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TITLE OF PRESENTATION
Digitization of Oil and Gas Industry
Oct 2018
2
Top R&D SpendersTotal Oil & Gas ER&D Spending
$ 50.2 B
Overall ER&D Intensity
4%
Region % of R&D Spend
North America 45%
Europe 49%
APAC 5%
CAGR
50.2
57.1
R&D Spending $B
2017 2021 E
3.5%
Consolidated ER&D Spending: Across the O&G space the ER&D spend is USD 50.20Bn,expected to grow at a CAGR of 3.5% till 2021
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
3
ER&D Spending by Top OEMs: ER&D spend is highly consolidated among the top 5 OEMs;Analytics and IIOT remain primary Digital spend segments.
Source : DRAUPNote: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0Top 5 6 - 15 16 - 30
Top 5 Companies have a combined ER&D Spendof USD 18 B and are all Oil Companies providingend to end services across Up-Stream, Down-stream andMid-Stream
The Oil and Gas Industry is fragmented with Top5 constituting ~33 percent and following 6-15spenders constituting ~27 Percent of the spend
Sl.No. Top 15 Oil & Gas companies by ER&D Spend
1 Petrochina
2 Royal Dutch Shell
3 Gazprom
4 ExxonMobil
5 Total S.A.
6 Chevron Corporation
7 Sinopec
8 British Petroleum
9 CNOOC Limited
10 Schlumberger
11 Canadian Natural Resources Ltd
12 Petróleo Brasileiro S.A.
13 Conoco-Phillips
14 Halliburton
15 Transocean
4
Houston serves as a global hotspot for oil and gas companies with its enormous domain
talent and emerging digital talents.
Note: Data curated by DRAUP Outsourcing module and updated in Sep 2018
Analysis of Top 15 oil and Gas companies and their R&D centers and Headcount Source : DRAUP
80k – 85k R&D Headcount
Oil and Gas R&D Footprint
Top Players
Hub Spoke AnalysisAmericas Europe APAC
76%
15%
9%
84%
9%
7%
72%
11%
17%
Outpost
Satellite
Hub
MEA
86%
14%
Houston, Texas
24% Europe
24%
APAC
17%
Rest of North America
12%
LATAM
14%
MEA
9%
• Top Oil and Gas giants
have setup their R&D
centres in Houston, Texas
a global hub for building
oilfield equipment
• Bangalore and Bay area
are emerging hotspots for
companies to setup digital
CoE recognizing the pool
of digital talents in these
regions
• Most of the hubs are
located in North America,
indicating that the
decision-making is still
governed from the US
5
1900-1940• Hydrocarbon• Oil Derrick • Geophones• Induced Resistivity • Richter Scale • Electrical Resistivity • Gravity/magnetics
1940-60• Reflection Seismic • 2D Magnetic Survey • Magnetotelluric• Seismic Reflection point • Analog Magnetic recording• Dual Vessel Seismic surveys
1960-80• Digital acquisition• Single vessel exploration • Seismic processing• Plate Tectonics• Hydrofracturing• 3D Seismic• Digital Marine Streamer
1980-2000• GPS• Geomodeling• VSP • Hydrocarbon indicator• 4D Seismic• Digital Marine Streamer• Sun Microsystems
2000-2020• Shale Gas• Micro-seismic• Fiber• Carbon sequestration• IoT• Automation• Big Data Analytics
Top 3 key technology focus
areas for the future
1763Bayes Theorem
1989First commercial software
1997IBM Deep Blue
2016AlphaGo beating Humans
Convergence of business needs and scientific advancements are driving key technologydisruptions in the O&G space
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
6
Digital Use Cases: Fleet Management, Equipment maintenance and Seismic Imaging are top use cases adopted by OEMs
Industrial Internet Of Things (IIOT)TECHNOLOGIES
BUSINESS AREAS
DIGITAL USE-CASES
Big Data/ Analytics
Automation/ Robotics
3D PrintingArtificial Intelligence
Augmented/ Virtual Reality
FRAMEWORK
Asset Lifecycle Management – Workflow Framework
Service Oriented Architecture– Design Framework
Open Platform Communications Unified Architecture- Communication Framework
Precision Direction Drilling Fleet Management Robotic Drilling
Systems
Predictive equipment
MaintenanceConnected Worker
Upstream Midstream Downstream
Seismic Imaging and surveying
Supply/Demand Balancing
Inventory Management
Field Safety and Productivity optimization
Intelligent Pipelines
Remote Maintenance
Refinery corrosion reduction
Shipping & Logistics Optimization
Well Risk Assessment
Rapid Prototyping
Current Investment FocusLow High
High Investment Focus
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
7
• Working with Providence Photonics to deploy an IoT enabled leak detection system. The system uses infrared images and computer vision. It provides early warning alert, even for small amount of leaks.
