Digital Oilfield

Outlook Report
Opportunities and challenges
for Digital Oilfield transformation

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Key insights
JWNs second annual Digital Oilfield Outlook Report, conducted with partners Siemens,
Storm Telematics and GDM Pipelines, has revealed a number of positive trends emerging
in the implementation of digital technologies in the Canadian oil and gas industry. The
survey of more than 350 industry professionals found that awareness and knowledge
about the various digital technologies available has improved, and feelings about
the overall benefits of Digital Oilfield implementation remain high. Emerging digital
technologies are seen to be increasingly market ready and the adoption curve has moved
forward, while concerns about cyber security have subsided. But important barriers
to adoption remain, both financial and organizational. Both vendors and users of the
technologies need to become more proactive in making the business case for technology
implementation, and measures must be taken within organizations to promote the use of
the technologies if the full benefits of the Digital Oilfield are to be realized.
Digital Oilfield technology implementation starts with

constraints. This could be alleviated as prices rebound

knowledge about the technology offerings and the po-

and the cost of Digital Oilfield technologies continues to

tential benefits they bring to an organization. The number

drop as it moves along the maturity curve. Existence of

of survey respondents who stated they had insufficient

organizational barriers was the second highest ranked

knowledge to answer questions about two specific Digital

impediment to adoption.

Oilfield use cases, Field Productivity and Fleet Manage-

Another significant finding was the decrease in those

ment, declined six per cent and eight per cent respectively,

respondents who felt cyber security could be a deal

a positive indication the industry is becoming more in-

breaker in adoption of Digital Oilfield technologies. As a

formed about technologies available.

barrier to implementation of Digital Oilfield use cases, it

In a deeper dive into the Field Productivity and Fleet

fell in rank from a tie as the second biggest impediment

Management use cases, it was found that respondents

in 2015 to the fifth-ranked barrier in this years report.

perceived both to have matured and moved significantly

There is often a disconnect between people in different

along the adoption curve. The year-over-year compari-

seniority groups and functional groups within organiza-

son shows the perception of Field Productivity and Fleet

tions as to the benefits and barriers of Digital Oilfield

Management technologies maturity and highly proven

technology implementation. A breakdown of organiza-

market readiness jumped by 27 percentage points. As

tional silos and a better alignment of interests among

many in the industry remain tentative about Digital Oil-

the various groups could go a long way toward moving

field technology maturity and uptake remains sluggish,

the adoption of Digital Oilfield technologies forward.

this is an important consideration going forward.

There is a strong case to be made that the biggest

The top ranked benefits of Field Productivity were increased

hurdle slowing adoption is not technology related, but

labour productivity, increased asset uptime and improved

rather business related. There remains a lack of a clear

safety, while those for Fleet Management were reduced

vision in many respondents minds as to the benefits

maintenance and repair costs, improved safety and increased

the Digital Oilfield can deliver, suggesting the need for

asset uptime. This indicates that while boosting efficiency is

a bottom-line business case to be made to move im-

paramount in todays challenging price environment, safety

plementation forward. Secondly, organizational barriers

remains a top-of-mind issue in the industry.

need to be overcome, an indication that companies lack

The biggest perceived barrier to implementation is iden-

sufficient expertise or clear leadership to drive a greater

tical to last years across the board response: budget

level of implementation.
3

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Contents
Siemens sponsor message...........................................................................................................................................6
Storm Telematics sponsor message.........................................................................................................................7
GDM Pipelines sponsor message...............................................................................................................................8
Executive summary.......................................................................................................................................................10
The productivity imperative........................................................................................................................................ 11
The digital opportunity................................................................................................................................................ 12
Digital Oilfield successes............................................................................................................................................. 14
What can the Digital Oilfield do?............................................................................................................................. 18
Survey methodology...................................................................................................................................................20
Early returns: Awareness since 2015 has increased......................................................................................... 23
Perceptions of Field Productivity technologies: The needle is moving................................................... 24
Key benefits of Field Productivity technology adoption: Whats not to like?....................................... 26
Key barriers of Field Productivity technology adoption: Not so fast....................................................... 27
Field Productivity case study: Access to data when its needed................................................................ 28
Field Productivity case study: Ending the paper chase................................................................................. 29
Perceptions of Fleet Management technologies: Solidifying its strong case........................................30
Key benefits of Fleet Management technology adoption: More than fuel savings............................. 32
Key barriers of Fleet Management technology adoption: Some roadblocks remain.......................... 33
Fleet Management case study: Driving down costs and optimizing with analytics............................34
Conclusions and recommendations....................................................................................................................... 35
Field Productivity case study: Virtual training................................................................................................... 36
Fleet Management case study: Model behaviour.............................................................................................40

Message from

ts been nearly two years since global crude oil

More and more, oil and gas executives are

prices declined in response to increased global

starting to look beyond their own markets and

supply, and the industry is still reacting to the

geographies to seek out lessons learned from the

changes that have been imposed on it. A series

most innovative companies from other industries.

of technical innovations brought light tight oil to

At Siemens, weve helped thousands of or

market and introduced a fundamental change to

ganizations across multiple industries gain more

the supply of crude oil that, as microeconomic

value from their data and documents by taking

theory would suggest, reduced market prices

a life cycle approach to technical information.

accordingly. If the crude oil market reacts like

In fact, connecting the digital thread from an

the natural gas market did to shale gas in the

initial idea, through its realization, to oper-

2000s, higher prices may not return anytime

ational utilization has helped organizations

soon. An appetite for innovation has arrived in

significantly improve margins and compete

the industry to react to these new conditions

more effectively on the global stage. The com-

that have not been seen in decades.

mon element was the need for rapid access to

JWNs 2016 Digital Oilfield Outlook Report pro-

complete, correct and consistent information

vides an opportunity to examine the progress of

to become more efficient, regardless of prod-

that innovative spirit on whats working well and

uct or process.
This is the essence of the Siemens Digital

what isnt, and suggests how we hold the gains

made to date as well as continuously improve.

Enterprise and its application to the Digital Oilfield.

Message from

he challenges that producers and suppliers

one in value in comparison to all other GPS fleet

are experiencing within the energy sector

management systems in North America. A con-

should not come as a surprise to anyone

tributing factor to our success is our approach to

living in North America today. There are constant

view your organization as an integrated system,

downward pricing pressures being placed upon

to obtain the granularity required to measure

everyone within the value chain. This combined

the true cost of inefficiency.

with increased costs, while at the same time hav-

Storms proprietary efficiency algorithms are

ing to do more with less, is placing significant

used to create visualizations based upon descrip-

strain on all stakeholders. With mounting chal-

tive analytics, which focuses on the historical

lenges comes opportunity to re-engineer the way

performance and the reasons behind past success

you have managed your fleet, assets and mater

or failure; diagnostic analytics, which is focused

ials in the past. The 2016 Digital Oilfield Outlook

on determining the root cause of certain perfor-

Report will hone in on and demonstrate the im-

mance outcomes; predictive analytics turns your

mense opportunity to maximize your operational

data into actionable information by determining

performance by leveraging tools and data to pro-

the probable future outcome of an event; and fi-

vide greater insight into the performance of your

nally prescriptive analytics that synthesizes the

organization to help solve the problems many or-

data and then suggests decision options to take

ganizations are facing today. Storm Telematics

advantage of predications.

provides a holistic view over everything related

In todays economic environment, data must

to your fleet, assets and materials by leveraging

be collected, blended from multiple sources,

and optimizing the data collected from the use

cleansed and mined in order for true fleet, asset

of enabling technologies such as GPS, radio fre-

and materials optimization to occur. An organiza-

quency tagging and analytics.

tion cannot become efficient if they do not know

Storm Telematics is extremely proud of the

where they are inefficient, and Storm Telematics

Frost & Sullivan Customer Value Leadership Award

is leading the way to bring forward best prac-

it received in 2016 that ranked Storm as number

tices in measuring the true cost of inefficiency.

Message from

ith our industry facing increasing

companies are looking to quickly and seamlessly

pressure to do more with less, now

integrate newly acquired assets into their exist-

is the time for us to redefine our

ing field programs, manage the abandonment

approach and embrace technology as a means

of inactive assets or enable field personnel to

to improve operations. The second annual Digital

make decisions in real time, these efforts may

Oilfield Outlook Report is leading the way as

be crippled or even halted without access to

organizations look to find new and better ways

proper information.

to become more efficient and improve field

As we look to the future, GDM is poised to

productivity.

help companies navigate the Digital Oilfield com-

At the heart of any successful Digital Oilfield

plexities by finding better and more efficient

implementation is access to comprehensive asset

ways to use information to minimize re-work,

intelligence. This includes accurate, consistent

maintain historical information that is critical to

information that can be used across multiple plat-

future operational success and ensure that in-

forms to gain a holistic picture of operations and

formation is readily available when and where

perform analytics to improve efficiency. Whether

it is needed most.

Grow your
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business.JWN AD
OUR COMPANY
JWN has been Canadas most trusted source of information, insight
and intelligence on the energy industry for over 75 years. Buyers and
influencers depend on the insight delivered by our products to make
informed decisions that affect Canadas oilpatch and the construction
industry in Alberta.
CUSTOM REPORTS AND CONSULTANCY
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studies and more.
For more information please visit us at jwnenergy.com

Executive
summary
The pall that settled over the oil and gas industry after

emerging industrial Internet of Things (IoT), which lever-

the global price collapse in mid-2014 has not abatedin

ages ever cheaper, ubiquitous connectivity, data storage

fact, in some ways it has only deepened over the past

in the cloud and analytics.

year. Amid the pullback in investment, the collapsing rig

If there is hope for a reinvigoration of the Canadian oil-

counts, the job losses and bankruptcies, the oversupply

patch, short of higher prices, the Digital Oilfield, in its many

overhang persists as low-cost producers continue to pump

guises, is the single most promising solution. It holds the

at near or record rates and the global economy remains

promise to bring down costs and shrink the industrys en-

anaemic. The term lower-for-longer to describe crude

vironmental footprint, conceivably in game-changing ways.

oil prices has become the new mantra, while new clouds

But as with any potentially disruptive technological change,

form on the horizon.

it is difficult to predict which applications will come to the

While the biggest story in oil and gas this century, the

fore and have the greatest impact in the years to come.

unexpected and transformative shale gas and tight oil revo-

Hence this survey. We questioned many of the oil and

lution, has been a tremendously positive one in reviving a

gas professionals closest to the emerging technologies,

North American oil sector once considered to be at or near

and those in a position to decide if and when to invest in

its peak, its impacts have not all been positive. Initiated

Digital Oilfield technologies, in order to ascertain their feel-

by the advancement of horizontal drilling and multistage

ings about the technologiestheir technological maturity,

fracturing technologies, the tight oil boom precipitated

readiness for adoption and potential profitability. We also

the supply glut now ravaging oil markets worldwide and

sought their thoughts about what they saw as the big-

helped deprive Canadian producers of their primary ex-

gest benefits and barriers to technology implementation

port market.

and their own level of knowledge about specific technology use cases.

