mature field redevelopments: how to stay relevant for the foreseeable future

13 – 14 FEBRUARY 2017

KUALA LUMPUR,

MALAYSIA

MATURE FIELD

REDEVELOPMENTS:

HOW TO STAY

RELEVANT FOR THE

FORESEEABLE FUTURE?

2

O&G COMPANY OF THE

FUTUREARNOLD VOLKENBORN &

CHEAH WAI SENG

ACCENTURE

Copyright © 2017 Accenture All rights reserved.

INTRODUCTION

CHEAH WAI SENG

Managing Director

Digital Lead for Energy, ASEAN

Accenture Consulting

ARNOLD VOLKENBORN

Managing Director

Head of Asia Pacific

Accenture Strategy Energy

Copyright © 2017 Accenture All rights reserved. 3

OUTLINE1. THE O&G COMPANY

OF THE FUTURE

2. DIGITAL DISRUPTION

IN O&G

3. WHAT NEXT?


Small Capex

Peak Oil Demand

Digital

O&G COMPANIES: TODAY VS FUTURE

Big

Bespoke

Many

Small

Standard

One/few

TODAY

1

2

3

FUTURETRENDS

FOCUS FOR TODAY


DIGITAL TECHNOLOGY MATURITY CURVE

DIGITAL TECHNOLOGY MOVES FASTER

THAN AN ADVANTAGE

Digital3

1

2

3

4

6

7

tod

ay

5

Cu

mu

la

tive

c

ap

ab

ility

1950 20201960 1970 1980 1990 2000 2010 2030

Amazon.comFounded 1994

Public Internet1991

System/390

1990

System/360

1964

Mainframe

Client-Server

and PCs

Web 1.0

eCommerce

SAPfounded1972

PC

1977

Sales of PCs

peak

2010

ARPANET 1969

Server-

Host

AWS launched2006

Web 2.02005

Web 2.0,

Cloud, Mobile

Salesforce.comFounded 1999

Public CloudMainstream

iPhone 2008

Self driving car2010

IoT and Smart

Machine

IoT, M2M

1999

?

Cognitive

IBM Deep Blue 2007

Big Data, Analytics,

Visualization

Big Data 1997

4.4 Zettabytes of data in 2014, IDC

Blockchain2008

Digital vs. technology: disruption vs. speed

Source: ASE Analysis


>1000 ENERGY DIGITAL START-UPS, RAISE

>300BN CAPITAL

Digital3

Source: Venture Scanner, Moji Karimi, ASE analysis



OF THE FUTURE


IN O&G

3. WHAT NEXT?


DISRUPTIONS IN THE ENERGY SPACE

DISRUPTION TYPE

Disruption of the

“What”

Disruption of the

“How”

Rise in EVs and

Self Driving Cars

Growth in

Renewables

Non-Tech

Tech

• Processes need to be lean & dynamic

• Massive data , real-time for advanced

analytics

• Fluid organizations

• Augmented decisions

• Open ecosystem

• Shared knowledgeAutomation

& Speed

Machine

Learning

Connectivity

Lean & Dynamic

Operations

Re-designed

Organization &

Capabilities

Operator, Vendor,

Customer Ecosystem

Stricter

Regulations

• 70% of petroleum used in transportation

• EV growth 70% (from 2014/15)

• Drop in cost for renewables since 2010:

70+% for solar and 50+% for windOil demand

for transportation

• Paris agreement: power gen to account

for 40% reduction of global GHG over

next 30yrsNatural Gas demand

Millennial

Workforce

Short-Cycle

Investment

Free Market

KEY DISRUPTIONS IMPACT


THEMES AND INITIATIVES

FOUR PRIMARY THEMES WILL BE DISRUPTING

THE O&G INDUSTRY

Note: 1)On-demand Fuel delivery

Source: World Economic Forum, Accenture Strategy Energy

Themes Initiatives Sub - Initiatives

Digital Asset Lifecycle

Management

Circular Collaborative

Ecosystem

“Beyond the Barrel”

