Digital Oilfield

Outlook Report

Opportunities and challenges

for Digital Oilfield transformation
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Key insights
JWNs second annual Digital Oilfield Outlook Report, conducted with partners Siemens,
Storm Telematics and GDM Pipelines, has revealed a number of positive trends emerging
in the implementation of digital technologies in the Canadian oil and gas industry. The
survey of more than 350 industry professionals found that awareness and knowledge
about the various digital technologies available has improved, and feelings about
the overall benefits of Digital Oilfield implementation remain high. Emerging digital
technologies are seen to be increasingly market ready and the adoption curve has moved
forward, while concerns about cyber security have subsided. But important barriers
to adoption remain, both financial and organizational. Both vendors and users of the
technologies need to become more proactive in making the business case for technology
implementation, and measures must be taken within organizations to promote the use of
the technologies if the full benefits of the Digital Oilfield are to be realized.

Digital Oilfield technology implementation starts with
knowledge about the technology offerings and the po-
tential benefits they bring to an organization. The number
of survey respondents who stated they had insufficient
knowledge to answer questions about two specific Digital
Oilfield use cases, Field Productivity and Fleet Manage-
ment, declined six per cent and eight per cent respectively,
a positive indication the industry is becoming more in-
formed about technologies available.
In a deeper dive into the Field Productivity and Fleet
Management use cases, it was found that respondents
perceived both to have matured and moved significantly
along the adoption curve. The year-over-year compari-
son shows the perception of Field Productivity and Fleet
Management technologies maturity and highly proven
market readiness jumped by 27 percentage points. As
many in the industry remain tentative about Digital Oil-
field technology maturity and uptake remains sluggish,
this is an important consideration going forward.
The top ranked benefits of Field Productivity were increased
labour productivity, increased asset uptime and improved
safety, while those for Fleet Management were reduced
maintenance and repair costs, improved safety and increased
asset uptime. This indicates that while boosting efficiency is
paramount in todays challenging price environment, safety
remains a top-of-mind issue in the industry.
The biggest perceived barrier to implementation is iden-
tical to last years across the board response: budget
constraints. This could be alleviated as prices rebound
and the cost of Digital Oilfield technologies continues to
drop as it moves along the maturity curve. Existence of
organizational barriers was the second highest ranked
impediment to adoption.
Another significant finding was the decrease in those
respondents who felt cyber security could be a deal
breaker in adoption of Digital Oilfield technologies. As a
barrier to implementation of Digital Oilfield use cases, it
fell in rank from a tie as the second biggest impediment
in 2015 to the fifth-ranked barrier in this years report.
There is often a disconnect between people in different
seniority groups and functional groups within organiza-
tions as to the benefits and barriers of Digital Oilfield
technology implementation. A breakdown of organiza-
tional silos and a better alignment of interests among
the various groups could go a long way toward moving
the adoption of Digital Oilfield technologies forward.
There is a strong case to be made that the biggest
hurdle slowing adoption is not technology related, but
rather business related. There remains a lack of a clear
vision in many respondents minds as to the benefits
the Digital Oilfield can deliver, suggesting the need for
a bottom-line business case to be made to move im-
plementation forward. Secondly, organizational barriers
need to be overcome, an indication that companies lack
sufficient expertise or clear leadership to drive a greater
level of implementation.

3
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Contents
Siemens sponsor message...........................................................................................................................................6
Storm Telematics sponsor message.........................................................................................................................7
GDM Pipelines sponsor message...............................................................................................................................8
Executive summary.......................................................................................................................................................10
The productivity imperative........................................................................................................................................ 11
The digital opportunity................................................................................................................................................ 12
Digital Oilfield successes............................................................................................................................................. 14
What can the Digital Oilfield do?............................................................................................................................. 18
Survey methodology...................................................................................................................................................20
Early returns: Awareness since 2015 has increased......................................................................................... 23
Perceptions of Field Productivity technologies: The needle is moving................................................... 24
Key benefits of Field Productivity technology adoption: Whats not to like?....................................... 26
Key barriers of Field Productivity technology adoption: Not so fast....................................................... 27
Field Productivity case study: Access to data when its needed................................................................ 28
Field Productivity case study: Ending the paper chase................................................................................. 29
Perceptions of Fleet Management technologies: Solidifying its strong case........................................30
Key benefits of Fleet Management technology adoption: More than fuel savings............................. 32
Key barriers of Fleet Management technology adoption: Some roadblocks remain.......................... 33
Fleet Management case study: Driving down costs and optimizing with analytics............................34
Conclusions and recommendations....................................................................................................................... 35
Field Productivity case study: Virtual training................................................................................................... 36
Fleet Management case study: Model behaviour.............................................................................................40

5
Message from
I
ts been nearly two years since global crude oil
prices declined in response to increased global
supply, and the industry is still reacting to the
changes that have been imposed on it. A series
of technical innovations brought light tight oil to
market and introduced a fundamental change to
the supply of crude oil that, as microeconomic
theory would suggest, reduced market prices
accordingly. If the crude oil market reacts like
the natural gas market did to shale gas in the
2000s, higher prices may not return anytime
soon. An appetite for innovation has arrived in
the industry to react to these new conditions
that have not been seen in decades.
JWNs 2016 Digital Oilfield Outlook Report pro-
vides an opportunity to examine the progress of
that innovative spirit on whats working well and
what isnt, and suggests how we hold the gains
made to date as well as continuously improve.
6
More and more, oil and gas executives are
starting to look beyond their own markets and
geographies to seek out lessons learned from the
most innovative companies from other industries.
At Siemens, weve helped thousands of or
ganizations across multiple industries gain more
value from their data and documents by taking
a life cycle approach to technical information.
In fact, connecting the digital thread from an
initial idea, through its realization, to oper-
ational utilization has helped organizations
significantly improve margins and compete
more effectively on the global stage. The com-
mon element was the need for rapid access to
complete, correct and consistent information
to become more efficient, regardless of prod-
uct or process.
This is the essence of the Siemens Digital
Enterprise and its application to the Digital Oilfield.
Message from
T
he challenges that producers and suppliers
are experiencing within the energy sector
should not come as a surprise to anyone
living in North America today. There are constant
downward pricing pressures being placed upon
everyone within the value chain. This combined
with increased costs, while at the same time hav-
ing to do more with less, is placing significant
strain on all stakeholders. With mounting chal-
lenges comes opportunity to re-engineer the way
you have managed your fleet, assets and mater
ials in the past. The 2016 Digital Oilfield Outlook
Report will hone in on and demonstrate the im-
mense opportunity to maximize your operational
performance by leveraging tools and data to pro-
vide greater insight into the performance of your
organization to help solve the problems many or-
ganizations are facing today. Storm Telematics
provides a holistic view over everything related
to your fleet, assets and materials by leveraging
and optimizing the data collected from the use
of enabling technologies such as GPS, radio fre-
quency tagging and analytics.
Storm Telematics is extremely proud of the
Frost & Sullivan Customer Value Leadership Award
it received in 2016 that ranked Storm as number
7
one in value in comparison to all other GPS fleet
management systems in North America. A con-
tributing factor to our success is our approach to
view your organization as an integrated system,
to obtain the granularity required to measure
the true cost of inefficiency.
Storms proprietary efficiency algorithms are
used to create visualizations based upon descrip-
tive analytics, which focuses on the historical
performance and the reasons behind past success
or failure; diagnostic analytics, which is focused
on determining the root cause of certain perfor-
mance outcomes; predictive analytics turns your
data into actionable information by determining
the probable future outcome of an event; and fi-
nally prescriptive analytics that synthesizes the
data and then suggests decision options to take
advantage of predications.
In todays economic environment, data must
be collected, blended from multiple sources,
cleansed and mined in order for true fleet, asset
and materials optimization to occur. An organiza-
tion cannot become efficient if they do not know
where they are inefficient, and Storm Telematics
is leading the way to bring forward best prac-
tices in measuring the true cost of inefficiency.
Message from
W
ith our industry facing increasing
pressure to do more with less, now
is the time for us to redefine our
approach and embrace technology as a means
to improve operations. The second annual Digital
Oilfield Outlook Report is leading the way as
organizations look to find new and better ways
to become more efficient and improve field
productivity.
At the heart of any successful Digital Oilfield
implementation is access to comprehensive asset
intelligence. This includes accurate, consistent
information that can be used across multiple plat-
forms to gain a holistic picture of operations and
perform analytics to improve efficiency. Whether
8
companies are looking to quickly and seamlessly
integrate newly acquired assets into their exist-
ing field programs, manage the abandonment
of inactive assets or enable field personnel to
make decisions in real time, these efforts may
be crippled or even halted without access to
proper information.
As we look to the future, GDM is poised to
help companies navigate the Digital Oilfield com-
plexities by finding better and more efficient
ways to use information to minimize re-work,
maintain historical information that is critical to
future operational success and ensure that in-
formation is readily available when and where
it is needed most.
Grow your
FULL PAGE
business.JWN AD
OUR COMPANY
JWN has been Canadas most trusted source of information, insight
and intelligence on the energy industry for over 75 years. Buyers and
influencers depend on the insight delivered by our products to make
informed decisions that affect Canadas oilpatch and the construction
industry in Alberta.

