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Strategies Accelerating Progress of Digital Oil Fields (DOF)

Saeed M. Mubarak, Saudi ARAMCO and Winford E. (Dutch) Holland, DOF Center for Action Research

Copyright 2013, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE Middle East Intelligent Energy Conference and Exhibiiton held in Dubai, UAE, 2830 October 2013.
This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessar ily reflect any position of the Society of Petroleum Engineers, its
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Abstract
The petroleum industry has recognized that DOF technologies make it possible to provide more efficient,
accurate, and timely information to decision makers. Business value has already resulted from some DOF
technology implementations, but there is still much opportunity to be captured and many lessons to learn to take
full advantage of the digital oilfield.
The infusion of digital technologies into hydrocarbon upstream industries has significantly impacted the E&P
business environment. In this new environment, it is imperative for organizations and their leaders to formulate
and deploy strategies that strengthen:

Organizational structure and capabilities to support the use and care of DOF.
Comprehension business needs and expectations through clear communication.
Competencies of industry professionals to improve collective performance.

Pioneers are exploring venues to create adaptive business environments capable of integrating this technological
change into their strategies and business value architecture. Continued improvisation of implementation methods
can result in the perception that DOF is just very uncertain and wasteful to warrant significant time, attention, and
resources. This paper describes a more ordered and disciplined implementation methods that may be used to
facilitate tangible DOF progress facilitating the management of assets more intelligently.
This paper also undertakes the mission of uncovering various strategies and technologies for leveraging
knowledge, experience, and decision making that could accelerate the progress of DOF implementation. Some of
the content of the paper is based on actual survey results, on field observations, and on rational speculation about
future trends and advances in DOF technologies and their implementation.
Introduction
The Petroleum Industry is recognizing the potential business value of digital technology. The DOF movement, led
by numerous vendors, is off and running toward DOF solutions. Appropriately applied, digital technology can be
a game changer for the upstream business of the future. But applying digital technology is easier said than done
as many companies are finding out.
Initial DOF projects have shown good potential but many have been degraded because of implementation
problems, due to both technical and business lack of readiness. In terms of implementation, company
approaches to DOF are all over the map with many approaches developed around existing vendor products
rather than around work processes they wish to improve. The marketplace in general has undergone several
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phases of learning about DOF .

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Phase One: Technology

Phase Two: Value

Realization

Phase Three: People

Processes and Technology

Phase Four: Value

Realization

Phase Five: Business Value

Architecture

The technology and sensors work.

But technology alone fails to show the expected business results.

People and Technology bring business value from field trial tests.
Important part of learning curve and demonstrating real examples of DOF benefits.
The implications of these trial tests are critical to the pursuit.

People are not the obstacle and psychology is not the driver.
It is a three-part systems problem driven by processes aligned with buiness objectives.

Measuring the value of technology alone is fruitless.

Measurement of improved processes shows realization of business value.
Value realization from improved processes can be difficult.

An organization's moving parts must be re-arranged for IU.

Strategic, Operations, and Technology processes must be in place before IU can be
optimized.

Figure 1: Five phases of learning from the DOF experience

Lessons Learned About DOF Initiatives:
As a part of our pursuit of the Intelligent Field, surveys were conduct to evaluate the state of our transition to
digitally enhanced work processes. In addition, we wanted to find out what professionals might need for their
future development. The survey was conducted in various venues with more than 300 participants from middle
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managers, project managers, and project professionals from around the world .
The questioner results are shown in the below charts and are followed by a quick interpretation of the results.
Question 1: What are you most expert at?

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Question 2: Why is the industry still not getting the

maximum value of DOF?

Question 4: Which component brings higher value

from DOF?

Question 3: How have you observed DOF impacting

our business?

Question 5: For those who have seen great value of

DOF, where is the value more pronounced?

Based on the above questionnaire results, the below points comprise the summary.

Most of the available DOF expertise is on technologies (hardware), with fewer experts on integration,
optimization and implementation.

