Chevron has announced a partnership with Microsoft that will see the company use cloud tech and the Internet of Things to streamline its business. The company intends to digitize oilfields around a cloud-based core, giving it more data insights.
The seven-year partnership brings Microsoft’s technology into Chevron’s existing digital transformation strategy. The company will use Microsoft’s Azure cloud platform as the bedrock for its digital services, data analytics and automated operations centres.
The relationship is intended to be a two-way affair that will encourage “joint innovation.” This includes employee cross-training between the firms and collaboration on technical projects. Chevron will use Microsoft’s existing services to make the most of its data lakes. In return, Microsoft will be able to develop new products that solve Chevron’s specific business challenges.
Chevron embraces DX
Chevron’s already operating as an increasingly digital business. It has connected its oil wells, ships and cables to the web, allowing real-time monitoring of the company’s worldwide operations.
An individual fiber optic cable inside an oil well can generate up to 1 terabyte of data a day, providing a continual stream of readouts on temperature and pressure. The adoption of Azure will allow Chevron to more efficiently process this data, ensuring the insights within don’t go unnoticed.
The strategic partnership will give Chevron the headroom to deploy new technologies and generate yet more data. The company said it’s pursuing improved operating agility, increased safety and greater revenue as the long-term aims of its digital strategy.
“We embrace every opportunity that streamlines our workflows, gives us insights into more efficient operations and helps us compete,” said Joe Geagea, Chevron’s executive vice president of Technology, Projects and Services. “We already have a head start in digitizing our oilfields, but we want to accelerate our deployment of new technologies that position us to increase our revenues, lower our costs and improve the safety and reliability of our operations.”
Another big DX move for Microsoft
The multi-year collaboration is another digital transformation win for Microsoft. The company’s increasingly focused on its enterprise customers and is rapidly expanding its cloud services around IoT and automation. Microsoft said Azure will let Chevron “become a truly digital business,” noting that its cloud network has server nodes in more regions than any other provider.
Industrial Edge: The Energy Opportunity
The recent rise in energy prices has brought into sharp contrast the need to re-examine how we generate, distribute, and consume electricity.
This article is a guest post by Natalya Makarochkina – Senior Vice President, Secure Power Division, International Operations, Schneider Electric
As if the drive to decarbonize energy as part of sustainability and climate change efforts was not enough, the recent rise in energy prices has brought into sharp contrast the need to re-examine how we generate, distribute, and consume electricity.
It has been well argued that simply generating more electricity is not the answer to the myriad of requirements now being faced. Greater transparency, management, and efficiency in distribution and utilization must all be achieved to better use what is available, even as demand might require greater volumes.
The increasing digitalization of industry, through the application of technologies such as Industrial IoT (IIoT), 5G and automation, managed through AI-assisted systems, has offered greater insights and visibility of how electricity is used than ever before. As Industry 4.0 has brought digital to industry and manufacturing, creating the Industrial Edge, that same trend in energy, Electricity 4.0, can have its methodologies adopted and implemented in industry, enabled by intelligent management systems, leveraging expertise from the world of data centers, microgrids and secure power. With these tools, services and insights, industries can ensure they utilize energy as efficiently as possible, even as they transform to meet the needs and demands of the future.
Industry 4.0 is the application of digital technologies to industry processes, supporting, enabling, and extending Operational Technologies (OT). Within this, the Industrial edge is the subset of edge computing where OT and information technologies (IT) combine to apply high speed analytics in a localized, on-site system, addressing various industrial and manufacturing challenges. The industrial edge can provide simple, secure, highly available, powerful autonomous edge computing solutions that can be managed remotely. These can be applied to dangerous, harsh, and extreme environments to ensure high availability, preventing, not recovering from, failure.
Electricity 4.0 is a similar fusing of electricity generation and distribution with digital technologies to deliver new capabilities, insights, and manageability. It will be the foundation of the new energy future of renewable energy sources and net-zero carbon, to allow intelligent distribution, delivering electricity where it is needed, as it is needed, storing it when it is not, and balancing the needs of all electricity users.