1 • Caterpillar’s asset intelligence platform uses Pentaho’s big data analytics solution to provide real-time equipment predictive intelligence, delivering ROI, growth and efficiency to customers
2
Examples of IoT adoption in the Oil & Gas sector
Use-case adoption priority[Enterprise Investment | Talent Investment | COEs Investment]
Ease
of a
dopt
ion
[Ent
erpr
ise
tech
nolo
gy re
adin
ess,
eas
e of
im
plem
enta
tion]
Improved production/
delivery
Reduced costs
(inventory, logistics)
Improved asset
uptime
Enhanced employee
performance
Compliance adherence
Enhanced service &
CX
Predictive asset maintenance ü ü ü ü ü ü
Workforce productivity ü ü ü
Logistics optimization ü ü ü
Production optimization ü ü ü üOperations risk & intelligence ü ü ü ü
Topuse-cases
Key ROI metricsOil & Gas
Predictive asset maintenance
Workforce productivity
Logistics optimization
Operations risk & intelligenceCustomer Experience
Production optimization
Energy management
Inventory management
Internet of Things (1/2): IoT has disrupted the O&G space enabling companies to address multiple workflows
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
8
Internet of Things (2/2): Large O&G companies are investing significantly in the IoT ecosystem
INVESTMENT AREAS INVESTMENTS & PARTNERSHIPSCOMPANY
Connectivity, Advanced Analytics, Mobility, Imaging, Monitoring, Security
Automation, Connectivity, Environment, Mobility
Artificial Intelligence, Mobility, Environment, Advanced Analytics, Automation
Analytics, Automation, Security, Connectivity
TECHNOLOGY PARTNERSHIPS
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
9
Automation (1/2): Oil and Gas companies are leveraging Automation to optimize processes and streamline asset management
Drivers of Automation
Process Optimization
Energy, material and time savings
Quality improvement
Reduction of waste, pollution control
Product Tracking
Safety, Increased Availability
Asset Optimization
Automation of Engineering
Commissioning and Maintenancetracking
Software Configuration
Back-up and versioning
Maintenance Support
01 02
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
10
Automation (2/2): Automating operations to achieve business goals
• A 360 degree real-timemonitoring center forall of Chevron’s mostcomplex wells
• Employees monitortrends and providesupport for drilling, datacollection and modelling.
Drilling & Completions Decision Support Center (DCD-SC): Power and Energy Management Group
• Remote monitoring of 1,400 pieces of rotating equipment on sixcontinents in real time
• Using predictive models to help identify and anticipate potential failures ormaintenance needs and avoid potential shutdowns.
• Offer diagnostic and engineering support to any facility
Case-in-point – Automated Activity Analysis
The Automated Activity Analysis workflow enabled the team on Chevron’sPacific Santa Ana drillship to achieve savings of more than $1 million in justthree months by reducing its tripping time – pulling the drill string from thewellbore and running it back in – while maintaining safe operating practices
Case-in-point – Remote Monitoring
The Group recently noticed a high level of turbine oil consumption in a gascompressor train at an operation in Thailand. After alerting the EDSC, aninspection revealed an issue with a pump. This led to a manual shutdown, duringwhich the pump was safely replaced. The pre-emptive action prevented earlyequipment failure and avoided lost production.
CASE STUDY : CHEVRON CORPORATION
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
11
Analytics (1/2): Use data driven insights to improve data transparency and drive operational efficiency
30,000
Number of sensors in an Oil Rig
4Million
Gigabytes of data generated
<5%Data Used by
operators
OIL FIELD OPERATIONS:30k+ Sensors, Temperature,Pressure, Flow, Pumps,Actuators, Valves, etc.
REMOTE COMMUNICATIONDEVICES:RTUs, PLCs, InstrumentationSystems, etc.