Most contributing constraint preventing operators to adapt to DOF are lack of experience and tolerance to
change (i.e., People).

While most of the participants see DOF endeavors add great value and create more opportunities. Others
see DOF introducing more complexities and additional expenditure.

The greatest potential value of Intelligent Field implementation is expected to come out of the
optimization, informed and predictive operations. Less value can be seen from knowledge management
or technologies.

Better integration and optimization is seen as the greatest value earned from implementation of DOF with
the least value of it on improving HSE.

From the above summary, realistic conclusions and expectations of an observer to current DOF endeavors follow:

The industry needs more experts in optimization, predictive and informed operations; however, the
industry has more experts in technologies.
The industry has more experts in technologies; nonetheless, technologies bring the least value from DOF
as per the survey results. The industry needs other experts to be able to extract the highest value.
DOF added value and created opportunities. The complexity from DOF perceived by some of the
participants is mainly due to lack of experience that resulted from the quick implementation of
technologies. The result was that DOF initiatives can sometimes outstrip the ability of the organization to

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optimally manage them.

The understanding of DOF technologies and expertise is still maturing. Companies may be big in
implementation but slower at utilization. DOF only provides the capabilities to manage business better.
A clearer path to achieve the maximum value of DOF is a result of continuous improvement in combined
endeavors that capitalize on the orchestration of technologies, knowledge management, business
intelligence, analysis and optimization; as may be seen in the following diagram (Figure 2).

Figure 2: Five essential progressive steps towards maximum value of DOF.

Central layer consume highest investment. Layers beyond brings more value

Getting Clear on Objectives DOF:

Management of an asset has to clarify priorities by structuring how business is run honoring their defined strategy.
They have to decide how to incorporate DOF to business knowing that DOF comes as a supplement and will not
change a strategy. Among the goals are

Reducing OPEX & CAPEX

Maximizing Production
Sustaining Production
Maximizing Recovery
Minimizing Operation Time

Once these goals are clear, only after that do DOF initiatives apply in terms of how to perform the sub-processes
for operational work. DOF is NOT the means of getting this clarity on overriding objectives. The aim of DOF
should be to eliminate work duplication not to add to work. Hence, DOF should make things easier, as opposed
to making things more complicated.
Our Improvement Imperatives:
The answers to one question in the survey of Intelligent Field professionals gave us pause. We were struck by the
large number of answers to the questions: Why is the industry still not getting the maximum value of DOF? The
answers pointed to a lack of experience and tolerance to change as the most important reason. What could
lack of experience mean? Our interpretation of the answers was this: the respondents were saying in the survey.

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We are not getting maximum value from DOF because:

We have not done this before or we have just started doing this.
We have nothing to fall back on.
We are not clear on how to proceed.
We are not sure about the issues that will arise and what we should do about them.
We have no clear roadmap.

