Some geologists use a word, catastrophism, to describe what they see as sudden upheavals found in the geologic record. Mass extinctions, worldwide volcanic activity and things like that are included.
Catastrophism could certainly describe recent workplace changes, resulting in a ramping up of reliance on technology including hardware, software and connectivity.
Rob Roberts, director in the Process & Technology group for global energy business advisory firm Opportune LLP, pointed out that this has created a push for companies to learn how to facilitate remote work and to become more efficient as, in the oil sector and many other areas, profits are squeezed. “We’re seeing a lot of companies that are realizing that they still need to do business. In order to do that, they need to come up with some efficient means.”
“In order to do that,” Roberts continued, “many of them are leveraging software.” Global tech leaders such as Microsoft have beefed up connectivity software like Teams, adding functionality and capacity in order to accommodate the flood of virtual meetings.
End users already connected with Microsoft, Salesforce or others may find it simple to just add a few more functions or users to their existing account. “And because it’s in the cloud, it becomes Opex instead of Capex. Cloud technologies have enabled what we have right now, as far as remote collaboration and work-from-home and still being able to make things work,” he observed.
In the oil patch, sometimes the fastest adopters of new technology are the independents, for two main reasons. Small firms have fewer layers of decision makers that have to sign off on a project, so changes can be streamlined. Second, implementation in an international major really is a lot bigger project than updating work systems for a few dozen or even a few hundred employees concentrated in one region. So even after the decision is made, it can take months to implement new technology across all locations.
Plus, some of the majors have insisted on creating their own systems internally, from scratch, which takes longer and can involve huge capital expenditures. Smaller firms signing on with established software companies may need some tweaks and some specialized reporting, but the overall system is already in place.
“What we’re seeing is a trend of more and more people moving to off-the-shelf software, so they don’t have customized support requirements.” No in-house IT people need to be deeply trained in this kind of system.
Since not every software company is a Microsoft or Google—many are startups with very specific solutions such as inventory tracking or back office ticketing, the question of compatibility could be asked: can all these packages work together easily?
They can, said, Roberts if they adhere to industry standards (API) or if end users employ standard cloud-based integration tools such as BizTalk or MuleSoft. “If you use the standard, cloud-based integration tools, it minimizes any mismatch from client to client,” he noted. Industry specific standards such as PIDX (Petroleum Industry Data Exchange), whose website describes it as being “made up of Oil and Gas Industry Standards leaders in the facilitation of digital business” can also facilitate cross-platform data sharing.
A somewhat unexpected result of the shift from pencils, then spreadsheets, will be in the kind of employees HR departments start searching as they rehire in the oil patch. “The people who are coming into the industry may not be as much oil and gas focused as they are tools focused,” Roberts said. Some new hires may be experts in big data or artificial intelligence, who’ll be looking to apply that expertise to analyzing data in any industry, including oil and gas.
The upside for workers will consist of greater career flexibility. “As you get to people who are less industry-specific but more technology focused, you’ll see them come from industry to industry, and be able to apply knowledge and tools from another industry that benefits oil and gas.” He cited historic similarities between mining and oil and gas as an example. In the future, lessons learned in more diverse industries like agriculture, heavy manufacturing and others may be applied across the board.
Cleargistix President and CEO Steven Toups is finding a sea change across both service companies and producers regarding paper ticketing for jobs and billing. The Louisiana native founded his Mandeville, LA based firm after spending four-plus years in the Permian Basin as CFO of a service company.
During that time he’d wrestled with field techs over lost, late or illegible work orders along with the billing and payroll delays that they caused.
In looking for a way to eliminate paper, (“Paper Is the Problem” is the company’s slogan) he targeted other service providers as his market—based on that personal experience. “I was out on location, I had my Safeland card, I had
my steel toes, my FRs and my H2S and my hard hat, so that real world experience in solving those real word problems is how we’ve created our system,” he said.
But that sea change he’s now seeing is broadening the market, as E&Ps are also leaning into efficiencies created by exchanging paper for digital entries. From the start, offering this system to producers was on Toups’s mind, but was expected to be further down the road that it’s turned out to be.
“The thing we are seeing out in the field and in talking to our customers and talking to others, is that the operators are really getting involved in information,” he said. Those operators are requiring service companies to tailor their invoices to the needs of the E&P.
“For the paper-based service companies,” Toups pointed out, “which is the majority of them, that is very, very difficult to do.” That’s because the look of an invoice is entirely a back-end or software based issue. To create a different type of invoice for every operator under a paper-based system would be nearly impossible.
Toups remembers this well from his own CFO days. “When I put my oilfield services CFO hat on, it (customizing invoices for separate clients) was a pain! We had a big spreadsheet as to how each one of our customers liked to be billed. It was constantly changing” and very time consuming. He said that the only way to be efficient in a billing multiverse is with a digital system.