Electricity 4.0 will enable smart grids in smart cities, as well as meeting the needs of industry through not just greater volume but facilitating demand side moderation and generation. Through the insights gained, grid operators will be able to model and forecast usage and demand to further increase efficiency and resilience, bringing large energy consumers into the fold as part of the new energy future.
The growing wave of digitalization in industry driven by transformation efforts, especially the implementation of IIoT, has meant that industries are better placed than ever before to gather and manage data on energy usage. However, industries were not always able to turn that data into intelligence, nor take advantage of it in real time.
Speaking to Dalia Adib, practice lead, edge computing lead with analyst STL Partners, Dalia emphasized the importance of being able to act quickly, at low latency on sensor and IIoT data gathered, rather than centralizing it in a remote data center.
The development of the Industrial Edge, that interface between OT and IT, has meant there are now facilities to utilize all that data from every sensor, machine and line.
Schneider Electric’s EcoStruxure Micro Data Centre and EcoStruxure IT combines edge compute expertise and innovation with remote intelligent management systems which enable customers and partners to leverage the Industrial Edge to make deep energy management more practical and informative than ever before.
The interface that is the Industrial Edge has the potential to deliver greater visibility across the entire infrastructure, from edge sensor to intelligent insight. With a holistic view of energy usage across the organization, predictive modelling can ensure that management can stay ahead of demand.
With many geographies likely to see some restrictions on energy supply in the near future, as major transitions towards renewable energy sources are embarked upon, the ability to confidently predict consumption and demand, moderate it where necessary and support sustainability goals, is vital. The potential for information gathering through IIoT, combined with edge deployed compute power to apply analytics, enable automation and even autonomous operation, can increase resilience, reduce downtime and ensure efficiency.
IIoT can facilitate predictive maintenance regimes, monitoring performance and efficiency, allowing remote management, to identify where failures may occur. Preventative measures can then be taken to ensure continuity. This applies not just in production and processing, but across the operation through power distribution and IT too.
There are many examples of industries taking the lead to bring the end-to-end benefits of IIoT, edge computing and direct intelligence to their business.
Tver Carriage Works is a more than century old company based in the city of Tver, northwest of Moscow. It deployed an EcoStruxure Data Center Expert managed modular data centre infrastructure to achieve its aim of Digital Transformation of its manufacturing enterprise. Manufacturing electric trains, rolling stock and carriages to travel at more than 200 kph, it needed compute power close to manufacturing lines to improve efficiency, increase resilience, and reduce downtime.
Brazil’s largest waste water treatment plant, Aquapolo, achieved a 15% increase in operational efficiency, with a lower cost of ownership, while providing drinking water for more than 500,000 customers. This was achieved while also improving compliance standards for environmental protection. There, the EcoStruxure Augmented Operator Advisor connects multiple industrial systems through an edge control framework, connecting Harmony HMI, Foxboro instrumentation, and ConneXium switches
The strides already made by industries to implement digitalization have brought many benefits, unifying OT with IT in the Industrial Edge. By taking on board the lessons of Electricity 4.0, industries can further improve efficiency, resilience and manageability.
With challenges expected in the near future as the world transitions to net-zero energy and operations, organizations that have achieved deep insights from sensor to core, will have the ability to predict, implement and adapt to change.
Natalya Makarochkina is Senior Vice President, Secure Power Division, International Operations, at Schneider Electric.
Suncor taps Microsoft to accelerate its digital transformation journey
“It’s certainly our first partnership of this kind in Western Canada,” said Sarah Kennedy, Microsoft’s director enterprise for Western Canada.
Over the next several years, Calgary-based Suncor and the tech giant will team up to connect its workforce, upgrade data centres, and increase analytics capabilities. In a press release the company said a move to cloud-based computing will allow it to more rapidly deploy new technologies and leverage artificial intelligence, machine learning, enhanced automation, and Industrial IoT.