After examining our survey results, studying the journal literature, and using our common sense, we identified a
number of actions that could be taken to help DOF professionals with their work. We high-graded our list to three
critical DOF Improvement Imperatives:
1. Aligning organizational structure for DOF.
2. Clarifying business needs and expectations.
3. Strengthening people competencies.
Our idea was to focus on only three improvement initiatives to best focus our work and use our available
resources.
Imperative One: Aligning Organizational Structure for DOF
Organizational elements (e.g., structure, processes, resources, technologies, etc.) are optimized over time around
core work processes. An organization needs to make sure that its structure is built to perform the strategy its
management has set out. Some DOF technologies may require reconfigurations to align support and improve
capabilities.
Business Value Architecture (BVA) is reconfiguration and it greases the skids for exploitation of DOF for
business value.
DOF must be supported by BVA. Architecture may be a fancy word, but it is being used today to describe how an
organization or an enterprise is put together. Enterprise architecture (EA) is a comprehensive description of an
organizations elements, i.e., its moving parts, including enterprise goals, business functions, business
processes, organization, roles, business information systems, software applications, and computer systems.
Configuring company architecture for DOF is decided based on managements accessible knowledge to target
specific business gains. DOF BVA can be described as a combination of three different structures that must be
aligned and integrated to maximize their business potential value.
1. Strategic Business Architecture including the companys DOF vision and strategic goals, measures,
and incentives.
2. Work Process Architecture including the matrix of technical and business work processes needed to
achieve the organizations strategic goals driven by DOF.
3. Technical Process Architecture including the processes inside the IT or R&D organization to
manage the digital resources required to enable work processes and enterprise optimization.
What comes next to this imperative is a progressive and continuing development of a clear set of roles and
responsibilities for the business with means to communicate them to relevant parties.
Imperative Two: Clarifying Business Needs and Expectations
Ownership in the era of the Digital Oilfield is required at all levels of the company, with each level having a critical
and unique role. Having various DOF project team members involved early in the development stages of DOF
allows ownership over their own DOF segment performance. This, in turn, helps them develop a sense of
responsibility and self-motivation. If these roles and responsibilities are not well defined and performed effectively,
DOF success will be doubtful.
These roles and responsibilities can be defined to serve specific business function/operation or facilitate more
efficient and effective business workflow. Operator will need to design workflows, identify disciplines involved and

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skill set required; and finally introduce appropriate roles and responsibilities that shall be an integral part of
business and are fully aligned with company short- and long-term objectives.
For a quick demonstration of the above, leadership in each level have a critical and unique role. If these roles are
not performed effectively, a project success will be doubtful. Leadership and management understand that DOF is
not something separate here; it is just an enabler that should be a normal part of business. The four levels are:
Executive Management sets the DOF Strategy and Balances Resources
The primary roles of Executive Management are twofold they must (1) Run-the-Business well all the time, and
(2) Change-the-Business well every time.
Executive Management must identify and authorize the DOF strategy and balance resources so that both Runthe-Business and Change-the-Business can be successful. Other Executive Management responsibilities (that
cannot be delegated) are as follows:

Identifying the critical capabilities that will be needed for DOF.

Resourcing the DOF initiative (people, money, time, focus/energy).
Devoting equal effort to Changing-the-Business to use DOF as to Running-the-Business.
Monitoring the progress on the desired change to DOF.
Balancing Run-the-Business and Change-the-Business demands for resources.
Participating directly in the DOF initiatives in a variety of roles.

Senior Management Builds DOF and Organizational Capabilities

The primary role of Senior Management in the DOF exploitation process is to translate the
executive-selected DOF strategy for future prosperity into initiatives and/or projects, to build and develop the
organizational capabilities for DOF success. The development of such capabilities can only be led at the senior
Management level.
Middle Management Validates New DOF Capabilities while Running-the-Business
Middle Management plays two critical roles during an organizational change. First, Middle Managements critical
and often overlooked role in organizational change is to lead the Run-the-Business approach on a day-to-day
basis while the organizational change to DOF is being designed, developed and implemented.
Second, middle managers are key in both validating the design of new DOF capabilities that are being put into
place and working out the details of implementing those new capabilities at the supervisor-employee level.
Supervisors lead Employees to be Ready, Willing and Able for DOF Performance
Supervisors are indisputably the indispensable critical link between management and employees. Like middle
managers, supervisors have dual responsibilities: managing the organizations day-to-day business while leading
employees to be ready, willing, and able to perform tomorrows way of doing business with DOF in use.
Imperative Three: Strengthen the competencies of industry professionals
The fundamentals of the petroleum industry have not changed much; however, the evolution of the various
technologies has surfaced out new set of expertise, knowledge and competencies.
Any DOF training or
development program has to be fine-tuned to avoid dilution of current skills base, whether Petroleum Engineering
or IT. In the new business environment, Petroleum Engineers need to know more about DOF technologies and IT
and vice versa. If the work domain of the Digital Engineer is as described as above, the needed competencies
that jump out are as shown in Figure 3.
Whats new in this figure is the addition of Business Principles to the known mix of Petroleum Engineering and
Information Technology. This business addition has to do with principles associated with work process design and
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engineering along with Program and Project Management .