The apparent decoupling of energy demand growth

with expanding gross domestic product portends slower

As this constitutes our second annual sampling of opinion,

fossil fuel needs even when the global economy returns

we have captured some flavour of the trends in the indus-

to expansion. Declining costs for, and rapid growth in, re-

try when it comes to the Digital Oilfield, and found them

newables, along with increasing efforts to decarbonize

to be mostly positive ones. New this year, we have drilled

energy production in light of last years COP21 agreement

more deeply into the reasons for answers from respondents

to reduce greenhouse gas emissions, foreshadow increas-

that they did not have enough knowledge about a par

ing regulation and costs on hydrocarbon producers, and

ticular technology application to form an opinion about it.

competitive pressures favouring lower-carbon producers.

Based on the responses, it has become clear that in-

As a high-cost and, in some respects, high-carbon-

dustry professionals collectively hold a high opinion about

intensity producer, all these pressures are particularly hard

the technologies and their strong potential to increase

felt in Canadas oilpatch. Though there is little it can do to

productivity and reduce costs in the oilfield. But barriers

affect global oil prices, Canadian producers and service

to implementation, which have shifted from last year, re-

and supply companies can affect coststhrough innova-

main a somewhat limiting factor. At the end of this report,

tion. And the greatest source of innovation today is digital.

we present some recommendations based on the survey

The dawn of the digital era has already ushered in sev-

results that could accelerate technology adoption and

eral disruptive technology advances, from the Internet and

enhance the competitiveness of the oil and gas industry

the smartphone to autonomous vehicles, social media and

in Canada. We hope they move the conversation forward

3-D printing. Digital technology has also made possible the

over the challenging year to come.

10

The productivity
imperative
To say that the Canadian oil and gas

sector, as voiced by some of the most

industry, and more particularly the

respected voices in the oilpatch. Our

Alberta economy, has just gone through

costs, both capital and operating, are

one of the most tumultuous periods in

uncompetitively high. We must re-

its history would be an understatement.

duce both our capital and operating

The oilpatch was on track to see its

costs substantially, in the order of a

biggest two-year capital spending

minimum 3050 per cent across the

decline in its 70-year history, the

board, to become sustainably com-

Canadian Association of Petroleum

petitive, industry veteran Jim Gray,

Producers (CAPP) said in April. Total

the co-founder and former head of

capital investment in the oil and natural

Canadian Hunter Exploration, said

gas sector was forecast to plummet 62

in March. We must, as others have

per cent, falling to $31 billion in 2016

observed, innovate and adapt on an

from a record $81 billion in 2014. The

urgent schedule.

carnage has been felt from the idled rigs

The productivity imperative grows

across western Canadawith the number

in importance as the lower-for-longer

of wells drilled forecast to plunge to just

oil price scenario stretches into its

3,500 in 2016, a 66 per cent drop from

third year and there is a growing sen-

2014to job losses across the country

timent that prices may never return to

an estimated 110,000 direct and indirect

the sustained levels hitherto needed

positions according to CAPP.

to make oilsands megaprojects and

We have the

third-largest
petroleum
resources in the
world, [and] our
technology and
our ingenuity are
the keys to our
ability to sell our
resources around
the world.
Greg Stringham,
former vice-president of
marketing and oilsands,
Canadian Association of
Petroleum Producers

Canada is particularly vulnerable

many conventional projects profitable.

to the oil price decline due to its high

A combination of factorsenergy effi-

cost of productionamong the highest

ciency measures, COP21 and growing

in the worldin part because of to its

international pressure to transition to

remote operations and relatively high-

a low-carbon economy, rapid growth

cost bitumen production. As a result,

in renewable power abetted by steeply

Canada saw the most production cur-

declining costs and progress to de-

tailed in response to low prices of any

carbonize the transportation sector

Mackenzie report found in July as prices

major oil producer, energy consultants

through higher-fuel economy vehicles

languished in the US$45/bbl range.

Wood Mackenzie noted in February.

and electric carsis leading some ex-

Whether or not the current low-

Canadian production from oilsands

perts to suggest the global economy

price environment represents a new

and conventional onshore is taking

may be nearing peak oil demand, at

normal, it is in the short- and long-term

the most pain due to the high costs

which point oil prices could remain in

interest of Canadian producers to pre-

and distance from marketplace, Wood

a lower range indefinitely.

pare for such an eventuality in order

Mackenzie said.

As it is, most major conventional oil

to remain competitive with lower-cost

These factors point to an increas-

projects worldwide are at risk of can-

producers and ensure the sustainable

ingly urgent productivity imperative

cellation or deferral if the price of oil

growth of an industry so pivotal to the

faced by the Canadian oil and gas

remains in the US$50/bbl range, a Wood

Canadian economy.

11

The digital opportunity

The oil and gas industry is an undisputed leader in many high-tech areasprimarily where
they apply to the industrys core functions of exploration, drilling and production of
hydrocarbons. But the industry is a laggard in some other areas of technology development,
like spending on research and development, and creation of new business models and
products and services. Foundationally, the means by which it goes about fulfilling its core
functions havent changed in disruptive ways. Even the development of the horizontal drilling
and multistage fracturing technologies that set off the tight oil and gas production bonanza
was based on technologies used in the industry for decadesbut applied in new ways.
In contrast, the digital sector is trans-

vehicles, drones), travel, health care and

redefining virtually all markets and in-

forming various sectors of the economy

personal fitness and others.

dustries in fundamental ways. The past

with a business model that focuses on

The emerging IoTthe melding

five years have seen an inflection point

technology development time scales that

of connected devices, the massive

in which fragmented efforts to connect

dwarf that of the oil and gas industry.

data storage capabilities of the cloud

machines and sensors in industry-specific

It often thrives in a culture where risk-

and increasingly sophisticated big data

ways are now coalescing into a compre-

taking is high, development cycle times

analyticsis bringing digital technology

hensive vision of connectivity permeating

are short and growth can be exponential.

to another level, enabling a host of new

the global physical environment.

Now, the digital realm is bumping up

applications to increase productivity.

With the capability to combine the

against the energy sector in ways that

The IoT represents a shift from the

deluge of data collected and analyzed

cannot be ignored. Digital technology

narrow development of new information

with machine learning and artificial

is creating disruptive new products and

and communication technology systems

intelligence, the IoT can automate com-

services that are proving to be trans-

for specific industries toward the broad

plex tasks, diagnose problems, predict

formational in other sectors, such as

view of pervasive interconnectivity of

breakdowns and reduce downtime, in-

personal communications (smartphones),

the global physical environment to pro-

telligently guide entire fleets of vehicles,

social media and gaming, transporta-

duce novel and actionable new insights,

remotely inspect, control and optimize

tion (car and bike sharing, autonomous

according to an IHS report released in

field equipment and a host of other

March. The [IoT] is a technology con-

tasks with performance results superior

cept that is currently transforming and

to that of human operators.

The technologies produced are not
incremental; they are transformational,

12

Chuck Grindstaff, president and chief

executive officer of Siemens, said in a keynote at the Global Leadership Conference.
Theres a confluence of transformational
forces that companies are leveraging to
make products that are smarter and more
connected than everand these products

In a report released by BP last year,

are fundamentally changing markets, he

the company said digital technologies

said. We are on the brink of an age in

have the potential to increase pro-

which the nature of innovation itself is

duction volumes by four per cent and

dramatically changing. We have always

reduce costs by 13 per cent by 2050.

talked about better, faster, cheaper, but

At a time of lower prices, revenues and

this goes beyond that. Weve talked about

capital spending, digital technologies

best practices, but we really need to think

including sensors, data analytics and

in terms of next practices.

automated systemsstand out as the

As its applications mature, the IoT

is expected to grow rapidly. Globally, it

leading contributors for reducing costs,

the report stated.

is estimated there will be 2650 billion

The Digital Oilfield potentially offers

connected devices by 2020 and the IoT

oil and gas companies the best route

will annually contribute up to $11 trillion

forward to bolster productivity and

in value by 2025. Specific to the oil and

reduce unit costs. The most mature of

gas industry, the Digital Oilfield market

Digital Oilfield technologies, like Field

is expected to reach $30.78 billion by

Productivity and Fleet Management,

2020, with compound annual growth

have been shown to be field-proven

of 4.31 per cent from 2015, according

value creators for early adopters, as

to Research and Markets. The energy

indicated by the case studies found

sector will need some 12,000 new data

in this report. Given the enormous

analysts across North America and some

potential the Digital Oilfield offers,

90 per cent of new jobs in oil and gas will

it is incumbent on the industry to

require superior digital skills, according

seek ways to overcome the barriers

to Accenture.

to adoption and pave the way for

a globally competitive oil and gas
industry in Canada.

13

We are in a global

innovation race, and
time is of the essence.
If you look at the pace
things work on the web,
with crowdsourcing
and the like, we want
to tap into that.
Effectively, when you
tap into that, we are
tapping into the worlds
brightest minds and
their network, and that
I see as an exponential
opportunity.
Judy Fairburn, executive
vice-president of business
innovation, Cenovus Energy,
and chair, Alberta Innovates

Digital Oilfield
successes
The Digital Oilfield leverages many of the technologies
associated with the IoT, and stands to benefit from
the rapid evolution of the IoT in the consumer market
and other industries. Just as the consumer market is
full of hype about the latest innovations related to
the IoT, like autonomous vehicles, social networks
and augmented reality, the oil and gas sector is
developing solutions based on the same platforms.
Recommendations stemming from the report included:

Digital Oilfield technologies that are under-

BP is hoping to improve worker produc-

going testing or already implemented and

tivity and cut health expenses by creating

paying dividends span many subsectors of

a fitter workforce using wearable tech-

the oil and gas industry:

nology. The company purchased 25,000

FitBit fitness trackers for its employees

In northern Alberta, oilsands mining com-

to encourage healthier lifestyles. Workers

panies are testing autonomous haulage

can one-up co-workers by accumulating

systems, otherwise known as driverless

more steps per day while earning points

trucks, to improve fleet efficiency and cut

toward lower health-care costsin the

costs. The self-driving heavy haulers are al-

U.S., companies can take up to 30 per

ready in use in hard rock mines in Australia

cent off the cost of insurance premiums

and Chile. Suncor Energy announced in

when employee participation is tied to

2015 that it is piloting the vehicles in

corporate wellness plans. Points earn

Albertas soft rock oilsands open pit mines,

employees lower co-pays, deductibles

a more challenging environment. It entered

and out-of-pocket health-care expenses.

into a five-year agreement to purchase

BP reported its health-care costs were

175 400-tonne, autonomous-ready heavy

reduced by almost nine per cent among

haul trucks from Japanese manufacturer

participants and four per cent overall

Komatsu Ltd. Early testing of the tech-

after implementation.

nology found the driverless vehicles cut

fuel consumption and maintenance costs

Caterpillar partnered with technology

with less wear and tear. Full implemen-

company Seeing Machines to develop a

tation of autonomous operations, which

fatigue tracking application that uses fa-

could take place by 2020, would create

cial recognition software to detect driver

more savings by displacing hundreds of

drowsiness. Destined for installation in

high-paying driving jobs.

