PIDX EU member forum, London (December 2013)

Statoil CIO on standardization, automation and 'BYOD.' Supply Chain Insight on 'leaving less in the bankers pockets.' Taulia on how to achieve this. Tracking CCUs across Statoil's supply chain. EPIM LogisticsHub. Contiki's contract management. PIDX hot projects.

PIDX, the petroleum industry data exchange standards body describes itself as the global forum for oil and gas e-business. PIDX was spun out of the American Petroleum Institute in 2010 and is now an independent organisation.

Statoil CIO Sonja Chirico Indrebø kicked off the session with a presentation on creating business value through standardization and process automation. This is a delicate balancing act as, ‘you can’t force the business to be standard.’ Previously Statoil has a 3-5 year IT project cycle time but this ‘did not give what we wanted.’ Projects now are allocated 12 months max with prioritized goals. Statoil is at the forefront of big data but, warns Indrebø, digitization per se creates a lot of data but no value. Statoil is now working on algorithms to realize the value, leveraging information standards to correlate data across domains. Regarding cyber security, Statoil is frequently targeted, for financials, intellectual property, business information. ‘People will steal anything.’ Key here is analytics on log files and network activity and a risk based approach. The ‘bring your own device’ (byod) situation is interesting—for senior managers, IT means mobile and they like the latest gear but these need to be used in a secure way. In the Q&A, Indrebø observed that taking away manual data activity is good as it improves data quality and frees people up to do higher value stuff. ‘It makes sense to digitize as far as possible.’ If as some believe, oil and gas is a twilight industry, sustainability can only be achieved by a continued focus on lowering costs. IT is to make a significant contribution to Statoil’s goal of over 2.5 mm boepd by 2020.

Supply Chain Insight editor Pete Loughlin observed that 90 days payment terms could be tough on smaller companies that pay high interest rates on working capital or around 20% factoring fees to their banks. Meanwhile a large buyer may be lucky to get a 1% return on cash on hand. The difference—the 19% ‘leaks’ into the banks’ pockets! But supposing the customer is the supplier’s banker—with help from a trusted third party. The only problem is that companies’ purchase to pay (P2P) and e-invoicing systems do not in general support such a holistic workflow. But there is help from third party service providers like Loughlin’s favourite, an unnamed technology provider that brought 95% on time payment to a US utility along with $46 million from the win-win ‘dynamic discount program.’

Those curious to know who were the unnamed utility and service provider did not have long to wait as Bertram Meyer, Taulia CEO and co-founder took the stage to explain his company’s ‘dynamic discounting’ technology. The utility in question was Pacific gas & Electric which decommissioned its accounts payable website last year and has partnered with Taulia to provide its suppliers with a free online tool for invoice submission along with the early payment discounts. Other oil country clients include National Oilwell Varco, Halliburton and Johnson Controls.

Jan-Erik Pihl presented on Statoil’s supply chain execution, planning and collaboration. Statoil has some 10,000 ‘cargo carrying units’ (CCU) on hire making around 14,000 port calls per year. The company is working to change its mindset to just in time—with a vision of where everything (supply base, trucks, offshore) is located. Suppliers are required to deliver ‘on time in full.’ Goods need to be held on base until everything is there. Goods are tracked with RFID/Bar code tags and via the Logistics Hub (more below). Supply chain event management monitors activity continuously. The system flags late delivery and offers penalties and bonuses as appropriate. Statoil leverages tracking solutions from Identec Solutions. These include RFID CCU tracking with ISO 18000-6 Gen2 certified kit and GPS devices on high value assets. Here Statoil is an active member of the Norwegian standards body GS1. The problem is that RFID is a technology not a standard. Implementations use different numbering/naming conventions, frequencies and IT interfaces. Some areas (drill pipe, container) have their own standards for frequency and codes. Statoil is working towards full asset visibility for CCU owners, facility and fabrication yards across transport, supply base and offshore installation.

Thore Langeland, strategic advisor with Norway’s Epim (E&P IM) organization presented the EPIM LogisticsHub (ELH), a knowledge base for cargo carrying units (CCUs) and offshore equipment. Norway’s integrated operations project which ran from 2005 to 2010 begat the automated identity and data capture standard AIDC and the oil and gas ontology (OGO). These leverage the W3C’s semantic web and the ISO 15926 generic information model, a.k.a. the GIM reference data library. The GIM RDL covers ‘pretty well everything,’ from HSE, through seismic to drilling and completions—offering a ‘holistic view of asset management.’ On the RFID front, the Norwegian oil and gas association has issued guideline 112 which presumably relates to GS1 above. EPIM’s logistics hub provides an event-based conceptual data model that leverages other data sources including the Brønnøysund company register, the NPD Fact Pages and more. The only catch is that users have to install equipment at all their sites. But this is ‘a very good investment for the industry.’

Exhibitor Christian Hjorth-Johansen gave a good pitch for CMA Contiki’s system for the management of formal contracts and commitments. Contiki’s contract management systems (CMS) has been around since 1981. French major Total is a user since 1997 ‘and we are still friends.’ Much key contractual information is informal—kept in emails, minutes, letters of certification and bank guarantees. Often these are ‘organized’ in personal folders all over the shop and stuff gets moved and/or deleted. Enter Contiki CMS which is used to write contract-related letters and emails. Contiki structures and manages the process of capturing all contract information and commitments. More from CMA Contiki.

As for PIDX, current hot projects include the supplier key performance indicator (KPI) initiative now in its second phase. The KPI group is working to standardize KPIs such as total recordable injury rate and non productive time. Read our interview with PIDX CEO on page 3 of this issue and access the PIDX presentations here.

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