The goal? Transforming Suncor’s retail network of Petro-Canada stations, tracking data collected from oilsands projects, and improved operations at its headquarters.
While not their first time working together, this strategic alliance is a first at this scale for the oilsands.
Suncor CEO Mark Little said working with Microsoft is a way to help the company achieve its fourth major transformation, dubbed ‘Suncor 4.0,’ which focuses on ushering the company into a new digital age.
“Although we are an industry leader in many respects, we still have much to learn in the digital space,” explained Suncor CEO Mark Little, “which is why we’re working with a number of organizations including Microsoft to challenge us.”
Regarded as an innovation leader in the oilsands, Suncor was the first to announce a a fleet of fully autonomous trucks at oilsands mines, as leveraging wireless badges for tracking and analyzing frontline maintenance work, improving safety and productivity.
“We view this as a competitive advantage to be digital before our competition,” said Suncor senior vice president of digital and enterprise technology, Sandy Martin.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Oil and gas needs to embrace digital transformation
The oil and gas sector has fallen behind other industries when it comes to digital transformation. Massive opportunity exists in technologies like cloud computing, the IoT and agile processes, but it remains to be seen whether the sector can adopt these tools in order to rapidly improve value throughout organizations.
Geoffrey Cann has worked as a consultant to oil and gas companies for 30 years. In his new book, Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas, Cann assesses how digital transformation is reshaping oil and gas, and how the industry can adopt technologies and processes to rapidly improve performance.
DX Journal interviewed Cann to find out where the oil and gas industry is currently in terms of digital transformation maturity, and what the industry needs to do to further embrace DX.
DX Journal: Has the oil and gas industry embraced digital transformation?
Cann: Oil and gas is among the least digitally switched on industries among the large industries. The role of autonomous tech is not high. Artificial intelligence isn’t as big as it is in other sectors.
The upstream industry is extremely data-intense. It generates untold quantities of data and they’ve been doing this for decades, so the industry has heaps and heaps of very large data sets. If you did a survey of companies that are buyers of supercomputers or have their own enormous data centres, oil companies would always be at the top of the list, because of this need to process subsurface data.
What’s happened is that the application of digital technologies is allowing the industry to go even deeper in resolution.
There’s a company in Calgary called Enersoft that’s taking a high-resolution photograph of drill cuttings and feeding the photographs into an artificial intelligence engine that can look at the photographs and can build up a completely new digital data set about an underground reservoir. They’re now able to model the underground data at the grain of sand level.
DX Journal: Can DX tech help oil and gas adapt to the competition from renewables?
Cann: As of yet there is no substitute for plastic and chemicals, which come from oil and gas. So there’s only a part of the industry that will have to change and cope with new alternative energy products.
The parts that do have to change are petroleum retailing and fuel distribution. The industry knows that there are serious clouds on the horizon when it comes to dealing with the rise of new alternative fuels. And it may come sooner than they think. Fuel delivery apps, shared vehicle services and autonomous vehicles are all serious threats.
DX Journal: Are there any tools these disruptive companies are using that oil and gas needs to embrace to better compete?
Cann: I’d say there are two tools. One is cloud computing. Oil and gas has not historically embraced cloud computing and there are still many people in the industry that cannot believe oil and gas should or will ever put its data into a third party cloud environment. They believe the data is proprietary and has intrinsic value. The idea that a third party could take your data, interpret it differently and then turn around and buy out your company is something so threatening that they won’t take the risk. In the face of banks putting all that customer data on the cloud, the CIA uses cloud computing — they still cling to this view.
Cloud will allow the industry to open up new business models that are right now very hard for them to get to. When you’re not on cloud, you’re siloed, you can’t swap data, can’t collaborate. Cloud changes that model up and it opens up new business models that they can’t otherwise get to. Cloud seems to be one of the key technologies to allow all the other creative inventions out there to really work. You go down the list: Google, Amazon, Netflix, Uber, Pinterest. These are all social technologies, but there’s no reason why the industrial sectors of the economy can’t take advantage of the same underlying technology.