5,000 mining vehicles around the world,

14

the fatigue detection technology

uses a camera and light system to
measure signs of fatigue like eye
closure and head position. Signs
a driver may be nodding off or
becoming distracted initiates an
in-vehicle alarm and sends a video
clip of the driver to a 24-hour sleep
fatigue centre at Caterpillar headquarters in Illinois, where a safety
adviser can verify the fatigue event

Digital Oilfield
use cases

6. AUTOMATED PRODUCTION
ASSET OPS
Installing robots or other automated
equipment to perform operating, as-

1. REMOTE ASSET MONITORING

sembly and maintenance tasks in 24/7

Collecting and analyzing sensor

continuous and safety-critical operat-

data related to flow, temperature,

ing environments. Machine intelligence

vibration and integrity to improve

allows the equipment to sense con-

operational safety and performance

ditions in their local environments,

related decisions (e.g. wireless vi-

recognize and solve basic problems

bration data transmitter, downhole

(e.g. self-driving mining trucks).

drilling sensors).

and contact the mine site manager.

7. FLEET MANAGEMENT

Follow-up is conducted to determine

2. REMOTE ASSET OPERATIONS

Obtaining real time datathrough

the cause of the event and possible

Developing systems to operate

the use of wireless networks, sen-

remedy to prevent future events.

plants and facilities from a remote

sors and video analyticsfrom on

Since installation of the systems a

location. The intent is to reduce the

board sensors to improve asset

year ago, Caterpillar estimates there

on-site complement of staff, thereby

identification, tracking, utilization

has been an 80 per cent reduction

increasing operating efficiency and

and logistics operations (e.g. vehicle

in fatigue events as drivers become

personnel safety (e.g. off-site plant

telematics, GPS tracking).

much more aware of the issue due

control centres).

to the alarm.
Maersk Oil is utilizing gaming technology on its offshore oil and gas
projects to build efficient platforms
and produce future cost savings. The
technology allows workers to carry
out virtual activities on the rig using

8. FIELD PRODUCTIVITY
3. PREDICTIVE MAINTENANCE

Maximizing worker efficiency by

Utilizing predictive data analytics

providing wireless mobility that en-

and condition-based maintenance

ables on-demand access to field

approaches to improve asset

data, engineering drawings and in-

availability and reliability (e.g.

ventory and communication with

predictive maintenance of elec-

centralized operations experts (e.g.

tric submersible pumps, mining

field tablets and augmented reality).

truck tire failure).

an Xbox controller from the comfort

9. BIOMETRIC MONITORING

of their onshore office. The technol-

4. PRODUCTION ASSET

Issuing wearable devices to enable

ogy places workers inside a virtual

OPTIMIZATION

continuous monitoring of field em-

model on their computer screens,

Utilizing specialized sensors to

ployee location, work status and

appearing as avatars able to move

monitor and data analytics to

health to prevent safety incidents

about within a 3-D visual depiction

identify improvements in complex

or to decrease response time for

of the physical confines of the facility.

operations (e.g. SAGD steam/pro-

emergency responders (e.g. wear-

duction optimization, optimization

ables: RFID tags, GPS trackers, H2S

of field operations activity).

detectors).

5. REMOTE ASSET INSPECTION

10. IN-FIELD MANUFACTURING

Employing remotely controlled de-

Operating portable manufacturing

vices that use imaging (video, IR,

equipment that can be used to re-

X-ray) and other sensors to complete

duce downtime from critical part

inspection and detection tasks more

failure by producing specialized

reality solutions that allow onshore

efficiently and safely than conven-

components/parts on demand and

technical experts to communicate

tional field operations (e.g. pipeline

on site, eliminating need for safety

with those offshore via real-time, in-

inspection drones, unmanned au-

stock or hot shot orders (e.g. enter-

teractive devices.

tonomous vehicles).

prise 3-D printing).

Maersk says the technology has the

potential to save millions of dollars.
The company, which has created a
Technology and Innovation team to
allow ideas to be developed, tested
and nurtured to commercial application, is also developing augmented

15

State of the Digital Oilfield:

Moving forward
JWN published its first Digital Oilfield Outlook Report in 2015 to assess the state of the
Digital Oilfield within 10 distinct use-case technology applications. An in-depth industry
survey was conducted to quantify the industrys level of awareness of the Digital Oilfield
and what was perceived to be the most promising technologies based on three specific
adoption dimensions: the level of maturity of the technology; the expected return on
investment; and organizational readiness to adopt the technology. The report examined
key benefits and barriers to technology acceptance and provided recommendations to
improve awareness and adoption. Recommendations stemming from the report included:

DEEPEN AWARENESS

IDENTIFY CHAMPIONS

ENCOURAGE

EXPAND THE

Developing a better under-

The nature of Digital

COLLABORATION

CONVERSATION

standing of Digital Oilfield

Oilfield innovations is that

A greater level of

Opportunity exists for tech-

technologies and benefits

they cross departments,

collaboration both within or-

nology vendors and oil and

among industry profession-

from IT to operations.

ganizations and among them

gas companies to share

als is a critical first step to

Leaders at all levels, includ-

is needed to take full advan-

knowledge, to better under-

ensuring those technol

ing executive sponsorship,

tage of the transformative

stand the industry pain

ogies will be considered for

will be needed to focus ef-

opportunity offered by the

points and the innovations

adoption.

forts and deliver results.

Digital Oilfield.

available to overcome them

and to jointly develop new
applications for emerging
digital technologies.

Statistical evidence reveals that, while capital

costs are indeed falling, this has not been
entirely achieved by grinding vendors. The real
driver of cost reduction is productivity.
David Yager, Calgary oilfield services management consultant

16

This second Digital Oilfield Outlook Report focuses pri-

and virtual reality, whereby workers can become

marily on the use cases of Field Productivity and Fleet

avatars in 3-D representations of field facilities.

Management. They were deemed to be the best candi-

Onscreen digital representations of equipment links

dates for more detailed investigation due to the fact they

to the equipments specifications, performance

were the top ranked of the 10 use cases above from the

and maintenance history, warranty information

first report, based on their perceived return on invest-

and inventory of replacement parts. Emerging

ment, technological maturity and organizational readiness

technologies include wearables that can track

to adoption them. This report looks at the year-over-year

workers locations, vitals and real-time status, like

changes in perceptions about each, as well as specific

detecting accidents, and tools like smart glasses

benefits and barriers to their adoption.

for hands-free data input and output delivery.

As the use cases perceived to be closest to or already

In a world in which consumer-based mobile

in commercial use, it makes sense to take a deeper dive

connectivity has become second nature, Field

into their adoption benefits and roadblocks at a time when

Productivity technology provides employees the

oil and gas companies are in major cost-cutting mode and

kind of functionality they have come to expect in

in search for those applications that can bring about ef-

their private lives, and can help to attract young,

ficiencies and cost savings on the shortest possible time

digital-literate workers into the workforce. It can

scale. Technologies months or years away from commer-

pay dividends in short order, often with payback

cialization, like in-field manufacturing, are not of immediate

in six to 18 months.

benefit to those looking for immediate cost-cutting solu-

Fleet Management technology has been shown

tions, whereas Field Productivity and Fleet Management

to have similarly rapid payback, creating cost

represent commercial, field-proven technologies for which

savings that go well beyond the aspects of opti-

a strong business case can be made today. As technology

mized routing, fuel savings and increased driver

solutions not confined to the oil and gas sector, applic

safety typically expected. In addition to improved

able in many cases to any industry that manages vehicle

vehicle utilization, preventative maintenance and

fleets and field workers, they also represent an oppor

planning into such aspects as advanced staging of

tunity for technology transfer from those industries where

parts, todays Fleet Management solutions touch

they are more established, potentially further shortening

on other aspects of a companys operations, like

the adoption process.

inventory management, that can resolve supply

chain pain points.

Field Productivity takes in those technologies and services that make fieldwork more efficient and lower operating

Unprecedented volumes of data from vehicles

costs over time. The replacement of paper-based workflows

as well as from other sources like historic fleet

with digital ones facilitated by mobile connected devices is

data, comparative data from other divisions and

one way Field Productivity is transforming the workplace. It

fleets and weather reports, is cleaned up, com-

is providing field workers with instant and up-to-date access

bined and analyzed to produce new levels of

to such resources as work orders and scheduling, service

actionable insights. Asset tracking, as well as

contracts and invoicing, instructional diagrams, schemat-

vehicle GPS monitoring, is leading to improved

ics and 3-D images of facilities and equipment, installation

inventory control and more customized vehicle

instructions and inspection checklists, and maps and GPS

fleet solutions.

positioning. It speeds financial transactions and reduces

Promotion of driver safety has advanced

errors typically introduced through manual paper-based

beyond the reactive tracking of speeding and

data input processes.

aggressive driving behaviour to proactive mea-

Real time audio-visual communication with head office

sures to promote and reinforce good driving

or central command centres allows experts to remotely

habits through techniques like in-cab verbal

diagnose problems and walk workers through fixes. More ad-

coaching and the gamification of competition

vanced Field Productivity technologies facilitate augmented

between drivers for safest driving performance.

17

What can the

Digital Oilfield do?

EA
R
T
S

Digital Oilfield technologies can

AM rader
E
R
ST Ufpagcility
D
I
M

provide a myriad of benefits to

individuals and organizations alike

EA
R
T
S

UP

ing

in
nm

um

Bit

WN
O
D

lity

i
fac
GD
A
S

al &
ionional
t
n
nve ntr
Co onve ction
uncprodu

FIELD TABLETS
Enables field workers to have
easy-to-use, hand-held ruggedized
device that can display and allow
manipulation of any necessary
catalogues, manuals, plan drawings and
3-D imagery. Customizable apps can be
downloaded to further improve worker
efficiency.

HIGH-RISK WEARABLES

DRIVER BEHAVIOUR

Improves the monitoring of

Improves driver safety,

employees working alone, in remote

decreases vehicle wear and

locations or high-risk workplaces to

lowers insurance costs by

detect or prevent man down

applying data analytics

situations by using head-mounted

algorithms and visualization

displays, wristbands and badges to

tools to driving pattern data

detect falls, test air quality, measure

to create individual driver

levels of drowsiness and heat

improvement reports.

exhaustion or to simply pinpoint the

AUGMENTED REALITY
Decreases the chance of repair errors
and increases worker safety by allowing
them to simulate the job they are
working on before physically interacting
with the equipment. AR also enables
users to access information relevant to a
particular job digitally superimposed on
the physical environment in which
theyre working.

wearers location.

18

ASSET TRACKING
Enables improved transparency of where all the

er
fin

Re

mobile assets are, where they are going and what they
are being used for. The data can be used to provide
utilization statistics that can help inform asset lease
versus buy decisions and to find optimum opportunities to divest assets.

