IQPC Emerging IT in Oil & Gas

The IQPC Emerging Information Technology in Oil and Gas conference was held in London last month and offered a different slice through the oil and gas IT matrix. E-procurement web portals like Trade Ranger are seeing their business models questioned by suppliers, who would rather talk directly to their clients and who were critical of the reverse auction procedure. The success of the corporate Intranet has led to a user-driven demand for access from outside the corporate firewall. The latest trendy e-business buzz is for ‘ubiquitous’, or ‘silent’ commerce using smart tag technology and a variety of mobile computing solutions. In the US, Voice-XML is extending the reach of customer relation management through the cell phone.

Neil Carmichael (Shell E&P) qualified the current dot-come débacle as a modern day equivalent of Tulipmania. Conscious that e-business in general has taken a knock from high profile failures such as Enron, Shell has reined in its e-business scope to ‘streamline processes and to connect more efficiently to stakeholders.’ The Internet Portal is the tool of choice and has been used to ‘expose the knowledge hidden in the business process.’ Portals need not be ‘glossy’, but rather a useful window on an organization’s data. Not all Shell’s Portal initiatives have been successful. GeoStar, a multi-language travel planning site, may be a ‘useful resource,’ but it is not making any money. GeoStar is ‘the nearest Shell has come to a dot-com bust!’ Shell’s successful Portal initiatives include Well Planning, e-Surplus and an internal bidding system for geophysical processing. The killer application is education, through Shell’s e-learning initiatives such as the Shell Open University. This provides careers management, information search and an online library of web based training.


Trade Ranger has had a tough time developing its business as an e-procurement intermediary. Initially, Trade Ranger tried to collect prices - and ‘generated a lot of angst’ among suppliers. The reverse auction is very transparent – too much so for some vendors who found Trade Ranger ‘too confrontational.’ Despite such issues, e-procurement proved an effective e-business pathfinder and helped ‘re-invent the process with a global mindset.’

Time bomb

John Keeble believes that Knowledge Management (KM) matters because of the demographic ‘time bomb.’ Today, 47-48 year olds dominate the age pyramid and this imbalance will impact in 10 years or so. Enterprise deploys KM through Communities of Practice (COP) and a ‘vibrant and diverse’ collection of websites including the London Geological Intranet, CyberDocs and Rapid which has now been developed into Landmark’s Web Open Works.

Lasmo Online

Russell Elliot (ENI/Lasmo) described how the popularity of Lasmo’s ‘Online’ portal led to calls from workers on the move to access the intranet from remote locations. The first solution was ‘WebMail,’ a home-brew Hotmail giving users access to their email from a hotel room. This led to the Lasmo’s Intranet via the Internet (IVI) project. Elliott believes that IVI will ultimately bring more flexibility in time management – with more working from home, less commuting stress etc. In short, a better world.

Silent commerce

OK, e-commerce may be a bit long in the tooth now, but u-commerce? s-commerce? Accenture’s Richard Payne explained how ‘ubiquitous’ or ‘silent’ commerce uses internet technology to deliver pervasive, cheap processing power coupled with new ways of operating a business. U-commerce will replace today’s ‘high cost, fragmented’ e-commerce. U-commerce mandates mobile connectivity and Payne outlined how web sites are becoming multi-channel portals which adapt their content and presentation to whatever browsing device is used via a XML ‘data islands’. Using the Compaq iPAQ Personal Digital Assistant, Payne showed how an executive dashboard scales to viewing on the small screen. Accenture built the administration site for The World Economic Forum for use on the Pocket PC. The technology is applicable to sales force automation and to work in high-risk environments using devices such as the ruggedized Fujitsu PenCentra 200 tablet. Data captured in the field can be uploaded and synchronized. In the US, Pocket PC’s can synchronize in wireless LAN ‘hotspots’ such as in Starbucks. Sales force automation can also include GIS-based displays so that the sales force knows exactly where to go.


A related u-commerce technology is the radio frequency identity tags (RFID). At around 17 cents each, the tags are cheap enough to allow for highly granular tracking of the supply chain. ExxonMobil customers can pay for goods and gas at the convenience store at nearly 1,600 Exxon service stations with a wave of their SpeedPass transponder. Accenture demoed the technology with a dummy petrol pump. Customers have an RFID tag on their key-fob or in the vehicle (as used in the EZ-tag). As customer ‘signs in’ with the tag, he or she can be bombarded with special offers of extra goods or services – using customer preference data mined from previous purchasing habits. McDonalds is trialing this in Texas, as is Mobil, with its SpeedTag .