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Figure 3: Competencies Required for Digital Oilfield

While the three competencies are obviously all needed to work the kind of process improvement described
earlier, all three competences do not have to reside in a single person. A three person team might be able to pool
their resources and have what it takes for the job. On the other hand, two persons might be an ideal fit as long as
both have deep technical expertise in either PE or IT and at least one has expertise in the business principles
(i.e., process architecture and engineering as well as program management). The key to achieve to maximum
value is ownership and collaboration. Below is a reasonable scenario for DOF engineers:
PE using physics and engineering to identify core work processes that could be improved by enabling with
digital technology.
Information Technology using IT knowledge and skill to improve core business processes by enabling
them with digital technology.
Business using business principles to make improved processes a
part of day-to-day operations, to gain organizational support for the
operation of those processes to create business value.
Figure-4 shows much of what we have presented but laid out in the form of
a curriculum for formal study for DOF team and DOF Engineers. The one
part of the curriculum that might need further explanation is what we have
called the Business Value Manager or DOF Team, who serves as the
Connector between engineering and IT, and ensures that the companys
objectives for DOF vision and mission are executed and met across the
entire asset value chain. This objective is accomplished by the utilization of
appropriate DOF technologies. Among the essentials that DOF teams must
know:
Work Process Architecture: The operations side of the upstream
business can be described as an organized set of work processes
(architecture) that show the day-to-day work of the organization and its
employees. A work process architect would be an expert on the work
process architecture, knowing interdependencies, recognizing strong
and weak points, and being able to identify the leverage points in the
architecture that have the highest potential for improvement with better
design and/or information technology.
Work Process Engineering: Work process engineering includes
expertise in identifying, improving, and streamlining workflow as well as
identifying the needed interfaces with digital technology to produce
additional business value.
Figure 4 possible programs for DOF team
and DOF Engineers

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Program Management: Program and Project Management provide the needed techniques, tools, and
discipline to direct a program of work that includes process redesign, selection of technology, and both the
readying of the technology for the organization and the readying of the organization for the technology.
One of the main functions of the DOF team is to create business environments driven by and aligned with the
advancements and integration of DOF. The DOF team focus areas are shown in Figure 5.

Figure 5: DOF Team Focus Areas

Next Steps for Getting and Staying Clear on DOF

It is both ideal and obvious for DOF to be embedded in the company strategies, structure and roles and
responsibilities, etc. What is not obvious (to some) is the importance of still having a DOF corporate team with
specific focus and responsibilities to ensure high quality and consistence practice of DOF within an organization.
Why is that so important? The answer can be said in many ways:
Old habits die hard. Organizations are hard to change on purpose! Mature organizations are designed as
stability structures that max efficiency and limit variation (i.e., change).Organization members must be
engaged to plan changes in the way of doing business. Organizational change must be planned, authorized
and led for business value.
Actual DOF company structure is most likely to be the original company structure overlaid with DOF
initiatives. The inertia tends towards original company structure unless is worked hard by dedicated
program that is maintained.
Continue to pursue DOF but use an orderly and disciplined process there is no need to reinvent the
wheel for implementation.
Continue to build capabilities: people, management and organizational support capabilities.
Concentrate on working top down, bottom up and sideways! And we will remember that patience is a
virtue!

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Acknowledgement:
The authors wish to thank Saudi Aramco management for permission to publish this article.
References:
1. Exploitation of the Digital Oilfield: Fifteen Requirements for Business Value. Dutch Holland, 2012.
2. Intelligent Well and Intelligent Field Development Discussion Group,
http://www.linkedin.com/groups/Intelligent-Well-Intelligent-Field-Development-887567?trk=myg_ugrp_ovr
3.

The Future Belongs to the Digital Engineer: Transforming the Upstream Energy Industry, by Dutch
Holland & Jim Crompton, pages 81-84, 2013.