Operations Excellence Takes Center Stage at TCS Oil & Gas Leadership Summit

Summary

Tata Consultancy Services (TCS) invited ARC Advisory Group to participate in the company's first Oil & Gas Leadership Summit at the Petroleum Club in Houston on June 2. The theme of the leadership summit, "Engage. Empower. Deliver." focused on thriving in challenging times and achieving operational excellence by leveraging digital technologies and strong technology partners.

Krish Rao, Vice President – Manufacturing, Life Sciences, Energy, Resources, Utilities, and Government at TCS gave welcoming comments and showed a short video that provided an overview of TCS' service and solutions capabilities.

Thriving in Challenging Times
Tom Franklin, Director – Upstream Center of Excellence at TCS, set the tone of the event by focusing on operational excellence. Mr. Franklin reminded the audience that the price of oil was $12 per barrel 35 years ago when he joined the oil & gas business and they were facing serious challenges back then. However, they persevered and overcame obstacles and helped bring one billion people out of poverty by providing economical energy, 60 percent of which relies on oil. According to Mr. Franklin, TCS believes that oil & gas is still a great business to be in, but needs to operate differently going forward, "Reimagine the business from the ground up, everything is on the table and digital technologies are a key driver to unlocking future potentialities," he commented.

TCS employs a combination of five digital forces to help customers reimagine their operations: Big Data/analytics, mobility and pervasive computing, Cloud, AI and robotics, and social media.

He outlined how TCS employs a five-step approach, which largely focuses on the production/lifting business since that's where greatest need exists today.

The first step involves the five ways to help operators reduce lifting costs: improve reliability, enhance production, extend asset life, remove cost, and optimize the supply chain. The second step involves leveraging four important technologies in analytics, robotics and AI, IIoT, and mobility. The third step involves leveraging three TCS solutions being demoed at the event: Ignio - a cognitive platform for enterprise IT operations; Digital Pipeline Surveillance – a safe & terrain independent solution that will help clients with round-the-clock surveillance of enterprise assets and replace traditional aerial reconnaissance; and a changing workforce solution that relies on social media to help manage the "Great Crew Change." The fourth step employs two business approaches - business intimacy and reimagination. The final step involved the overarching imperative to focus on operations excellence.

In conclusion, Mr. Franklin reemphasized that TCS' objective is "operational excellence without compromise."

Upstream Oil & Gas Ripe for Digital Transformation
Tim Shea, Senior Analyst, ARC Advisory Group provided an overview on how the challenging environment created by low oil prices was an ideal time for companies to consider investing in IIoT-enabled solutions such as advanced analytics and machine learning, cloud computing, and collaborative communications. New upstream technologies such as multiphase flow metering, intelligent completions, intelligent pumps can help operators thrive.

Shea concluded his presentation by highlighting some real world applications in which IIoT-enabled solutions and operational analytics are helping operators with well monitoring and optimization, artificial lift optimization, supply chain optimization, and collaborative operations solutions that connect siloed operations and drive operational improvements. Shea cautioned the audience that most of them are in the hydrocarbon extraction, production and refinement business and not in the complex systems integration and analytics business; and thus the need to work with technology partners that possess both deep domain oil & gas, as well as analytics, engineering and complex systems integration expertise.

Operations Analytics Provides Business Value
Jan Erik Johansson, Industry Advisor, Upstream Oil & Gas at TCS, started by stating the industry has come a long way. Today, unlike in the past, safety is the number one issue for companies.

According to Mr. Johansson, today's digital world requires industry to change the way it does business going forward. He cited industry data that through 2017, 60 percent of Big Data analytics projects will fail to go beyond piloting and experimentation. Furthermore, through 2018, 90 percent of deployed data lakes will be useless due to too much data captured for uncertain use cases. His presentation therefore focused on analytics and the operational value TCS can help operating companies realize.

Mr. Johannsson presented a case study from a customer in Eastern Australia running a large gas processing operation with thousands of wells, tens of compressors, and six processing plants.  Like most oil & gas companies, the user was challenged by the time spent in finding, aggregating, preparing, and analyzing data stored in different siloed databases, rather than on analyzing those data. TCS provided material cost savings benefits to the customer by leveraging the four dimensions of operations analytics: addressing key business questions, treating data as an asset, employing analytics, and deploying automation as a delivery strategy.

TCS developed its Field Data Services for this customer to automate aggregation and analysis of key operational data by leveraging data quality dashboards and creating business rules addressing key issues such as completeness, accuracy, consistency, timeliness, and uniqueness of key production data and KPIs. According to Mr. Johannson, to date, this has saved the customer over 100 man days; significantly improved field data to corporate data storage collection rates; enabled the client to correctly identify 98 percent of all field data outage causes; and provided analysis that led to a 10 percent reduction in pump off/pump on times, thereby reducing pump down time and increasing production.