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Executive
summary
The pall that settled over the oil and gas industry after
the global price collapse in mid-2014 has not abatedin
fact, in some ways it has only deepened over the past
year. Amid the pullback in investment, the collapsing rig
counts, the job losses and bankruptcies, the oversupply
overhang persists as low-cost producers continue to pump
at near or record rates and the global economy remains
anaemic. The term lower-for-longer to describe crude
oil prices has become the new mantra, while new clouds
form on the horizon.
While the biggest story in oil and gas this century, the
unexpected and transformative shale gas and tight oil revo-
lution, has been a tremendously positive one in reviving a
North American oil sector once considered to be at or near
its peak, its impacts have not all been positive. Initiated
by the advancement of horizontal drilling and multistage
fracturing technologies, the tight oil boom precipitated
the supply glut now ravaging oil markets worldwide and
helped deprive Canadian producers of their primary ex-
port market.
The apparent decoupling of energy demand growth
with expanding gross domestic product portends slower
fossil fuel needs even when the global economy returns
to expansion. Declining costs for, and rapid growth in, re-
newables, along with increasing efforts to decarbonize
energy production in light of last years COP21 agreement
to reduce greenhouse gas emissions, foreshadow increas-
ing regulation and costs on hydrocarbon producers, and
competitive pressures favouring lower-carbon producers.
As a high-cost and, in some respects, high-carbon-
intensity producer, all these pressures are particularly hard
felt in Canadas oilpatch. Though there is little it can do to
affect global oil prices, Canadian producers and service
and supply companies can affect coststhrough innova-
tion. And the greatest source of innovation today is digital.
The dawn of the digital era has already ushered in sev-
eral disruptive technology advances, from the Internet and
the smartphone to autonomous vehicles, social media and
3-D printing. Digital technology has also made possible the
10
emerging industrial Internet of Things (IoT), which lever-
ages ever cheaper, ubiquitous connectivity, data storage
in the cloud and analytics.
If there is hope for a reinvigoration of the Canadian oil-
patch, short of higher prices, the Digital Oilfield, in its many
guises, is the single most promising solution. It holds the
promise to bring down costs and shrink the industrys en-
vironmental footprint, conceivably in game-changing ways.
But as with any potentially disruptive technological change,
it is difficult to predict which applications will come to the
fore and have the greatest impact in the years to come.
Hence this survey. We questioned many of the oil and
gas professionals closest to the emerging technologies,
and those in a position to decide if and when to invest in
Digital Oilfield technologies, in order to ascertain their feel-
ings about the technologiestheir technological maturity,
readiness for adoption and potential profitability. We also
sought their thoughts about what they saw as the big-
gest benefits and barriers to technology implementation
and their own level of knowledge about specific technol-
ogy use cases.
As this constitutes our second annual sampling of opinion,
we have captured some flavour of the trends in the indus-
try when it comes to the Digital Oilfield, and found them
to be mostly positive ones. New this year, we have drilled
more deeply into the reasons for answers from respondents
that they did not have enough knowledge about a par
ticular technology application to form an opinion about it.
Based on the responses, it has become clear that in-
dustry professionals collectively hold a high opinion about
the technologies and their strong potential to increase
productivity and reduce costs in the oilfield. But barriers
to implementation, which have shifted from last year, re-
main a somewhat limiting factor. At the end of this report,
we present some recommendations based on the survey
results that could accelerate technology adoption and
enhance the competitiveness of the oil and gas industry
in Canada. We hope they move the conversation forward
over the challenging year to come.
The productivity
imperative
To say that the Canadian oil and gas
industry, and more particularly the
Alberta economy, has just gone through
one of the most tumultuous periods in
its history would be an understatement.
The oilpatch was on track to see its
biggest two-year capital spending
decline in its 70-year history, the
Canadian Association of Petroleum
Producers (CAPP) said in April. Total
capital investment in the oil and natural
gas sector was forecast to plummet 62
per cent, falling to $31 billion in 2016
from a record $81 billion in 2014. The
carnage has been felt from the idled rigs
across western Canadawith the number
of wells drilled forecast to plunge to just
3,500 in 2016, a 66 per cent drop from
2014to job losses across the country
an estimated 110,000 direct and indirect
positions according to CAPP.
Canada is particularly vulnerable
to the oil price decline due to its high
cost of productionamong the highest
in the worldin part because of to its
remote operations and relatively high-
cost bitumen production. As a result,
Canada saw the most production cur-
tailed in response to low prices of any
major oil producer, energy consultants
Wood Mackenzie noted in February.
Canadian production from oilsands
and conventional onshore is taking
the most pain due to the high costs
and distance from marketplace, Wood
Mackenzie said.
These factors point to an increas-
ingly urgent productivity imperative
faced by the Canadian oil and gas
sector, as voiced by some of the most
respected voices in the oilpatch. Our
costs, both capital and operating, are
uncompetitively high. We must re-
duce both our capital and operating
costs substantially, in the order of a
minimum 3050 per cent across the
board, to become sustainably com-
petitive, industry veteran Jim Gray,
the co-founder and former head of
We have the
Canadian Hunter Exploration, said
third-largest
in March. We must, as others have
petroleum
observed, innovate and adapt on an
resources in the
urgent schedule.
world, [and] our
The productivity imperative grows technology and
in importance as the lower-for-longer our ingenuity are
oil price scenario stretches into its the keys to our
third year and there is a growing sen- ability to sell our
timent that prices may never return to resources around
the sustained levels hitherto needed the world.
to make oilsands megaprojects and
Greg Stringham,
many conventional projects profitable.
former vice-president of
A combination of factorsenergy effi- marketing and oilsands,
ciency measures, COP21 and growing Canadian Association of
Petroleum Producers
international pressure to transition to
a low-carbon economy, rapid growth
in renewable power abetted by steeply
declining costs and progress to de-
carbonize the transportation sector Mackenzie report found in July as prices
through higher-fuel economy vehicles languished in the US$45/bbl range.
and electric carsis leading some ex- Whether or not the current low-
perts to suggest the global economy price environment represents a new
may be nearing peak oil demand, at normal, it is in the short- and long-term
which point oil prices could remain in interest of Canadian producers to pre-
a lower range indefinitely. pare for such an eventuality in order
As it is, most major conventional oil to remain competitive with lower-cost
projects worldwide are at risk of can- producers and ensure the sustainable
cellation or deferral if the price of oil growth of an industry so pivotal to the
remains in the US$50/bbl range, a Wood Canadian economy.
11
The digital opportunity
The oil and gas industry is an undisputed leader in many high-tech areasprimarily where
they apply to the industrys core functions of exploration, drilling and production of
hydrocarbons. But the industry is a laggard in some other areas of technology development,
like spending on research and development, and creation of new business models and
products and services. Foundationally, the means by which it goes about fulfilling its core
functions havent changed in disruptive ways. Even the development of the horizontal drilling
and multistage fracturing technologies that set off the tight oil and gas production bonanza
was based on technologies used in the industry for decadesbut applied in new ways.

In contrast, the digital sector is trans-
forming various sectors of the economy
with a business model that focuses on
technology development time scales that
dwarf that of the oil and gas industry.
It often thrives in a culture where risk-
taking is high, development cycle times
are short and growth can be exponential.
Now, the digital realm is bumping up
against the energy sector in ways that
cannot be ignored. Digital technology
is creating disruptive new products and
services that are proving to be trans-
formational in other sectors, such as
personal communications (smartphones),
social media and gaming, transporta-
tion (car and bike sharing, autonomous
vehicles, drones), travel, health care and
personal fitness and others.
The emerging IoTthe melding
of connected devices, the massive
data storage capabilities of the cloud
and increasingly sophisticated big data
analyticsis bringing digital technology
to another level, enabling a host of new
applications to increase productivity.
The IoT represents a shift from the
narrow development of new information
and communication technology systems
for specific industries toward the broad
view of pervasive interconnectivity of
the global physical environment to pro-
duce novel and actionable new insights,
according to an IHS report released in
March. The [IoT] is a technology con-
cept that is currently transforming and
redefining virtually all markets and in-
dustries in fundamental ways. The past
five years have seen an inflection point
in which fragmented efforts to connect
machines and sensors in industry-specific
ways are now coalescing into a compre-
hensive vision of connectivity permeating
the global physical environment.
With the capability to combine the
deluge of data collected and analyzed
with machine learning and artificial
intelligence, the IoT can automate com-
plex tasks, diagnose problems, predict
breakdowns and reduce downtime, in-
telligently guide entire fleets of vehicles,
remotely inspect, control and optimize
field equipment and a host of other
tasks with performance results superior
to that of human operators.
The technologies produced are not
incremental; they are transformational,

12
Chuck Grindstaff, president and chief
executive officer of Siemens, said in a key-
note at the Global Leadership Conference.
Theres a confluence of transformational
forces that companies are leveraging to
make products that are smarter and more
connected than everand these products
are fundamentally changing markets, he
said. We are on the brink of an age in
which the nature of innovation itself is
dramatically changing. We have always
talked about better, faster, cheaper, but
this goes beyond that. Weve talked about
best practices, but we really need to think
in terms of next practices.
As its applications mature, the IoT
is expected to grow rapidly. Globally, it
is estimated there will be 2650 billion
connected devices by 2020 and the IoT
will annually contribute up to $11 trillion
in value by 2025. Specific to the oil and
gas industry, the Digital Oilfield market
is expected to reach $30.78 billion by
2020, with compound annual growth
of 4.31 per cent from 2015, according
to Research and Markets. The energy
sector will need some 12,000 new data
analysts across North America and some
90 per cent of new jobs in oil and gas will
require superior digital skills, according
to Accenture.
In a report released by BP last year,
the company said digital technologies
have the potential to increase pro-
duction volumes by four per cent and
reduce costs by 13 per cent by 2050.
At a time of lower prices, revenues and
capital spending, digital technologies
including sensors, data analytics and
automated systemsstand out as the
leading contributors for reducing costs, We are in a global
the report stated. innovation race, and
The Digital Oilfield potentially offers time is of the essence.
oil and gas companies the best route If you look at the pace
forward to bolster productivity and things work on the web,
reduce unit costs. The most mature of with crowdsourcing
Digital Oilfield technologies, like Field and the like, we want
Productivity and Fleet Management, to tap into that.
have been shown to be field-proven
Effectively, when you
tap into that, we are
value creators for early adopters, as
tapping into the worlds
indicated by the case studies found
brightest minds and
in this report. Given the enormous
their network, and that
potential the Digital Oilfield offers,
I see as an exponential
it is incumbent on the industry to
opportunity.
seek ways to overcome the barriers
to adoption and pave the way for Judy Fairburn, executive
vice-president of business
a globally competitive oil and gas
innovation, Cenovus Energy,
industry in Canada. and chair, Alberta Innovates
13
Digital Oilfield
successes
The Digital Oilfield leverages many of the technologies
associated with the IoT, and stands to benefit from
the rapid evolution of the IoT in the consumer market
and other industries. Just as the consumer market is
full of hype about the latest innovations related to
the IoT, like autonomous vehicles, social networks
and augmented reality, the oil and gas sector is
developing solutions based on the same platforms.
Recommendations stemming from the report included:

Digital Oilfield technologies that are under-
going testing or already implemented and
paying dividends span many subsectors of
the oil and gas industry:
In northern Alberta, oilsands mining com-
panies are testing autonomous haulage
systems, otherwise known as driverless
trucks, to improve fleet efficiency and cut
costs. The self-driving heavy haulers are al-
ready in use in hard rock mines in Australia
and Chile. Suncor Energy announced in
2015 that it is piloting the vehicles in
Albertas soft rock oilsands open pit mines,
a more challenging environment. It entered
into a five-year agreement to purchase
175 400-tonne, autonomous-ready heavy
haul trucks from Japanese manufacturer
Komatsu Ltd. Early testing of the tech-
nology found the driverless vehicles cut
fuel consumption and maintenance costs
with less wear and tear. Full implemen-
tation of autonomous operations, which
could take place by 2020, would create
more savings by displacing hundreds of
high-paying driving jobs.
BP is hoping to improve worker produc-
tivity and cut health expenses by creating
a fitter workforce using wearable tech-
nology. The company purchased 25,000
FitBit fitness trackers for its employees
to encourage healthier lifestyles. Workers
can one-up co-workers by accumulating
more steps per day while earning points
toward lower health-care costsin the
U.S., companies can take up to 30 per
cent off the cost of insurance premiums
when employee participation is tied to
corporate wellness plans. Points earn
employees lower co-pays, deductibles
and out-of-pocket health-care expenses.
BP reported its health-care costs were
reduced by almost nine per cent among
participants and four per cent overall
after implementation.
Caterpillar partnered with technology
company Seeing Machines to develop a
fatigue tracking application that uses fa-
cial recognition software to detect driver
drowsiness. Destined for installation in
5,000 mining vehicles around the world,