SMART ZONES
Reduce possibility of asset

g&
tinion
e
k
r t
Ma tribu
dis

incidents by drawing geo-fences

around regions or sites to enforce
customizable attributes including
speed limits and hazard warnings.

MAINTENANCE
Reduces the chance of unexpected asset failure and
subsequent repair costs by being able to tailor effective

ing

preventative and predictive maintenance schedules

ess
rocity
p
s l
Ga faci

based on historical and projected usage patterns.

FUEL EFFICIENCY
Minimizes how much fuel
is used per day/trip by
optimizing route

ls

ica
hem
c
t
o
tr n
Pe pla

selection, regulating
maximum speeds and
determining acceptable
idle times based on job
requirements and
weather systems.
Additionally, total GHG
emissions are lowered.

CLOUD ACCESS
Provides a secure library of plan
drawings, schematics, supplier part

SMART FORMS

catalogues, forms, training

Reduces paperwork and

manuals and procedures that is

transposition errors when

24/7 two-way access-enabled on

inputting field data. Provides

any type of mobile device.

accurate metrics and improved

Eliminates the need for workers to

reporting of completed
fieldwork through enhanced
data visualization software.

fie
Oil

carry physical material with them

ce

ffi
do

or return to an office location to

access necessary data.

19

Survey methodology
In the spring of 2016, JWN, in partnership with Siemens, Storm Telematics and GDM Pipelines, undertook a comprehensive survey of oil and gas professionals to assess their perceptions about Digital
Oilfield technologies and their readiness for adoption across the Canadian oil and gas industry.
Ten more in-depth interviews were also conducted in order to gain a more granular assessment of
attitudes and perceptions concerning the technologies under review. The survey is a follow-up on
a 2015 survey, which assessed 10 different Digital Oilfield technology use cases, and thus provides
year-over-year comparisons of many aspects of the transition.
In order to gain an overall industry perspective, the survey targets a broad cross-section of industry professionals, encompassing companies of various size and subsector (service and supply,
exploration and production and others) and diverse demographics (from executives and senior
management to technologists and front-line workers).
The survey had more than double the 2015 sampling, with responses from 355 individuals compared to 160 last year, to provide a higher level of accuracy of the opinions and attitudes of the
industry in general. As such, the results presented here provide an accurate barometer of todays
industry perspectives on the readiness and current level of adoption of Digital Oilfield technologies.

20

Digital Oilfield technology adoption

dimensions, benefits and barriers
The survey was broken into two sections. The

year-over-year and would provide insight as to

first section focused on asking the same adop-

how the level of awareness and adoption by the

tion dimension questions as were asked in the

industry was shifting. The second section then

first Digital Oilfield Outlook Report for each of

drilled into the adoption benefits and barriers

three use cases. This would draw out whether

for each of top two use cases to emerge from

and what type of industry trends were emerging

last years report.

Adoption dimensions for each use case

Solution
maturity

Please provide your

understanding of the
maturity of this use case
and readiness for in-field
deployment.

This use case:

1) W
 ill not be ready for at least 18 months
2) Will be ready for testing in 18 months
3) Is ready for testing today
4) Is ready for deployment
5) Is highly proven in the market

Business case
of the ROI

Please provide your

perception of the return
on investment (ROI) of this
use case (and associated
technologies) relative
to other uses of capital
investment.

This use case compared to other options for capital use:

1) Much weaker ROI
2) Somewhat weaker ROI
3) C
 omparable ROI to other uses of capital
4) Somewhat stronger ROI
5) Much stronger ROI

Organizational
readiness

Please provide an
assessement of your
current organizations
readiness to adopt this use
case and the associated
people, process and
technology changes.

My current organization:
1) Will not be ready for at least 18 months
2) Will likely be ready in the next 618 months
3) W
 ill likely be ready in the next 6 months
4) Has most of the capabilities today
5) Is fully capable and is ready to adopt this use case

Use case top

adoption
benefits

What are the biggest

perceived benefits of
adopting the given usecase technologies (choose
up to your top three)?

Use case top

adoption
barriers

What are the top identified

barriers to adoption
of the given use-case
technologies in your
organization (choose up to
top three)?

Decreased unplanned outages

Improved safety
Increased asset uptime
Reduced maintenance and repair costs
Improved production/enhanced recoveries
Increased labour productivity
Optimized inventory
Lowered environmental impact
Reduced energy costs increased security

Budget constaints
Existence of organizational barriers
Cybersecurity concerns
Difficulty in consolidating disparate/siloed data
Poor data quality
Low network capacity for data transmission
High cost to collect machine data
Lack of interoperability of solutions between
different vendors
Poor integration with existing solutions and
infrastructure
Shortage of necessary talent
Superior alternatives

21

Adoption dimensions for each use case

On average, each adoption dimension question for each

year-over-year changes and trends. Respondent industry

use case in this years Digital Oilfield survey garnered 150

subsectors consisted of 52 per cent supply and service, 20

respondents versus last years average response total of

per cent exploration and production, five per cent oilsands,

126, an 11 per cent increase in participation. By asking some

three per cent engineering, procurement and construction

of the same questions as last year, the data can measure

management, two per cent midstream and 17 per cent other.

Industry knowledge: Respondents who indicated they lacked adequate insight to answer a use-case question
were probed further with the following question

Reasons for
lack of subject
matter insight

Out of scope for my role in my organization

I do not clearly understand the benefits of adoption
The currently available literature is too technical or complex
I do not clearly understand who all the vendors are and
what their specific solutions are
I have not seen enough applicable case study examples
I have not seen enough demonstrations/pilot projects
I do not know all of the adoption requirements (people,
process, technology) for my organization

What is the main reason

for your do not have
adequate insight
response to one or
more of the previous
questions related to the
given use case?

A broad and representative cross-section of the Canadian energy industry surveyed

others

s&s

producers

5%

22%

26%

6%

355

total respondants

52%

3%

4%
11%

4%

7%
8%

20%
12%

8%

executive

management

technical

12%
front line/
support

The survey of 355 industry professionals represented a broad

The functional group category other is comprised of supply

cross-section of responses by seniority, including senior exec-

chain/procurement, environment, health and safety, human

utives (C-suite), vice-presidents, general managers, directors,

resources and finance.

senior technical advisers, asset managers, engineers, geologists,

By industry vertical, representation included exploration

geophysicists, accountants and instrumentation technicians.

and production, service and supply and others, comprised of

The seniority group category front line/support is com-

representatives from midstream, downstream, engineering,

posed of union front-line staff (foremen/supervisors), other

procurement and construction management, government

non-union regular staff and professionals (e.g. LL.Bs, C.As).

agency and consulting groups.

22

Early returns: Awareness since

2015 has increased
YoY change in respondents overall awareness of Field
Productivity and Fleet Management Digital Oilfield
technologies
2015

Overall industry awareness of Digital Oilfield technologies is improving, as shown by the decline in the number
of survey participants who did not complete parts of
the survey due to a perceived lack of adequate insight

2016

about the subject matter. The increase is a positive foundational step since improved industry awareness is more
likely to translate into increased industry adoption of

67%

60%

the technologies.

overall awareness

Respondent demographic breakdown: industry vertical versus seniority

out of scope
for my role
2%

1%
2%

dont understand
vendor/solution
landscape

unaware of
all adoption
requirements

dont understand
adoption benefits

information
too technical/
complex

not enough
case studies

2%

6%

6%

11%

13%

not enough
pilots

66%

44%

of all respondants
indicated lack of
adequate insight
to at least one
survey question

6%
1%

2%
3%

1%
2%

20%

9%
executive

management

23%
13%
technical

front line/
support

In response to the high number of respondents signalling a

adoption benefits, finding the details too complex and tech-

lack of knowledge about the technologies previously, this sur-

nical and a lack of pilots and case studies, were not cited

vey asked a supplemental question of those respondents to

as top concerns. Therefore, the task of vendors is the more

gain insight into the reasons behind their lack of awareness.

straightforward one of pointing to the benefits of the tech-

Primarily, respondents stated they felt knowledge about the

nologies and why that should matter to them, as opposed

technology was out of the scope of their role within their

to convincing them that the technology itself works.

On the other hand, the fact so many respondents felt it

organization63 per cent for Field Productivity and 68

per cent for Fleet Management.

was outside of their roles to become knowledgeable about

In one sense, the fact that a strong majority of those who

the technologies indicates they are not taking on the obli-

felt they lacked adequate insight chose the reason they felt

gation to stay informed about new technologies that could

it was out of the scope of their roles can be considered a

make their jobs or the jobs of their colleagues more pro-

good sign, since it does not reflect poorly on the technologies

ductive and safe. This reinforces organizational barriers as

themselves and their potential benefits. Other responses

workers dont see the benefit in pursuing technological

that could have indicated that, such as not understanding

change and may view it as a burden instead.

23

Perceptions of
Field Productivity
technologies:
The needle is moving

YoY change in perceived relative ROI of

FP technologies
2016
43%

50

41%

2015

Field Productivity was already highly ranked last year in

28%

logical maturity and organizational readiness, ranking in

second place out of 10 use cases in 2015, showing the indus9%

25%

terms of perceived return on investment (ROI), techno

10%

10

6%

20

18%

16%

30

3%

per cent

40

try is highly confident in its commercial appeal compared

to other Digital Oilfield applications. In 2016, that perception has only improved.

0
weakest

weak

neutral

strong

strongest

As the graphs show, Field Productivity has solidified its

position in particular in terms of technology maturity and
readiness for adoption. A majority of those who provided
a response, i.e. not including those who answered they had

YoY change in perceived maturity of

FP technologies
2015

inadequate knowledge to respond, believe the technology

is to some degree already ready for deployment. A particu-

2016

larly big jump was seen in those responding the technology

50

31%
23%

over year, and a similar fall in those suggesting maturity rechange recorded in this years survey, a strong indication the

9%

19%

15%

percentage points, from four per cent to 31 per cent year

mains at least 18 months away. This is the biggest perception

4%

10

14%

20

11%

per cent

30

20%

26%

38%

40

is highly proven in the market with an improvement of 27

Field Productivity use case has moved rapidly up the technology maturity scale in the eyes of industry professionals
and pointing to the likelihood of more widespread adoption.

0
ready
> 18
months

ready
< 18
months

in
testing

deployed

highly
proven

That trend is also reflected in the significant increase in

companies readiness to adopt the technology, up from a
mere six per cent last year to a meaningful 23 per cent this
year. This indicates that internally, organizations are starting to put into place the necessary resources to facilitate

YoY change in perceived organizational

readiness for FP techhnologies
2015

23%

important competitive advantage going forward.

