small companies do not survive under pressure. Many thanks to my business partners and all AVGeo associates for their support.
The quality of the people involved in a venture also determines the quality of the delivered projects. While Oil and Gas organizations were focused on artificial intelligence #AI, machine learning #ML, and digital transformation projects in 2018, it is the people who make these projects successful. Selecting appropriate data, conditioning the data, framing the problem for #AI or #ML, selecting/designing the algorithm, understanding inputs and outputs, and accurately interpreting the results are human responsibilities. The way these results are communicated is particularly important and requires common language between data managers, IT, project geoscientists and engineers, data scientists and decision makers.
Our primary focus should be on upgrading our technical understanding at all levels, including executives. This is required for the industry to survive and thrive in the post-2014 climate. Digital transformation IS the transformation of humans, with the goal of updating our knowledge and proficiency of the technologies we use. In 2019, all of us need to take a close look at our habits and working methods. Human memory has a way of playing tricks on us, and we need to keep reminding ourselves that computer capabilities in 2019 are not the same as ten years ago, the way we interact with and experience the internet changes at least annually (or sub-annually), and communications methods we use today are attempting to connect and normalize previously segregated repositories of information. Existing legacy IT solutions and software were "built to last", which in itself is a problem. They need to be modified and updated to administer transition to solutions, which are "built to change."
In 2018 Oil and Gas corporations were focused on internal processes in an effort to keep the lights on. It is easy to overlook the long-term value creation when organizations are focused on baseline costs and expense-cutting. Connections to the external world and the changes happening in it are getting more and more difficult for corporations to maintain. Promising technologies are getting lost in too much noise, the pace of technological innovation is perceived as too fast, there is little time or guidance to sort out the strategy on moving forward, and pressure is on IT departments to reduce their operating budgets. As a result, the gap between internal corporate technical capabilities and leading technologies is getting wider as time goes on.
Revisit established business practices to make organizations more responsive and open to change. Data exchanges, project definitions, and approvals need to be focused on the long-term value of the change rather than the short-term cost. If the benefits of the exercise are clear to the stakeholders, procurement and IT, the conversation will be about budget allocation and priorities rather than “chasing pennies around a $10 bill”.
Oil and Gas data management also continues to suffer through the four years of cost reductions during the downturn, which makes large volumes of data not suitable for use by #AI and #ML algorithms due to the wide variation in storage methods and mnemonics. Data management technologies have evolved significantly in the last five years, and existing legacy systems do not take advantage of the benefits of new data management philosophies.
Capital investment will need to be made into data management projects in 2019-2020. The approach to existing legacy data management systems needs to be developed honoring specific requirements for each data type used in oil and gas projects.
Last but not least
Funding for innovation in the oil and gas industry has shifted to supply chain management, robotics and security in 2018. Development and survival of the Upstream innovation ecosystem need to be a forefront priority in 2019 and will require new marketing models and more active role of oil and gas operating companies supporting small innovative businesses.
These are the issues Upstream Oil and Gas Industry needs to address in 2019 to build a solid foundation for successful delivery of exploration and production projects in 2020-2025. These are not IT projects- they are business transformation projects which require the engagement of geoscience and engineering subject matter experts, executives, data management and IT specialists.
Let's overcome inaction in front of the white page of 2019. Let's kick industry into the action of reinventing itself rather than deploying old management practices dealing with challenges of 2019.