14
 the fatigue detection technology
uses a camera and light system to
measure signs of fatigue like eye
closure and head position. Signs
a driver may be nodding off or
becoming distracted initiates an
in-vehicle alarm and sends a video
clip of the driver to a 24-hour sleep
fatigue centre at Caterpillar head-
quarters in Illinois, where a safety
adviser can verify the fatigue event
and contact the mine site manager.
Follow-up is conducted to determine
the cause of the event and possible
remedy to prevent future events.
Since installation of the systems a
year ago, Caterpillar estimates there
has been an 80 per cent reduction
in fatigue events as drivers become
much more aware of the issue due
to the alarm.
Maersk Oil is utilizing gaming tech-
nology on its offshore oil and gas
projects to build efficient platforms
and produce future cost savings. The
technology allows workers to carry
out virtual activities on the rig using
an Xbox controller from the comfort
of their onshore office. The technol-
ogy places workers inside a virtual
model on their computer screens,
appearing as avatars able to move
about within a 3-D visual depiction
of the physical confines of the facility.
Maersk says the technology has the
potential to save millions of dollars.
The company, which has created a
Technology and Innovation team to
allow ideas to be developed, tested
and nurtured to commercial applica-
tion, is also developing augmented
reality solutions that allow onshore
technical experts to communicate
with those offshore via real-time, in-
teractive devices.
Digital Oilfield
use cases
1. REMOTE ASSET MONITORING
Collecting and analyzing sensor
data related to flow, temperature,
vibration and integrity to improve
operational safety and performance
related decisions (e.g. wireless vi-
bration data transmitter, downhole
drilling sensors).
2. REMOTE ASSET OPERATIONS
Developing systems to operate
plants and facilities from a remote
location. The intent is to reduce the
on-site complement of staff, thereby
increasing operating efficiency and
personnel safety (e.g. off-site plant
control centres).
3. PREDICTIVE MAINTENANCE
Utilizing predictive data analytics
and condition-based maintenance
approaches to improve asset
availability and reliability (e.g.
predictive maintenance of elec-
tric submersible pumps, mining
truck tire failure).
4. PRODUCTION ASSET
OPTIMIZATION
Utilizing specialized sensors to
monitor and data analytics to
identify improvements in complex
operations (e.g. SAGD steam/pro-
duction optimization, optimization
of field operations activity).
5. REMOTE ASSET INSPECTION
Employing remotely controlled de-
vices that use imaging (video, IR,
X-ray) and other sensors to complete
inspection and detection tasks more
efficiently and safely than conven-
tional field operations (e.g. pipeline
inspection drones, unmanned au-
tonomous vehicles).
15
6. AUTOMATED PRODUCTION
ASSET OPS
Installing robots or other automated
equipment to perform operating, as-
sembly and maintenance tasks in 24/7
continuous and safety-critical operat-
ing environments. Machine intelligence
allows the equipment to sense con-
ditions in their local environments,
recognize and solve basic problems
(e.g. self-driving mining trucks).
7. FLEET MANAGEMENT
Obtaining real time datathrough
the use of wireless networks, sen-
sors and video analyticsfrom on
board sensors to improve asset
identification, tracking, utilization
and logistics operations (e.g. vehicle
telematics, GPS tracking).
8. FIELD PRODUCTIVITY
Maximizing worker efficiency by
providing wireless mobility that en-
ables on-demand access to field
data, engineering drawings and in-
ventory and communication with
centralized operations experts (e.g.
field tablets and augmented reality).
9. BIOMETRIC MONITORING
Issuing wearable devices to enable
continuous monitoring of field em-
ployee location, work status and
health to prevent safety incidents
or to decrease response time for
emergency responders (e.g. wear-
ables: RFID tags, GPS trackers, H2S
detectors).
10. IN-FIELD MANUFACTURING
Operating portable manufacturing
equipment that can be used to re-
duce downtime from critical part
failure by producing specialized
components/parts on demand and
on site, eliminating need for safety
stock or hot shot orders (e.g. enter-
prise 3-D printing).
State of the Digital Oilfield:
Moving forward
JWN published its first Digital Oilfield Outlook Report in 2015 to assess the state of the
Digital Oilfield within 10 distinct use-case technology applications. An in-depth industry
survey was conducted to quantify the industrys level of awareness of the Digital Oilfield
and what was perceived to be the most promising technologies based on three specific
adoption dimensions: the level of maturity of the technology; the expected return on
investment; and organizational readiness to adopt the technology. The report examined
key benefits and barriers to technology acceptance and provided recommendations to
improve awareness and adoption. Recommendations stemming from the report included:

DEEPEN AWARENESS IDENTIFY CHAMPIONS ENCOURAGE EXPAND THE

Developing a better under-
standing of Digital Oilfield
technologies and benefits
among industry profession-
als is a critical first step to
ensuring those technol
ogies will be considered for
adoption.
The nature of Digital
Oilfield innovations is that
they cross departments,
from IT to operations.
Leaders at all levels, includ-
ing executive sponsorship,
will be needed to focus ef-
forts and deliver results.
COLLABORATION
A greater level of
collaboration both within or-
ganizations and among them
is needed to take full advan-
tage of the transformative
opportunity offered by the
Digital Oilfield.
CONVERSATION
Opportunity exists for tech-
nology vendors and oil and
gas companies to share
knowledge, to better under-
stand the industry pain
points and the innovations
available to overcome them
and to jointly develop new
applications for emerging
digital technologies.

Statistical evidence reveals that, while capital

costs are indeed falling, this has not been
entirely achieved by grinding vendors. The real
driver of cost reduction is productivity.

David Yager, Calgary oilfield services management consultant

16
This second Digital Oilfield Outlook Report focuses pri-
marily on the use cases of Field Productivity and Fleet
Management. They were deemed to be the best candi-
dates for more detailed investigation due to the fact they
were the top ranked of the 10 use cases above from the
first report, based on their perceived return on invest-
ment, technological maturity and organizational readiness
to adoption them. This report looks at the year-over-year
changes in perceptions about each, as well as specific
benefits and barriers to their adoption.
As the use cases perceived to be closest to or already
in commercial use, it makes sense to take a deeper dive
into their adoption benefits and roadblocks at a time when
oil and gas companies are in major cost-cutting mode and
in search for those applications that can bring about ef-
ficiencies and cost savings on the shortest possible time
scale. Technologies months or years away from commer-
cialization, like in-field manufacturing, are not of immediate
benefit to those looking for immediate cost-cutting solu-
tions, whereas Field Productivity and Fleet Management
represent commercial, field-proven technologies for which
a strong business case can be made today. As technology
solutions not confined to the oil and gas sector, applic
able in many cases to any industry that manages vehicle
fleets and field workers, they also represent an oppor
tunity for technology transfer from those industries where
they are more established, potentially further shortening
the adoption process.
Field Productivity takes in those technologies and ser-
vices that make fieldwork more efficient and lower operating
costs over time. The replacement of paper-based workflows
with digital ones facilitated by mobile connected devices is
one way Field Productivity is transforming the workplace. It
is providing field workers with instant and up-to-date access
to such resources as work orders and scheduling, service
contracts and invoicing, instructional diagrams, schemat-
ics and 3-D images of facilities and equipment, installation
instructions and inspection checklists, and maps and GPS
positioning. It speeds financial transactions and reduces
errors typically introduced through manual paper-based
data input processes.
Real time audio-visual communication with head office
or central command centres allows experts to remotely
diagnose problems and walk workers through fixes. More ad-
vanced Field Productivity technologies facilitate augmented
17
and virtual reality, whereby workers can become
avatars in 3-D representations of field facilities.
Onscreen digital representations of equipment links
to the equipments specifications, performance
and maintenance history, warranty information
and inventory of replacement parts. Emerging
technologies include wearables that can track
workers locations, vitals and real-time status, like
detecting accidents, and tools like smart glasses
for hands-free data input and output delivery.
In a world in which consumer-based mobile
connectivity has become second nature, Field
Productivity technology provides employees the
kind of functionality they have come to expect in
their private lives, and can help to attract young,
digital-literate workers into the workforce. It can
pay dividends in short order, often with payback
in six to 18 months.
Fleet Management technology has been shown
to have similarly rapid payback, creating cost
savings that go well beyond the aspects of opti-
mized routing, fuel savings and increased driver
safety typically expected. In addition to improved
vehicle utilization, preventative maintenance and
planning into such aspects as advanced staging of
parts, todays Fleet Management solutions touch
on other aspects of a companys operations, like
inventory management, that can resolve supply
chain pain points.
Unprecedented volumes of data from vehicles
as well as from other sources like historic fleet
data, comparative data from other divisions and
fleets and weather reports, is cleaned up, com-
bined and analyzed to produce new levels of
actionable insights. Asset tracking, as well as
vehicle GPS monitoring, is leading to improved
inventory control and more customized vehicle
fleet solutions.
Promotion of driver safety has advanced
beyond the reactive tracking of speeding and
aggressive driving behaviour to proactive mea-
sures to promote and reinforce good driving
habits through techniques like in-cab verbal
coaching and the gamification of competition
between drivers for safest driving performance.
What can the
Digital Oilfield do? R EA M
ST
OWN
Digital Oilfield technologies can D
AM rader
provide a myriad of benefits to
R E
individuals and organizations alike
I DST Ufpagcility
M
EA M
ST R ing
UP
in
enm
um
Bit

ility
fac
AGD
S

al &
n t ionional
nve ntr
Co onve ction
uncprodu

FIELD TABLETS
Enables field workers to have
easy-to-use, hand-held ruggedized
device that can display and allow
manipulation of any necessary
catalogues, manuals, plan drawings and
3-D imagery. Customizable apps can be
downloaded to further improve worker
efficiency.

HIGH-RISK WEARABLES DRIVER BEHAVIOUR

Improves the monitoring of
employees working alone, in remote
locations or high-risk workplaces to
detect or prevent man down
situations by using head-mounted
displays, wristbands and badges to
detect falls, test air quality, measure
levels of drowsiness and heat
exhaustion or to simply pinpoint the
wearers location.
AUGMENTED REALITY
Improves driver safety,
Decreases the chance of repair errors
decreases vehicle wear and
and increases worker safety by allowing
lowers insurance costs by
them to simulate the job they are
applying data analytics
working on before physically interacting
algorithms and visualization
with the equipment. AR also enables
tools to driving pattern data
users to access information relevant to a
to create individual driver
particular job digitally superimposed on
improvement reports.
the physical environment in which
theyre working.

18
 ASSET TRACKING
Enables improved transparency of where all the
ery mobile assets are, where they are going and what they
fin
Re are being used for. The data can be used to provide
utilization statistics that can help inform asset lease
versus buy decisions and to find optimum opportuni-
ties to divest assets.