With a native digital system—meaning that there is never a paper ticket, everything starts out digitally—all data resides on a single database from where it can be infinitely sorted according to the needs of each department internally and any client externally. It can be done on any schedule, as well.
Next steps for operators may involve a no-paper policy, Toups believes. “That is, they’re not taking paper, whether that paper is manual or whether it’s scanned in,” nothing that’s not digital may be allowed in the near future. Some operators are already floating the idea among their service companies in order to gauge the response.
With a list of service providers conforming to one producer’s requirements, the question of standardization returns. Toups said, “That’s going to be a significant component. That’s really why we believe our software puts our customers into a very advantageous position. Once it’s native digital, however your end customer wants it, we can get it there.”
Designing such a system is a balance between being flexible, user friendly and cost-effective. “In the software world, making things simple is hard,” Toups observed. “We spent a lot of time making it absolutely as easy as possible for the folks in the field to do their jobs.” Anticipating repetitive entries and preloading them into the system so they can be accessed with a click instead of being typed in is a big part of that.
Once the field person finishes the ticket and clicks “OK” the data is instantly propagated to accounting, billing, payroll and to supervisors for planning and evaluation.
As producers gravitate to paperless systems, they too will be able to get instant feedback at least daily, to help manage resources instead of waiting a week or a month to discover and act on an issue. This should create further economies in challenging economic times.
That information is so valuable to producers that even as they understand that digital ticketing means they receive their bill up to 30-45 days sooner than under paper, it’s worth the tradeoff because of how much value it brings to their operations when data is available daily .
Alberta, Canada-based RigER offers yet another aspect of paperwork reduction, aimed at rental companies with extensive inventory, letting them digitize tracking, invoicing and billing. The name stands for Rig Equipment Rental.
Their beginning was much like that for Cleargistix—a pain point involving paper. It was, said Nikolai Korniyuk, the company’s VP of marketing and business development “the inability to reconcile multiple paper tickets and Excel tracking sheets in order to generate invoices.”
Company CEO Michael Maltsev pointed out that the oil and gas sector—along with the government—lags behind most other industries in digitalization. “Oil and gas is second place and government is probably first place—from the bottom,” he joked.
“That is why it’s very important to digitalize,” he continued. “Oil and gas itself is a very conservative industry so people try to avoid any risks.” Maltsev said the oil patch did invest in digitalization 20 years ago, but when the dot-com crash came they lost large amounts of money and have been reluctant to venture back. “They spent millions and they have nothing as a result.”
While the spring 2020 economic crash has sent more companies seeking to digitalize for the cost savings, Maltsev noted that the industry as a whole has a reluctance to jump into early adoption. Most companies don’t want to be the first to digitize. “Everyone wants a proven concept, and to see working results from other companies.”
Beyond simply digitizing, Maltsev said the 2020 situation created the need for cloud-based mobility, so everyone can work from home or other remote locations. For example, “New technology is coming to the field—5G is one of
them—which allows accessibility to your network anywhere so you can make a mobile or digital ticket instead of a paper ticket, and that is why it streamlines the process and gives you full transparency of your operations.”
The fact that companies are looking for those two things—cloud and mobile solutions but only those that are already proven to work—is a challenge for developers.
Malsev said the third thing clients seek is integration with existing software, because they have paid for it, are familiar with it and need to keep using it. “We’d like to integrate any new piece of software with all software systems we have in our organization.”
As the COVID-19 crisis matures, Maltsev has seen companies getting past the initial shock of shutdowns and quarantines, realizing life must go on—and considering software upgrades in much larger numbers than before. It has led RigER to add a range of new modules for things like ERP and other metrics. They have also included integration with Microsoft Power BI visualization software.
“Now, with the (COVID-19) situation stabilizing a little bit, a lot of them are turning their attention to actually building, creating or revisiting the solutions they’ve been using, or implementing new systems. So we have been having conversations with companies that for sure know that the crisis is going to be over, and consider this as a great time to build the digital ecosystem for their operations and make sure that they have the time to fine-tune it.” That way, when demand returns, they’re prepared to scale up digitally instead of with paper.
Layoffs that targeted higher-paid employees in favor of a younger, more tech-savvy workforce, is also driving digitalization. Maltsev sees another issue, in that younger people are avoiding oil and gas to the extent that there may not be enough people to replace the previous generation one for one—so the efficiencies of digitalization may be necessary.
He added that COVID-19 and work from home has accelerated digitalization of the industry. “The work-from-home environment requires cloud and mobile solutions. People right now understand the power of digitalization.”
Every crisis is different, but the common thread lies in the changes they bring. As the world was already lurching toward digitization of business, 2020 has launched it into a whole new phase.
Change is always painful and this one is particularly so, but those offering these kinds of solutions may be helping others stay afloat during these storms.
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Paul Wiseman is a freelance writer in the oil and gas sector.