Mobile workflow integration

Accenture showed how new technology is extending workflow to the mobile work force. The problem today is that value is generated outside the office, but e-business is limited to inside. Some software companies are working to provide channel-based access to sales data from WAP phones or Pocket PCs. Currently, connectivity is not robust, so transactions are shaky.


Heiner Hochreutener, VP with Emerson Process Management* had a lot to say about procurement portals, not much of it very complementary. The portal tends to put up a ‘one size fits all’ barrier between client and supplier. This may hide the technological richness of an e-procurement site like EPM’s where clients can accurately specify complex goods and services. Hochreutener noted that the next generation of e-procurement should allow for rich service side functionally to be visible across the portal.

Round Trip

Such is the promise of Commerce One’s ‘Round Trip’ portal technology. Round Trip allows suppliers to host and maintain their own product catalogs. In any event, B2B is a lot of work for the contractor, and while portals may have a role, Hochreutener insists that as a vendor ‘we don’t like catalogues and we don’t like sign-up or transaction fees.’

OFS Portal

Bill Le Sage, OFS Portal president, outlined the role of this supplier supported, not for profit B2B portal. OFS Portal should be a source of value for both parties. As a standards-based portal, OFS’ ultimate objective is to disappear – standards should mean that there are no intermediaries, no Trade Ranger, no OFS Portal, although this might be something of an ideal. In March 2001 OFSP had 10 members, now it has 17. OFSP members realize that e-commerce in the field of complex goods and services requires a sophisticated approach. The simplistic, marketplace paradigm – designed to drive down prices and to ‘commoditize’ everything has not worked. The reverse auction has proved a blunt tool. Most suppliers want a one to one dialogue with buyers.

Content, content..

Content – in the form of standardized catalogues – is the stumbling block. A drill bit is not a commodity, although you can easily fill in an SAP file, this could lead to a potentially dangerous mismatch. OFS is developing content, transactional standards. These will necessarily be a compromise and there may even be a multiplicity of standards. ‘Six standards are better than none. But one imperfect standard is better than six ‘perfect’ ones!’ Le Sage commented on the high level of collaboration that has existed in the past between service companies.

Trust gone

The unpopular reverse auction process has meant that much of the trust between vendors has gone. But B2B is not going to go away. Increasingly oil and gas companies are installing ERP systems which, along with content and standards, will drive B2B uptake. OFSP, along with PriceWaterhouseCoopers, Marathon and Unocal have been selected by API/PIDEX to develop standards for complex products and services. Five pilots will be initiated this month. Le Sage notes the different complexity of sourcing (complex) and fulfillment (relatively simple) which represents the low hanging fruit of e-commerce. OFSP has developed 1500 product straw man templates (400 came from Trade Ranger). A template administration tool will be in production in November 2001 and 1900 templates will be finished by February 2002.


Tony Smith is a Director of Rex, an independent consultant and systems integrator, and a member of the UN ebXML initiative. Rex is working to consolidate and monitor key performance indicators (KPI) using research into Internet-enabled supply chain management done at the University of St. Gallen in Switzerland. Rex’s technology consolidates information from sensors throughout an oil refinery or other plant to display as KPI’s on a ‘dashboard.’ A star display summarizes the current state of affairs with red/green ‘traffic light’ indicators of performance. The internet allows Rex’s consultants to transfer work around time-zones to work around the clock. Rex’s KPI monitoring solution can be delivered as Extranet/Intranet, by data replication or through Application Service Provision (ASP) – the preferred route. Smith gave a real-time demonstration of remote KPI monitoring of a real oil refinery located in Seattle.


Gary Moucha, director of global e-business with Amerada Hess presented proof of concept work done by Hess along with Accenture, Tasco and Phillips. Hess owns 1100 retail outlets in the eastern USA. They offer a ‘price competitive’ gas and fast food family experience in C-Stores with mini-malls. Hess is using simple cell phone-based u-commerce in the form of a Vortal, or voice portal. The technology is based on Voice XML. VXML plugs right in to existing cell phone users in the US who can then pre-order and pre-pay. This eliminates queuing – believe it or not you may otherwise have to queue for 20 minutes for a ‘Blimpey*’. VXML leverages existing standards and technologies. Voice recognition is ‘getting very good.’ Other fields of VXML application include refinery control and data collection, offshore plant and energy management.


Aventail’s technology is similar Lasmo’s IVI, offering secure access to the corporate Intranet from any location with web access. Aventail provides virtual private networks and secure, hosted extranets to let users authenticate themselves and access corporate resources behind the firewall. Deloitte & Touche use the Aventail net to connect 15,000 consultants throughout the world to its applications. Access can also be provided from within a client-site firewall. BP Exploration Alaska’s OilNet uses Aventail Net to connect to external services providers.

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