SMART ZONES
Reduce possibility of asset
g&
incidents by drawing geo-fences
ke tinion
r t
around regions or sites to enforce Ma tribu
customizable attributes including dis
speed limits and hazard warnings.
MAINTENANCE
Reduces the chance of unexpected asset failure and
subsequent repair costs by being able to tailor effective
ing preventative and predictive maintenance schedules
ess
p rocity based on historical and projected usage patterns.
s l
Ga faci

FUEL EFFICIENCY
Minimizes how much fuel
is used per day/trip by
optimizing route
selection, regulating
ls
ica maximum speeds and
o c hem
t determining acceptable
tr n
Pe pla idle times based on job
requirements and
weather systems.
Additionally, total GHG
emissions are lowered.

CLOUD ACCESS
Provides a secure library of plan
drawings, schematics, supplier part
SMART FORMS catalogues, forms, training
Reduces paperwork and manuals and procedures that is
transposition errors when 24/7 two-way access-enabled on
inputting field data. Provides any type of mobile device.
accurate metrics and improved Eliminates the need for workers to
reporting of completed carry physical material with them
ffice
do
fieldwork through enhanced or return to an office location to
l
fie
Oil
data visualization software. access necessary data.

19
Survey methodology
In the spring of 2016, JWN, in partnership with Siemens, Storm Telematics and GDM Pipelines, under-
took a comprehensive survey of oil and gas professionals to assess their perceptions about Digital
Oilfield technologies and their readiness for adoption across the Canadian oil and gas industry.
Ten more in-depth interviews were also conducted in order to gain a more granular assessment of
attitudes and perceptions concerning the technologies under review. The survey is a follow-up on
a 2015 survey, which assessed 10 different Digital Oilfield technology use cases, and thus provides
year-over-year comparisons of many aspects of the transition.
In order to gain an overall industry perspective, the survey targets a broad cross-section of in-
dustry professionals, encompassing companies of various size and subsector (service and supply,
exploration and production and others) and diverse demographics (from executives and senior
management to technologists and front-line workers).
The survey had more than double the 2015 sampling, with responses from 355 individuals com-
pared to 160 last year, to provide a higher level of accuracy of the opinions and attitudes of the
industry in general. As such, the results presented here provide an accurate barometer of todays
industry perspectives on the readiness and current level of adoption of Digital Oilfield technologies.

20
Digital Oilfield technology adoption
dimensions, benefits and barriers
The survey was broken into two sections. The
first section focused on asking the same adop-
tion dimension questions as were asked in the
first Digital Oilfield Outlook Report for each of
three use cases. This would draw out whether
and what type of industry trends were emerging
year-over-year and would provide insight as to
how the level of awareness and adoption by the
industry was shifting. The second section then
drilled into the adoption benefits and barriers
for each of top two use cases to emerge from
last years report.

Adoption dimensions for each use case

Solution Please provide your This use case:

maturity understanding of the
maturity of this use case
and readiness for in-field
deployment.
1) W
 ill not be ready for at least 18 months
2) Will be ready for testing in 18 months
3) Is ready for testing today
4) Is ready for deployment
5) Is highly proven in the market

Please provide your

Business case
perception of the return
of the ROI on investment (ROI) of this
use case (and associated
technologies) relative
to other uses of capital
investment.
This use case compared to other options for capital use:
1) Much weaker ROI
2) Somewhat weaker ROI
3) C omparable ROI to other uses of capital
4) Somewhat stronger ROI
5) Much stronger ROI

Organizational Please provide an My current organization:

readiness assessement of your
current organizations
readiness to adopt this use
case and the associated
people, process and
technology changes.
1) Will not be ready for at least 18 months
2) Will likely be ready in the next 618 months
3) W ill likely be ready in the next 6 months
4) Has most of the capabilities today
5) Is fully capable and is ready to adopt this use case

Use case top What are the biggest
perceived benefits of
adoption
adopting the given use-
benefits
case technologies (choose
up to your top three)?
Decreased unplanned outages
Improved safety
Increased asset uptime
Reduced maintenance and repair costs
Improved production/enhanced recoveries
Increased labour productivity
Optimized inventory
Lowered environmental impact
Reduced energy costs increased security

What are the top identified Budget constaints

Use case top
barriers to adoption Existence of organizational barriers
adoption Cybersecurity concerns
of the given use-case
barriers technologies in your Difficulty in consolidating disparate/siloed data
organization (choose up to Poor data quality
top three)? Low network capacity for data transmission
High cost to collect machine data
Lack of interoperability of solutions between
different vendors
Poor integration with existing solutions and
infrastructure
Shortage of necessary talent
Superior alternatives

21
Adoption dimensions for each use case

On average, each adoption dimension question for each
use case in this years Digital Oilfield survey garnered 150
respondents versus last years average response total of
126, an 11 per cent increase in participation. By asking some
of the same questions as last year, the data can measure
year-over-year changes and trends. Respondent industry
subsectors consisted of 52 per cent supply and service, 20
per cent exploration and production, five per cent oilsands,
three per cent engineering, procurement and construction
management, two per cent midstream and 17 per cent other.

Industry knowledge: Respondents who indicated they lacked adequate insight to answer a use-case question
were probed further with the following question

What is the main reason Out of scope for my role in my organization

Reasons for
for your do not have I do not clearly understand the benefits of adoption
lack of subject The currently available literature is too technical or complex
adequate insight
matter insight response to one or I do not clearly understand who all the vendors are and
more of the previous what their specific solutions are
questions related to the I have not seen enough applicable case study examples
given use case? I have not seen enough demonstrations/pilot projects
I do not know all of the adoption requirements (people,
process, technology) for my organization

A broad and representative cross-section of the Canadian energy industry surveyed

others s&s producers

5%
7%
22% 3% 4%
26% 6%
8%
11%
355
4%
20%
total respondants 12% 12%
8%
52%
executive management technical front line/
support

The survey of 355 industry professionals represented a broad
cross-section of responses by seniority, including senior exec-
utives (C-suite), vice-presidents, general managers, directors,
senior technical advisers, asset managers, engineers, geologists,
geophysicists, accountants and instrumentation technicians.
The seniority group category front line/support is com-
posed of union front-line staff (foremen/supervisors), other
non-union regular staff and professionals (e.g. LL.Bs, C.As).
The functional group category other is comprised of supply
chain/procurement, environment, health and safety, human
resources and finance.
By industry vertical, representation included exploration
and production, service and supply and others, comprised of
representatives from midstream, downstream, engineering,
procurement and construction management, government
agency and consulting groups.

22
 Early returns: Awareness since
2015 has increased
YoY change in respondents overall awareness of Field Overall industry awareness of Digital Oilfield technolo-
Productivity and Fleet Management Digital Oilfield gies is improving, as shown by the decline in the number
technologies
of survey participants who did not complete parts of
the survey due to a perceived lack of adequate insight
2015 2016
about the subject matter. The increase is a positive foun-
dational step since improved industry awareness is more
likely to translate into increased industry adoption of
60% 67%
the technologies.

overall awareness

Respondent demographic breakdown: industry vertical versus seniority

out of scope unaware of dont understand dont understand information not enough not enough
for my role all adoption vendor/solution adoption benefits too technical/ pilots case studies
requirements landscape complex
1%
2% 2%
2%

6% 6%
6%
11% 1% 2%
3%
13% 66% 44% 1%
2% 20%
23%
of all respondants 13%
indicated lack of 9%
adequate insight
to at least one executive management technical front line/
survey question support

In response to the high number of respondents signalling a
lack of knowledge about the technologies previously, this sur-
vey asked a supplemental question of those respondents to
gain insight into the reasons behind their lack of awareness.
Primarily, respondents stated they felt knowledge about the
technology was out of the scope of their role within their
organization63 per cent for Field Productivity and 68
per cent for Fleet Management.
In one sense, the fact that a strong majority of those who
felt they lacked adequate insight chose the reason they felt
it was out of the scope of their roles can be considered a
good sign, since it does not reflect poorly on the technologies
themselves and their potential benefits. Other responses
that could have indicated that, such as not understanding
adoption benefits, finding the details too complex and tech-
nical and a lack of pilots and case studies, were not cited
as top concerns. Therefore, the task of vendors is the more
straightforward one of pointing to the benefits of the tech-
nologies and why that should matter to them, as opposed
to convincing them that the technology itself works.
On the other hand, the fact so many respondents felt it
was outside of their roles to become knowledgeable about
the technologies indicates they are not taking on the obli-
gation to stay informed about new technologies that could
make their jobs or the jobs of their colleagues more pro-
ductive and safe. This reinforces organizational barriers as
workers dont see the benefit in pursuing technological
change and may view it as a burden instead.

23
 Perceptions of
Field Productivity
YoY change in perceived relative ROI of
FP technologies
technologies:
2015 2016 The needle is moving
50

43%
41%
40 Field Productivity was already highly ranked last year in
28%

terms of perceived return on investment (ROI), techno

per cent

25%

30
logical maturity and organizational readiness, ranking in
18%
16%

20 second place out of 10 use cases in 2015, showing the indus-

10%

try is highly confident in its commercial appeal compared

9%
6%

10
3%

to other Digital Oilfield applications. In 2016, that percep-

0 tion has only improved.
weakest weak neutral strong strongest
As the graphs show, Field Productivity has solidified its
position in particular in terms of technology maturity and
readiness for adoption. A majority of those who provided

YoY change in perceived maturity of a response, i.e. not including those who answered they had
FP technologies inadequate knowledge to respond, believe the technology
is to some degree already ready for deployment. A particu-
2015 2016
larly big jump was seen in those responding the technology
50
is highly proven in the market with an improvement of 27
38%

40 percentage points, from four per cent to 31 per cent year

31%

over year, and a similar fall in those suggesting maturity re-

26%

30
23%

mains at least 18 months away. This is the biggest perception

20%

19%
per cent

15%

20 change recorded in this years survey, a strong indication the

14%
11%

Field Productivity use case has moved rapidly up the tech-

9%

10
4%

nology maturity scale in the eyes of industry professionals

0 and pointing to the likelihood of more widespread adoption.
ready ready in deployed highly
> 18 < 18 testing proven That trend is also reflected in the significant increase in
months months
companies readiness to adopt the technology, up from a
mere six per cent last year to a meaningful 23 per cent this
year. This indicates that internally, organizations are start-

YoY change in perceived organizational ing to put into place the necessary resources to facilitate
readiness for FP techhnologies adoption. This is an important consideration given the major
advances in the Industrial IoT, one of the drivers of advanced
2015 2016
Field Productivity technologies for which it will become in-
50
creasingly vital for the oil and gas sector to take on. Studies
41%

40 suggest the Industrial IoT could have a transformative im-

pact on industry, and keenness to embrace it could be an
24%

30
23%
22%
per cent

important competitive advantage going forward.