The perceived ROI, however, has not significantly changed,

9%

6%

14%

22%

10

18%

15%

pact on industry, and keenness to embrace it could be an

20%

24%

suggest the Industrial IoT could have a transformative im-

30
20

Field Productivity technologies for which it will become increasingly vital for the oil and gas sector to take on. Studies

18%

per cent

40

advances in the Industrial IoT, one of the drivers of advanced

2016

41%

50

adoption. This is an important consideration given the major

perhaps an indication respondents are waiting for a stronger

business case to be made. Vendors might consider better
making the case through case studies or marketing to cus-

0
> 18
months

618
months

barriers
still exist

capable adopted
but not
adopted

tomers in a way more tailored to their specific needs.

24

ADOPTION DIMENSION SCORES BY SENIORITY

FOR FP TECHNOLOGIES
tech.
maturity

ROI

org.
capabilities

overall

executive

3.57

3.65

3.05

3.42

management

3.34

3.36

2.75

3.15

technical

3.41

3.26

3.23

3.30

front line/
support

3.75

3.16

2.94

3.28

average

3.49

3.36

3.00

3.28

Field Productivity
adoption:
Demographic breakdown
Breaking down Field Productivity adoption dimensions by
demographic group reveals some important insights. From
a seniority perspective, it is promising to see that executives,
though further removed from the direct applications of the
technologies, all scored above average on the three adoption
dimensions, indicating buy-in at companies most senior levels. However, management was shown to be the least bullish
of all seniority groups, indicating a substantial disconnect be-

ADOPTION DIMENSION SCORES BY FUNCTIONAL

GROUP FOR FP TECHNOLOGIES
tech.
maturity

ROI

org.
capabilities

overall

operations

2.97

3.24

2.93

3.05

instrumentation,
controls & eng.

3.85

3.62

3.88

3.78

information
technology

3.55

3.33

3.25

3.38

others

3.80

3.39

3.38

3.53

average

3.49

3.36

3.27

3.37

tween the two most senior groups. While executives appear

cognizant of the big picture benefits of technology adoption,
and technical and front-line staff see the immediate on-theground benefits, management is pointedly less convinced
of the advantages digital technology would bring, creating
a potential impediment to adoption.
Among functional groups, it is also telling that one field
group, the instrumentation, controls and engineering group,
scored the highest in all three dimension categories, since this
group would be at the front line providing the input data and
using that data in the field, while the operations group scored
much lower (overall 3.05 versus 3.78). As operations are key
decision makers in adoption, this could present a challenge for
actual implementation of Field Productivity technologies. Based

ADOPTION DIMENSION SCORES BY INDUSTRY

VERTICALS FOR FP TECHNOLOGIES
tech.
maturity

producers

on the lower scores in all adoption dimensions for the more junior staff compared to executives, there appears to be a large

ROI

org.
capabilities

overall

3.16

3.29

2.85

3.10

service &
supply

3.61

3.43

3.10

3.38

others

3.74

3.32

3.06

3.37

average

3.49

3.36

3.00

3.28

communication or support gap that needs to be overcome.

By industry vertical, the service and supply segment, with
more resources in the field, scores consistently ahead of producers. To the extent producers seek to increase the benefits of
these technologies, and thereby pare per barrel production costs,
it makes sense to invest in raising their organizations ability to
adopt and use digital technologies rather than depend on the
service and supply sector to move adoption forward for them.

Little or no innovation was occurring at $100/bbl [price of oil]. Now, at roughly

$35/bbl, everyone is innovating and working diligently to reduce costs and remain
relevant. In this context, $30 oil isnt such a bad thing. For we Canadians to be
sustainable players in this increasingly complex and competitive global market, we
simply have to improve our recent performance.
Jim Gray, co-founder and former head of Canadian Hunter Exploration

25

Key benefits of Field Productivity

technology adoption: Whats not to like?

Since Field Productivity applications

are designed to make workers more

Weighted average rankings of respondents top three choices for

perceived benefits of adopting FP technologies

productive, it is not surprising that increased labour productivity ranks as the

top benefit. Because Field Productivity
applications focus on having the right
people at the right place at the right

increased labour
productivity

45%

time with the right equipment, it fol-

improved safety

lows that industry would rank having

reduced maintenance
and repair costs

assets running for longer and with less

maintenance as top outcome benefits.
The third-ranked benefit, improved
safety, is gained by the technologys
ability to provide a real-time view of
the location and condition of people
and mobile assets in the field. Up-todate information on demand allows

39%

increased asset uptime

37%
34%

improved production/
enhanced recoveries

32%

decreased unplanned
outages
lowered environmental
impact
optimized inventory
reduced energy costs

31%
17%
15%
14%

workers to be more aware of their surroundings by, for example, knowing

where buried utilities and pipelines
are via technologies like augmented

FIELD PRODUCTIVITY

are. Both front line and technical groups

reality applications that use digital

BENEFITS: BY SENIORITY AND

prioritize safety and asset uptime, the

geospatial data.

FUNCTIONAL GROUP

issues they are most impacted by and

Increasing efficiency of the field

In terms of seniority, there is alignment

have the most control over.

workforce and thus cutting costs, rather

over the perception that the major benefit

By job function, no one perceived

than bolstering oil and gas production,

Field Productivity technologies provide

benefit is universally recognized, which

a side benefit of reduced downtime, is

can increase labour productivity, but

suggests the messaging of the key

seen to be the main benefit for much

that is where the similarities end. With

benefits of these technologies is not yet

of the technology involved in Field

their eyes firmly on the bottom line, ex-

clear. Just as there was the potential for

Productivity. It is also clear how big

ecutives and senior management view

adoption roadblocks because priorities

a priority safety is in the oil and gas

decreasing unplanned outages and im-

did not align with the seniority demo-

industry, placing in the top three for

proved production and recoveries as

graphics (executives versus front line)

both use cases.

most important. This can be attributed in

here too the operations group (the deci-

When reviewing the offerings of the

part to the costs associated to shutting

sion makers) have a very different view

major technology providers and com-

down operations unexpectedly, which

as to what these technologies can pro-

paring it to this data, it is apparent that

can amount to millions of dollars in lost

vide versus the instrumentation, controls

the industry gets it, as the perceived

revenue per day, exceeding revenues

and engineering group (the key users).

benefits are aligned to the actual bene-

being brought in through steady state

Making a clear business case that ad-

fits being marketed. This is an important

operations. On the other hand, the closer

dresses both groups needs will be key

step in making the connection between

a person is to the physical operation of

in advancing to see more technologies

need and solution offerings.

an asset, the more safety focused they

implemented.

26

Key barriers of Field Productivity

technology adoption: Not so fast

Consistently, budgetary constraint and

existence of organizational barriers con-

Weighted average rankings of respondents top three choices for

perceived barriers of adopting FP technologies

tinue to rank as the first and second

biggest barriers to adoption of both
Field Productivity and Fleet Management use cases. Because some of key
enablers for use cases overlap, it is not
surprising to see the perception of the
top barriers to be similar.
The second-ranked barrier, the existence of organizational barriers, indicates
that some of the financial issues and
pressures could be improved if Digital

budget
constraints

45%

existence of
organizational barriers
lack of interoperability
of solutions

poor quality data

nologies if they could be integrated with

existing systems. This is a direct function

22%

high cost to collect

machine data

of a cross-functional group initiative.

interested in piloting or adopting tech-

24%

cybersecurity concerns

low network capacity for

data transmission

long indicated that they would be more

27%

poor integration with

existing solutions

Oilfield technology was viewed as more

Additionally, organizations have

38%

21%
20%
19%

shortage of necessary
talent

18%

difficulty in consolidating
disparate/siloed data
superior alternatives

14%
8%

of organizations wanting to minimize

the risk of having to rely on only a few
vendors or solutions and their prefer-

FIELD PRODUCTIVITY

ence for making step changes versus

BARRIERS: BY SENIORITY AND

groups that the high cost to collect

quantum leaps.

It is among the different functional

FUNCTIONAL GROUP

machine data (the IT group) and the

The fourth-ranked barrier to adoption,

By seniority, all groups indicated budget

shortage of talent (the operations

poor integration with existing solutions,

constraints as their top perceived bar-

group) appear for the first time as

supports the comments of some survey

rier, but it was the executive group, at

barriers to Field Productivity technol-

respondents that the real challenge isnt

34 per cent, that had the largest per-

ogy adoption. It is also instructive that

the cost, ease of technology integra-

centage of respondents. Together with

it is the instrumentation, controls and

tion or getting the necessary data, but

this groups third-highest perceived bar-

engineering group that is concerned

rather the glut of disparate data from

rier, the high costs to collect machine

about cyber security and not the IT

numerous sources that first has to be

data, representing another cost issue,

group. Since Field Productivity tech-

standardized and normalized before

it becomes obvious there is a very cost

nologies could allow the distribution

anything of value can be done with it.

conscious approach to adoptioneven

and access of key electronic engineer-

With the lower ranking of concerns

more so than to functionality and in-

ing plans and schematics, the former

over low-network capacity, it is apparent

tegration/interoperability concerns

group has security concerns because

that the data management infrastruc-

with current technologies. Organiza-

of the sensitive content, whereas the

ture issue is becoming less of a limiting

tional barriers are consistently ranked

latter group is confident in the security

factor, a positive signal for Digital Oil-

as a second-place concern across

infrastructure, but rather is concerned

field implementation going forward.

the board.

about the cost to gather remote data.

27

Field Productivity case study:

Access to data when its needed
A matter as simple as access to infor-

available. Data may be stored in a fil-

historical infrastructure including asso-

mation has the potential to cost oil and

ing cabinet, on a network drive, on a

ciated production and environmental

gas companies millions of dollars per

spreadsheet or in someones own head,

features. Access to such information

day when it means the difference be-

making it difficult or impossible to use

at a companys fingertips, in the office

tween operating and not operating an

the information to make decisions about

or in the field, is allowing companies

asset. When a large exploration, de-

the most efficient way to use, plan and

to avoid costly information gap delays

velopment and production company

schedule resources.

and improve efficiency.

sought to put a recently purchased

Field productivity begins with asset

GDM showed this to be the case

pipeline back into service, it had to

intelligenceaccess to accurate, con-

when it enabled a mid-sized western

wait two weeks to get information on

sistent information that can be used

Canadian oil producer to proactively

the originally approved maximum op-

across multiple platforms in the or-

manage the integration of new assets

erating pressure on the line before it

ganization to gain a holistic picture

by providing information to its teams

was able to proceed. It also experi-

of operations and perform analytics

in the field shortly after the transac-

enced delays related to field activity

designed to improve efficiency.

tion, rather than having to wait for

in abandoning pipelines due to lack

Asset intelligence is particularly

weeks to begin managing the new

of information about the pipelines

valuable in the oil and gas industry,

assets. The technology also made the

exact location, and the inability of field

where assets are copious, diverse in

submission of One Call reports more

workers to provide updates to data in

nature and geographically dispersed:

efficient by having faster access to

real-time to facilitate timely and in-

In western Canada, there are over

accurate information about pipelines

1,400 operators managing in excess

and changes to pipelines, thus en-

Additionally, work is sometimes

of 660,000 kilometres of pipelines,

suring the safety of both company

done multiple times because people

795,000 wells and 158,000 facilities.

personnel and the public.

dont realize it has been completed

There are over 333,000 pipelines

In another case, a large integrated

before, or do not have access to the

that have been built in western

oil and gas producer was able to save

previous records, notes GDM Pipelines,

Canada since 1900; approximately 73

$300,000 in municipal road use taxes

a Calgary-based provider of compre-

per cent of these are still operating.

by demonstrating its actual road usage

hensive pipeline, facility, midstream

Approximately 30 per cent of op-

based on routing to its known assets.

and transportation information to the

erating pipelines are greater than

Additionally, a provincial regulator in

Canadian oil and gas industry. Critical

20 years old.

western Canada with an identified

formed decision-making.

information about an assets history is

Field Productivity solutions like that

need to make historical documents

often misplaced when assets change

provided by GDM integrate and re-

more accessible is in the process of

hands, leading to time lost trying to find

late information across the complex

using GDMs technology to make them

information or completing field activities

physical network of wells, pipelines

available, rather than adding additional

that could have been avoided if histor-

and facilities across western Canada,

staff to manually retrieve documents

ical information had been immediately

providing reporting on current and

when requested.

