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.
How to live forever: the longevity industry ramps up
The growing longevity industry may be on the verge of extending our lifespans by years or decades. Here’s an overview of the future of your health. Assuming it’s not just tech industry hype.
On September 3, Peter Diamandis sent out this provocative little tweet:
In a way, it’s encouraging: ditch the late-night deep-dish pizza, log an extra couple of miles on the treadmill, and voila — you can comfortably expect a much, much longer life than you’re probably anticipating right now.
But is there any truth to the claim?
Diamandis is well known in tech circles — maybe most notably as the Founder & Executive Chairman of XPRIZE, which offers global crowdsourcing innovation challenges, and the Executive Chairman & Co-Founder of Singularity University, which delivers executive educational programs and business consultancy services.
Diamandis is also deeply involved in the rapidly growing ‘longevity sector.’ For example, he’s also the President of Vaxxinity which has a mission to “Democratize health by pioneering the third biologic revolution.”
You’d be forgiven if you’re confused about what that means.
You’d also be right to be suspicious, as Diamandis has a checkered past on related issues. As MIT Technology Review reported, back in 2021, Diamandis hosted a conference only to see it turn into a COVID-19 super spreader event. His response was to launch a subsequent webinar to calm attendees, where they were reportedly offered “fraudulent COVID-19 treatments, from injectable peptides to amniotic fluid.”
So, yes. Consider the source.
Still, there might be something there. There are billions in venture capital now pouring into the industry, with a high of over $6 billion allocated to firms in 2021. There’s also something intuitive about the idea that as medicine and technology improve, and we gather more evidence about protecting our health, our lifespans will get longer. That’s been the general trajectory of the human race for hundreds of years now. In many western countries, human lifespan has roughly doubled over the last two hundred years.
Why would things stop now?
What is the longevity industry?
Fundamentally, the longevity sector is new enough (it’s less than a decade old) and poorly understood enough to be the subject of a debate about what it actually is. The most common way to describe it is a sector that is focused on extending human lifespan — or human healthspan, depending on who you talk to or what company is being hyped.
The real confusion hits when you get to the details.
The longevity industry incorporates multiple poorly understood sectors like biomedicine and biotech, geroscience (effectively, the study of the risks of aging), and agetech (which addresses the needs of aging people). Recent advancements in AI are also part of the reason the sector is suddenly so intriguing. They may unlock some of the exciting possibilities of human healthspan expansion.
This is probably a good place to make the distinction between lifespan and healthspan. Lifespan is fairly obvious. But healthspan refers to the period of time someone can live without suffering from chronic or debilitating disease. Live to 87 while golfing, traveling, and living your best life until the day you die? Great. Live to 95 but spend the last 20 years of your life being shuttled in and out of hospitals? Less great.
The longevity industry is looking beyond both of these horizons. Prognosticators like Diamandis are forecasting the ability for humans to live to the age of 120, 130, or even longer with healthspans that extend just as long.
How big a leap is this longevity movement from where we are today?
If you’ve been tracking the digital transformation of the healthcare sector, the longevity movement may seem a bit far-fetched.
The stories of modern digital health tend to be focused on more prosaic issues: the efforts to digitize health records, the struggle to share information across health care providers, and the privacy implications of both.
We have seen advances in cancer treatments, telehealth, and considerable focus on what digital healthcare delivery can do for rapidly aging populations around the world.
But the narrative has not focused on ‘moonshot-style’ health outcomes.
However, there has been a simultaneous and significant shift going on amongst innovators and scientists in the healthcare industry, as Deloitte noted:
“We are beginning to see a paradigm shift from disease-focused treatments to those that address the underlying mechanisms of aging, biological systems, and wellness. In fact, a growing community of scientific researchers believe they have the tools to extend healthy human life, transforming health care as we know it today.”
This reframing of the opportunity could be the significant unlock for longevity. Global spending on healthcare runs to about $9 trillion USD which feels even bigger when you see it with all its attendant digits: $9,000,000,000,000.
This is about 11% of the total GDP of all nations on Earth.
If the focus of that spending shifted primarily to eliminating the underlying causes of aging and disease instead of treating them, what would that mean for the future of the longevity industry — and the lives of everyday people?
Retro Biosciences & other notable companies that may extend your life — and health
In 2022, a company called Retro Biosciences emerged with $180 million in venture capital and a mission to ‘add 10 years to the healthy human lifespan’ by ‘focusing on the cellular drivers of aging to design therapeutics eventually capable of multi-disease prevention.’
MIT Technology Review then revealed that all Retro Biosciences’ money came from Sam Altman, the CEO of OpenAI, which created ChatGPT.
Retro Biosciences is a useful analog for many longevity companies. It’s extraordinarily capital intensive and its timeline to commercialize and scale its outputs is much longer than many investors could tolerate. This is especially true, given the need for regulatory approvals for some of the potential treatments or products that would affect human health.
