® Originally appeared in World Oil JUNE 2021 issue, pgs 37-40. Posted with permission.

MANAGEMENT ISSUES: SPECIAL INTERVIEW

Scaling-up digitalization for a low-carbon industry

Two senior executives with TotalEnergies and Schlumberger give their thoughts and analysis of what the industry’s digital transformation effort has accomplished and where it is headed in the future.

For decades, technology, innovation, novating, and we have a historical track and vast volumes of data have been the record of developing technology that has traits of success for the oil and gas indus- completely transformed the industry; try. Recent world events have reinforced such as intelligent completions, hydraulic the importance of digitalization, particu- fracturing and horizontal drilling. Digital larly for enhanced remote operations. transformation now represents our indus- With immense potential to be had, the try’s greatest opportunity for value cre- industry must focus on real business value, ation, while also demonstrating to society attracting and developing new talent, and how we can sustainably unlock energy for reducing environmental impacts. If tack- the benefit of all. led correctly, it can demonstrate to society The world still needs a lot of energy. how it can safely and sustainably unlock Access to reliable, affordable and sustain- energy, enabling a more cost-conscious, able energy is a legacy we, as an industry, efficiency-driven and greener industry to will need to assure for society; we need emerge from the energy transition. to work together. SPE Offshore Europe Though it is widely accepted that the 2021 is an important forum, where we can Jean-Luc Guiziou, Managing Director, adoption of digital enablers and technolo- bring collective knowledge together, dis- TotalEnergies E&P UK LTD gies must be broader and deeper than cuss new ideas, challenge each other and remote operations alone, the smart use set the next steps for our vital role in the of digital capabilities across domains and energy transition. workflows, from concept to production to end of life, needs to generate true value, WO: How significantly do you not a false economy. think digital transformation is World Oil Editor-in-Chief Kurt Abra- penetrating the upstream industry, ham discussed these digital dilemmas in terms of daily operations? with TotalEnergies’ Jean-Luc Guiziou and Schlumberger’s Wallace Pescarini, both JLG: I would say that historically, we have of whom are Executive Committee mem- two elements that are helping us. The first bers for SPE Offshore Europe 2021 and element is data. For decades, we have been are leading a panel session on this topical generating and processing phenomenal subject. amounts of data, in particular to gener- ate images of the earth. In doing so, our World Oil (WO): How important do industry has become one of the largest you think digital transformation is to consumers of computing power on the the global upstream industry today? Wallace Pescarini, President Offshore planet. The second element is automa- Atlantic, Schlumberger tion. This is something which has been Jean-Luc Guiziou (JLG): Digital trans- deeply rooted into our installations for a formation is now at the core of the strategy long time. Now, digital transformation is ŝ An exclusive interview with of the oil and gas industry’s upstream play- taking it one step further. JEAN-LUC GUIZIOU, Managing Director, ers, I would say. And this is true through- We need to exploit the data that we’ve out the whole value chain, from explora- got, and mainly, I would say, it’s also about TotalEnergies E&P UK Ltd, and WALLACE tion all the way to the end customer. changing the way we work. And on this PESCARINI, President, Offshore Atlantic, front, there has been significant progress Schlumberger, and members, 2021 Executive Wallace Pescarini (WP): I agree. The over the past year, but there remains a lot Committee, SPE Offshore Europe 2021 E&P sector has a long tradition of in- to do, in order to capture the full value of

World Oil® / JUNE 2021 37 MANAGEMENT ISSUES: SPECIAL INTERVIEW digital. We have not yet altered our busi- have been developing a number of digital lation. This is gradually influencing the ness processes, I would say. products to help us optimize and be more way we are working on our sites. efficient in the way we work. We have From our control rooms, we can cut WP: We need to recognize that we are been quite successful, so far, in drilling the emissions on our installations and try lagging, compared with other industries. operations. For example, TotalEnergies to track the missed opportunities for opti- However, the pandemic has been a cata- E&P UK has developed a product which mization, from the wellhead down to the lyst for accelerating the digital transforma- completely modifies the daily drilling re- export gas valve. These digital develop- tion of our industry. port from being paper-based to having all ments essentially bring together a lot of In addition to data and automation, we the information in a single digital portal. data that already existed, but which were also need to consider our people, and a This not only captures the data of the op- not gathered and presented in a way that real shift in mindset, as essential factors for erations, but also the learnings from the allowed operators to optimize the pro- success in our transformation. By enabling engineers on past wells to advance future cesses and the flow. improved efficiency and lowering both drilling operations. We have an ambitious target of value production costs and the carbon footprint Over the past year and a half, we have creation over the coming years, thanks our industry creates, digital adoption will generated genuine value by accelerating to the pace of digital innovation. For ex- ultimately allow us to safely and sustain- our drilling operations in the UK, by sav- ample, we have set up a digital factory to ably continue providing reliable energy to ing seven to ten days of drilling on some serve all of TotalEnergies’ businesses. the world. of the more expensive HPHT wells. This scales up to all our affiliates with drilling WP: We have always championed the WO: Where exactly is digital operations. Mobility devices and smart need for data openness and collabora- transformation affecting, altering rooms are making a real difference to tion across the industry to drive efficiency and changing the way that certain day-to-day operations on almost all our and more sustainable solutions. Based on oil and gas field operations are assets in the UK. Operators who have that, in 2017 we delivered to the industry carried out, whether that be those digital mobility devices can access the DELFI cognitive E&P environment, exploration, drilling, completions or information about the equipment directly which combines domain science with ad- production? from the place they are working on the in- vanced digital technologies to transform stallation. They can link to the vendor and planning and operational activities across JLG: Over the past two to three years, we benefit from the digital twin of the instal- the E&P lifecycle. This environment al-

