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Driving Operational Excellence Through Digital Transformation in Oil & Gas

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Marcel Cappetti

Guest Blog by Marcel Cappetti, Managing Director, Oil and Gas, Global Enterprise Theater

I’ve just returned from CERAWeek in Houston—an international event that could be described as “Davos for the energy industry.” It’s a gathering of the power elite, including industry, finance, technology, and government leaders from around the globe. For me, it was the perfect sensing post for all the angst and opportunity that pervades the industry today.

It was my privilege to participate in a panel on “Leveraging Operational Excellence to Drive Margin Expansion”—a key concern of oil and gas (O&G) executives following the crash in oil prices. Too often in previous downturns, companies have relied heavily on deep cost cuts—including massive layoffs and cancelled projects—to keep margins afloat. But this time seems different. There is general agreement in the industry that we will not be returning to $100-a-barrel oil prices any time soon. So it’s time for more than a course correction. It’s time for digital transformation. Digital transformation will drive operational excellence and, yes, margin expansion.

Marcel at CERAWeek

During my talk last week, I shared highlights from a new Cisco study discussing the new reality in O&G and the opportunity for digital transformation through the Internet of Everything (IoE)—the networked connection of people, process, data, and things. Key findings include:

  • “Operational efficiency of existing projects” and “maintenance of assets and infrastructure” will be the top two areas of increased investment over the next 24 months.
  • O&G leaders clearly understand data’s potential—they named “data analytics for faster, better decision-making” as the No. 1 driver for IoE investment.
  • Business transformation—including breaking down organizational silos and converging IT and OT people, processes, and technologies—is essential for digital transformation. According to Cisco’s study, 59 percent of respondents do not believe their IT and OT organizations are aligned.
  • Companies that transform will have a significant bottom-line impact. Analysis by Cisco Consulting Services shows that by implementing a range of IoE-empowered solutions, oil and gas companies can capture their share of $600 billion of Value at Stake between 2016 and 2025. For a $50 billion firm, this translates into an 11 percent bottom-line (EBIT) improvement.

Cisco can help O&G companies in their journey to digital transformation through the investments we have made in key technologies—such as analytics, data, sensors, wireless, and mesh—and through solutions developed with key partners. For example:

  • Remote Operations—Developed with GE, our Connected Oilfield solutions increase personnel safety and improve asset integrity with predictive maintenance; real-time analytics at the edge and virtual expert support enable faster and better decisions.
  • Pipeline Automation—In partnership with Schneider Electric, Cisco’s Connected Pipeline solution uses analytics at the edge to improve security and environmental protection with predictive detection of pipeline intrusion, leakage, and deformation.
  • Wireless Operations—Developed in partnership with Honeywell and Emerson, this Connected Processing Plant solution improves personnel safety and process efficiency with wireless real-time tracking, video analytics, and automated incident response.
  • Secure Operations—Industrial cybersecurity solutions improve security and risk management to combat new and evolving cyber security threats, specifically in the process control domain. A good example is a project for Royal Dutch Shell that provides remote proactive monitoring and SLA-driven management of security, applications, and infrastructure. We are working with industrial control system delivery partners such as Yokogawa Electric and Rockwell Automation to support this solution, which Shell plans to deploy at all upstream, downstream, and lubricant sites.

When the price of oil stood at more than $100 per barrel, the need for oil and gas companies to improve operational efficiencies was primarily driven by the competitive marketplace—and many firms took no action at all. Read More »

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20 Years Hence – What Do Oil, Dating, Digital, and Analytics Have In Common?

How often do you think about the linkage of today’s digital Internet technologies with the gas that we put into our cars and the fuels that heat our homes? Probably not very often. In fact, for many years, I envisioned them as two separate worlds. Here’s why…

Back in 1995, when I met my wife and we were first dating, I distinctly remember talking with her father (now my favorite father-in-law!) Bill Dalgetty about his career at Mobil Oil. Like most senior Mobil executives, Bill started his career at a Mobil gas station and worked his way up over many years, eventually serving as the General Manager of Environment, Health and Safety for Mobil’s operations around the world. Read More »

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Success for Cisco at Yokogawa Users Conference

 

Last week Cisco participated in the Yokogawa Users Conference and Exhibition at the Royal Sonesta Hotel in Houston, TX.