20%
18%

18%

The perceived ROI, however, has not significantly changed,

14%
15%

20
perhaps an indication respondents are waiting for a stronger
9%

10
6%

business case to be made. Vendors might consider better

0 making the case through case studies or marketing to cus-
> 18 618 barriers capable adopted
months months still exist but not tomers in a way more tailored to their specific needs.
adopted

24
ADOPTION DIMENSION SCORES BY SENIORITY
FOR FP TECHNOLOGIES Field Productivity
tech.
maturity
ROI
org.
capabilities
overall
adoption:
executive 3.57 3.65 3.05 3.42 Demographic breakdown
management 3.34 3.36 2.75 3.15

technical 3.41 3.26 3.23 3.30 Breaking down Field Productivity adoption dimensions by
demographic group reveals some important insights. From
front line/
3.75 3.16 2.94 3.28 a seniority perspective, it is promising to see that executives,
support
though further removed from the direct applications of the
average 3.49 3.36 3.00 3.28
technologies, all scored above average on the three adoption
dimensions, indicating buy-in at companies most senior lev-
els. However, management was shown to be the least bullish
of all seniority groups, indicating a substantial disconnect be-
ADOPTION DIMENSION SCORES BY FUNCTIONAL tween the two most senior groups. While executives appear
GROUP FOR FP TECHNOLOGIES
cognizant of the big picture benefits of technology adoption,
tech. org.
ROI overall
maturity capabilities and technical and front-line staff see the immediate on-the-
ground benefits, management is pointedly less convinced
operations 2.97 3.24 2.93 3.05
of the advantages digital technology would bring, creating
instrumentation,
controls & eng.
3.85 3.62 3.88 3.78 a potential impediment to adoption.
Among functional groups, it is also telling that one field
information
3.55 3.33 3.25 3.38
technology group, the instrumentation, controls and engineering group,

others 3.80 3.39 3.38 3.53 scored the highest in all three dimension categories, since this
group would be at the front line providing the input data and
average 3.49 3.36 3.27 3.37 using that data in the field, while the operations group scored
much lower (overall 3.05 versus 3.78). As operations are key
decision makers in adoption, this could present a challenge for
actual implementation of Field Productivity technologies. Based
ADOPTION DIMENSION SCORES BY INDUSTRY on the lower scores in all adoption dimensions for the more ju-
VERTICALS FOR FP TECHNOLOGIES
nior staff compared to executives, there appears to be a large
tech. org.
maturity
ROI
capabilities
overall communication or support gap that needs to be overcome.
By industry vertical, the service and supply segment, with
producers 3.16 3.29 2.85 3.10
more resources in the field, scores consistently ahead of pro-
service & ducers. To the extent producers seek to increase the benefits of
3.61 3.43 3.10 3.38
supply
these technologies, and thereby pare per barrel production costs,
others 3.74 3.32 3.06 3.37 it makes sense to invest in raising their organizations ability to
adopt and use digital technologies rather than depend on the
average 3.49 3.36 3.00 3.28
service and supply sector to move adoption forward for them.

Little or no innovation was occurring at $100/bbl [price of oil]. Now, at roughly

$35/bbl, everyone is innovating and working diligently to reduce costs and remain
relevant. In this context, $30 oil isnt such a bad thing. For we Canadians to be
sustainable players in this increasingly complex and competitive global market, we
simply have to improve our recent performance.

Jim Gray, co-founder and former head of Canadian Hunter Exploration

25
 Key benefits of Field Productivity
technology adoption: Whats not to like?
Since Field Productivity applications
are designed to make workers more
productive, it is not surprising that in-
creased labour productivity ranks as the
top benefit. Because Field Productivity
applications focus on having the right
people at the right place at the right
time with the right equipment, it fol-
lows that industry would rank having
assets running for longer and with less
maintenance as top outcome benefits.
The third-ranked benefit, improved
safety, is gained by the technologys
ability to provide a real-time view of
the location and condition of people
and mobile assets in the field. Up-to-
date information on demand allows
workers to be more aware of their sur-
roundings by, for example, knowing
where buried utilities and pipelines
are via technologies like augmented
reality applications that use digital
geospatial data.
Increasing efficiency of the field
workforce and thus cutting costs, rather
than bolstering oil and gas production,
a side benefit of reduced downtime, is
seen to be the main benefit for much
of the technology involved in Field
Productivity. It is also clear how big
a priority safety is in the oil and gas
industry, placing in the top three for
both use cases.
When reviewing the offerings of the
major technology providers and com-
paring it to this data, it is apparent that
the industry gets it, as the perceived
benefits are aligned to the actual bene-
fits being marketed. This is an important
step in making the connection between
need and solution offerings.
Weighted average rankings of respondents top three choices for
perceived benefits of adopting FP technologies
increased labour
productivity
increased asset uptime
improved safety
reduced maintenance
and repair costs
improved production/
enhanced recoveries
decreased unplanned
outages
lowered environmental
impact
optimized inventory
reduced energy costs
FIELD PRODUCTIVITY
BENEFITS: BY SENIORITY AND
FUNCTIONAL GROUP
In terms of seniority, there is alignment
over the perception that the major benefit
Field Productivity technologies provide
can increase labour productivity, but
that is where the similarities end. With
their eyes firmly on the bottom line, ex-
ecutives and senior management view
decreasing unplanned outages and im-
proved production and recoveries as
most important. This can be attributed in
part to the costs associated to shutting
down operations unexpectedly, which
can amount to millions of dollars in lost
revenue per day, exceeding revenues
being brought in through steady state
operations. On the other hand, the closer
a person is to the physical operation of
an asset, the more safety focused they
26
45%
39%
37%
34%
32%
31%
17%
15%
14%
are. Both front line and technical groups
prioritize safety and asset uptime, the
issues they are most impacted by and
have the most control over.
By job function, no one perceived
benefit is universally recognized, which
suggests the messaging of the key
benefits of these technologies is not yet
clear. Just as there was the potential for
adoption roadblocks because priorities
did not align with the seniority demo-
graphics (executives versus front line)
here too the operations group (the deci-
sion makers) have a very different view
as to what these technologies can pro-
vide versus the instrumentation, controls
and engineering group (the key users).
Making a clear business case that ad-
dresses both groups needs will be key
in advancing to see more technologies
implemented.
 Key barriers of Field Productivity
technology adoption: Not so fast
Consistently, budgetary constraint and
existence of organizational barriers con-
tinue to rank as the first and second
biggest barriers to adoption of both
Field Productivity and Fleet Manage-
ment use cases. Because some of key
enablers for use cases overlap, it is not
surprising to see the perception of the
top barriers to be similar.
The second-ranked barrier, the exis-
tence of organizational barriers, indicates
that some of the financial issues and
pressures could be improved if Digital
Oilfield technology was viewed as more
of a cross-functional group initiative.
Additionally, organizations have
long indicated that they would be more
interested in piloting or adopting tech-
nologies if they could be integrated with
existing systems. This is a direct function
of organizations wanting to minimize
the risk of having to rely on only a few
vendors or solutions and their prefer-
ence for making step changes versus
quantum leaps.
The fourth-ranked barrier to adoption,
poor integration with existing solutions,
supports the comments of some survey
respondents that the real challenge isnt
the cost, ease of technology integra-
tion or getting the necessary data, but
rather the glut of disparate data from
numerous sources that first has to be
standardized and normalized before
anything of value can be done with it.
With the lower ranking of concerns
over low-network capacity, it is apparent
that the data management infrastruc-
ture issue is becoming less of a limiting
factor, a positive signal for Digital Oil-
field implementation going forward.
Weighted average rankings of respondents top three choices for
perceived barriers of adopting FP technologies
budget
constraints
existence of
organizational barriers
lack of interoperability
of solutions
poor integration with
existing solutions
cybersecurity concerns
high cost to collect
machine data
low network capacity for
data transmission
poor quality data
shortage of necessary
talent
difficulty in consolidating
disparate/siloed data
superior alternatives 8%
FIELD PRODUCTIVITY
BARRIERS: BY SENIORITY AND
FUNCTIONAL GROUP
By seniority, all groups indicated budget
constraints as their top perceived bar-
rier, but it was the executive group, at
34 per cent, that had the largest per-
centage of respondents. Together with
this groups third-highest perceived bar-
rier, the high costs to collect machine
data, representing another cost issue,
it becomes obvious there is a very cost
conscious approach to adoptioneven
more so than to functionality and in-
tegration/interoperability concerns
with current technologies. Organiza-
tional barriers are consistently ranked
as a second-place concern across
the board.
27
45%
38%
27%
24%
22%
21%
20%
19%
18%
14%
It is among the different functional
groups that the high cost to collect
machine data (the IT group) and the
shortage of talent (the operations
group) appear for the first time as
barriers to Field Productivity technol-
ogy adoption. It is also instructive that
it is the instrumentation, controls and
engineering group that is concerned
about cyber security and not the IT
group. Since Field Productivity tech-
nologies could allow the distribution
and access of key electronic engineer-
ing plans and schematics, the former
group has security concerns because
of the sensitive content, whereas the
latter group is confident in the security
infrastructure, but rather is concerned
about the cost to gather remote data.
Field Productivity case study:
Access to data when its needed
A matter as simple as access to infor-
mation has the potential to cost oil and
gas companies millions of dollars per
day when it means the difference be-
tween operating and not operating an
asset. When a large exploration, de-
velopment and production company
sought to put a recently purchased
pipeline back into service, it had to
wait two weeks to get information on
the originally approved maximum op-
erating pressure on the line before it
was able to proceed. It also experi-
enced delays related to field activity
in abandoning pipelines due to lack
of information about the pipelines
exact location, and the inability of field
workers to provide updates to data in
real-time to facilitate timely and in-
formed decision-making.
Additionally, work is sometimes
done multiple times because people
dont realize it has been completed
before, or do not have access to the
previous records, notes GDM Pipelines,
a Calgary-based provider of compre-
hensive pipeline, facility, midstream
and transportation information to the
Canadian oil and gas industry. Critical
information about an assets history is
often misplaced when assets change
hands, leading to time lost trying to find
information or completing field activities
that could have been avoided if histor-
ical information had been immediately
available. Data may be stored in a fil-
ing cabinet, on a network drive, on a
spreadsheet or in someones own head,
making it difficult or impossible to use
the information to make decisions about
the most efficient way to use, plan and
schedule resources.
Field productivity begins with asset
intelligenceaccess to accurate, con-
sistent information that can be used
across multiple platforms in the or-
ganization to gain a holistic picture
of operations and perform analytics
designed to improve efficiency.
Asset intelligence is particularly
valuable in the oil and gas industry,
where assets are copious, diverse in
nature and geographically dispersed:
In western Canada, there are over
1,400 operators managing in excess
of 660,000 kilometres of pipelines,
795,000 wells and 158,000 facilities.
There are over 333,000 pipelines
that have been built in western
Canada since 1900; approximately 73
per cent of these are still operating.
Approximately 30 per cent of op-
erating pipelines are greater than
20 years old.
Field Productivity solutions like that
provided by GDM integrate and re-
late information across the complex
physical network of wells, pipelines
and facilities across western Canada,
providing reporting on current and
28
historical infrastructure including asso-
ciated production and environmental
features. Access to such information
at a companys fingertips, in the office
or in the field, is allowing companies
to avoid costly information gap delays
and improve efficiency.
GDM showed this to be the case
when it enabled a mid-sized western
Canadian oil producer to proactively
manage the integration of new assets
by providing information to its teams
in the field shortly after the transac-
tion, rather than having to wait for
weeks to begin managing the new
assets. The technology also made the
submission of One Call reports more
efficient by having faster access to
accurate information about pipelines
and changes to pipelines, thus en-
suring the safety of both company
personnel and the public.
In another case, a large integrated
oil and gas producer was able to save
$300,000 in municipal road use taxes
by demonstrating its actual road usage
based on routing to its known assets.
Additionally, a provincial regulator in
western Canada with an identified
need to make historical documents
more accessible is in the process of
using GDMs technology to make them
available, rather than adding additional
staff to manually retrieve documents
when requested.
Field Productivity case study:
Ending the paper chase
Tundra Process Solutions, a Calgary-
based instrumentation and control
specialist in the oil and gas industry,
was getting so bogged down with its
paper-based work order processes
that delivery time for invoices after
work had been completed could
stretch to four to six weeks. The com-
pany, which also provides service and
in-house custom engineered solutions,
serves remote locations throughout
western Canada.
The company was old-school, still
employing paper and pen in the field
and using Excel-generated service
reports. Its three dozen field techni-
cians needed to attend to company
offices to manually enter written
work onto company computers, cre-
ating excessive non-billable hours.
Other inefficiencies seeped into the
working day. The company couldnt
effectively track its field workers or
generate reports on billable time
and had no effective way to trace
other inefficiencies and bottlenecks.
Tundra turned to a paperless solu-
tion offered by ServiceMax, a field
service management software com-
pany based in California, in order
to automate and speed up the bill-
ing process, reduce non-productive
time and needed paperwork, provide
field workers with remote access to
information and work orders, im-
prove forecasting and cash flow
and provide data for analysis that
could reduce bottlenecks and lead
to greater workforce productivity.
Tundra created a four-person task
force to extensively trial the soft-
ware, including sandbox testing, used
by software developers to test new
programming code in isolation from
the production environment, and a
field service process before rolling
out the ruggedized iPad-based solu-
tion in 2015.
The new process starts with cre-
ation of work orders in ServiceMax
dispatch console, which can then be
sent electronically, along with any
other necessary information, to techni-
cians in the field. The job is automatically
placed into their calendar when it is
accepted by the field worker.
29
From there, all work performed
is entered onto a report on the iPad,
including time, parts and materials
used, and when completed the report
is relayed to the companys office for
processing. With customer signoff,
the report is uploaded and automat-
ically emailed to the customer, and
invoicing can occur the same day.
Tundra realized a 75-per-cent
reduction in the time to send out
an invoice after service was com-
plete and a 25-per-cent reduction
in non-billable time. And there were
other benefits. The reporting errors
of the paper era were eliminated.
Analysis of the data now available
brings new transparency, enabling
the company to effectively track
aspects like billable and non-billable
hours, worker productivity and ex-
penses, and to determine its highest
expenses compared to revenue.
The solution is also a time saver
technicians can file work orders
and other documents online, largely
eliminating their need to come into
the office.
Perceptions of Fleet Management
technologies: Solidifying its strong case

