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Making IE a grand scale success - Intelligent Energy Report

Tuesday, August 26, 2014

Steps which would help make intelligent energy a 'grand scale success' include taking a longer term view, understanding the pace of change, and perhaps getting more women involved, according to discussions in the third plenary session of Intelligent Energy 2014

To make Intelligent Energy a 'grand scale success', it might help to avoid using the word 'intelligent' because it come across as patronising, said Paul Williams, managing director of operational performance consultancy WCG.

Photo: Perhaps the name ‘Intelligent Energy’ sounds patronising to senior oil and gas people - Paul Williams, managing director of operational performance consultancy WCG. (standing). Behind him from left to right: Cindy Reece. Director of management and information with SPE, formerly Upstream Tech nical Support Manager with ExxonMobil; Trond Unneland Senior Upstream Advisor at Chevron; Leo Pirela, Global Director for Intelligent Fields and Asset Management Optimizatio n, Baker Hughes; and Pieter Kapteijn, consultant, formerly director of corporate technology and innovation at Maersk Oil & Gas

Perhaps the word 'intelligent' (in 'Intelligent Energy' is wrong, he suggested. 'People say, 'I don't want intelligence, I want practical solutions to solve my problem.' Intelligence is a bit patronising,' he said.

Not all projects have been successful, Mr Williams noted. When he was previously working at BP, delivering collaborative work environments linking onshore and offshore, 'most withered on the vine'.

A big problem was the differing cultures between onshore and offshore, he said. 'Offshore people like their independence, onshore people like to reflect.'

Mr Williams was so interested in oil and gas cultural issues that he left BP to become a consultant, specialising in 'behaviour, team dynamics, relationships, emotions and process changes,' he said.

People talk a lot about having an enthusiastic 'sponsor' for a change, but if the sponsor is too enthusiastic that can also cause the project to fail, he said.

'Change sponsors become marginalised, they keep taking about their ideas,' he said. They often 'concentrate on the technology, not the benefits.'

And when projects get authorised to go-ahead, if you move too fast, you risk marginalising the people who don't like the idea, which can cause problems later.

The idea that humans resist change is not true, he said. Evidence for this is how excited people get when there is a new baby in the family. What people dislike is being told what to do, or having their objections ignored.

A further issue is that people underestimate the competition for senior manager's time. 'I deal with senior operational leaders day to day,' Mr Williams said. 'You're competing against other [demands on attention] - HR, system optimisation work. Your offering has to be better.'

Pieter Kapteijn

Pieter Kapteijn, an independent oil and gas consultant and formerly director of corporate technology with innovation with Maersk Oil and Gas, also conference committee chairman of the first Intelligent Energy conference in 2006, had some interesting perspectives on the pathway of intelligent energy.

'When we started [with intelligent energy projects] we didn't know where we are going,' he said. 'When we arrived we don't know where we are.'

We know that intelligent energy projects can work. 'The fundamentals are there,' he said. 'There is so much collateral to show there is value to this.'

Mr Kapteijn asked the audience if they thought intelligent energy had 'crossed the chasm', as described in Geoffrey Moore's famous 1991 book, where the 'chasm' is a big gap which a new technology is thought to have to cross in order to reach the mainstream.

In a show of hands, around 25 per cent of the audience said yes, but around 55 per cent said no.

Intelligent energy 'is not a capability like any other capability, it is much more than that,' he said.

The oil and gas industry had been talking about integration challenges for long before intelligent energy conferences started, he said. '33 years ago, the chief petroleum engineer of Shell said that the main problem with the company was integration.'

One problem with technology implementations is that oil and gas companies do not see much urgency to implement new technology, they compete to get access to reserves, but after that the margins are usually healthy, he said.

Also oil and gas executives often do not take a long term enough view to recognise the benefits of new technology, with the average CEO being in place for 3.5 years.

Another point is that the oil and gas industry has an unnecessary 'fear of complexity,' he said.

'The industry is complex, but it is not difficult.'

Top managers often drive for simplicity, saying 'please capture it in three slides,' he said. 'Many people are driven towards over simplifying.'

Mr Kapteijn recalled an experience early in his career when he was asked to make a presentation for the board of Shell (where he was working at the time), and they asked him to just show the most important three slides of his presentation, rather than the whole thing. He thought that senior managers should have been able to absorb all of it.

Another problem is the oil and gas industry's tendency to chop up problems in order to solve them, because it can prevent taking a broad picture view.

An example of this is the fact that Germany has built more wind power than any other country, but also its greenhouse gas emissions have gone up at the same time. 'My view is that the big picture has been neglected,' he said.

The pathway to Intelligent Energy might have been better if the intelligent energy advocates had put together a partnership with an asset earlier and got a real test project running, or brought in ideas from other industries, he said.

Mr Kapteijn noted that issues of 'misalignment between the interest of individuals and the group' seem to come up more often in Intelligent Energy conferences than in other areas of the oil and gas industry.


Rick Morneau, a former Chevron head of Strategic Research and Technology Development for Transformational Information Technology, asked if part of the reason so many projects fail is men. 'Are we gender challenged?' he asked. 'Men approach teamwork like a bobsleigh team, they want to be in front and everyone else is behind them.'

Cindy Reece, event chairperson and former Upstream Technical Support manager with Exxon Mobil Corporation Upstream Information Technology, said, 'in my own opinion, there are gender differences in how we approach things, but more strong personality traits.'

Mr Kapteijn said, 'The alpha male model is a competitive model, you can't do this [intelligent energy] in a competitive environment. Women tend to be better at guiding the overall health of the system.'

Leo Parela, Director i-field with Baker Hughes, said that competitive behaviour could be caused more by reward mechanisms than gender. 'I've come across very competitive females,' he said. 'I don't agree the gender is the main cause. We [should] have systems to reward individuals, not teams. 'Flat organisations can only work if you reward people for what they achieve as a team.'

Paul Williams said that common personality traits of 'intelligent energy' people could be causing obstacles. 'The personality of people in IE is different to personalities in operations. So you tend to marginalise yourself.'

Biggest impact

Delegates were asked which of the intelligent energy technologies they thought has the biggest impact.

Leo Parela of Baker Hughes said he thought that increases in recovery factor could have the biggest impact. 'An increase in recovery by 1 per cent can be billions of dollars,' he said.

Mr Kapteijn pointed out that when calculations make a discount on future earnings to work out their value today, you often find that the moves with the biggest short term benefit often win.

However at national oil companies like Saudi Aramco, there is more of a long term view. 'The focus is always on ultimate recovery, it leads to different solutions. They have embraced this [intelligent energy],' he said.

Mr Williams said thought that the technology with the biggest impact is collaborative working environments. 'I've worked in 50 [collaborative working environments] across the world. Humans working as one team has a tremendous effect on efficiency. They say hello,' he said.

But it is always important to note than in surveys of why people joined the oil and gas industry, the biggest reasons always turn out to be 'money, travel and prestige', Mr Williams said.

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