DATA LINK
CORP SYSTEMS / HADOOP:Data Management, Records,Analytics Platforms
ANALYTICS:Real-time data analytics,Monitoring Systems,
CHALLENGES
Lack of data integrity and storagelimitations
Lack of data standards to enablecondition based monitoring,diagnostics, prognostics and productlife cycle management
Data Quality – how to clean data,reduce the noise & clutter
Data not used in decision making
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
12
Analytics (2/2): Analytics for improving fleet management
Year 3Year 2
Year 1
• Capture & Publish data• Improve data quality & detail• RCA
Uptime improvement
Performance improvement
Other Opeximprovements
• Improve maintenance/ engineering design Centralize & Standardize troubleshooting
• Digitize troubleshooting• Automate troubleshooting process
• Capture performance data• Benchmark fleet to understand
outliers
• Standardize operations to ensure consistent performance
• Commercialize Data Analytics• Expand & commercialize data
analytics
• Identify missing data• Analyze/ attempt to analyze
existing data
• Fix data & analyze data• Implement constraints/data
governance to improve data• Identify & implement opportunities for
improvement
• Continue to improve data quality• Implement new initiatives as dictated
by data
Case –In-Point : One of the largest O&G drilling contractors has started on a initiative for three year horizon period to improve fleet uptime and centralize troubleshooting mechanism
Note: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
13
Oil and Gas Ecosystem is expanding beyond the traditional companies: Tech Giants,Start-ups, and Service Providers are at the forefront of building digital-first solutions
Technology Giants such as Google, Microsoft and IBM are heavily investing in their cloud and analytics platform to develop software-based use cases for Oil and Gas
Technology Giants: Exploring newer use cases in cognitive computing and AI
Start-ups: Rapidly maturing Ecosystem in Houston and Bay Area2
Analytics, IoT and Clean energy are major focus areas gaining investments among startups
Service Providers: Service Providers are building in-house platforms or partnering with technology companies to develop IoT platforms 3
Service Providers can provide capability in emerging areas such as ML, AI, IoT talent. Companies can orchestrate partnership strategies such as engaging in a staffing, GDC, and outcome-based model to develop emerging capabilities
Disrupting Incumbents by focusing on Digital Components in the value chain
1
Source : DRAUPNote: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018
14
Tech giants: Companies like Microsoft and IBM have built advanced analytics and AI
toolsets into their cloud products to develop digital use cases across the value chain
Tech Giants are leveraging
software expertise in AI, IOT, Vison, and Connected Cloudto identify emerging use cases
Working closely with OEMs &
startups for building domain-
specific use cases such as
Equipment health monitoring, Cognitive exploration etc.
Focus Area
Tech Giants Start-ups Service Providers
Source : DRAUPNote: Analysis is based on the DRAUP’s proprietary engineering database, updated in Feb 2018
Upstream
Midstream
Downstream
Accelerate deeper geological insights to improve decision making in exploration and production, and yield more productive oil extraction.E.g: Precision Drilling, Reservoir simulation
Help midstream pipeline operators increase operational efficiency and compliance in areas such as LNG and gas transportation, pipeline integrity management, and workforce management.
Help refineries, petroleum delivery operators, gas retailers, and other downstream oil and gas companies improve cost and operational efficiencies and improve profitability. E.g: Trade optimization
Google Cloud Platform provides differentiated infrastructural components to develop equipment health monitoring systems.
Google’s cloud-based AI to speed up the long cycle times involved with interpreting the subsurface information
Using Google Cloud customers can supercharge their applications, whether it’s training machine learning models on infrastructure, or easier software development and deployment
Microsoft is working to develop a coherent reference architecture that will enable better integration of upstream applications through the composition of common application components
Applying deep learning to reservoir characterization, modeling and simulation, building domain-specific visualization for mixed reality, midstream logistics and marketing operations.
• Asset Track and Trace• Predictive equipment
maintenance• Cognitive Exploration
• Enterprise and Predictive Asset Management
• Supply Chain Optimization• Connected Workers
• Smarter Manufacturing
15
Tech-Giants: Seismic imaging and surveying, Field productivity, production asset optimization and predictive maintenance are top use cases built around cloud-based platforms
Field Exploration &Acquisition
Analytics
AI based subsurface image interpretation
Upstream Digitization
Oil Field Optimization
Key Activities and workloads
Developing two prototype cognitive applications specifically designed to augment Repsol’s strategic decision making in the optimization of oil reservoir production and in the acquisition of new oil fields.
