POSC was 10 years old this month. Way back when, POSC set out to build the definitive standard data model for E&P, which all vendors and users would deploy to underpin their data management. Thus was Epicentre born. But the E&P IT world at large gave the project a lukewarm reception, and while Epicentre is still on POSC’s books, focus has shifted to the greener pastures of e-business. E-business brings new technology - in the form of the ‘X’tensible Markup Language, XML. For hardcore data modelers, moving from Express (the data modeling language used to define Epicentre) to XML probably seems like a huge step backwards, but believers in the KISS principle will no doubt be greatly relieved by this turn of events.
Having established the new technology, the debate is now focusing on what to do with it. The guiding line is that POSC’s new business is e-business (hasn’t it always – see this month’s editorial). But the shift in technology focus hides a more fundamental mutation. During its first 10 years of existence, POSC was firmly rooted in upstream IT. The technological spectrum was from geology and geophysics through to production. Now e-business, XML and the rest is causing the domain focus to shift. POSC’s business now encompasses procurement, finance and knowledge management to name but a few. If you came along to the POSC show expecting to find out exactly what has been achieved over the last 10 years, or even what is going on today, you would have left disappointed. But if you were looking for an excellent introduction to the world of E-squared E2 – i.e. Energy and E-business, then this was just the show for you.
There are a few fundamentally different types of company being set up to do E2 – this and that. Some majors oils have set up independent companies to run their e-services for them, with the intent that they should capture more business on the open marketplace. This approach neatly combines new tech e-business with old tech restructuring! Another type of company is the successful bricks and mortar business which has set up a web-based service – Network Oil falls into this category. And the third is the pure e-play, the technology and venture capital funded dot com of which Application Service Provider GeoNet is an example. Naturally, the different start-up’s don’t agree on who has got it right, and Network Oil’s Stuart Page was quick to vaunt the merits of the free market – and to deprecate the much larger Trade Ranger and PetroCosm as ultimately suffering from being tied to a single buyer, or group of buyers.
Chevron is a firm believer in the tied supplier business model. Indeed Chevron has several irons in the e-fire. One of the few large oil companies to have continued lending significant support to POSC, Chevron has been instrumental in the organization’s refocusing on e-business. Chevron has set up PetroCosm (e-procurement) and UpstreamInfo (ASP, IT outsourcing) and Retailers Market (sales). All this is handled through a new Chevron unit – the e-Business Development Company with David Clementz as president.
Chevron does not like the term ‘new economy’ since this implicitly deprecates the old economy, but it believes that new types of companies are emerging with few assets and lots of intellectual capital. ‘Old economy’ companies can play too – by leveraging their own intellectual capital - as Chevron intends to do through its new unit. The new structure has allowed Chevron to move extremely fast – in the case of PetroCosm, it took only three months to go from a ‘piece of paper’ to having a management team in place.
In a keynote address on the rise of e-business, POSC Chairman, Chevron’s John Hanten gave an update on the health of the estimated 150 different e-commerce ventures in the petroleum industry. The signs of a commercial shakeout are already here, and portal users are now faced with a multiplicity of different standards - which was what everyone was trying to avoid in the first place. Hanten raised the specter of ‘portal wars’ between these hubs - “if everyone does it differently, there will be chaos.” Chevron is therefore pushing for XML-based standards for the business to business (B2B) hubs. Chevron is in a good position to act upon this as it occupies the chairs of POSC, PIDEX and the API.
The POSC led attempt to bring about convergence between the standards orgs(Open Energy Exchange - See PDM Vol 4 N°10) has not met with unqualified success. The contact with the POSC CAESAR Association (which despite its name is not connected with POSC!) does not appear to have born fruit. PPDM rebuffed POSC’s overtures at the organizational level – but the collaborative reference data work resulted in a ‘just in time’ press release announcing positive results (see last month’s PDM.) The different bodies (API, PIDEX, PCA, PPDM and POSC) have, however, agreed to ‘keep communication channels open.’
Trade Ranger’s Gertjan Ophoff described the pitfalls and potential of having standardized electronic catalogues to enable e-procurement. E-Procurement requires identification of trading partners, RFI quotation and proposal, contract issuance, invoicing, payment, auctioning and bidding. Another dimension is the position of the e-commerce hubs with respect to Federal Trades Commission (FTC) competition legislation. Legal issues are provisionally resolved now that the FTC has approved the hub’s license, but reserves the right to review. The fear is that the hubs will act as a cartel and squeeze suppliers. Ophoff described the FTC review as a ‘sword of Damocles’ over the hubs’ activity. Trade Ranger has forty companies led by BP Amoco and Conoco procuring goods and services for plant construction.
A dissenting voice was heard from a POSC traditionalist, Total Fina Elf’s CIO, Philippe Chalon. POSC’s standard data model, Epicentre, and the software integration platform ‘should by now have solved the problems of lost data and software interoperability.’ But the lack of cooperation between vendors has prevented this happening. Even within a single vendor’s product line there may be multiple data models. Chalon is skeptical as to the merits of XML considering the technology as equivalent to the POSC Exchange Format (PEF) solution. In this context, XML is therefore not especially innovative and unlikely to be a panacea. Chalon considered that ‘behind XML there must be a data model.’ Chalon also lends support to the Open Spirit Architecture – which he considers the ‘right solution’ allowing for some data to be shared without sharing the whole model.
Exxon Mobil, according to Bill Ragosa, uses many world-wide standards allowing staff to work seamlessly irrespective of location. Exxon recognizes best of breed software tools and strives to use one tool per function where possible. Data management supports this philosophy by establishing authority and responsibility, common procedures for access and update, and common formats. Data Management is managed through a world-wide organization which for instance ensures data ownership, common database management systems, common services for storage space, backup and problem solving. A ‘standard set’ of upstream data repositories (some Exxon proprietary developments) is deployed. Data services ensure business success and increase upstream productivity. Standard processes allow staff to move from one location to another and find themselves in front of the same desktop. Exxon is not afraid of developing its own technology and is “committed to developing high impact technology for the upstream through a $250 million annual R&D budget.” Over the years, the fruits of this program have included 3D seismic, seismic stratigraphy, digital reservoir simulation, seismic imaging with supercomputers and the first horizontal well.
Following the merger with Mobil, the Finder-GeoShare-OpenWorks infrastructure has been adopted to the Exxon Proprietary data model. This reflects less on the merits of the databases, but rather on the fact that 70% of Exxon Mobil’s data is in the Exxon database with the remainder in Finder. Exxon Mobil still uses GeoShare to move data into OpenWorks projects.
BP Amoco’s Hunter Rowe described work done internally using real-time collaborative tools SameTime and QuickPlace. These were deemed to be immature technologies and BP developed its own tools to support partner collaboration on the Gulf of Mexico Crazy Horse development. Other innovative technologies which have been on trial at BP include Autonomy’s Active Knowledge Agent. Outside of the organization, the enLinx.com site was developed to leverage the Forties pipeline system in the North Sea and now allows proprietors of small oil and gas pools to contact infrastructure owners. Rowe states “e-Business has been an exciting journey for BP. The internet is a ‘show stopper’ for the large number of employees who can access it. BP is ‘deeply digital’ thanks to the Microsoft Common Operating System.” Problems remain with interconnectivity between ‘back office’ data systems.
© Oil IT Journal - all rights reserved.