Fig. 1. TotalEnergies is training its workforce in the use of digital equipment to increase mobility on industrial sites. Image: ©ZYLBERMAN Laurent - Graphix Images – TotalEnergies.

38 JUNE 2021 / WorldOil.com MANAGEMENT ISSUES: SPECIAL INTERVIEW lows stakeholders to unlock the full value Fig. 2. The breadth and depth of Schlumberger domain and AI expertise is available of data for making critical business deci- through the INNOVATION FACTORI. Image: Schlumberger. sions and gaining efficiency. We have seen significant progress over the past 12 months, and through the growing adop- tion by several operators, we are able to quantify some of these gains. On the planning side, if you look at seismic processing programs nowadays, turn-around time has been reduced from 18 months to 2.5 months, principally driv- en by applications of artificial intelligence and machine learning. With this 80%-plus improvement in efficiency, geoscientists can now allocate their time to de-risking projects and compressing time to discov- ery and development of higher-quality, lower break-even cost prospects. Our DrillPlan solution allows well construction stakeholders to collaborate our organization’s high standards of data scaling-up by a factor of about five of the across disciplines, and integrate and au- quality and data governance. value that we have been able to capture in tomate the design stages for more reliable 2020 and that we plan to capture in 2021. well planning. These solutions have prov- WP: Our strategy today is centered around So, effectively, we see a space to increase en to be transformational for operators, the performance of our customers, and this value by five-fold or so in the coming and they have also become a key enabler digitalization is a cornerstone of our shared four or five years. of efficiency for Schlumberger, where we performance gains ambition. This means An event like SPE Offshore Europe deliver integrated projects. unlocking efficiency, reducing the cost of 2021 can really galvanize action in this On the production side, in Latin Amer- barrels produced, and minimizing the car- crucial area and spur the motivation to be ica, digital innovation and edge automa- bon footprint that our customers generate able to leverage those technologies and tion helped us improve the efficiency of during their operations. During the pan- the data itself, and to make digital trans- artificial lift ESPs by more than 30% while demic, we accelerated the use of remote formation an enabler. reducing field crew well site visits by 97%. operations in all our drilling and logging Boosting production, extending pump activities, allowing the continuity of our WP: This may be the most exciting aspect life, increasing safety, and reducing carbon customers’ operations in a safe and reliable of the opportunity in front of us. Though footprint were remarkable outcomes and manner. We also realized, in the process, we are in the early days, the last year has a promising example of the value at stake. that this translated into a reduced carbon revealed the huge efficiency and perfor- We look forward to partnering with more footprint of our operations, a performance mance upside that digital can unlock. and more operators to unlock similar per- benefit ultimately shared with the opera- For us to continue in this direction formance gains. tors. We have an important mandate to and make the best of the opportunity, we collaborate with our customers and are need to keep embracing openness and a WO: How successful have digital committed to helping them deliver more collaborative mindset within the industry. transformation and data analytics resilient and sustainable energy solutions. In 2019, Schlumberger open-sourced the been in improving the efficiency of DELFI data ecosystem and contributed the average operator’s or service WO: How much room do you think it to The Open Group OSDU Forum to company’s operations? there is for digital transformation to harmonize information exchange and further affect/modify the average improve data flow across stakeholders. JLG: We have seen tangible results in operator’s or service company’s Partnerships are extremely important, not the operating efficiency and integrity of operations? only with our peers but also with digital our installations, and that’s true across technology providers and innovators. For the UKCS as a basin, Fig. 1. We have im- JLG: I believe there is still a lot of room for example, we recently introduced a global proved our operating efficiency, due to a digital transformation to help and increase cloud-based data solution, built with number of enablers, and one of them has our efficiency and improve our ways of Microsoft Azure, that is opening access to been the installation of so-called “smart working. There’s a lot to do from drilling data and AI, unlocking significant poten- rooms.” For more than five years now, they to logistics, and to the production opera- tial for productivity and performance gains have been in constant contact with the tions, themselves, as we seek to increase across all domains, Fig. 2. Such openness control rooms at the site itself, enabling the pace on emissions reductions, as well. and collaboration will enable us to acceler- us to support some of the decisions of the From our experience of digital transfor- ate innovation in the industry and bring to control room. The next step is data ana- mation over the past two years in the UK, scale the early gains we are witnessing. lytics, where I think the key challenge to I would say that when we look at our ob- reach its full value will be to put in place in jective in four- or five-years’ time, we see a WO: Do you have any estimates as

World Oil® / JUNE 2021 39 MANAGEMENT ISSUES: SPECIAL INTERVIEW

onboard and they will be increasingly Fig. 3. Schlumberger experts work closely with clients to help sustain, refine, and tune the solutions supporting global operations. Image: Schlumberger. operated from onshore. We already see a shift from some of the work and activities that used to be carried out onsite, we are now transferring those activities onshore and the vision is that this will be even more important in the coming years.

