The Democratization of Technology.... An Essential Component of the Digital Transformation in Oil Exploration and Production
Digital Transformation is reshaping all industries in a race to increase profitability by reducing business cycles and increasing efficiencies. In particular, Digital Transformation is the last resort in the Oil & Gas industry to increase profitability through a process that resembles a deliberate search for a faster and better oil. First oil. The extremely long period that happens since the capture of an exploratory area until the first oil is a like rodent that is devouring the NPV’s of the projects. Better oil, to increase efficiency, reducing CAPEX, decrease business cycle time, and lowering the break-even.
Most of the activity developed during this first period of an upstream project until the first oil is related to Exploration and the technologies used are those in the fields of Geosciences (Geology, Geophysics and Reservoir Simulation). While Exploration Success rates in Exploration remain constant over the Industry at an average rate of 30%, Economic Success rates and consequently the average IRR of exploration projects, are well below historical averages for the industry. One of the reasons is that in Geosciences, regardless of technological advances in the realm of quantitating practitioners, most of the decisions in Exploration are made in the field of generalist practitioners. Professionals that belong to this environment of generalist practitioners usually support business decisions as drilling, farm-in, or farm-out of opportunities. Digital Transformation will empower these qualitative practitioners because they will have readily available tools and experience that in the past was concentrated in a handful of skilled specialists. In particular, the interpreters will accelerate their work, and they will have available at their fingertips very sophisticated tools, now possible thanks to High-Performance Computing that will be available to them through the Cloud. All of it is part of a broader Technological Democratization.
Oil and Gas Upstream has always been particularly hungry for High-Performance Computing for all of those technologies required for modeling and imaging the earth’s interior. There are two reasons for this never-ending need for supercomputing. First, as physical models are increasingly growing in complexity because of the complexity of real systems, the computational cost required to resolve these systems mathematically is increasing in at least one order of magnitude every five years. On the other hand, closing the fidelity between Modeling and Imaging requires increasingly more scales (higher frequencies to be accounted for in the Imaging), and the computational cost increases with the fourth power of the rate required in the Imaging.
While the computer power growth is logarithmic following almost mathematically Moore’s law over the last 40 years, the cost for every 100,000 transistors over the same period is also decaying exponentially and today is lower than 1/10 th of a cent.
The convergence between High-Performance Computing and the Cloud has made possible that Geoscientific technologies
From the ’70s there is a non-stop race to fulfill the ultimate human desire: I want a bigger computer!! Technology breakthroughs occurring almost every ten years feed this dream: Networked Operating Systems, Networks of Workstations and Clusters, Grid Computing and now, finally, he ubiquitous supercomputing: the Cloud. The convergence between High-Performance Computing and the Cloud has made possible that Geoscientific technologies that were in the past available to a handful of highly specialized geophysicists, geologists, and engineers because of supercomputing requirements, are today readily accessible to hundreds of professionals through an internet connection. This is the primary component of today’s technology democratization. With a little bit of training, the geoscience professionals of today will have the experience of being specialists. They will no longer be engaged in tasks requiring manual, repetitive work with little or no benefit to their companies; they will be involved with the application of science in a creative environment within their workplace. While the motivation of these professionals will rocket, their companies will benefit from having 50 times more highly skilled specialists and professionals undertaking high value-added projects. This is how Digital Transformation through Technology Democratization with the Cloud as an enabler will empower all of these qualitative practitioners contributing to the desired reduction of business cycle times and the increase of exploration success rates.