Note: Analysis is based on the DRAUP’s proprietary engineering database
Chevron’s efforts to digitize its oil fields and accelerate deployment of new technologies that can increase revenues, reduce costs and improve the safety and reliability of operations
Development of AI programs that will make it possible to interpret subsurface images, notably from seismic studies (using Computer Vision) and automate the analysis of technical documents (using Natural Language Processing)
Digitize the upstream industry and improve exploration results by applying things like deep learning and augmented reality to reserve estimations, modeling and simulation, which would result in highly interactive applications
Optimizing the water-flooding process at mature Gazprom Neft fields, with the aim of increasing the ORF and reducing injection volumes, has been identified as a pilot project.
Use-Cases PartnershipTech Giants Start-ups Service Providers
16
• Start-ups in Oil & Gas industry are working mostly on Clean Tech, Analytics, And The Internet Of Things.
• Uptake is a the only Unicorn in the Oil & Gas Industry, which is an Industrial IOT platform that analyses data to predict and prevent failures
• Maana has investments from global players like Shell, Saudi Aramco and Chevron. They provide a knowledge platform to turn human expertise and data into Digital Knowledge.
Startups like WellAware use connected devices to help O&G companies boost productionand predict equipment maintenance needs
Source : DRAUP
Tech Giants Start-ups Service Providers
Note: Data curated by DRAUP Start-up module and updated in Feb 2018Note: The list above is non-exhaustive
Total Start-Up Talent
poolPredictive Analytics
Automation
AdvancedTech
Top Verticals/Tech focus Key Start-ups
Total Number of Start-ups
200+
Total Funding (Till 2018)
~$1.5 Bn
Key Workloads
Clean Tech
Focus
Digital Knowledge Platform
Enables companies to create models at scale by encoding the expertise of their employees and combining that with data from silos
Industrial IoT Platform
Ingest and analyze sensor and enterprise data, transforming it into actionable insights and immediate outcomes
Solves complex problems using the collective intelligence of human observation and sensor information to improve critical decisions.
Intelligent operational control
Spectral Imaging
Offers the only spectral imaging camera in the world that can both identify and quantify gas releases in real time to detect leaks faster
Industrial IoT
Helps E&P, Midstream and Chemical Service companies to collect reliable data and actionable analytics.
17
Houston and Bay area are key hotspots of US that drive start-up innovations in oil and gasindustry
Source : DRAUP
Oil & Gas Start-up Hotbeds
USA
48% Rest of Europe
17%
APAC
9%Rest of America
15%
UK
7%
MEA
4%
Oil and Gas Marketplace
Full Data Analytics Solutions
USA
High Performance Composite subsea pipeEnd-to-end drone based inspection services
UKUltrasound 3D imaging of Oil & Gas wells
Unmanned Aerial Vehicles for capturing data
Canada
Produce fuel from CO2
Produce biocatalyst substitutes for Biodiesel
Israel
Focus Areasq Operational Improvement
§ IoT§ Analytics Platforms§ M2M communication§ Wireless Sensors§ Artificial Intelligence§ Cloud Computing§ Robotics
q Clean Tech § Alternative Energy§ Alternative Materials§ Environmental Impact-
Technologies with the potential to mitigate the environmental impact
Advanced Data Analytics & Decision making
Waste Management
France
IndiaRemotely Operated Vehicles
Energy Storage
Tech Giants Start-ups Service Providers
Note: Analysis is based on the DRAUP’s global talent hotspots module, updated in July, 2018
18
Alternate Energy AI / AnalyticsIndustrial
IOTNetwork & Security Platform Investment Analysis
AI company for transforming upstream exploration to
search for oil reserves Beyond Limits
Develops novel sensor technology for management of oil and gas
reservoirsSilicon Microgravity
Advanced charging solutions for drivers of electric vehicles (EV)
NewMotion
Analyses data generated by industrial operations
Maana
Develop 3D-imaging industrial process measurement solutions
through tomographic technology
Rocsole
Provides software and business solutions to design, automate & manage energy storage systems
Geli
Organizes energy data and employs big data analytics to
generate real-time predictions
Autogrid
Deep-tech company that designs, produces and deploys embedded
Industrial sensors
Avenisense
Operates a cellular network dedicated to low-energy
communication for connected objects(IOT)
Sigfox
Provides wireless seismic recording systems with real-time data for
exploration & production industry.Wireless Seismic
Automated vehicle technology safety/efficiency in trucking industry
Peleton Technology
Pioneer in cybersecurity & compliance for cloud & on-
premise ERP & business-critical applications
Onapsis Inc.