WP: Digital transformation is a continu- ous process, so it’s not a one or two-year task, but a journey that will take us well beyond the next ten years. How we adapt and grow will define our industry in the long run. We have an exciting opportunity ahead of us to shape a resilient industry, focused on creating sustainable value for many more decades, Fig. 3. The main chal- lenge will be to embrace the right mindset, and to prepare and equip our people. Everybody will be impacted by the way that we will work. People at the well site, people at the office, the petro-technical communities, everyone’s role will be to how much money the upstream scales up for all our affiliates with drilling transformed. We are very excited to train industry is pouring into digital operations. more people and entice new talent. We transformation on an annual basis? need to create an industry that is able to WP: I think that every company and every attract the new generation, who seek ex- WP: Most impressive, I think, is the po- operator is at a different level of maturity. posure to this level of digitalization, inno- tential value at stake from digitalization While it is very clear that pioneers will vation and sustainability. I believe that our for the industry, which the World Eco- realize the benefits of their digital invest- industry can offer this to them. nomic Forum, in a 2017 publication, es- ments first, other operators will also capi- REFERENCE timated at $1 trillion for the 2016-2025 talize on the lessons learned from these 1. https://oilandgasuk.co.uk/product/ukcs-data-digital- period. This is remarkable. early adopters to accelerate the rate of maturity-survey-report-2020/ The stakes, though, go beyond finan- this digital transformation. Even the most cial benefits. That same publication esti- skeptical players in the industry are now JEAN-LUC GUIZIOU joined TotalEnergies mates that we can reduce up to 1.3 billion starting to realize that the winners will be in 1988 as a research and development project manager in geophysics. He has had tonnes of CO2, save around 800 million those who embrace digital transformation several senior roles in the business, including gallons of water, and avoid spills equiva- as fast as possible. President of TotalEnergies E&P Canada in Calgary, President of TotalEnergies United lent to 230,000 barrels of oil. So, the digi- Arab Emirates in Abu Dhabi and later, Senior tal transformation is definitely attracting a WO: How important do you see Vice President, Subsidiaries Operations, at lot of interest—we really need to focus on digital transformation being to your TotalEnergies’ Corporate Finance. Mr. Guiziou company in the future, in the next joined TotalEnergies E&P UK in October 2017 this $1 trillion value opportunity and the as the Integration Project Leader for the associated environmental benefits. five to 10 years? merger with Maersk Oil UK. He was appointed Managing Director in May 2018. He is a graduate of the Ecole Nationale Supérieure WO: How much is the digital JLG: Well, there is no doubt that the digi- de Géologie de Nancy (1985) and Stanford transformation improving your tal transformation will be one of the key University (MSc, 1988). own company’s operations and enablers for the more global energy transi- WALLACE PESCARINI has more than 20 years efficiencies? tion that we are in. As a company, and as of leadership experience in the oil and gas an industry, I see the importance of the industry, working in various management and JLG: engineering positions in Latin America, North At TotalEnergies E&P UK, we have digital transformation as being significant. America, Europe, Africa, the Middle East and increased our operating efficiencies by We will get the value from the digital facto- Asia. He began his career at Schlumberger in 2% or 3%. We are generating value from ries that we are putting in place, in the dif- 1997, in Brazil. As President, Offshore Atlantic, Mr. Pescarini is responsible for Schlumberger’s simplification. For instance, our new daily ferent companies of the upstream sector. business in Europe, Africa, Latin America and drilling report has been replaced by a fully My belief is that when we have matured North America offshore. His global vision and digital template. We have also generated through the first cycle of developing tools leadership skills are combined with extensive worldwide industry experience to accelerate genuine value by accelerating our drilling for our engineers and our operations to be the transformation of the oilfield services operations in the UK over the past year- more efficient and simpler, we will scale- sector into a competitive and sustainable and-a-half and can now save seven to ten up the impact of the new ways of working. energy technology industry. He holds an MBA from Erasmus University in Rotterdam, days of drilling on some of the more ex- Our vision is that our installations, off- the Netherlands, and a bachelor’s degree in pensive HPHT wells. This consequently shore in particular, will have fewer people electrical engineering from UNIFEI in Brazil. Article copyright © 2021 by Gulf Publishing Company. All rights reserved. 40 JUNE 2021 / WorldOil.comNot to be distributed in electronic or printed form, or posted on a website, without express written permission of copyright holder.