28

Field Productivity case study:

Ending the paper chase
Tundra Process Solutions, a Calgary-

service management software com-

From there, all work performed

based instrumentation and control

pany based in California, in order

is entered onto a report on the iPad,

specialist in the oil and gas industry,

to automate and speed up the bill-

including time, parts and materials

was getting so bogged down with its

ing process, reduce non-productive

used, and when completed the report

paper-based work order processes

time and needed paperwork, provide

is relayed to the companys office for

that delivery time for invoices after

field workers with remote access to

processing. With customer signoff,

work had been completed could

information and work orders, im-

the report is uploaded and automat-

stretch to four to six weeks. The com-

prove forecasting and cash flow

ically emailed to the customer, and

pany, which also provides service and

and provide data for analysis that

invoicing can occur the same day.

in-house custom engineered solutions,

could reduce bottlenecks and lead

serves remote locations throughout

to greater workforce productivity.

western Canada.

Tundra realized a 75-per-cent

reduction in the time to send out

Tundra created a four-person task

an invoice after service was com-

The company was old-school, still

force to extensively trial the soft-

plete and a 25-per-cent reduction

employing paper and pen in the field

ware, including sandbox testing, used

in non-billable time. And there were

and using Excel-generated service

by software developers to test new

other benefits. The reporting errors

reports. Its three dozen field techni-

programming code in isolation from

of the paper era were eliminated.

cians needed to attend to company

the production environment, and a

Analysis of the data now available

offices to manually enter written

field service process before rolling

brings new transparency, enabling

work onto company computers, cre-

out the ruggedized iPad-based solu-

the company to effectively track

ating excessive non-billable hours.

tion in 2015.

aspects like billable and non-billable

Other inefficiencies seeped into the

The new process starts with cre-

hours, worker productivity and ex-

working day. The company couldnt

ation of work orders in ServiceMax

penses, and to determine its highest

effectively track its field workers or

dispatch console, which can then be

expenses compared to revenue.

generate reports on billable time

sent electronically, along with any

The solution is also a time saver

and had no effective way to trace

other necessary information, to techni-

technicians can file work orders

other inefficiencies and bottlenecks.

cians in the field. The job is automatically

and other documents online, largely

Tundra turned to a paperless solu-

placed into their calendar when it is

eliminating their need to come into

accepted by the field worker.

the office.

tion offered by ServiceMax, a field

29

Perceptions of Fleet Management

technologies: Solidifying its strong case
YoY change in perceived relative ROI of
FM technologies

0%

41%

nological maturity and organizational readiness (and

fifth in ROI). This year, it improved in all those cate-

27%

gories, with a particularly strong 27 percentage point

boost in the perception it is already highly proven in

15%

11%

25% 33%

18%

16%
0%

10%

the 10 Digital Oilfield use cases and in terms of tech-

the market, up from 11 to 38 per cent, among those

who provided a rank.

3%

20%

2015, Fleet Management was ranked highest overall of

37%

50%

30%

was and remains the darling of the Digital Oilfield. In

2016

2015

40%

In terms of technology use cases, Fleet Management

Fleet Management rose year-over-year in the perception

weakest

weak

neutral

strong

strongest

that organizations are fully capable and ready to adopt the

technology (from 16 to 26 per cent). Together with the sig-

YoY change in perceived maturity of

FM technologies

nology is past the initial pilot stages and abundantly ready

28%

32%

ready
>18
months

or much stronger (15 per cent) ROI compared to other in11%

7%

4%

8%

14%

20%

ready
<18
months

The case for ROI is also solid, with more than half of respondents feeling it has somewhat stronger (37 per cent)

19%

30%

for larger scale deployment.

vestments. That compares to just 21 per cent ranking its

15%

40%

38%

39%

50%

0%

the results tangibly show that industry believes this tech-

2016

2015

10%

nificant increase in recognized maturity of the technology,

adoption as somewhat weaker (18 per cent) or much weaker

(three per cent) than other uses of capital.

in
testing

deployed

More generally, Fleet Managementtype technologies

highly
proven

have become more high profile in recent years as hype

about their potential grows in the consumer market, with
advanced mobile-based personal navigation applications

YoY change in perceived organizational

readiness for FM technologies

and monitoring technology, car sharing applications now

available and both automobile and information technol-

2016

2015

ogy companies investing billions of dollars in the race

50%

to develop the driverless car. In the oil and gas industry, companies are piloting driverless trucks in oilsands
26%

mining operations in addition to adopting more conven-

16%

tional Fleet Management solutions. At a time of rapid

technological innovation, Fleet Management is an area

15%

26%

24%

27%
16%

16%

12%

20%

16%

30%

23%

40%

to watch with more cost-cutting applications sure to

10%

enter the marketplace in the near to midterm.

0%
> 18
months

6-18
months

barriers
still exist

capable
but not
adopted

adopted

30

Fleet Management
adoption:
Demographic
breakdown
Perhaps surprisingly, the seniority group most
driving Fleet Managements favourable ratings
was the executive group. With the front-line group
having a below-average score, its clear the value

ADOPTION DIMENSION SCORES BY SENIORITY FOR

FM TECHNOLOGIES
tech.
maturity

ROI

org.
capabilities

overall

executive

4.36

3.45

3.27

3.70

management

3.93

3.54

3.34

3.60

technical

3.85

3.35

3.65

3.62

front line/
support

3.41

3.29

3.00

3.24

average

3.92

3.42

3.35

3.56

and importance of these technologies is not making its way down the full chain of command.
The real value of Fleet Management technologies is the ability for operations to have data

ADOPTION DIMENSION SCORES BY FUNCTIONAL GROUP

FOR FM TECHNOLOGIES
tech.
maturity

ROI

org.
capabilities

overall

operations

3.53

3.06

3.15

3.25

instrumentation,
controls & eng.

4.11

3.67

3.50

3.76

information
technology

4.45

3.80

3.73

3.99

others

4.05

3.56

3.40

3.67

average

3.92

3.42

3.35

3.56

analyzed so it can pinpoint where it needs to

change high-cost behaviour (e.g. driving patterns and style, idle times, improved routing).
Yet in terms of functional groups, operations
does not appear to fully understand or believe
in the ROI, taking a dimmer view than the overall
average score and contrasting sharply with ITs
high ratings across the board. Addressing this
disconnect could be key to improving adoption.
The other category, including midstream,
downstream, engineering, procurement and
construction management, government agency
and consulting groups, is particularly confident

ADOPTION DIMENSION SCORES BY INDUSTRY

VERTICALS FOR FM TECHNOLOGIES
tech.
maturity

ROI

org.
capabilities

overall

producers

3.69

2.92

3.12

3.24

service &
supply

4.02

3.59

3.41

3.68

others

3.96

3.65

3.52

3.71

average

3.92

3.42

3.35

3.56

about Fleet Managements potential. This could

be a reflection of the fact some of the companies in this category operate some of the
largest vehicle fleets and are therefore most
cognizant of the demonstrated benefits of the
technologys adoption.

Fleet management is a solid platform for communications providers to build

additional value, beyond connectivity, for automakers, third-party logistics
companies and the like. Autos represent the raison detre of IoTthings with
wheels, always connected, all the time interacting with other things with
wheels and their environment.
Eric Goodness, IoT and mobile analyst, Gartner Inc.

31

Key benefits of Fleet Management technology

adoption: More than fuel savings

While fuel cost savings is the most

demonstrated and obvious benefit of

Weighted average rankings of respondents top three choices for

perceived benefits of adopting FM technologies

Fleet Management solutions, survey respondents surprisingly ranked reduced

energy costs at the bottom of the list,
choosing instead aspects leading to

reduced maintenance
and repair costs

44%
42%

improved safety

higher efficiency. In fact, understanding

behaviour, usage and wear patterns of
mobile assets in order to lower maintenance and repair requirements was
seven to 10 priorities spots higher than
focusing on reducing fuel consumption.
This could be an indication respondents
are looking past the most established
benefit of Fleet Managementfuel savingsto the more intangible savings
that have come to the fore as the technology has advanced in sophistication
and capabilities.

increased asset uptime

35%

increased labour
productivity

35%

improved production/
enhanced recoveries
decreased unplanned
outages
lowered environmental
impact
increased security

21%
17%
16%

optimized inventory

14%

reduced energy costs

14%

As expected from a technology intended to monitor and improve driver

24%

behaviour, improved safety was highly

ranked, second only to reduced maintenance and repair costs. The results
indicate there is a shift in industry
workers view and comfort level in the
increased visibility of their movements
and operations as there is a direct safety

the responsibility on their shoulders to

mobile warehouses, this makes sense,

benefit, and this transparency isnt just

drive down costs in light of falling rev-

but surprisingly that insight seems

about reprimands and job reductions.

enues. Increased asset uptime was a

to have been missed by the other

top three benefit listed by all groups.

group, of which a big sub-grouping

FLEET MANAGEMENT

Among functional groups, increased

is the supply chain management and

BENEFITS: BY SENIORITY AND

asset uptime is again a consensus top

FUNCTIONAL GROUP

three choice, as is improved safety.

Finally, it is apparent that the focus

While most groups see improved safety

The outlier is the optimization of in-

of vendors on the potential fuel and op-

as the biggest upside to Fleet Manage-

ventory seen as the chief benefit of

erating cost savings do not align with

ment by a wide margin, the biggest

Fleet Management in the IT group. This

the top benefits listed by survey re

misalignment among seniority levels

suggests the IT group believes having

spondents. This could be a case where

is seen in managements greater focus

more insight into the whereabouts of

the vendors needs to better educate

on cost factors, likely a reflection of to-

mobile assets translates into optimizing

the user or adapt their offerings to bet-

days challenging price environment and

inventory. As trucks are often seen as

ter correspond with user perceptions.

32

procurement teams.

