PDM Interview- Thore Langeland, Statoil (December 1999)

Thore Langeland is manager of Statoil's ĎCyberorgí IT architecture and currently heads up the OLF - the Norwegian Oil Industry body. Langelendís thesis is that the increased cooperation between subsurface (geology) and facilities (engineering) is the way forward and that information sharing represents the next quantum leap in IT and business process improvement.

PDM - we understand that you are an advocate of closer integration of subsurface and topside facilities - how are these attempts at cooperation going?

Langeland - Subsurface and facilities are still two different cultures, but if you look at what has been happening in the subsurface domain itself, you can see how things are improving. Previously, geologists and reservoir engineers operated in separate universes and communicated little. Nowadays cooperation in the reservoir description and modeling field is much more widespread. In Statoil, we have multi-disciplinary groups working on project evaluation and we have found that this process mandates cooperation between the various cultures.

PDM - does such collaboration require lightweight exchange of summary information or do you have a more comprehensive approach, with a shared data model?

Langeland - our business process improvement involves several well-identified steps beginning with acreage selection through prospectivity evaluation through estimates of NPV according to different geological and scenarios. It is this close coupling of geology and engineering that forces cooperation. In the past, we know that we have over-engineered facilities. Drilling costs can be as much as one third of the overall project costs and a holistic approach is needed to optimize well spacing for instance. When it comes to drilling a well Statoil has different decision points - an economic evaluation, if positive, will likely lead to further evaluation through to the final project. The 3D model is a great focus for the project team who all are involved. In this environment, it is just too wasteful to have two cultures.

PDM - in all this is IT a facilitator or a handicap?

Langeland - Back in 1988 a typical subsurface analysis involving only a few wells might take several weeks. This kind of activity has been greatly speeded up by modern software tools. But software is still lacking at the frontier of reservoir and process engineering.

PDM - From Helge Hatlestadís presentation, the Statoil architecture reflects the traditional discipline breakdown to a large extent. Just how much is cross-discipline integration really working today.

Langeland - We currently have working integration between SAP R/3 and Landmark's product suite - this represents finance to subsurface integration. The same goes for the facilities and finance, with the Integraph to SAP links. Linkage also exisits between Health Safety and Environment (HSE) and the facilities POSC/CAESAR environment. Having said that, we still need more software that operates across the different boundaries. We ultimately need to be able to 'see' the whole value chain - from exploration through to refining.

PDM - Why is Statoil still working on an Epicentre-based Corporate Data Store (CDS) when you already have Petrobank?

Langeland - Petrobank is the master data store for raw data. The CDS, of which Project Synergy is a component will hold interpreted data.

PDM - we keep hearing of the Asgard project in the context of Statoil's IT. These technical presentations are frequently associated with significant projected cost savings. To the world at large though, Asgard is best known for its massive cost overruns*. Can you legitimately claim cost savings through major IT developments which are invariably highly front-end loaded?

Langeland - We in Statoil have not presented cost savings in this context. Our aim all along has been to change the organization and to improve working practices. We are convinced of the need to take advantage of sharing information and resources and of the long-term advantages to be gained from this strategy.ź

*Editorís note - cost overruns (not necessarily related to IT) on the Asgard project caused a major political upheaval in Norway earlier this year leading to the resignation of a number of Statoilís board members.

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