POSC White Paper:
The Internet and The E&P Industry
[based on the POSC Member Meeting, Rijswijk,
The Netherlands, March 1997]

Review Version, January 28, 1998

Background

The theme of the POSC Member General Meeting in Rijswijk, The Netherlands, in March 1997 was "Internet and E&P". There were keynote presentations, a panel discussion, and break-out sessions. The purpose of these sessions was to focus attention on how the E&P industry is responding to recent developments surrounding the Internet. The purpose of this white paper is to use the Rijswijk meeting as a basis to begin to identify requirements that must be met in order for the Internet to deliver significant benefits to the E&P industry. In this paper, the terms Internet and internet technology are used to refer not only to the current, actual Internet and the technologies that support it, but also to any successor global computing / communication capabilities and future supporting technologies.

Comments on the issues raised in this white paper are requested from E&P industry organizations, Internet technology organizations, Internet and related standards organizations, etc. Please address comments by email to Doniger@POSC.org. Comments received will be posted on the POSC Web Site for review by POSC members and will contribute to future decisions regarding POSC activities related to Internet technology.

Keynote Presentations

The keynote sessions at the Rijswijk meeting were given by Hans Haringa of Shell, Martin Peersmann of TNO, and Paul Haines of Schlumberger / GeoQuest. The keynote speakers were joined by Pierre Chevalier of Cap Gemini, Ian Batty of Oilfield Systems, and David Archer of POSC for a panel discussion. Break-out sessions followed the panel discussion and addressed Internet-related opportunities and required technologies.

Hans Haringa, Shell International Exploration and Production

Hans Haringa referred to the Unpredictable Certainty: that the Internet would change our business and private lives in ways no one could predict. He said that earth orbiting satellites were starting to provide unsaturated bandwidth suitable for the transmission of E&P data. He said that E&P companies should be look for innovative ways to work, rather than just optimizing today's work tasks. He said that E&P companies should focus on building a global culture. He predicted that companies that have no strategy will be overtaken by events and by those who do have a strategy.

Martin Peersmann, TNO

Martin Peersmann described how E&P companies are accessing data and information from multiple remote databases today. He said that information is being shared at all levels inside E&P companies -- from an E&P asset team all the way to the board of directors. He said that decision support processes will evolve to take advantage of this expanded information. He predicted that governments will probably take about five years longer to respond to Internet-related events than E&P companies themselves. He cautioned, though, that data security will be a major issue constraining the use of Internet technology.

Paul Haines, Schlumberger / GeoQuest

Paul Haines described several ways in which his company uses Internet technology internally and together with customers. He said that over 130 client companies benefit from connecting through the Internet to a Schlumberger data server in Denver which contains well logs from over 100,000 wells. He said that the number of data domains served from Denver via the Internet is being expanded, as is the geographical coverage.

Predictions

The Rijswijk meeting panel members offered these predictions of the future:

The next quantum leap in Internet use in the E&P industry will follow a significant increase in the available data transmission bandwidth. This will come through combinations of actual throughput, improved data compression techniques, optimized data selection by intelligent agents, data beaming, and other techniques.
E&P companies will use smart applications to filter out unwanted data.
Data base technology will offer more object-oriented, massively distributed, and flexible products. These products will be capable of storing many forms of complex data, including spatial data, earth models, text, and image.
The Internet will enable self-training of E&P company workers, joint-venture partners, customers, etc. Today, for example, Shell provides all employees with Internet access and encourages to look outside the organization for technology solutions before starting to develop unique solutions.
Rather than rendering project and corporate data stores obsolete, the Internet will enhance options for access to and use of these and other forms of distributed data storage.
New revenue models will become available from service providers and telecommunication companies to support charging for connectivity. Software and data suppliers will rent their products, e.g. rather than selling licenses for locally installed software and data.

Break-out Session Results

Two of the three member break-out groups identified these points as important opportunities for the E&P industry to obtain value from the Internet (and related technologies) on a strategic basis:

E&P companies should work smarter by making data and information more widely available for use.
E&P companies should form virtual organizations.
E&P companies should have a policy of granting seamless access to data.
E&P companies should integrate the different kinds and sources of information needed to manage each E&P asset.
E&P companies should improve the flow of information between suppliers and customers.
E&P companies should move the work to the people -- not the people to the work.

The third break-out group identified these points as important requirements on future Internet (and related) technology from the E&P industry:

Interoperability (Open Web architecture; Inter-Application Communication (POSC standards) to include Internet; POSC standards for Business Object, Data Object and architecture; Java expansion API).
Security (More openness in data sharing; one's own security from outsiders; management of security during access and delivery; Java security)
Bandwidth and performance

Issues for Further Consideration

For Oil and Gas (E&P) Companies

Consider raising the level of awareness of the value of Internet and Internet-technologies as a worldwide mechanism for information broadcasting, dissemination, and sharing. Support both short-term projects to exploit the Internet and long-term cross-industry initiatives to refine the Internet into a robust, reliable resource.