Technology Enhances Drilling Operations
Dr. Pradeep Annaiyappa, Director, Automation Technology Engineering at Nabors Corporate Services, which has benefitted from a successful ten-year partnership with TCS, talked about how drilling automation can help increase safety, reduce cost, and improve wellbore quality. His focus is on developing control systems for drill rigs to the operator's specifications.

Mr. Annaiyappa commented that the industry's push to drilling automation is moving us to build integration between the different rig equipment providers and service providers on a drilling rig. However, in the land drilling market, disparate goals among the participants in the drilling process and the logistics and business model have prevented widespread adoption of automation. To combat this trend, industry organizations such as IADC ART and SPE DSATS are proposing integration architectures that require all rig equipment control systems to talk to an integration server and allow service company and operator applications to be able to automate and optimize the drilling process.

Mr. Annaiyappa outlined the current challenges facing the industry:

• Most equipment control systems are not designed to be controlled via an external software system. Handshake protocol needs to be defined and control system security not designed to allow multiple external systems to control the same piece of equipment.
• Service providers and operators are typically not on the rig control network; the single biggest reason why WITS, a serial protocol is still the most widely used protocol on the rig.
• Current IT infrastructure deficiencies include lack of effective rig network, unavailability of computing infrastructure, and lack of intellectual property protection in an integrated environment.
• Intellectual property and liability concerns

Mr. Annaiyappa outlined the three automation layers in which they operate: machine automation, which relies on M2M and fieldbus protocols; process automation, which relies mainly on Ethernet; and the advisory automation level, for which the data are often offsite and must be accessed remotely by a remote operations center.

He mentioned that Nabors Corporate Services is working on several initiatives in key areas such as:

• Standardization of rig infrastructure: network and control system hardware, modular software development and deployment, integrated HMI, and software test and training
• Integration of rig services: instrumentation, directional drilling, casing running, managed pressure drilling, and automated pipe handling
• Automation services: drill-a-stand down, auto tripping, anti-blocks up/down, and trip times/drilling times
• Rig Cloud Infrastructure and RigCloud Services: private cloud infrastructure, infrastructure as a service, sand-box access to automation services, and remote access, and
• Framework services: internationalization, licensing, unit conversion, historian, alarm management, and asset management

Achieving Operational Excellence via Digital Solutions
Venkatesh Patil, Global Head of Engineering, Energy at TCS, focused on achieving operational excellence by leveraging digital technologies. Mr. Patil provided an overview of TCS' Engineering & Industrial Services (EIS) business, which provides an integrated services capabilities portfolio (engineering and R&D services) across product/process lifecycle: product development, plant solutions, and transformation. The group has 17,000 engineers across nine verticals: automotive; aerospace; machinery & process; hi-tech & telecom; energy, resources & utilities; life sciences; retail; and CPG. TCS employs a horizontal focus since every industry can learn from and/or be relevant to/for other industries.

He discussed how the upstream oil & gas operates in high-risk frontiers. The key factors involve capital, costs, and risk. Specific issues are safe operations of assets, return on capital employed (ROCE) and capex optimization; opex, energy costs, and productivity; availability, reliability, throughout, and production yield; and process safety, environment, asset integrity, and human capital. TCS relies on a science-based approach when working with customers to solve their problems and provide business value.

Much of Mr. Patil's talk focused on asset reliability. Three pillars that comprise asset reliability are risk-based inspections, reliability centered maintenance, and real-time condition monitoring. He presented a case study showing a customer that successfully leveraged TCS during a turnaround at one of its refineries with over 800 critical rotary equipment (pumps, compressors, fans, heaters, etc.) and 3,600 pieces of static equipment (vessels & tanks, pipelines) across 12 units (RBI) to realize two days of turnaround time savings and $9 million savings in turnarounds.

Mr. Patil concluded by stating that asset reliability techniques are key to reduce cost while containing risk; disruptive digital technologies are enabling real-time condition monitoring of assets; and people and change management are equally critical for success.

Conclusion
The TCS Oil & Gas Leadership Summit imparted strong thought leadership and real-world examples on how companies operating in today's margin-compressed times can leverage digital technologies and solutions through strong technology partnerships to achieve operational excellence.

ARC Advisory Group clients can view the complete report at ARC Client Portal on www.ARCweb.com or Box.com

If you would like to buy this report or obtain information about how to become a client, please Request ARC Info

Keywords: Tata Consultancy Services (TCS), Nabors Corporate Services, Asset Reliability, Asset Management, Operations Analytics, Operations Excellence, ARC Advisory Group.