Driving Oil & Gas Innovation and Workforce Development in ...acton.the-tma.org/acton/attachment/28093/f-02ca/1/-/-/-/-/Bruce Bailie.pdf · Global Megatrends The pace and magnitude

Driving Oil & Gas Innovation and Workforce Development in

the Digital Era Bruce Bailie, Digital Officer, Siemens

siemens.com

© Siemens AG 2017. All rights reserved.

Unrestricted © Siemens AG 2017

Page 2 17th November 2017

Global Megatrends

Digitalization

• The drivers for the explosive growth

Change and adaptation in the Oil & Gas

Industry

• Changing workforce requirements

• What have we learned from other industries

Siemens response to attracting and retaining

the new skillsets required

Topics

Global Megatrends

The pace and magnitude of change is often

astonishing. And the challenges these changes

bring are transforming the world we live in.



Globalization

• Global competition is impacting productivity and production

locations.

Urbanization

• In 2050, nearly 70 percent of the global population will be living

in cities (up from 54 percent today).

Demographic change

• By 2050, the global population will have grown from the

current level of 7.3 billion to 9.7 billion – and needs will rise

accordingly. Back in 1950, there were only 2.5 billion people

on the planet.

Climate change

• According to scientists, in the summer of 2015, the Earth’s

atmosphere had the highest CO2 concentration in 800,000

years.

Megatrends – Challenges that are transforming our world

This slide is animated! Do not ungroup any elements!



Megatrends – Challenges that are transforming our world

Digitalization: The Opportunity

By the same token, according to some forecasts,

interconnected industrial assets will create a

multitrillion US $ industry in less than a decade.

Digitalization

In the future, we’ll be living in a world that’s

increasingly interconnected by complex and

heterogeneous systems. By 2020, the amount

of data stored worldwide will have grown to

44 zettabytes. Around 50 billion devices will be

linked online.

Source: IDC, The Digital Universe of Opportunities: Rich Data and the Increasing Value of the Internet of Things, April 2014; Dave Evans (Cisco): The Internet of Things, How the Next Evolution of the Internet Is Changing Everything, April 2011



Phase 1

Mechanical Production

Phase 2

Electrification

Phase 3

Automation

Phase 4

Digitalization

Siemens Has Been at the Forefront of The Industrial ‘Evolution’



Automation Electrification

Digitalization

Siemens has a Track Record with Disruptive Technologies Milestones of a 170-year history

1866

The dynamo makes

electricity part of

everyday life

1816 – 1892

Company founder,

visionary and inventor

1847 Pointer telegraph

lays the foundation

of Siemens as a

global company

1925

Siemens electrifies

the Irish Free State

with a hydroelectric

power plant

1975

Breakthrough of

high-voltage direct

current (HVDC)

transmission

2010

TIA Portal takes

automation a

stage further

2016

MindSphere introduced as the digitalization platform for all industries

2012

Test operation of the

world’s largest rotor for

offshore wind turbines

1983

First magnetic resonance

imaging scanner goes

into operation

1959

SIMATIC makes

Siemens a leader in

automation technology

Werner von Siemens Siemens innovations over the past 170 years



VR Context

- Walkinside

Building a Digital Core Through Acquisition US$ 10 Billion+ in Software Acquisitions since 2007

Beginning of

production automation;

Siemens receives

patent for SIMATIC.

1958

1995/96

Plant Engineering

& Execution

ETM / XHQ

Innotec

COMOS Berwanger

- OGM

Elan

& Active

RuggedCom

IBS

Preactor Camstar

2008 2008 2009 2011 2012 2013

2014

2016 2017

UGS –

Teamcenter / NX

2007

Perfect Costing Solutions

2012

Kineo

2013

LMS

TESIS

Polarion

CD-adapco Mentor

Graphics

Product Development

& System Engineering

1958

ORSI

2011

Vistagy

Today, Siemens is the second largest

software company in Europe.



What is Driving the Digitalization Explosion Across All Industries

Applicability to O&G

Predictive Maintenance

Mass Transit Industry Barcelona – Madrid

99.9% availability of trains

Only 1 of 2,300 trips is late

Remote diagnosis facilitates

predictive maintenance


Improved Cycle Time

Automotive Industry Masserati, Turin

30% less development time

Digital production optimizes

plant design and facilitates

manufacturing flexibility


Image Analytics

Health Industry Multiple Locations Worldwide

Enables more patients to be

treated in less time

Installed in 100+ hospitals,

20+ countries, and applied to

10,000+ patients

50% reduction in doctor’s

time for bone reading

Automated image processing

enables faster diagnosis

10% higher accuracy rate

and detection of fractures


Remote Monitoring

Marine Industry Hamburg (Service Center)

3x more cars produced due

to Siemens Manufacturing

Execution System

Reduced cost for operation

and commissioning

Increased availability and

avoidance of unplanned

downtimes

Enables shorter time

to market

Increased availability and

avoidance of unplanned

downtimes

Remote monitoring facilitates

expert center support

40% of all critical systems

monitored in real-time with

expert technical support

Sensor explosion with IoT Secure Connectivity

Integrated PLM from

Concept to Production Advanced Analytics



But it’s

not all bad …

- 45% Brent crude decline

- 27% Upstream cost index decline

- 18% The differential upstream

operators must make up Supplier cost cuts

Not sustainable

or healthy for industry

30+% > 60 yrs. old Aging workforce

CO2 Tightening emissions

requirements

Competition for technical resources

(e.g. software

engineers) ‘Lower for Longer’

Price horizon

Why Innovation Matters in Oil & Gas The market demands adaptation



Refineries Tank farms & storage

Downstream

FPSO (Floating, Production, Storage & Offloading)

Subsea Drilling Platforms

Onshore

Upstream

Offshore

LNG (Liquefied Natural Gas)

Midstream

Oil & Gas Pipelines

Siemens Oil & Gas Portfolio



Change – and Adaptation – in the Oil & Gas Industry

Change – market oriented, demographic and technological – is forcing

transformation in the oil & gas industry.