Key barriers of Fleet Management technology

adoption: Some roadblocks remain

Aside from the current state of the

industry, battling the deepest bust

Weighted average rankings of respondents top three choices for

perceived barriers of adopting FM technologies

cycle in a generation, the fact budget

constraints is ranked as the top perceived barrier to Fleet Management
adoption is not helped by the fact that
the technology is for the most part
cutting edge and thus has yet to come
down the cost curve. It could also be
hypothesized that budget constraints
is a default answer in the absence of

48%

budget constraints
existence of
organizational barriers

44%

difficulty in consolidating
disparate/siloed data

24%

poor integration with

existing solutions

22%

cybersecurity concerns

22%

a strong business case and a history

of proven pilots and integrations. As
time goes on and more pilots and case
studies prove their value, this barrier
should be easier to overcome and more
specific concerns, such as integration
with existing solutions, will come to
the forefront.
Most positive in the rankings for
both use cases is the marked decrease

poor data quality

18%

high cost to collect

machine data

18%

lack of interoperability
of solutions

17%

shortage of necessary
talent

14%

low network capacity

for data transmission
superior alternatives

12%
7%

in concerns about cybersecurity, a

potential deal breaker that was tied
for the second-highest barrier to
adoption of Digital Oilfield technologies in 2015.
In percentage terms, it was ranked

FLEET MANAGEMENT

At the functional level, cyberse

as a top barrier less than half as often

BARRIERS: BY SENIORITY AND

curity pops back onto the agenda

as budget constraint for both use

FUNCTIONAL GROUP

with three out of the four groups

cases. While it remains an issue that

When broken down by seniority group,

making this their third-highest

needs to be prudently dealt with, it is

there is a distinction whereby the closer

concern, though at relatively low

promising in that what was perceived

groups are to the technology, the more

percentage levels compared to the

as a major infrastructure, behavioural

concerned they are with cybersecurity.

top two barriers cited. Oddly enough,

and perception-based barrier can be

This may be a function of having a better

it is not the IT group that ranks it in

overcome to that degree in a relatively

understanding of the technical consider-

the top three. Instead, that group

short period of time. Since much of the

ations of implementation, whereas the

is more focused on the cost to col-

technology applications rely heavily

groups making specific purchasing deci-

lect the machine data that could be

on wireless mobile access and cloud

sions at the management level are more

generated. This could indicate the

computing, it is a positive step forward

focused on the overall picture and how

concerns of the other groups are

to see cybersecurity concerns fall to

implementation fits in with the different

speculative and based more on per-

the middle of the grouping.

applications already in place.

ception than reality.

33

Fleet Management case study: Driving down

costs and optimizing with analytics
Canadian Natural Resources Limited,

a GPS, RFID and analytics offering

Pro fleet tracking technology provides

one of the largest independent oil and

into an organizations operations. The

more advanced mapping features,

gas producers in the world, faced a

telematics data (SMART-vu Pro) and

including integrated Patchmaps, in ad-

fleet management challenge recently.

radio frequency identification (RFID)

dition to detailed and comprehensive

In order to reduce vehicle fleet costs

(SMART-vu TagNet) data collected is

reporting, allowing Canadian Natural

and enhance the health and safety of

used to establish a baseline (SMART-vu

to obtain critical fleet performance

its workers, it wanted to take a more

Analytics), which is in turn used to trend

data within three clicks.

proactive approach to reducing ex-

the metrics measured by leveraging pro-

Storm continues to provide

posure to safety incidents by curbing

prietary efficiency algorithms in the areas

Canadian Natural with a dedicated

negative actions like speeding. It also

of descriptive analytics (what happened),

Implementation Specialist to assist all

wanted to obtain Diagnostic Trouble

diagnostic analytics (why did it happen),

11 districts in optimizing fleet assets,

Codes from on-board vehicle com

predictive analytics (what will happen)

including training and support by way

puters reporting on various metrics, like

and prescriptive analytics (what is the

of configuring scheduled reports for

seatbelt usage, and reduce exposure

best outcome and how it can be made

various Canadian Natural stakeholders

to theft of its ATVs. And it needed to

to happen).

and setting up escalation procedures

replace the CDMA communications

Storm integrates telematics data

network it used that was in the pro-

and RFID technology into an algo-

using a flexible alerting engine.

The technology allowed Canadian

cess of being discontinued.

rithm-based analytics engine to analyze

Natural to establish a solid baseline for

The Calgary-based company,

the massive volumes of data coming

ongoing trending analysis and to begin

which manages a fleet of more than

in from multiple sources and formats

measuring reliably specific metrics such

800 vehicles in 11 operating districts,

and turns it into clear, highly granular

as speeding, idling and off-hour usage

approached the challenge as an oppor-

information that is converted into ac-

of fleet assets. Within the first quarter

tunity to upgrade to the latest in Fleet

tionable intelligence able to deliver

of deployment, one of the divisions was

Management solutions, which leverage

quantifiable savingsand ultimately

able to determine that $4,179 in fuel

digital platforms to maximize fleet ef-

measuring the cost of inefficiency.

was used as a direct result of excessive

ficiencies. It chose the SMART-vu Pro

Storm seamlessly transitioned

speeding (29 assets) and 3,850 litres

solution offered by Storm Telematics.

Canadian Naturals hardware that was

of fuel was used during 2,485 hours

SMART-vu Pro is a powerful GPS dis-

installed into its fleet to the SMART-vu

of idling (based on 30-plus minutes).

patching tool that also functions as a

Pro platform, replacing the necessary

The first division deployment achieved

comprehensive reporting system and

legacy CDMA modems with HSPA mo-

a 24-per-cent return on investment

can be configured according to specific

dems and deployed satellite tracking

in year one and a 152-per-cent return

customer needs. Storm Telematics, an

devices, providing ubiquitous coverage

on investment in year two. Increased

Edmonton-based company, optimizes

using the Globalstar satellite network,

safety is achieved for employee and

fleets by building business impact mod-

onto the companys ATV fleet to re-

contractor workers by providing visi-

els to validate the value of implementing

duce exposure to theft. The SMART-vu

bility over driver behaviour.

34

Conclusions and
recommendations
Present a robust business case
Budget constraint has rated at the top of the barriers to adoption of Digital
Oilfield technologies every time the question has been asked. But what does that
mean? While the oil and gas industry has been subsumed in a ruthless cost-cutting
spiral since prices collapsed two years ago, that doesnt mean companies are
not investing in activities that will save money. Indeed, as cost cutting becomes
paramount, it makes more sense to spend on measures to reduce expenses, not
less. That suggests proponents of Digital Oilfield technologies are not making a
convincing enough business case for implementation to pay for itself and actually add value to the enterprisebudget constraint becomes a default answer
in the absence of strong business cases and a history of proven implementations. The ability to make a strong business case, including a robust cost-benefit

Focusing on the
quantitative benefits
of your idea is the
most effective way of
removing your biggest
hurdle when dealing
with key decision
makerstheir personal
biases.
 Bob Phillips, chairman of the

board, Precision Drilling

analysis and evidence of successful implementation through pilot projects, case

studies and testimonials, can go a long way to de-risking the decision to invest
in any new technology.

Building an effective business case

The role of a business case is that of

with existing systems, training require-

is to be able to work deeper through the

a communication tool, composed in a

ments). Once these two elements have

tree to identify the specific examples of

language that the target audience under-

been determined, a proper cost-benefit

how a given technology could benefit

stands and with enough detail to facilitate

analysis can be performed to allow a

a user or the organization and then roll

decision making. Using a business case

logic- and fact-based decision on adop-

back up and assign specific values (fac-

approach to sell technology adoption

tion to be made.

tors, multipliers, absolute values) to all

opportunities is first about moving away

the micro and macro benefit levers that

from simple qualitative benefit expression

NAVIGATING A BUSINESS CASE

would change from the baseline oper-

(e.g. this application will make your work-

DECISION TREE FRAMEWORK

ating scenario.

ers more efficient and safe) to providing

The framework example below is de-

At the end of the exercise, a com-

quantifiable rigour around the potential

signed to assist in visualizing all the cost

prehensive benefits value should be

benefits (e.g. this application will decrease

levers adopting a new Digital Oilfield

generated that can be then compared

the volume of work by X, increase pro-

technology could affect. After estab-

against the costs, including all the im-

ductive time by Y and lower operating

lishing a proper baseline scenario, a user

plementation considerationscost

costs by Z over a specific timeframe).

trying to make a business case would

to purchase, maintenance, integra-

After benefits have been effectively

identify all the relevant solution bene-

tion with other systems and training,

categorized and quantified, implementa-

fits that match the application need

to ensure the benefits will outweigh

tion considerations need to be addressed

and work through the framework, left

the costs by the amount and within

and also quantified (e.g. cost to purchase

to right, highlighting all the applicable

the timeframe required for capital

and maintain a solution, integration costs

macro and micro benefit levers. The goal

investment.

35

Business case decision tree framework for adoption

of Field Productivity technologies
PLANNED
OPERATIONS

UNITS OF WORK
(e.g. number of truck rolls)

UNPLANNED
OPERATIONS

FIELD PRODUCTIVITY

TIME
(e.g. hours spent completing a job
start to finish)

Use case

PRODUCTIVE
TIME

UNPRODUCTIVE
TIME

COST
(e.g. the average labour rate being
incurred)

OPEX

Macro benefit levers

Micro benefit levers

Field Productivity case study: Virtual training

Using Siemens advanced simulation softwarewhich gen-

Using Siemens COMOS facility management software pro-

erates precise, 3-D virtual representations of technologically

gram, and its COMOS Walkinside 3-D virtual reality model-building

complex industrial facilities, including detailed information

system, technicians can see themselves depicted as an avatar

and the complete history of associated componentsa com-

in a virtual model of a facility, which they are training to use

pany operating an offshore oil processing platform in Africa

or required to inspect. Safety is enhanced and the need for

was able to begin its training on a virtual model while its fu-

paperwork, like training manuals, component diagrams and

ture workplace was still under construction. By reducing the

inspection reports, is reduced or eliminated. Companies can

time needed for training sessions on board, the oil platform

also use the technology to complete planning and virtual com-

entered service two months earlier than planned.

missioning of a facility before a single bolt had been tightened.

36

MAINTENANCE: Servicing assets

routinely/scheduled to maintain
normal operations

Reduce frequency of site visits by performing trouble ticket analytics on

asset usage versus planned work and maintenance schedules to determine
which activities can pushed up or back to align with other site visits.

INSPECTIONS: Assessing the

operational health/status of
an asset

Reduce number of site visits by monitoring infrastructure and completing asset inspection remotely and combining actual site visits through
optimizing inspection schedules.

INSTALLATION: Putting new

assets into service or adding
functionality to existing assets

Decrease the number of follow-up trips required to complete installations by providing 24/7 access to centrally located troubleshooting
experts, installation guides and video tutorials to ensure the job can be
done correctly the first time.

REPAIR: Fixing an asset that has

failed unexpectedly or correcting
previous work done incorrectly

Reduce the need for site assessment visits by analyzing historical

maintenance and repair logs to best determine cause of failure and dispatching properly trained crews with the right parts/equipment the
first time.