YoY change in perceived relative ROI of

In terms of technology use cases, Fleet Management
FM technologies
was and remains the darling of the Digital Oilfield. In
2015 2016 2015, Fleet Management was ranked highest overall of
50%
the 10 Digital Oilfield use cases and in terms of tech-
41%
37%

40% nological maturity and organizational readiness (and

25% 33%

fifth in ROI). This year, it improved in all those cate-

27%

30%
gories, with a particularly strong 27 percentage point
18%
16%

boost in the perception it is already highly proven in

15%

20%
11%

the market, up from 11 to 38 per cent, among those

10%
who provided a rank.
3%
0%

0% Fleet Management rose year-over-year in the perception

weakest weak neutral strong strongest
that organizations are fully capable and ready to adopt the
technology (from 16 to 26 per cent). Together with the sig-
YoY change in perceived maturity of nificant increase in recognized maturity of the technology,
FM technologies
the results tangibly show that industry believes this tech-
2015 2016
nology is past the initial pilot stages and abundantly ready
50%
for larger scale deployment.
39%

38%

40% The case for ROI is also solid, with more than half of re-
32%
28%

spondents feeling it has somewhat stronger (37 per cent)

30%
or much stronger (15 per cent) ROI compared to other in-
19%

vestments. That compares to just 21 per cent ranking its

15%

20%
14%

11%

adoption as somewhat weaker (18 per cent) or much weaker

7%
8%

10%
4%

(three per cent) than other uses of capital.

0% More generally, Fleet Managementtype technologies
ready ready in deployed highly
>18 <18 testing proven have become more high profile in recent years as hype
months months
about their potential grows in the consumer market, with
advanced mobile-based personal navigation applications
YoY change in perceived organizational and monitoring technology, car sharing applications now
readiness for FM technologies
available and both automobile and information technol-
2015 2016
ogy companies investing billions of dollars in the race
50%
to develop the driverless car. In the oil and gas indus-
40% try, companies are piloting driverless trucks in oilsands
mining operations in addition to adopting more conven-
27%

26%
26%
24%

30%
23%

tional Fleet Management solutions. At a time of rapid

16%

16%
16%

16%

technological innovation, Fleet Management is an area

15%

20%
12%

to watch with more cost-cutting applications sure to

10%
enter the marketplace in the near to midterm.
0%
> 18 6-18 barriers capable adopted
months months still exist but not
adopted

30
Fleet Management ADOPTION DIMENSION SCORES BY SENIORITY FOR
FM TECHNOLOGIES

adoption: tech.
maturity
ROI
org.
capabilities
overall

Demographic executive 4.36 3.45 3.27 3.70

breakdown management 3.93 3.54 3.34 3.60

technical 3.85 3.35 3.65 3.62

Perhaps surprisingly, the seniority group most
driving Fleet Managements favourable ratings front line/
3.41 3.29 3.00 3.24
support
was the executive group. With the front-line group
having a below-average score, its clear the value average 3.92 3.42 3.35 3.56

and importance of these technologies is not mak-

ing its way down the full chain of command.
ADOPTION DIMENSION SCORES BY FUNCTIONAL GROUP
The real value of Fleet Management technol- FOR FM TECHNOLOGIES
ogies is the ability for operations to have data
tech. org.
ROI overall
analyzed so it can pinpoint where it needs to maturity capabilities

change high-cost behaviour (e.g. driving pat- operations 3.53 3.06 3.15 3.25
terns and style, idle times, improved routing).
instrumentation,
Yet in terms of functional groups, operations controls & eng.
4.11 3.67 3.50 3.76

does not appear to fully understand or believe

information
4.45 3.80 3.73 3.99
in the ROI, taking a dimmer view than the overall technology

average score and contrasting sharply with ITs

others 4.05 3.56 3.40 3.67
high ratings across the board. Addressing this
disconnect could be key to improving adoption. average 3.92 3.42 3.35 3.56
The other category, including midstream,
downstream, engineering, procurement and
construction management, government agency ADOPTION DIMENSION SCORES BY INDUSTRY
VERTICALS FOR FM TECHNOLOGIES
and consulting groups, is particularly confident
tech. org.
about Fleet Managements potential. This could ROI overall
maturity capabilities
be a reflection of the fact some of the com-
producers 3.69 2.92 3.12 3.24
panies in this category operate some of the
largest vehicle fleets and are therefore most service &
4.02 3.59 3.41 3.68
supply
cognizant of the demonstrated benefits of the
technologys adoption. others 3.96 3.65 3.52 3.71

average 3.92 3.42 3.35 3.56

Fleet management is a solid platform for communications providers to build

additional value, beyond connectivity, for automakers, third-party logistics
companies and the like. Autos represent the raison detre of IoTthings with
wheels, always connected, all the time interacting with other things with
wheels and their environment.

Eric Goodness, IoT and mobile analyst, Gartner Inc.

31
 Key benefits of Fleet Management technology
adoption: More than fuel savings
While fuel cost savings is the most
demonstrated and obvious benefit of
Fleet Management solutions, survey re-
spondents surprisingly ranked reduced
energy costs at the bottom of the list,
choosing instead aspects leading to
higher efficiency. In fact, understanding
behaviour, usage and wear patterns of
mobile assets in order to lower main-
tenance and repair requirements was
seven to 10 priorities spots higher than
focusing on reducing fuel consumption.
This could be an indication respondents
are looking past the most established
benefit of Fleet Managementfuel sav-
ingsto the more intangible savings
that have come to the fore as the tech-
nology has advanced in sophistication
and capabilities.
As expected from a technology in-
tended to monitor and improve driver
behaviour, improved safety was highly
ranked, second only to reduced main-
tenance and repair costs. The results
indicate there is a shift in industry
workers view and comfort level in the
increased visibility of their movements
and operations as there is a direct safety
benefit, and this transparency isnt just
about reprimands and job reductions.
FLEET MANAGEMENT
BENEFITS: BY SENIORITY AND
FUNCTIONAL GROUP
While most groups see improved safety
as the biggest upside to Fleet Manage-
ment by a wide margin, the biggest
misalignment among seniority levels
is seen in managements greater focus
on cost factors, likely a reflection of to-
days challenging price environment and
Weighted average rankings of respondents top three choices for
perceived benefits of adopting FM technologies
reduced maintenance
and repair costs
improved safety
increased asset uptime
increased labour
productivity
improved production/
enhanced recoveries
decreased unplanned
outages
lowered environmental
impact
increased security
optimized inventory
reduced energy costs
the responsibility on their shoulders to
drive down costs in light of falling rev-
enues. Increased asset uptime was a
top three benefit listed by all groups.
Among functional groups, increased
asset uptime is again a consensus top
three choice, as is improved safety.
The outlier is the optimization of in-
ventory seen as the chief benefit of
Fleet Management in the IT group. This
suggests the IT group believes having
more insight into the whereabouts of
mobile assets translates into optimizing
inventory. As trucks are often seen as
32
44%
42%
35%
35%
24%
21%
17%
16%
14%
14%
mobile warehouses, this makes sense,
but surprisingly that insight seems
to have been missed by the other
group, of which a big sub-grouping
is the supply chain management and
procurement teams.
Finally, it is apparent that the focus
of vendors on the potential fuel and op-
erating cost savings do not align with
the top benefits listed by survey re
spondents. This could be a case where
the vendors needs to better educate
the user or adapt their offerings to bet-
ter correspond with user perceptions.
 Key barriers of Fleet Management technology
adoption: Some roadblocks remain

