ENERGY INDUSTRY MYTHS - OUT WITH THE OLD, IN WITH THE NEW

Oil and Gas companies believe they are innovators and leaders in technology. This myth is perpetuated by the functional leaders and experts that find and produce oil and gas. It is true that the industry has been blessed with high margins and technical experts use significant amounts of data to find and understand reservoirs. What is interesting is that this use of technology enhances what these technical experts have always done and because the data that is required is large requires companies to have significant computing power and storage capacity.

What has not happened is a transformation that improves how oil and gas companies operate. Oil and Gas companies have fundamentally not changed since the 1900’s with the exception of outsourcing services and new shiny tools that allow Geologists and Engineers the ability to map and contour plays with lines and colours versus using colour pencils. The tool of choice for the industry remains the spreadsheets supplemented by new tools that perform some of the old tasks more efficiently.

Other industries have redefined themselves by reengineering processes, allowing all individuals the access and capability to analyze their data and integrating technology into the way they work, collaborate with others and drive productivity.

These concepts have generally been ignored in the Oil and Gas industry as leaders and functional experts strive to maintain their independence and creativity by rejecting any technologies or the ideas of technologies that would take away their independence or the capacity to be make individual decisions.

There is a growing recognition that Oil and Gas companies must improve their productivity as well as their cost structures. This burning platform generally occurs in times when Energy price are low and companies have an imperative to improve. The last attempt to improve productivity was through the advent of Enterprise wide systems. This world was somewhat successful but failed primarily due to cost overruns and the creation of restrictive environments that locked customers into systems that could not be changed or if they could be changed it was at enormous costs. These trends drove companies to create a backlash against this type of technology and drove experts in the industry to again fight against the trends of capturing data, improving accessibility and analysis across the entire corporation or re-engineering how the companies operate and create value.

I believe that we are approaching an inflection point. The cost of technology continues to fall and new tools such as cloud computing, data storage and sensors to capture and record data evolve. The industry will begin to evolve and will join other industries in the 21st century but they will need to break down the culture’s, myth’s and functional biases that exist within this industry. Enabling technology should not foster ineffective processes, mounts of red tape and bureaucracy. Technology can not succeed if people and processes are not effectively aligned.

"The real problem is not whether machines think but whether men do."

B. F. Skinner