JOB ASSESSMENT: Scoping job

requests to identify all possible
required resources

Reduce the amount of time a call out could take by conducting outcome probability and risk-based impact analysis on trouble tickets so
that the optimally trained technician/crew can be dispatched rather
than using a first-available, first-out approach.

JOB COMPLETION: Conducting

work on the asset at site and time
required to finish the job

Decrease time to completion by providing instant around-the-clock access to centrally located experts, manuals, procedures and engineering
schematics.

TRAINING: Providing resources

with new skills needed to improve
their safety and output

Maximize output from crews by optimizing how crew downtime is

spent by scheduling skills and safety training during expected downtimes or off peak hours.

SEARCH: Expending effort

looking for parts and equipment
needed for the job

Reduce resources spent on searching for parts and equipment by having

real-time overview of inventory at fixed and mobile warehouses so that
parts can be available without delay for routine and emergency jobs.

TRAVEL: Travelling to and from

the worksite

Decrease distance crews travel through intelligent routing of trouble

calls that balances impact of asset failure versus likelihood of failure
versus crew availability and time for crew to respond.

WORKFORCE PLANNING:
Optimizing how crews are staffed
and deployed

Reduce average labour costs by organizing crews based on frequency

of call outs versus required response time versus total overtime wages
(e.g. standby or on-call model, 24/7 ops). Additionally, optimize the
mix of skillset and seniority of crews using predictive workload models
based on historical call-out data.

Micro benefit categories

Examples of application benefits

37

Business case decision tree framework for adoption

of Fleet Management technologies
UNITS OF WORK
(e.g. number of truck rolls)

OPERATIONS

FLEET MANAGEMENT

Use case
OPEX
COST
(e.g. the average costs associated
with a truck roll or km traveled)
CAPEX

Macro benefit levers

Micro benefit levers

38

UTILIZATION: Optimizing how

mobile assets are used

Increase transparency of fleet location and usage to improve their utilization

and decrease total distance traveled through intelligent routing, and optimizing the number of mobile assets required to be owned/rented in the fleet.

MAINTENANCE: Servicing assets

routinely/scheduled to maintain
normal operations

Reduce frequency of required shop visits by performing trouble ticket analytics on asset usage versus planned work and maintenance schedules
to determine which jobs can pushed up or back to align with shop visits.

REPAIR: Fixing an asset that has

failed unexpectedly or correcting
previous work done incorrectly

Reduce potential for re-work or the need for additional resources to be

dispatched by properly analyzing the information received on the original trouble ticket and calculating possibilities, probabilities and impact of
additional issue and dispatching crews accordingly rather than using a firstavailable, first-out approach.

SAFETY: Minimizing incidents

through safe operations of mobile
assets

Decrease chances of lost time to injury due to driver incidents by monitoring

driver patterns and conditions and providing real-time (e.g. in-cab) coaching
and creating safe zones (e.g. virtual GPS zones regulating maximum speeds).

FUEL: Determine strategies to

save on amount of fuel used in
operations

Improve driver behaviour through operations monitoring and coaching so

that mobile assets are used in an optimum fashion (e.g. no speeding, limit
idling). Decrease fuel usage by following proper maintenance schedules and
operating guidelines (e.g. tire pressure).

INSURANCE: Paying premiums

for asset operation and accident
claims

Reduce overall insurance rates of mobile assets by being able to quantifiably

demonstrate statistics of driver behaviour and provide factual information
to correctly determine at-fault parties in accident situations, thereby reducing claim and litigation costs.

ENVIRONMENT: Lowering
environmental impact due to
operations

Reduce overall carbon emissions and subsequent carbon taxes by following

proper maintenance schedules, driving less aggressively and travelling fewer
kilometers due to route optimization. Lower other environment costs associated with fees for automotive parts by reducing wear through excessive use.

FLEET: Managing the purchase,

lease and divestiture of assets

Increase the time between purchases of assets and increase recovery of assets to be divested as a result of reduced wear due to improved operator
usage patterns and proper maintenance programs.

Micro benefit categories

Examples of application benefits

39

Fleet Management case study: Model behaviour

A Calgary-based service and supply company that

engagement, with a $295,000 payback on the com

operates a total fleet size of 2,100 assets sought out

panys 110 vehicles. It projected over $150,000 in annual

an assessment for entering into a pilot for 110 heavy-

savings based on reductions in fuel consumption and

duty vehicles (including vacuum trucks, water-hauling

asset deterioration based on a projected five-per-cent

trucks and assorted vehicles serving the needs of the

reduction in aggressive driving behaviour, over $26,000

oil and gas, petrochemical and mining industries) to

in fuel savings by reducing idling by 15 per cent, an

determine the savings a Fleet Management solution

additional $120,000 revenue based on improved utiliza-

could provide. Storm Telematics undertook a detailed

tion and over $176,000 in annual maintenance savings

audit of the fleet to determine possible efficiencies to

based on improved preventative maintenance and re-

reduce costs and improve safety. It used an existing

duced vehicle wear and tear.

methodology that tracks savings in driver behaviour

Based on these projected savings, it was estimated

by moving the worst driving offenders in a fleet in line

that breakeven would occur before six months. Storm

with the best drivers, using in-house benchmarked

projected a 408-per-cent, five-year return on invest-

data revised based on the specific nature of the com

ment. Additional savings could be realized if some

panys fleet. The estimate assumed no use of Storms

assets are shown to be saleable without impacting

analytical engine or ongoing fleet optimization ser-

operations. There were also significant potential cost

vices, but was solely focused on using SMART-vu Pro

avoidance and soft benefits with high-potential value

to measure specific metrics related to driver behaviour

that were not included in the ROI projection.

improvements, idling reduction, asset utilization improvements and maintenance savings.

Some of the direct benefits associated with this

case study can be plotted in the business case deci-

Working in collaboration with the organization,

sion tree above, such as vehicle maintenance, driver

Storms business impact model found there would

safety, fuel consumption and divestiture of assets, for

be a positive net present value in the first year of the

assessment through the framework.

40

Engage technology champions

Survey responses indicate there is a high level of confidence in many Digital
Oilfield technologies readiness for adoption and ability to pay dividends, but
the internal workings of organizations themselves are perceived to be one of
the biggest barriers to getting them implemented, second only to budget constraints. This is not entirely unexpected, since the kind of sweeping technology
transformation that adoption of Digital Oilfield technologies can entail often
requires a cultural shift and re-engineering of process throughout the organ
ization, the breaking down of functional silos and embracing of collaborative
business models, overcoming knowledge gaps and perseverance to see the
transformation through. Given the enormity of the challenge, a lack of clearly
defined ownership of the task of driving technology selection and implementation forward can become an impediment. One way to move implementation
up the agenda is to appoint a leader or team tasked solely with spearheading
the transition, including rigorously assessing new technologies, testing and
piloting the best candidates, quantifying the value of implementation and
moving to scale those technologies determined to be cost effective. Moreover,

Identifying, testing
and implementing
new technologies
that are critical to
helping solve an
organizations or
the industrys most
pressing issues cant
be another line item
to someones existing
job description, but
has to be their only
responsibility and
built right into their
job title if you want to
experience change of
any consequence.

an effective leader or team should be able to overcome employee resistance

to change and convince colleagues that implementation is indeed within the
scope of their roles and within their abilities to execute.

 Amit Varma, chief executive

officer, True Site View

Engage with suppliers

The product-as-a-service model increasingly used in the software and other
industries changes the nature of the relationship between the customer and
the vendor from that of a one-time purchase to that of an ongoing relationship,
with the vendor promoting customer satisfaction over the life of the product. This benefits both sides in the transaction. Tracking of customer usage
of a software or product creates valuable feedback to the vendor that can be
analyzed and used for ongoing product improvement, while the customers
ongoing relationship with the vendor ensures it receives the most benefit from
the technology. Some vendors now use customer engagement teams, or implementation specialists, specifically tasked with maximizing customers value
from their technology. Implementation specialists are engaged with managing the onboard implementation, system configurations, troubleshooting and
addressing the training needs of its customers. With the ability to make its technology on board easy to understand for end users and to showcase the value
proposition of a companys products, customer engagement teams can play
a critical role in the success of a technology in the marketplace. Additionally,
suppliers can often bring experience from other oil and gas companies and
from other industries. Those best practices will help drive more value.

41

Innovation is as much
about new technologies
as it is about change
management. The
sooner vendors and
buyers trust and see
each other as strategic
partners rather than
transactional groups,
the sooner they will get
to move at web speed.
 Kevin Frankowski,
executive director, Kinetica
Ventures

Break down the silos

Part of the reason for the existence of organizational barriers is the
presence of entirely separate disciplines within organizations that have
customarily not interacted. If information technology is not considered
a full business partner in the process, a gap will remain between IT
systems and operational technology systems. Enterprise software development and embedded control systems development have traditionally
operated in their own silos, employing different tools, platforms, professional skills sets and corporate cultures. Yet Digital Oilfield technology
implementation usually requires some degree of melding of the two.
Remote sensors need to be programmed for the task for which they
are installed as well as to provide data for analysis and potential actions. Much of the value from Field Productivity and Fleet Management
come from IT integrationIT needs to be more closely aligned in order
to gain full value. Companies must accelerate behavioural change across

However, the true realization

of the [Digital Oilfield]
vision comes not in the
field, but in head office,
and how producers change
their business processes
to leverage analytics and
to integrate the silos that
can exist, for example,
between the exploration
and production sides of the
business. Unlocking this
potential is as much about
people and process as it is
about technology.

the organization by reinforcing teamwork and promoting collaborative

engagement among diverse working groups that are all essential to the

James Freeman, chief technology

officer, Zedi

success of Digital Oilfield technology implementation.

Maintain cybersecurity vigilance

Concerns about cybersecurity have fallen, from second place among barriers to
the Digital Oilfield to fifththats the good news. But as more companies install
more sensors and devices, and collect and transmit exponentially more sensitive data, the security of that data will always be a worryand the threat will
always remain. As the IoT penetrates the oilfield, now is no time to let the guard
downand see it return to security being a major barrier to implementation.
Companies need to reach the same sort of widespread level of understanding
and enforcement around cybersecurity that they have today with protecting
their people (safety), the environment and their physical assets (reliable operating and maintenance practices). That means carefully designing security into
IoT systems from the beginning and exercising continued vigilance throughout
the implementation and lifespan of the system.

42

The attackers are

already doing a
great job sharing
information between
groups, and in order
for security providers
to keep up, we will
need to get better at
sharing information as
well.
Nate Kube, chief
technology officer, Wurldtech

Maximize Operational
Efficiency With Real
Asset Intelligence
GDM helps companies
navigate the complexities of
the modern digital oilfield, by
finding more efficient ways
to use real-time oilfield asset
data. We aim to minimize
re-work, maintain critical
historical information for
future operational success,
and ensure all information is
readily available when and
where it is needed most.

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