Digitalization, in particular, has emerged as a powerful antidote to the

‘new normal’. But the new normal requires new skillsets, posing a new

challenge in a world replete with demand for technical resources.



The Digital Era is Driving New Workforce Requirements

in All Industries

• Data Scientists

• Programmers

• Software Engineers

• Experts in Artificial Intelligence and Robotics

• Tech savvy petroleum, mechanical, electrical

engineers with extensive domain knowledge

• Rapidly evolving technologies

• Highly specialized digital disciplines

• Substantial amount of the O&G industries domain

expertise will soon be retiring

• Time to build or replace domain expertise

Wanted:

+

Constraints:



Can We Learn From Other Industries?

• Consider the advanced process control in the 80’s

• Or rapid adoption of SAP systems in the

early 90’s

• Both required deep domain knowledge and a

good understanding of new complex technology

• It is the combination that delivers the most value

and also makes the resources so scarce.

• There are similar talent challenges to previous

technology breakthroughs but the pace and

volume is very different, in essence the same

problem but on a much bigger scale

Is it really a new challenge?



What Did We Learn From History and Other Industries?

• Being a scarce resource and in demand makes

you feel special

• New complex technology thrives in communities

• Find ways to be flexible in “isolation”

• Understand the longer term impact:

• Is the demand project based or temporary

• How will the technology “ease of use” evolve

• Small companies generally respond better to the

required flexibility and therefore …

… what will it take to recruit / retain young

‘denizens of data’ in the oil & gas industry?

From the individual perspective

From the company perspective



(Continuing operations; in millions

of € except where otherwise stated) Fiscal 2016

Volume

Orders 86,480

Revenue 79,644

Locations

Countries 200

Manufacturing Facilities 289

Employees (in thousands) Sept. 30, 2016

Total (continuing operations) 351

Germany 113

Outside Germany 238

Yes, We’re Big… And Very Old A global powerhouse in engineering solutions with 170 years of experience

Research and Development

Spend €4.7bn

Dedicated personnel 33,000

Industrial businesses and revenue By the numbers: Fiscal 2016

“As a technology provider, we are

developing tomorrow’s solutions for

major markets, like LNG”

Digital

Factory

13%

Healthcare (Separately managed)

17% Building

Technologies

8%

Financial

Services

Process Industries

and Drives

11%

Power

and Gas

20%

Energy

Management

15%

Wind Power and Renewables

7%

Mobility

10%

Power

Generation

Services

% N/A



1 In fiscal 2016 2 Centers of Knowledge Interchange

€4.7 billion 33,000

7,500 3,500

€ €

9 16

University cooperation –

our knowledge edge

Inventions and patents –

securing our future

Expenditures for R&D in fiscal 2016 R&D employees1

Inventions1 Patent applications

CKI universities2

Principal partner universities

3 Employee figures: Status Sept. 30, 2016

Corporate Technology

1,600 patent experts

7,400 4,800 employees worldwide

software developers

researchers

Our competence center for innovation and

business excellence3

And We Are Still Driving Innovation Siemens R&D and Corporate Technology

Siemens expenditures for research and development



Cooperate Invest Found

Collaboration with startups Capital volume

€1 billion for five years

Selected innovation fields

Distributed

electrification

Connected

(e-)mobility

Artificial

intelligence

Autonomous

machines Block-chain

applications

In October 2016, Siemens set up a

separate unit to foster disruptive ideas

more vigorously and to accelerate the

development of new technologies.

The unit’s name, next47, plays on the

fact that Siemens was founded in 1847.

We are using next47 to pool our existing

startup activities.

Driving Innovation… Outside the Mother Ship

Next 47: A separately managed unit for startups



Developing a Digital Core: Build (through Partnerships)

Partners And many

more…

Systems



Attracting and Retaining the New Skillsets Required To effectively navigate the new normal

Being big doesn’t mean you have to be behind.

Attracting and retaining the right workforce to drive

innovation in oil & gas and other verticals is achievable

– even for a 170-year old Bavarian behemoth.



And by the Way, We Have A Certain Reputation…

Any interested job applicants in the audience?

Siemens Ranked #1 on Forbes

Global 2000: Top Regarded

Company List, FY 2017



The Rampant Pace of Change in World is Driving

Transformation on a Massive Scale

The Oil & Gas Industry is Adapting to a New Normal

Digital Adoption is Key to Remaining Competitive

Although Challenging, Driving Innovation and

Building a Tech Savvy Workforce in the Digital Era is

Possible – Even for a 170 year-old Company

In Summary…



Bruce Bailie

Digital Officer

Oil & Gas Vertical

Americas Region

siemens.com

Thank You for Your Attention!

Documents

Driving Oil & Gas Innovation and Workforce Development in ...acton.the-tma.org/acton/attachment/28093/f-02ca/1/-/-/-/-/Bruce Bailie.pdf · Global Megatrends The pace and magnitude