As Samuel Gil, Partner at JME Ventures told TechCrunch: “The main challenge of the space is that the most audacious approaches and products have to be clinically tested in large samples of the population for very long periods of time.”
But Gil is ultimately a longevity optimist: “Although the target market for most products is still very niche at the moment, I do believe that they will go mainstream in the medium term. The opportunities are endless, as the space is only getting started now and will infiltrate all aspects of our life in the next five to 10 years.”
Retro Biosciences is one of a handful of notable new companies focused on longevity. Others include the Jeff Bezos-co-founded Alto Labs, which seeks to reverse disease, injury, and disabilities through cellular rejuvenation programming; Juvenescence, which is developing therapeutic interventions that will enable people worldwide to live longer, healthier lives; and Unity Biotechnology, which is developing medicines to slow, halt, or revere diseases of aging.
Ultimately, there are real reasons to be very cynical about big claims coming out of Silicon Valley, especially those that haven’t been proven out. But expanding human longevity and healthspan is one of tech’s more noble missions. And that could kick off a new era of human flourishing, both physically and financially.
To wit: Christian Angermayer, Founder of Aperion Investment Group, told TechCrunch that while there are no current products in-market that have been proven to delay aging, once there are, everything will change.
“Once the first ones are proven in a clinical trial, we expect that to go from zero to a trillion-dollar industry within a decade. It will be that fast.”
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Self-driving car revolution is coming, but slowly
In Munich, where this week’s IAA motor show is taking place, an interactive street survey elicits an overwhelming “yes” when asking passers-by if they would take a self-driving taxi from the station to the Oktoberfest beer festival.
But while the number of coloured balls placed in the “yes” column shows no shortage of enthusiasm, experts say the long-promised future of autonomous cars remains some way off.
“Five years ago, we thought that by 2025 we would have significant autonomy in many vehicles, which is not the case,” said Christophe Aufrere, chief technical officer of car-parts maker Forvia.
Pandemic-related disruptions to the car industry, a shift towards investing in electrification and the sheer complexity of the technology have all contributed to keeping the autonomous-driving revolution stuck in the slow lane.
Now, “we’re more inclined to say it will happen by 2030,” Aufrere told AFP.
Ahead of the pack, German luxury carmaker Mercedes-Benz has received international approval for its “level three” autonomous driving system in accordance with United Nations standards.
The hands-free level three allows for autonomous driving in certain conditions such as heavy traffic or motorway speeds up to 60 kilometres per hour (37 mph). The driver can take their eyes off the road but must be ready to intervene if needed.
The system is available as an option on the flagship Mercedes S-Class, which has a six-figure price tag.
Honda won a world-first approval to sell level three autonomous cars in Japan in 2021.
But the vast majority of today’s commercially available cars come equipped with “level two” partial automation at best.
That includes Tesla’s well-known “autopilot” and offers features such as adaptive cruise control or automated parking — while the driver remains alert at all times.
– ‘Step by step’ –
But the driverless “robotaxis” teased by the Munich survey remain a futuristic dream in most cities, with Europe lagging behind the United States and China in trialling such services in the real world.
These “level four” vehicles, like the robot cabs from Waymo or Cruise used in San Francisco, can operate without human intervention within designated areas.
The uneven deployment in Europe wasn’t down to regulations or technological challenges but rather a matter of funding that was harder to come by on the continent, according to Christophe Perillat, CEO of French automotive supplier Valeo.
Nevertheless, “autonomous vehicles are making progress year after year,” Perillat said at the IAA.
Professor Lutz Eckstein from RWTH Aachen University agreed, saying “significant advances” were on the horizon.
So-called level 2+ systems that also monitor the driver’s attentiveness and fatigue are expected to become more widespread, he said, predicting that the number of level three systems on the market would also increase.
“By the end of the decade, we want to achieve the ability to drive on the motorway at speeds of 130 kilometres per hour,” a Mercedes spokesperson told AFP.
The company aims to offer level four highly-automated driving by the same deadline.
“The idea is to proceed step by step,” confirmed Forvia’s CTO Aufrere. “Because we want to be sure it works.”
Where will AI go next?￼
This year’s Collision conference featured a wide range of buzzy AI solutions — both B2B and for consumers.
The buzzy topic of AI was not in short supply at this year’s annual Collision conference in Toronto. The list of applications using the technology was seemingly endless — from both the presenters and exhibitors.
It comes at a unique time, as analysis of the industry reveals that we’ve crossed into the “era of deployment.” At the same time, it’s imperative that we think critically and ask questions about said deployment.
In June, Research and Markets revealed a study demonstrating how the AI industry has experienced immense expansion and maturation in recent years, from a $62B market in 2020, to projections saying 40% growth annually until 2026.
Meanwhile, the 2023 AI Index, an independent initiative at the Stanford Institute for Human-Centered Artificial Intelligence (HAI), reports that:
- AI systems can both have a large carbon footprint (when training), and be “used to optimize energy use”
- Incidents of AI misuse is “rapidly” on the rise. As the Stanford team explains, ‘more AI, more problems”
- There was a 27% decrease in Global AI private investment (year-over-year) from 2021 to 2022. At the same time, over the last decade, investment has increased — in 2022, it was 18 times greater than in 2013.