Energizing New Energies

New Era of Automation

Advanced Analytics & Modeling

Connected Worker

Digital Information Sharing & Operational Transparency

Real Time Supply / Demand Balancing

Digital Customer Services

Omni-Channel Retail & Experience based Services

Consumer Energy Choices

Autonomous Operations & Robots

Remote Operations Center

Predictive/ Prescriptive Maintenance

Operations Optimization

Cognitive Computing

Block-chains / Smart Contracts

3D Printing/Additive Manufacturing

Wearables

Targeted Digital Marketing

Hyperlocal Mobile Fuel Options1

Alternative Energy Choice & Platforms


PRELIMINARY VALUE AT STAKE

DIGITAL TRANSFORMATION UNLOCKS UP TO $1.6-

$2.5 TRILLION OF VALUE

USD Bn

Cumulative Industry Impact –

2016-2025 – USD bn1

TotalStartups

1

Downstream

779

535

MidstreamUpstream

90

153

WORK IN PROGRESS

Note: (1) Impact to Earnings before Interest and Taxation (EBIT); mt refers to Million tonnes.

Source: World Economic Forum, Accenture Strategy Energy Analysis,

Cumulative Societal & Customer Impact –

2016-2025

108K Barrels of Oil Spills avoided in Midstream

Operations

24.1% reduction in accidents & injuries

120K Barrels of Oil Spills avoided in Upstream

operations

$637bn total Societal impact

791 Mn Gallons of water usage reduced

2,195 mt CO2

equivalents, 4.89 mt SO2, 1.13

mt NOX, & 11.48 mt CO emissions avoided

$5.2 bn in potential productivity improvement from

556 mn hours of time savings

$945bn total business impact


HALF OF THE O&G COMPANIES WILL INCREASE

THEIR DIGITAL SPEND

ROBOTICS, AI AND WEARABLES ARE THE MAIN AREAS EXPECTED TO SEE INCREASED INVESTMENT

38% 36%36%

57%

31%

44%

13%

23% 22% 20%

35%

12%16%

28%

38%30%

Mobile

devices

Artificial

intelligence

IoT Robotics

& drones

Cloud Collaboration

& social tools

Wearable

technology

Big Data/

Analytics

+15% +7% +10%

Less or don’t know

same amount

more

significantly more

56%

46%

45%

Faster and better decisions

Real-time decision making

Better asset management

80%

30%

36%

14%

20%

Source: Accenture + Microsoft survey


EXAMPLE: APPLICATION OF DIGITAL AND

ANALYTICS HAS SIGNIFICANT IMPACT ON

OPERATIONS


“In the past we just

reported on data.

Analytics has

transformed that by

creating value from that

data. We can now

analyze and predict

outcomes.”

Shaun GregorySenior Vice President of Science, Technology and Strategy

ASPIRATION: WHAT IF THE FIELD OPERATED LIKE

UBER AND THE WELL WAS THE “CUSTOMER”?

THE BRAIN

AI-based hub of

operations

Hauling, roustabout, workovers

Multi-skilled

technicians …

… with support

apps: Mobility smart

glasses virtual reality

Summon help for artificial lift failure

Dispatch tech; virtual reality assists with

instructions

Auto artificial lift

optimization

Update algorithm

Remote multi-asset

hub of operationsCross-assets analytics;

dispatch of robots Call maintenance technician if issue

Saltwater

disposal

Pre-programmed

drone surveillance route

Virtual learning

Each day, intelligent well

reports health & requests

support to Skynet

Predictive algorithms design

location-based route

prioritization for multi-skilled

crew

Wells reprioritize real time as

issues arise; directly call for

support as needed

Drones provide remote

surveillance support and “drop

off” robotic tech support

Skynet manages the field (eg

optimizes production, predicts

failures, pre-plans workovers,

rates tech performance)

CAPABILITIESEMERGING DIGITAL UNCONVENTIONAL

DIGITAL IN MATURE FIELDS

DIGITAL TRANSFORMATION COULD BE A GAME

CHANGER TO MATURE FIELDS


What is Digital’s role in a lean, nimble and asset focused mature field operations?

Why mature fields are the best candidates for Digital Transformation?