Aside from the current state of the Weighted average rankings of respondents top three choices for
perceived barriers of adopting FM technologies
industry, battling the deepest bust
cycle in a generation, the fact budget
constraints is ranked as the top per- budget constraints 48%
ceived barrier to Fleet Management
existence of
adoption is not helped by the fact that 44%
organizational barriers
the technology is for the most part difficulty in consolidating
24%
cutting edge and thus has yet to come disparate/siloed data

down the cost curve. It could also be poor integration with

22%
existing solutions
hypothesized that budget constraints
is a default answer in the absence of cybersecurity concerns 22%

a strong business case and a history

poor data quality 18%
of proven pilots and integrations. As
time goes on and more pilots and case high cost to collect
18%
machine data
studies prove their value, this barrier
lack of interoperability
should be easier to overcome and more 17%
of solutions
specific concerns, such as integration
shortage of necessary
with existing solutions, will come to 14%
talent
the forefront. low network capacity 12%
Most positive in the rankings for for data transmission

both use cases is the marked decrease superior alternatives 7%

in concerns about cybersecurity, a
potential deal breaker that was tied
for the second-highest barrier to
adoption of Digital Oilfield technol-
ogies in 2015.
In percentage terms, it was ranked
as a top barrier less than half as often
as budget constraint for both use
cases. While it remains an issue that
needs to be prudently dealt with, it is
promising in that what was perceived
as a major infrastructure, behavioural
and perception-based barrier can be
overcome to that degree in a relatively
short period of time. Since much of the
technology applications rely heavily
on wireless mobile access and cloud
computing, it is a positive step forward
to see cybersecurity concerns fall to
the middle of the grouping.
FLEET MANAGEMENT
BARRIERS: BY SENIORITY AND
FUNCTIONAL GROUP
When broken down by seniority group,
there is a distinction whereby the closer
groups are to the technology, the more
concerned they are with cybersecurity.
This may be a function of having a better
understanding of the technical consider-
ations of implementation, whereas the
groups making specific purchasing deci-
sions at the management level are more
focused on the overall picture and how
implementation fits in with the different
applications already in place.
At the functional level, cyberse
curity pops back onto the agenda
with three out of the four groups
making this their third-highest
concern, though at relatively low
percentage levels compared to the
top two barriers cited. Oddly enough,
it is not the IT group that ranks it in
the top three. Instead, that group
is more focused on the cost to col-
lect the machine data that could be
generated. This could indicate the
concerns of the other groups are
speculative and based more on per-
ception than reality.

33
Fleet Management case study: Driving down
costs and optimizing with analytics
Canadian Natural Resources Limited,
one of the largest independent oil and
gas producers in the world, faced a
fleet management challenge recently.
In order to reduce vehicle fleet costs
and enhance the health and safety of
its workers, it wanted to take a more
proactive approach to reducing ex-
posure to safety incidents by curbing
negative actions like speeding. It also
wanted to obtain Diagnostic Trouble
Codes from on-board vehicle com
puters reporting on various metrics, like
seatbelt usage, and reduce exposure
to theft of its ATVs. And it needed to
replace the CDMA communications
network it used that was in the pro-
cess of being discontinued.
The Calgary-based company,
which manages a fleet of more than
800 vehicles in 11 operating districts,
approached the challenge as an oppor-
tunity to upgrade to the latest in Fleet
Management solutions, which leverage
digital platforms to maximize fleet ef-
ficiencies. It chose the SMART-vu Pro
solution offered by Storm Telematics.
SMART-vu Pro is a powerful GPS dis-
patching tool that also functions as a
comprehensive reporting system and
can be configured according to specific
customer needs. Storm Telematics, an
Edmonton-based company, optimizes
fleets by building business impact mod-
els to validate the value of implementing
a GPS, RFID and analytics offering
into an organizations operations. The
telematics data (SMART-vu Pro) and
radio frequency identification (RFID)
(SMART-vu TagNet) data collected is
used to establish a baseline (SMART-vu
Analytics), which is in turn used to trend
the metrics measured by leveraging pro-
prietary efficiency algorithms in the areas
of descriptive analytics (what happened),
diagnostic analytics (why did it happen),
predictive analytics (what will happen)
and prescriptive analytics (what is the
best outcome and how it can be made
to happen).
Storm integrates telematics data
and RFID technology into an algo-
rithm-based analytics engine to analyze
the massive volumes of data coming
in from multiple sources and formats
and turns it into clear, highly granular
information that is converted into ac-
tionable intelligence able to deliver
quantifiable savingsand ultimately
measuring the cost of inefficiency.
Storm seamlessly transitioned
Canadian Naturals hardware that was
installed into its fleet to the SMART-vu
Pro platform, replacing the necessary
legacy CDMA modems with HSPA mo-
dems and deployed satellite tracking
devices, providing ubiquitous coverage
using the Globalstar satellite network,
onto the companys ATV fleet to re-
duce exposure to theft. The SMART-vu
34
Pro fleet tracking technology provides
more advanced mapping features,
including integrated Patchmaps, in ad-
dition to detailed and comprehensive
reporting, allowing Canadian Natural
to obtain critical fleet performance
data within three clicks.
Storm continues to provide
Canadian Natural with a dedicated
Implementation Specialist to assist all
11 districts in optimizing fleet assets,
including training and support by way
of configuring scheduled reports for
various Canadian Natural stakeholders
and setting up escalation procedures
using a flexible alerting engine.
The technology allowed Canadian
Natural to establish a solid baseline for
ongoing trending analysis and to begin
measuring reliably specific metrics such
as speeding, idling and off-hour usage
of fleet assets. Within the first quarter
of deployment, one of the divisions was
able to determine that $4,179 in fuel
was used as a direct result of excessive
speeding (29 assets) and 3,850 litres
of fuel was used during 2,485 hours
of idling (based on 30-plus minutes).
The first division deployment achieved
a 24-per-cent return on investment
in year one and a 152-per-cent return
on investment in year two. Increased
safety is achieved for employee and
contractor workers by providing visi-
bility over driver behaviour.
Conclusions and
recommendations
Present a robust business case
Budget constraint has rated at the top of the barriers to adoption of Digital Focusing on the
Oilfield technologies every time the question has been asked. But what does that quantitative benefits
mean? While the oil and gas industry has been subsumed in a ruthless cost-cutting of your idea is the
spiral since prices collapsed two years ago, that doesnt mean companies are most effective way of
not investing in activities that will save money. Indeed, as cost cutting becomes removing your biggest
paramount, it makes more sense to spend on measures to reduce expenses, not hurdle when dealing
less. That suggests proponents of Digital Oilfield technologies are not making a with key decision
convincing enough business case for implementation to pay for itself and actu-
makerstheir personal
ally add value to the enterprisebudget constraint becomes a default answer
biases.
in the absence of strong business cases and a history of proven implementa-  Bob Phillips, chairman of the

tions. The ability to make a strong business case, including a robust cost-benefit board, Precision Drilling
analysis and evidence of successful implementation through pilot projects, case
studies and testimonials, can go a long way to de-risking the decision to invest
in any new technology.

Building an effective business case

The role of a business case is that of
a communication tool, composed in a
language that the target audience under-
stands and with enough detail to facilitate
decision making. Using a business case
approach to sell technology adoption
opportunities is first about moving away
from simple qualitative benefit expression
(e.g. this application will make your work-
ers more efficient and safe) to providing
quantifiable rigour around the potential
benefits (e.g. this application will decrease
the volume of work by X, increase pro-
ductive time by Y and lower operating
costs by Z over a specific timeframe).
After benefits have been effectively
categorized and quantified, implementa-
tion considerations need to be addressed
and also quantified (e.g. cost to purchase
and maintain a solution, integration costs
with existing systems, training require-
ments). Once these two elements have
been determined, a proper cost-benefit
analysis can be performed to allow a
logic- and fact-based decision on adop-
tion to be made.
NAVIGATING A BUSINESS CASE
DECISION TREE FRAMEWORK
The framework example below is de-
signed to assist in visualizing all the cost
levers adopting a new Digital Oilfield
technology could affect. After estab-
lishing a proper baseline scenario, a user
trying to make a business case would
identify all the relevant solution bene-
fits that match the application need
and work through the framework, left
to right, highlighting all the applicable
macro and micro benefit levers. The goal
is to be able to work deeper through the
tree to identify the specific examples of
how a given technology could benefit
a user or the organization and then roll
back up and assign specific values (fac-
tors, multipliers, absolute values) to all
the micro and macro benefit levers that
would change from the baseline oper-
ating scenario.
At the end of the exercise, a com-
prehensive benefits value should be
generated that can be then compared
against the costs, including all the im-
plementation considerationscost
to purchase, maintenance, integra-
tion with other systems and training,
to ensure the benefits will outweigh
the costs by the amount and within
the timeframe required for capital
investment.

35
Business case decision tree framework for adoption
of Field Productivity technologies

PLANNED
OPERATIONS

UNITS OF WORK
(e.g. number of truck rolls)

UNPLANNED
OPERATIONS

PRODUCTIVE
TIME
TIME
FIELD PRODUCTIVITY (e.g. hours spent completing a job
start to finish)
UNPRODUCTIVE
TIME
Use case

COST
(e.g. the average labour rate being OPEX
incurred)

Macro benefit levers Micro benefit levers

Field Productivity case study: Virtual training

Using Siemens advanced simulation softwarewhich gen-
erates precise, 3-D virtual representations of technologically
complex industrial facilities, including detailed information
and the complete history of associated componentsa com-
pany operating an offshore oil processing platform in Africa
was able to begin its training on a virtual model while its fu-
ture workplace was still under construction. By reducing the
time needed for training sessions on board, the oil platform
entered service two months earlier than planned.
Using Siemens COMOS facility management software pro-
gram, and its COMOS Walkinside 3-D virtual reality model-building
system, technicians can see themselves depicted as an avatar
in a virtual model of a facility, which they are training to use
or required to inspect. Safety is enhanced and the need for
paperwork, like training manuals, component diagrams and
inspection reports, is reduced or eliminated. Companies can
also use the technology to complete planning and virtual com-
missioning of a facility before a single bolt had been tightened.

36
 MAINTENANCE: Servicing assets Reduce frequency of site visits by performing trouble ticket analytics on
routinely/scheduled to maintain asset usage versus planned work and maintenance schedules to determine
normal operations which activities can pushed up or back to align with other site visits.

INSPECTIONS: Assessing the Reduce number of site visits by monitoring infrastructure and complet-
operational health/status of ing asset inspection remotely and combining actual site visits through
an asset optimizing inspection schedules.

Decrease the number of follow-up trips required to complete instal-

INSTALLATION: Putting new
lations by providing 24/7 access to centrally located troubleshooting
assets into service or adding
experts, installation guides and video tutorials to ensure the job can be
functionality to existing assets
done correctly the first time.

Reduce the need for site assessment visits by analyzing historical

REPAIR: Fixing an asset that has
maintenance and repair logs to best determine cause of failure and dis-
failed unexpectedly or correcting
patching properly trained crews with the right parts/equipment the
previous work done incorrectly
first time.

