This is another of those ‘be careful what you wish for’ deals. As folks have been banging on for years about ‘digital transformation’ without knowing or caring what it means, a transformation comes along fully formed and smacks the world in the face. Enter the covid19 digital transformation. No more being stuck in traffic jams or squeezed into the underground. No more chatting around the water cooler. No more expensive downtown office rentals. Working from home is where it’s at. And all thanks to Zoom, a technology that nobody saw coming and that isn’t even really new. The question is, will it last?
In the oil industry, the direct impact of remote working is difficult to evaluate. On the one hand, for many, it has been a way of life for quite a while. Smaller operators may call on the services of favored consultant seismic interpreters or reservoir engineers. While such folks may have required rather chunky IT for a home office in the past, having their tools of the trade available in the cloud removes this obstacle. In fact, it puts the remote worker on an equal footing with the major’s engineers, an interesting corollary of the push towards the cloud. But just as those pushing for digital transformation are keen to point out, ‘most digital transformation projects fail’. So how might the shift to teleworking ‘fail’?
A decade or so ago, some of the business-oriented consultants tried to convince oil bosses that geoscience was just like any other work process. Seismic interpretation was a ‘commodity’ activity that could be improved by the application of Taylorism and ‘lean’ processes. I don’t think they got very far. A quick google search for ‘oil and gas shift work’ suggests why. All shift work, i.e. where productivity is really at stake, is in the field, not in the office. Interpreters and, for that matter, software developers don’t work shifts. Despite the push for efficiencies in geoscience and for the rapid development of software as ‘minimal viable products’ the fact is that, in the oil and gas industry, like in software, work is a lot more relaxed than say, working in meat packing*.
The really key activity in oil and gas is the wheeling and dealing that goes on prior to the award of a concession. The geoscientists and engineers inform this activity of course but it is executed by folks who have a special relationship with the license holders or governments. Such special relationships may be arms-length and completely above board. Or, as Transparency International likes to remind us, not so transparent. Other wheeling and dealing opportunities abound in the secondary market as permits are exchanged, farmed-out and sold. This wheeling and dealing defies a Taylorism/efficiency analysis as does the ‘financial engineering’ that accompanies the deals. What is key here is confidence, persuasion and, as in much of human endeavor, the chance of financial gain.
I now invite you to a future meeting of a foreign potentate, some influential financiers and an independent oil company’s exec. The meeting takes place in a small downtown apartment with a brass plate on the door.
Potentate: ‘Pleased to meet you, but where are all your employees?’
Oil exec: ‘Ah, now we are pretty much a virtual company, all our employees work from home now’.
Potentate: ‘Really, how interesting. Our National oil company has ten thousand people working in a steel and glass tower’.
Oil exec: ‘Err right, we used to do it like that …’
Potentate: ‘Our people swear by their in-house IT. We have a 5 petaflop computer on site…’
Oil Exec: ‘We do all our computing in the cloud now, no need for anything on site’.
Potentate: ‘What was that I was just reading about Google and oil and gas IT?’
Oil Exec: ‘Err, right… Let’s talk finance.’
OK, I'm not very good at dialog. What I am trying to get across is that an oil and gas company is a builder of confidence in its capacity to execute geoscience, engineering and finance. The geoscientists and engineers working visibly inside a glass and steel tower are, along with their day jobs, building confidence in the operation, like so many actors in a play. Back in the day, the majors would present their proposed work in theatrical 3D visionariums. Today, expertise in artificial intelligence may play a similar role.
Of course, as now, one size does not fit all in oil and gas theater. I can imagine shale operators working from less ostentatious locales than for instance ExxonMobil’s mega campus in Spring, Texas, or Total’s yet-to-be-built high-rise in La Défense. Both of these are designed to impress, and it doesn’t look like teleworking was part of the program when they were planned.
Along with the covid transformation, oil and gas is currently being disrupted by the green movement, by shareholder revolts and by un-friendly comment in the financial community. WoodMac’s Luke Parker was quoted in the FT as saying, ‘Make no mistake, companies the likes of Shell and BP are already ushering in the twilight years.’ In their twilight years, maybe the majors need the theater of a major downtown location more than ever.
* I am of course supposing that the geoscientists and engineers are lucky enough to still have a job. My sympathies to those who are currently ‘resting’, as they say in the theater.
© Oil IT Journal - all rights reserved.