Helps industrial companies by replacing paper workflows with
collaboration technology for industrial work
Parsable
Processing system to produce renewable liquid fuels from wood
and agricultural residues.
Ensyn
Web-based predictive intelligence platform which
helps to increase energy efficiency
Veros systems
Deliver robust, highly sensitive chemical monitoring technologies for both offshore and onshore use
LUX Assure
Recognized globally as the most trusted source for independent, fact-based cybersecurity guidance
NSS Labs
Design, qualification & production of Thermoplastic Composite Pipe (TCP) solutions for offshore Oil &
Gas industry.
Airborne Oil & Gas
Startup investments and acquisitions: Startups developing use-cases around Clean Tech and Operational improvement are prime investment targets of OEMs
Acquisition Investment
Note: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018
Enables the production of chemicals and fuels from
cellulosic biomass.
.
Renmatix
FreeWire Technologies
Create intelligent energy delivery systems and brings clean power to applications.
70%
13%
17%
Clean Tech
Operations
Othe rs
45%
32%
21%
6%
Clean Tech
Operations
Energy
Othe rs
77%
19%
2%
2%
Clean Tech
Operations
Energy
Othe rs
26%
69%
5%
Clean Tech
Operations
Othe rs
66%
34%
Operations
Othe rs
Tech Giants Start-ups Service Providers
19
“Manage the old” “Renew the old ; Build the new”• 2D/ 3D data conversion/ Migration • Design Standardization • Structural drawings
• Converting current assets into a fleet of connected assets in an integrated environment
• Obsolescence Management and Component Engineering
• Skid Design & Modularization• Test Engineering support • Modular tool design with enhanced safety
features
• Management of drilling data from remote rigsites to base location of Upstream Oil& G
as Operators.
• Stack –up Analysis • Firmware migration to new
Hardware/Software • Testing of various equipment
• IOT Controller & Gateway for Oil refinery• Building of Automation platforms for
extracting, analysing data across the entire O&G value chain
Service Providers: Digital disruption is leading to sizeable opportunities for service providers in two key areas
Tech Giants Start-ups Service Providers
Note: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018
20
Key Engagements executed by Service Providers
“Manage the old” “Build the new”
Design a modular skid for Gas Separation process containing of individual multiple skids
Project Overview
Project Overview
• The scope of work for Modular design is to design the individual skids based on the Process P&IDs, Vendor Equipment GA drawings inline with Client requirements of each Skid size.
• Based on the skid sizes, designing the structural part of the skid frames, fabrication details extraction from 3D Model like Isometrics, Piping Layouts, structural layouts & BOQ etc.,
• Key deliverables: 3D Model ; Isometrics ; Structural drawings; Piping Layouts; BOM
Customer Multinational energy corporation Customer
IOT Controller & Gateway for Oil refinery
Project Overview
One of the world's largest oil field service company
Project Overview
• Bi-directional valves in the pipeline shall be enabled with IOT Controller & Gateway.
• The existing valves shall have multiple sensors which shall then be pushed to the cloud via the selected gateway interface.
• The controller is having support for Modbus, TCP/IP, Profibus and Ethernet Industrial protocols.
• This also includes - Data Logging, Event Logging, Historical trending and historical dashboard.
Tech Giants Start-ups Service Providers
Note: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018
21
End to End IoT/ Connectivity platforms: Service Providers are building in-house platforms or partnering with technology companies to develop IoT platforms with the following functionalities:
• Connected Systems• Multi Protocol• Multi cloud platforms• Devise Provisioning and Onboarding
IoT Solution/Platform
Platform/Frameworks which enable the following services:• Wireless Communication • Remote Monitoring• Remote Control, Control operations and alarm management • N/W configuration
Remote Monitoring &
Control
Unified Analytics platforms
Service Providers are offering data driven solutions and are working on “ End to End” platforms for
• Data Management and Visualization Suite• KPI Analytics• Well and Equipment health• Rig and well automation • Asset, Fleet management
In addition to the above key areas, Service Providers are also investing in area of1. Augmented reality – New Product launch, User guide, Catalogue2. Building element and security access management
Service Providers are developing Platforms/ Frameworks in key areas to address the newer requirements
Tech Giants Start-ups Service Providers
Note: Analysis is based on the DRAUP’s vendor ecosystem module, updated in July, 2018