The second thing they could do is not a technology, but it’s agile. The oil and gas industry runs on a traditional waterfall change model. And it is no longer in synch with the pace of change driven by digital innovation. The biggest benefit of agile is the ability of the oil and gas industry to change faster. In some industries, the transition from ideation to 50 percent market penetration is six years. And then you look at oil and gas, and from ideation to 50 percent market penetration is 30 years. It’s incredibly slow.
DX Journal: Thinking about the teams building DX, who should be leading this DX effort?
Cann: The successful introduction of technology into oil and gas requires leadership. The industry is very cautious and very risk-averse, and they adopt change very slowly. The industry has been extremely profitable over the years. When times are good, as they were from 2009 to 2014, a certain kind complacency sets in. A number of marginal improvements that Google would just leap on, oil and gas will say, no it’s just not worth the aggravation of having to adopt it, and we make so much money, it won’t change our economics by making something a little better. So the industry doesn’t embrace change very quickly.
Successful change does need very strong leadership from the company to demonstrate unyielding and relentless support to drive that change, in the face of these huge vectors that cement things in place and help them not change.
Leadership’s job is to lead, and they should be out in the field, communicating their vision, explaining to the field why change is important; explaining to them that the performance of the company is at stake if they don’t improve; holding people accountable if they don’t change; rewarding people that do change; answering their questions; supporting their supervisors. That’s what leaders are supposed to do.
DX Journal: Has anyone in the industry embraced that shift and developed digital transformation solutions?
Cann: NAL Resources Management Ltd. is an oil company owned by Manulife. In 2014, when the price of oil went down, NAL embarked on the usual playbook to fix the economics of the business. They went to the suppliers and asked for price concessions. They took a look at spending and cut back on anything that wasn’t urgent. They trimmed their dividend. They would have looked at their growth plan and slowed them all down. And they trimmed headcount. And they still weren’t going to be successful in the newly priced market.
The chief financial officer said, why don’t we try some of this new digital technology. They brought in three technologies and got them to work together. They brought in an artificial intelligence engine, to read contracts, a robot to build the calculations of the contract, and blockchain to take the calculations and autopay the recipients. NAL found a 90-95 percent productivity improvement over the status quo, enabling them to grow without adding headcount.
They’ve since had a steady stream of other oil companies contacting them to find out how on Earth they did this. The bot technology is being copied in a variety of places. Suncor has a whole bot team that does nothing but work on bots.
DX Journal: What is a career insight you’ve gained when it comes to DX that surprised you and that surprises people the most?
Cann: The biggest one is it’s not about technology, it’s about people. Most oil and gas companies think it’s the other way around, they think it’s about the technology, and they fear the technology. It’s not. It’s about engineering people and process change.
DX Journal: What’s the biggest mistake companies are making today when it comes to digital transformation?
There’s so many. I think the biggest mistake is underestimating the amount of attention and energy it’s going to take to work with people and move organizations to support the change.
And companies don’t often take a big enough view of what the technology could do for them. I’ll use NAL as an example. They brought in three technologies: artificial intelligence, bot technology and blockchain. What many companies would do is they would just trial artificial intelligence and then not get much of a payoff. They’d say, it’s a little faster than our people. They might put a bot in, and the bot would be faster than their people, but they’d say, well, it’s faster than our people, but we don’t want the headache of having to fire anybody. They might put blockchain in and then conclude, it’s not making any difference on how efficient we are. And they’d be correct in each instance, because they took such a narrow view of the problem they’re trying to solve.
I think the prize in the future is going to go to those organizations that embrace a bigger vision, and look much more holistically across about how to rethink the whole company, not just to dabble with a specific technology.
Cann’s new book Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas is available now in both paperback and Ebook format. Bulk purchases are available through direct correspondence with the author and an audiobook version is forthcoming.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
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