Abundance of historical data Easily scalable to multiple assets Production at stake is small

Empowers decision

making towards the

bottom of the

organization

Drives the culture of

continuous

improvement to the

organization

Enables tighter

integration between

functions and with

suppliers

Streamlines reporting

processes and speeds

up decision making

Simplifies

organization to focus

on key value-adding

activities

Analytics

“ Generates insights

through analysis and

visualization”

Cloud

“Enables greater

visibility to a single

source of information”

Automation

“Executes routine and

time consuming tasks by

design ”

Mobility

“Reaches out and

interact with people on

business needs”

IoT

“Connects everyone in a

collaborative ecosystem”


INTEGRATED OPERATIONS: DIGITALIZING A NEW WAY OF WORKING

IO, POWERED BY DIGITAL, CAN DEMONSTRATE

THE CRITICAL CHARACTERISTICS REQUIRED TO

ADDRESS THE DYNAMIC NATURE OF OPERATIONS

…

• Activity planning

• Logistics scheduling

• Material management

• Manpower requirements

• Well monitoring

• Reservoir surveillance

• Interventions

• Artificial lift

Integrated

Planning & Execution

Well & Reservoir

Management

• HSE compliance

• Process/equipment failure

• Defect identification

• Turnaround tracking

• Production surveillance

• Bottlenecks identification

• Hydrocarbon allocation

• Blending optimization

Production OptimizationOperations & Maintenance

BRAINS OF THE

OPERATIONS

IO

Offshore Ops

Logistics

ProcurementWarehouse

Onshore Ops

Projects

Subsurface

CHARACTERTICS

Real-Time

• Real-Time surveillance and

performance tracking

• Faster response /

optimization

Predictive

• Big Data, Analytics enabling

scenario-driven analysis

• Focus on proactive

intervention, optimization

Automated

• Remote operations

• Data-backed decisions

• Minimized human error

Insight-driven

• Leverage institutionalized

data allowing look-back into

solution performance

• Actionable insights

Seamless collaboration

• Virtual collaboration,

anytime, anywhere

• Enabled by open platform,

asset light model

Real Time connectivity Real Time connectivity

Seamless cross-functional collaboration anchored on value optimization and delivery

Source: ASE Point-of-View


IOC: MOBILIZING THE POWER OF DIGITAL

… DRAMATICALLY CHANGING THE WAY WE WORK

AND DELIVERING TANGIBLE VALUE

Total SavingsOptimizationSurveillance

Lo

w C

ase

3-5%

3%

2%

Field

Management

5%

Hig

h C

ase

2-3%

1%

7-12%

7%

2%

2-4%

2%

2%

Impact for a typical effective IO Center

Representative share of production opex and capexWell “The Customer”Field “The Uber”

Centralized field management, based on digital intelligence, optimizes production, predicts failures, pre-plans

workovers, rates tech performance

AI & Analytics

based Field

Management

Support

Applications

Multi-skilled

Technicians

Auto optimization

Update algorithm

Virtual learning

Call maintenance technician if issue

AI based

operations

center

Call in tech for artificial lift failure

Tech Virtual Reality to “see” instructions to repair

Vendor Pool

Remote multi-

asset ops hub

Pre-programmed

drone surveillance route

IOC



OF THE FUTURE


IN O&G

3. WHAT NEXT?


THE WORLD NEEDS O&G CO V.4

Analytics

Capital

Capability

Productivity

Regulation

policy

Development

stage Global

trade

relation-

ships

New

Products

Economic

activity

Manufacturing

Infrastructure

Transport

SecurityHealth

Care

R&D

Banking

Subsidies

TaxesLearning

curvesCollaboration

Pricing

Societal

values

Consumer

preferences

National

gov’ts

Tech.

adoption

Consumer

behavior

O&G Co

V.4

Digital

Downstream

Energy

Security

Regional

Growth

Upstream

Adjacent

Businesses

New

Companies

Source: Accenture Strategy


TO SUCCEED, THE MALAYSIAN ECOSYSTEM

NEEDS WORK AS ONE

PETRONAS and PACs

Provide platform for

collaborative thinking

PETRONAS, PACs,

Service Sector

Utilise existing infrastructure

Labs/ Incubators;

Universities

Develop concepts/ pilots

Govt. bodies/

agencies

Provide incentives, facilitate

partnerships

Service Sector

Develop Proof-of-Concept

PETRONAS

Provide collective feedback on

concepts

Service Sector

Implement and roll-out digital

and technology applications

MOGSC / MPRC

Enable expansion of service

sector

Service Sector

Bring in new/ proven ideas

Financial Institutions

Provide credit support

PETRONAS

Accelerate value realization

Private Equity/ VCs

Promote equitable,

participation of service sector


IDEATION

PROOF-OF-

CONCEPT

OPERATE AND

SUSTAIN

CONCEPT

DEVELOPMENT

SCALE

PETRONAS

Provide stewardship on large

scale disruption
