The petroleum industry sees vast potential for expanding its e-business activity, but shopping on the Internet isn’t yet part of the vision.
In the wake of the dot-com crash, the industry’s sobered new view of e-business “is not about hype. It’s not about over-inflated expectations,” Greg MacGillivray told the Convergence 2002 information technologies conference in Calgary last week.
In oil and gas exploration and production, for example, the industry has to contend with too many unpredictable factors to rely on purchasing from web-based catalogues, said MacGillivray, manager of business ventures at Suncor Energy Inc.
Project unknowns can range from the size and pressure of a natural gas reservoir, to public concerns over sour-gas wells and site-specific environmental regulations for new oilsands developments.
That means oil and gas companies typically have to buy complex equipment and hire highly specialized services “on the fly,” depending on how each project evolves, MacGillivray said.
Moreover, such equipment and services often have to be delivered to remote sites as quickly as possible to save on project costs.
The list of standardized products typically offered in digitized catalogues by web-based vendors may not be exactly what’s required, be in stock, or even be manufactured anymore, MacGillivray said.
Exploration and production departments “care all about price and deliverability performance,” not about having a personalized “customer experience” in a virtual shopping mall, he said.
Brad Gaulin, founder of myMarketWorks Inc. says his Calgary company, in partnership with the Petroleum Technology Alliance of Canada and the law firm Gowlings, is working to improve the Internet marketplace for the oil and gas industry.
The partners are identifying e-business services and solutions that have good potential to improve the industry’s competitiveness and reduce costs.
These many and varied offerings are presented in a matrix, a format organized around specific industry activities such as geophysics, drilling, well completion and others. The matrix enables oil and gas companies to see exactly who is offering what service in specific areas and at what price.
E-business applications are expected to greatly improve the management of enormous amounts of information handled by the industry, says Robert Austin, co-chair of the e-business committee for the Canadian Association of Petroleum Producers (CAPP).
The CAPP committee is working with the provincial government to create an electronic registry of information for Alberta’s entire petroleum industry. The registry’s launch is scheduled for Oct. 1.
CAPP’s interest is to eliminate what industry sees as the unnecessary duplication of information that flows between oil and gas companies and various government regulators, said Austin, director of information systems at Anadarko Canada Corp.
The petroleum registry would become the single, authoritative source of volumetric and infrastructure data on the industry, says John Finlaison, manager of the project for the provincial Department of Energy.
The registry will consist of a shared, interactive database accessible via the Internet by government, industry and the public.
Industry’s biggest concern is ensuring that confidential areas of the database are securely protected against industrial espionage or saboteurs. A company doesn’t want its secret geological data on a promising exploration well, for example, to fall into a competitor’s hands.
Finlaison said the registry will be extremely well protected, using multiple electronic firewalls, secret passwords and encrypted data.
Interest in e-business and other IT areas remains high, judging by Convergence 2002. Organizers say the conference and technology show had a record 4,000 exhibitors and delegates, the highest turnout in its six-year history and up from about 3,500 last year.