- Companies that have adopted AI are pulling ahead, while the proportion of those adopting AI has actually plateaued.
- Only 35% of Americans surveyed agree that “products and services using AI had more benefits than drawbacks,” compared to 78% of Chinese respondents, 76% from Saudi Arabia, and 71% from India.
It seems clear that the sector is at something of a crossroads.
DX Journal spoke to four AI startups at Collision, covering areas like filing taxes, DIY home and appliance repair, game building, and building work teams — all showing how AI can have an impact both at home and the workplace.
DIY home maintenance, with a little AI help
Collision presenter Eradj Khaidarov, Chief Technology Officer of IrisCX, spoke on the topic of “Delivering a more human experience through visual intelligence and AI.” He transitioned from twenty years in the video conferencing field to IrisCX, a video-based troubleshooting app that helps users with DIY repair. Anything from appliances to home devices, AI determines the make, model, problem, and spits out possible solutions.
“All of us hate dealing with manuals from 10 years ago and only keep them around when we truly need them — and we also hate dealing with YouTube videos that may not necessarily answer all our questions,” he explained. “The interactions with our product can help you get to an answer faster, without having someone come to your home. It’s just the little bit of guidance that can help us solve a problem quickly and efficiently.”
AI allows the app to summarize certain markers in the conversation, to formulate what was truly the problem.
Let AI help find your next hire
Meanwhile, Raphael Ouzan, co-founder & CEO of A.Team, wants AI to revolutionize how people build teams.
Prior to helping found the startup, he served in the Israeli military for five years in cyberwarfare and cryptology, “finding the power-people you could work with, even in impossible missions.”
Later, he built teams as he built start-ups, and realized he wanted to build something that would enable anyone to find the right teammate — or teammates — to accomplish a greater goal.
When a user logs in to A.Team, they will do a search for their preferred skill and industry, while the AI will detect keywords, suggesting the relevant team that matches the work desired.
“I would describe it as a platform that enables the formation, management, and scaling of elite tech teams that drive massive change for companies,” he said.
“You can look at it like a high-end UpWork, for teams.”
A.Team has raised $55 million, funded by the likes of rapper Jay-Z, and has advisors that include Fiverr founder Shai Wininger and former UpWork CEO Stephane Kasriel.
Creativity + AI
One very popular area where AI is being leveraged is for imagery, game creation, and video creation.
Unity offers tools and solutions for game developers, industrial customers, and professional artists. And as Chief Marketing Officer Carol Carpenter explains, “what we are seeing is that every pixel, every piece of art, every frame will be compacted on the creative side by AI.”
“If you draw two frames, then ask: ‘hey, draw ten more for me like this.’ Or, I want a scene in a digital twin or game, with snowing mountains. AI can offer some art to choose from.”
One of their newest products, Unity Muse, launched during Collision. As Carpenter describes, it “has a feel like ChatGPT, where programmers can type in an image request, and either see it animated or developed on-demand.”
For example, the user could input the text: “Ferrari driving down a steep hill,” and what would pop out would be AI’s creation based on the request. The user could decide to keep it as a standalone graphic, or instruct Unity Muse to make the image animate.
From there, the sky’s the limit, although a human hand — and creativity — will always play a part.
To build a game today with real time 3D, she explains, what’s required is experience and coding knowledge. “It’s not something you just pick up and do easily.”
With Unity, there’s an “ability to use natural language to create, to accelerate the process,” said Carpenter. “We still very much believe the creator needs to have ideas; they need to have the spark of imagination. AI is good for getting started or a prototype. Then there needs to be polish and human element of judgment.”
Your taxes, automated
Many believe that the best place to deploy AI is for truly mundane tasks that make sense to automate.
In that vein, Ben Borodach and his team have brought it to tax filing.
April is touted as the first AI-powered tax system that both optimizes and files taxes, via a large language model and proprietary generative AI that reads tax law.
“It doesn’t matter if you’re an Uber driver, an e-commerce seller, or a family with two jobs, you still get the same experience,” explained the co-founder and CEO. “A personalized leveraging of AI, where we serve up 1.2 septillion unique paths to filing returns. So every single person gets a customized flow for their specific experience.”
There are, Borodach explained, thousands of possible tax questions across federal, state, and local jurisdictions that a taxpayer could be asked. Each time the user answers a question, the program learns more about the user.
As AI technologies evolve, its growth is poised to reshape virtually every field it touches.
It is already entering our lives in an accessible, individualized way, catering to the unique needs of each user. From healthcare and education to finance and entertainment, its capabilities will soon permeate unexpected areas, transforming our lives in profound ways.
Dave is a journalist whose work has appeared in more than 100 media outlets around the world, including BBC, National Post, Washington Times, Globe and Mail, New York Times, Baltimore Sun.
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