Include provisions in business planning and strategies for the kinds of benefits that the Internet can provide for reduced cost and reduced need for travel. Recognize and respond to the sociological and organization changes that can be enabled through Internet use. The redistribution of business activities may be the most important driver to greater use of the Internet.

Refine and articulate quality of service requirements related to the Internet, e.g. security features, reliability, filtering, etc.

Continue to support standardization efforts related to data, especially efforts that are implementation technology independent. Lack of such standardization will limit the benefits that can be realized from the Internet (as was the case for other computing environments).

Track developments related to basic Internet technology. The origins of Internet technology goes back more than twenty years -- long before becoming widely used commercially and via commercial network access providers by the public. It was the significant changes in capacity and cost in both computers and networks that caused the acceleration of Internet use. Future improvements in technology -- qualitative as well as quantitative -- may have similarly revolutionary affects.

Consider establishing ongoing research and development effort(s) to identify beneficial structural improvements in the ways the E&P industry operates, including the redistribution of business processes within E&P, e.g. virtual teams / virtual business operations, remote real-time monitoring and control, satellite remote sensing, etc. Project these opportunities into requirements for new applications, infrastructure, standards-based specifications, etc.

Consider advanced capabilities coming out of the general developments around the Internet and Internet technologies and agree on how such capabilities do or do not apply in the E&P industry, e.g. electronic commerce, electronic funds transfer, etc.

Consider the roles that POSC can play effectively to help recognize and promote such opportunities, e.g. endorsement of emerging technology, acceleration of the development of standards and specifications for object-based, distributable application architecture, domain object models, and business object definitions, extend the scope of use of the integrated spatial earth model to support greater discipline integration, endorse, adapt, or develop standards and specifications for data object identity, security, and privacy, etc.

Develop positions on how Internet-related advancements can streamline communication with and monitoring by government agencies. Promote these opportunities with governments and support projects to achieve results.

Work with E&P suppliers to develop industry estimates of Internet throughput and bandwidth usage and future requirements. Use this information to promote developments from the general IT suppliers.

Consider the advantages of featuring companies working on future Internet-related products and services at E&P industry trade shows and conferences, including joint technical sessions and panel discussions.

For Information Technology Companies

Understand the commercially motivated desires of the E&P industry to use the Internet, Internet technology, and future global networks and infrastructure to best advantage.

Relate the requirements of the E&P industry in this regard to those from other industries so that research, development, and deployment investments can be optimized while assuring that the work toward meeting the true needs of the E&P industry can be tracked, i.e. E&P companies can participate in setting priorities and "investing" in needed projects.

Collaborate with E&P companies to see how developments from other industries can be applied and/or adapted to meet unique E&P needs, e.g. security and encryption from the banking industry applied to the public network data security concerns of the E&P industry.

Bandwidth and compression technology are considered major issues limited the growth of the use of the Internet by E&P companies. The bandwidth is the limiting thing. Effective compression techniques can expand bandwidth delivered. Today, lossless compression techniques give results that are no better than one to three. (There are some compression techniques that suffer from a degree of data degradation, but yield compression rates of 1 to 100.) The industry's goal is for distributed data access to appear as if it is almost local. Intranets are achieving 2 MB rates on dedicated lines. At 64 KB on an Internet, large quantities of E&P data can not be loaded at an adequate transfer rate. Beaming techniques are being investigates using dedicated transmitters for faster transmission. Shared applications accessed over the Internet also require a large bandwidth. Work with E&P companies and suppliers to gain a better understanding of bandwidth and compression requirements, e.g. determining the degree and nature of degradation that can be tolerated for specific classes of E&P data. Involve E&P companies in research and development projects to expand capabilities in these areas.

For E&P Service Companies

Find ways to provide access to leading-edge commercial applications via the Internet, recognizing the need for appropriate licensing and access control.

Find ways to provide access to diverse data sources, including both those that are fully compatible (standards-based) and those that are not (accepting the need to operate in a somewhat degraded mode).

Find ways to establish and manage commercial "E&P object" data repository service via the Internet, i.e. libraries of isolated but well-defined clumps of data, allowing companies to "rent" storage space, search commercially available data objects, access (license and pay for) desired commercially available data objects, designate subscribing companies, search for subscription objects, access subscription objects, etc. Store both standards-based and other objects.

Develop, manage, and provide information sources, i.e. search engines and data bases, concerning specialized E&P data accessible via the Internet.

Conclusion

It is important for E&P companies and suppliers to integrate Internet technology into their strategic and tactical planning. Both the opportunities and the challenges are significant and worthy of attention. Risks can be reduced through collaboration within the industry and across industry boundaries. The very nature of Internet technology appears to be fundamentally compatible with the virtual business practices that E&P companies seek to employ for optimization of results and reduction of costs.

Please address comments to Alan Doniger, POSC Director of Technology at Doniger@POSC.org.

Updated: January 28, 1998. Send questions and comments to webmaster@posc.org

POSC White Paper: The Internet and The E&P Industry [based on the POSC Member Meeting, Rijswijk, The Netherlands, March 1997]