In this, our first year’s participation in the event, we showed our new offers on the exhibit floor : Secure Ops and Collaborative Operations for the Oil and Gas industry.

Serhii Konovalov, Global lead for O&G Industry, and Jason Celaya, Energy Industry IoE PSS, have been working closely with Oil & Gas and Petrochemical customers and the Yokogawa team over the three days of the event.

Greg Carter, Director/GM, Internet of Everything (IoE) Services Group at Cisco hosted the breakout session: “Internet of Everything (IoE) Enabling IA Solutions and Innovation”. In that session he comprehensively explained, “What is Internet of Everything (IoE)” and presented how IoE enables value-added IA solutions and provides innovations for life cycle management with focus on IA customers.

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 I had the opportunity to talk with Serhii and here are his comments to some aspects of the event:

What is the biggest topic among customers during the event? “Two major topics were clearly in the lead: Industrial Control Systems Cyber Security and accelerated growth of Industrial Wireless in O&G”

What kind of solutions is Cisco and Yokogawa working together? “ Cisco and Yokogawa are working on the number of initiatives to address emerging trends and joint customer requirements. One major initiative that we launched and showcased at the event is Secure Ops, that directly targets Cyber Security challenges with innovative and systematic approach”

What is your general opinion of Cisco participation? “The participation at the event demonstrated growing strength of partnership between Cisco and Yokogawa. It was great to hear feedback and strong support from the customers at the event about Cisco’s continued focus on O&G industry and Internet of Things, as well as great time to discuss current projects and priorities”

Watch out for other events that Cisco will be making a big impact at in the future!

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Welcome to the NEW Energy Blog from Cisco

I have great pleasure in introducing you to the new Cisco Energy Industry Blog.

Did you know that the Energy Industry is one of Cisco’s fastest growing sectors served with huge opportunities for Cisco partners and customers? You probably know that Cisco has historically served the Enterprise IT and Network buying centers of most energy companies around the globe, but did you know that Cisco has a growing presence in the Operational Technologies areas of these companies solving real business, technical and process challenges? Yes, the Internet of Everything is here!

Nico Smit Welcomes you to the new Energy Blog and the re-invigorated YouTube and Facebook social media for Cisco Energy

That’s because over the past decade we’ve pushed the relevance of Cisco well beyond the concerns of the networking engineer and are now leading the dialogue, solutions and innovations for energy firms’ lines of business—crossing the entire value chain and ecosystems that compose an energy enterprise organization. With a complement of collaboration, virtualization and video service architectures that we provide over the network, Cisco has proven to be a trusted partner for a variety of firms in the energy sector, transforming their businesses and creating long-term competitive advantage through new models for customer growth, product and business innovation, agility and operational excellence.

Oil and Gas - huge future opportunity

Future opportunity for Oil and Gas. What’s your view?

So what can you expect from this blog? Who are the people contributing, and what are their backgrounds? What are Cisco’s views and opinions about the Energy Industry? Why would you be interested?

We want you to be part of the dialogue. Cisco has gained increased influence with energy companies not only in terms of technical guidance, but also in terms of business advice and thought leadership. The goal of this blog is to share and broaden that perspective. Read the blogs, watch the videos and give us your comments and opinions. We welcome your viewpoint and constructive feedback. Check out our other social media platforms: Cisco Energy YouTube Channel, Cisco Manufacturing and Energy Facebook, and the Cisco Energy Twitter feed. Read More »

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Internet of Things – What is Cisco doing for Business with IoT?

 I recently had the pleasure of talking to Tony Shakib and Navdeep Johar at a recent Cisco Live event, and asked both to talk about The Internet of Things and what it means for business, particularly industrial businesses.

" here's... Tony Shakib, Vice President, Business Solutions

Tony Shakib, Vice President, Business Solutions, Cisco

After a great session presented by Tony Shakib at Cisco Live, I talked to Tony and Navdeep , Cisco Johar and gained insight into what the Internet of Things (IoT) actually is, and how the technology is being applied in a variety of industry sectors including manufacturing, (process and discrete), oil and gas, and transportation, and how customers can monetize this for their organization’s benefit. IoT is real and it’s happening now!

“Internet of things is the foundation; how do you make the sensors a lot smarter; how do you generate a lot more data from it; and how do you monetize and control the data so that you could put it into interesting applications….the next step is we’re trying to put all these technologies in the context of vertical [industry] applications”

Read More »

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