Reduce the amount of time a call out could take by conducting out-
JOB ASSESSMENT: Scoping job
come probability and risk-based impact analysis on trouble tickets so
requests to identify all possible
that the optimally trained technician/crew can be dispatched rather
required resources
than using a first-available, first-out approach.

JOB COMPLETION: Conducting Decrease time to completion by providing instant around-the-clock ac-
work on the asset at site and time cess to centrally located experts, manuals, procedures and engineering
required to finish the job schematics.

TRAINING: Providing resources Maximize output from crews by optimizing how crew downtime is
with new skills needed to improve spent by scheduling skills and safety training during expected down-
their safety and output times or off peak hours.

SEARCH: Expending effort Reduce resources spent on searching for parts and equipment by having
looking for parts and equipment real-time overview of inventory at fixed and mobile warehouses so that
needed for the job parts can be available without delay for routine and emergency jobs.

Decrease distance crews travel through intelligent routing of trouble

TRAVEL: Travelling to and from
calls that balances impact of asset failure versus likelihood of failure
the worksite
versus crew availability and time for crew to respond.

Reduce average labour costs by organizing crews based on frequency

WORKFORCE PLANNING: of call outs versus required response time versus total overtime wages
Optimizing how crews are staffed (e.g. standby or on-call model, 24/7 ops). Additionally, optimize the
and deployed mix of skillset and seniority of crews using predictive workload models
based on historical call-out data.

Micro benefit categories Examples of application benefits

37
Business case decision tree framework for adoption
of Fleet Management technologies

UNITS OF WORK
OPERATIONS
(e.g. number of truck rolls)

FLEET MANAGEMENT

Use case
OPEX

COST
(e.g. the average costs associated
with a truck roll or km traveled)

CAPEX

Macro benefit levers

Micro benefit levers

38
 Increase transparency of fleet location and usage to improve their utilization
UTILIZATION: Optimizing how
and decrease total distance traveled through intelligent routing, and optimiz-
mobile assets are used
ing the number of mobile assets required to be owned/rented in the fleet.

MAINTENANCE: Servicing assets Reduce frequency of required shop visits by performing trouble ticket an-
routinely/scheduled to maintain alytics on asset usage versus planned work and maintenance schedules
normal operations to determine which jobs can pushed up or back to align with shop visits.

Reduce potential for re-work or the need for additional resources to be

REPAIR: Fixing an asset that has dispatched by properly analyzing the information received on the origi-
failed unexpectedly or correcting nal trouble ticket and calculating possibilities, probabilities and impact of
previous work done incorrectly additional issue and dispatching crews accordingly rather than using a first-
available, first-out approach.

SAFETY: Minimizing incidents Decrease chances of lost time to injury due to driver incidents by monitoring
through safe operations of mobile driver patterns and conditions and providing real-time (e.g. in-cab) coaching
assets and creating safe zones (e.g. virtual GPS zones regulating maximum speeds).

Improve driver behaviour through operations monitoring and coaching so

FUEL: Determine strategies to
that mobile assets are used in an optimum fashion (e.g. no speeding, limit
save on amount of fuel used in
idling). Decrease fuel usage by following proper maintenance schedules and
operations
operating guidelines (e.g. tire pressure).

Reduce overall insurance rates of mobile assets by being able to quantifiably

INSURANCE: Paying premiums
demonstrate statistics of driver behaviour and provide factual information
for asset operation and accident
to correctly determine at-fault parties in accident situations, thereby reduc-
claims
ing claim and litigation costs.

Reduce overall carbon emissions and subsequent carbon taxes by following

ENVIRONMENT: Lowering
proper maintenance schedules, driving less aggressively and travelling fewer
environmental impact due to
kilometers due to route optimization. Lower other environment costs associ-
operations
ated with fees for automotive parts by reducing wear through excessive use.

Increase the time between purchases of assets and increase recovery of as-
FLEET: Managing the purchase,
sets to be divested as a result of reduced wear due to improved operator
lease and divestiture of assets
usage patterns and proper maintenance programs.

Micro benefit categories Examples of application benefits

39
Fleet Management case study: Model behaviour
A Calgary-based service and supply company that
operates a total fleet size of 2,100 assets sought out
an assessment for entering into a pilot for 110 heavy-
duty vehicles (including vacuum trucks, water-hauling
trucks and assorted vehicles serving the needs of the
oil and gas, petrochemical and mining industries) to
determine the savings a Fleet Management solution
could provide. Storm Telematics undertook a detailed
audit of the fleet to determine possible efficiencies to
reduce costs and improve safety. It used an existing
methodology that tracks savings in driver behaviour
by moving the worst driving offenders in a fleet in line
with the best drivers, using in-house benchmarked
data revised based on the specific nature of the com
panys fleet. The estimate assumed no use of Storms
analytical engine or ongoing fleet optimization ser-
vices, but was solely focused on using SMART-vu Pro
to measure specific metrics related to driver behaviour
improvements, idling reduction, asset utilization im-
provements and maintenance savings.
Working in collaboration with the organization,
Storms business impact model found there would
be a positive net present value in the first year of the
40
engagement, with a $295,000 payback on the com
panys 110 vehicles. It projected over $150,000 in annual
savings based on reductions in fuel consumption and
asset deterioration based on a projected five-per-cent
reduction in aggressive driving behaviour, over $26,000
in fuel savings by reducing idling by 15 per cent, an
additional $120,000 revenue based on improved utiliza-
tion and over $176,000 in annual maintenance savings
based on improved preventative maintenance and re-
duced vehicle wear and tear.
Based on these projected savings, it was estimated
that breakeven would occur before six months. Storm
projected a 408-per-cent, five-year return on invest-
ment. Additional savings could be realized if some
assets are shown to be saleable without impacting
operations. There were also significant potential cost
avoidance and soft benefits with high-potential value
that were not included in the ROI projection.
Some of the direct benefits associated with this
case study can be plotted in the business case deci-
sion tree above, such as vehicle maintenance, driver
safety, fuel consumption and divestiture of assets, for
assessment through the framework.
 Engage technology champions
Survey responses indicate there is a high level of confidence in many Digital Identifying, testing
Oilfield technologies readiness for adoption and ability to pay dividends, but and implementing
the internal workings of organizations themselves are perceived to be one of new technologies
the biggest barriers to getting them implemented, second only to budget con- that are critical to
straints. This is not entirely unexpected, since the kind of sweeping technology helping solve an
transformation that adoption of Digital Oilfield technologies can entail often organizations or
requires a cultural shift and re-engineering of process throughout the organ the industrys most
ization, the breaking down of functional silos and embracing of collaborative
pressing issues cant
business models, overcoming knowledge gaps and perseverance to see the
be another line item
to someones existing
transformation through. Given the enormity of the challenge, a lack of clearly
job description, but
defined ownership of the task of driving technology selection and implemen-
has to be their only
tation forward can become an impediment. One way to move implementation
responsibility and
up the agenda is to appoint a leader or team tasked solely with spearheading
built right into their
the transition, including rigorously assessing new technologies, testing and
job title if you want to
piloting the best candidates, quantifying the value of implementation and experience change of
moving to scale those technologies determined to be cost effective. Moreover, any consequence.
an effective leader or team should be able to overcome employee resistance
to change and convince colleagues that implementation is indeed within the  Amit Varma, chief executive
officer, True Site View
scope of their roles and within their abilities to execute.

Engage with suppliers

The product-as-a-service model increasingly used in the software and other Innovation is as much
industries changes the nature of the relationship between the customer and about new technologies
the vendor from that of a one-time purchase to that of an ongoing relationship, as it is about change
with the vendor promoting customer satisfaction over the life of the prod- management. The
uct. This benefits both sides in the transaction. Tracking of customer usage sooner vendors and
of a software or product creates valuable feedback to the vendor that can be buyers trust and see
analyzed and used for ongoing product improvement, while the customers each other as strategic
ongoing relationship with the vendor ensures it receives the most benefit from
partners rather than
the technology. Some vendors now use customer engagement teams, or im-
transactional groups,
the sooner they will get
plementation specialists, specifically tasked with maximizing customers value
to move at web speed.
from their technology. Implementation specialists are engaged with manag-
ing the onboard implementation, system configurations, troubleshooting and  Kevin Frankowski,
addressing the training needs of its customers. With the ability to make its tech- executive director, Kinetica
Ventures
nology on board easy to understand for end users and to showcase the value
proposition of a companys products, customer engagement teams can play
a critical role in the success of a technology in the marketplace. Additionally,
suppliers can often bring experience from other oil and gas companies and
from other industries. Those best practices will help drive more value.

41
 Break down the silos
However, the true realization
Part of the reason for the existence of organizational barriers is the
of the [Digital Oilfield]
presence of entirely separate disciplines within organizations that have
vision comes not in the
customarily not interacted. If information technology is not considered
field, but in head office,
a full business partner in the process, a gap will remain between IT and how producers change
systems and operational technology systems. Enterprise software devel- their business processes
opment and embedded control systems development have traditionally to leverage analytics and
operated in their own silos, employing different tools, platforms, profes- to integrate the silos that
sional skills sets and corporate cultures. Yet Digital Oilfield technology can exist, for example,
implementation usually requires some degree of melding of the two. between the exploration
Remote sensors need to be programmed for the task for which they and production sides of the
are installed as well as to provide data for analysis and potential ac- business. Unlocking this
tions. Much of the value from Field Productivity and Fleet Management potential is as much about
come from IT integrationIT needs to be more closely aligned in order people and process as it is
to gain full value. Companies must accelerate behavioural change across
about technology.
the organization by reinforcing teamwork and promoting collaborative James Freeman, chief technology
engagement among diverse working groups that are all essential to the officer, Zedi
success of Digital Oilfield technology implementation.

Maintain cybersecurity vigilance

Concerns about cybersecurity have fallen, from second place among barriers to The attackers are
the Digital Oilfield to fifththats the good news. But as more companies install already doing a
more sensors and devices, and collect and transmit exponentially more sensi- great job sharing
tive data, the security of that data will always be a worryand the threat will information between
always remain. As the IoT penetrates the oilfield, now is no time to let the guard groups, and in order
downand see it return to security being a major barrier to implementation. for security providers
Companies need to reach the same sort of widespread level of understanding to keep up, we will
and enforcement around cybersecurity that they have today with protecting
need to get better at
their people (safety), the environment and their physical assets (reliable oper-
sharing information as
well.
ating and maintenance practices). That means carefully designing security into
IoT systems from the beginning and exercising continued vigilance throughout Nate Kube, chief
the implementation and lifespan of the system. technology officer, Wurldtech

42
Maximize Operational
Efficiency With Real
Asset Intelligence
GDM helps companies
navigate the complexities of
the modern digital oilfield, by
finding more efficient ways
to use real-time oilfield asset
data. We aim to minimize
re-work, maintain critical
historical information for
future operational success,
and ensure all information is FULL PAGE
readily available when and
where it is needed most.
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