Developing a Cloud Strategy for E&P Companies
Cloud computing refers to the delivery of cloud computing services over the Internet. The technology makes it possible to build scalable services, provides universal access to data and applications, and contributes to significant cost reductions. These benefits have made the cloud increasingly popular with oil and gas companies.
According to a Microsoft customer story, Shell, for instance, has leveraged the power of the cloud to create a more streamlined and centralized solution for application development. This solution enables geophysicists, software engineers, QA specialists, and external vendors to collaborate on the same project from any location.
Consultancy firm Accenture refers to one of their clients, Hess Corporation, who expects to optimize costs by 40 percent by transferring workloads to a cloud solution and save 10 to 20 percent in labor costs through automation on a cloud management platform.
Considering the benefits inherent in cloud computing, developing a strategy for transitioning to the cloud becomes increasingly crucial for oil and gas companies. As the global research and advisory firm Gartner puts it: “If you have not developed a cloud-first strategy yet, you are likely falling behind your competitors.”
Developing a cloud strategy, however, is no easy task. This article aims to ease the transition and arm you with tips on how to get started on your cloud journey. If you are new to cloud computing, I suggest you read the article, A CIOs Guide to the Cloud Universe, first.
Focus on the Business Value of Cloud Computing
In their publication, What’s driving the Oil and Gas Market to Cloud?, consultancy firm Accenture notes that the successful journey to the cloud typically starts with a business case based on both a cost reduction component and a business value component.
The first relates to the potential for significantly reducing IT infrastructure costs with the cloud, while the latter relies on the potential for leveraging cloud-enabling capabilities such as advanced analytics and automation.
Cost reductions are a critical component of the journey to the cloud. But more weight should be added to the business value component of the cloud by using advanced analytics, artificial intelligence (AI), machine learning (ML), and automation.
In a survey from 2017, Accenture and Microsoft found that more and more oil and gas companies are migrating to the cloud to accelerate decision making and reduce time to oil and gas.
From a business continuity perspective, the cloud offers enterprises a means of keeping processes running and accessing vital systems in case of a crisis. When premises must shut down, or evacuation plans take effect, like during the Covid-19 pandemic, remote access to vital processes enables businesses to handle the situation satisfactorily.
Define a Roadmap for Your Cloud Journey
Two companies will never experience the same cloud journey. There are several strategic options on the journey to the cloud. Microsoft, for instance, has in their e-book, Enterprise Cloud Strategy, identified three typical stages of cloud migration: experimentation, migration, and transformation. Familiarizing yourself with these stages may ease the cloud migration process and help you develop a cloud strategy for your organization.
- Experimentation: At this first stage, two processes take place. The developers start making applications to establish knowledge of crucial application management in the cloud, how to develop, test, deploy, monitor, and maintain them. Concurrently the corporate and IT departments seek to investigate the possibilities of the cloud, seeing its potential to develop and improve products, services, and applications for the company.
- Migration: This stage involves the actual migration of the IT portfolio to the cloud. The migration phase requires cooperation and collaboration across several different enterprise functions – from technical and operational staff to the executive team, regulatory compliance staff, HR, and other relevant functions.
- Transformation: During this phase, selected applications are redesigned to harvest the true potential of the cloud.
Consultancy firm Accenture, on the other hand, suggests a four-step methodology when pivoting to the cloud:
- Strategy and analysis: Identify, deliver, and measure business impact by aligning technical delivery to business imperatives.
- Planning and design: Define and design the target state architecture, and create blueprints, patterns, sequences, and roadmaps.
- Transition and implementation: Manage projects to deliver expected business outcomes on time, within budget, and with controlled levels of risk.
- Execution, continuous improvement, and ongoing migrations: Manage the cloud environment while continuing to migrate applications, platforms, and infrastructure to the cloud.
Modernizing Applications: The 5 R’s
A critical part of any cloud strategy is to decide which applications to move to the cloud. In 2010, Gartner formulated five different strategies for migrating applications to the cloud, called “the five R’s”: rehost, refactor, revise, rebuild, and replace. Since then, Microsoft has expanded “the five R’s” based on their own experiences to
- Retire: Abandoning old applications that provide little value and are rarely used. Useful functionality of the legacy applications may be adopted into a consolidated, modern application in the cloud.
- Replace: Involves replacing a legacy application that provides some value with a cloud-ready, off-the-shelf application with a lower total cost of ownership.
- Retain, wrap, and expand: Relevant for applications that are valuable and have an acceptable level of total cost of ownership. These applications can be retained and fitted with a new “wrapper” to enhance and add functionality and gain additional value.
- Rehost: Involves keeping the original functionality of the application but move it to the cloud to save costs and ease the application management. Particularly suitable for applications that provide value but are costly to operate and manage.
- Re-envision: Applications that provide value but are difficult to move to the cloud can be re-envisioned and rebuilt in the cloud, with modern technology, architecture, and uses cases.
Identify Relevant Cloud-Based Platforms for E&P Companies
- Delfi Cognitive E&P Environment: The Delfi Cognitive E&P Environment is a cloud-based space that enables collaboration by connecting people, data, and software applications related to exploration, development, drilling, production, and midstream. As a mark of SLB, the platform makes it easy to move data to the cloud, facilitate next-gen application, and eliminate the need for high-performance equipment on-premise.
- iEnergy Cloud: The iEnergy Cloud is Halliburton and Landmark-operated platform that offers E&P tools and resources in the cloud. The platform is particularly suitable for E&P companies that want to leverage centralized solutions and reduce the need for investments in on-premise hardware.
- Cognite Data Fusion: Founded in 2016, Cognite Data Fusion is a platform that functions as a resource to transform industrial data into information and to create an ecosystem of industrial applications. Cognite Data Fusion is particularly suitable for centralizing production data and enables E&P companies to leverage artificial intelligence (AI) and machine learning (ML) capabilities through next-gen applications.
- Bluware: Bluware leverages cloud computing, AI, and ML for geophysical data, applications, and workflows. The platform enables end-users to quickly move data in and out of the cloud by transforming legacy application files into objects that are compatible with the cloud. The solution makes it possible to transfer data to the public cloud, enables next-gen applications on seismic data, and the possibility to leverage AI and ML.
- Open Group Open Subsurface Data Universe (OSDU®): The core principle of the OSDU® solution is to separate data from applications. This will be achieved by developing a common data platform with standard public APIs and to involve global cloud hosting vendors to build working implementations. Software vendors, oil companies, academia, and open community projects can develop software on the OSDU® data platform
Ensure Cloud Integration
E&P companies often rely on more than one cloud provider to tackle specific tasks and deploy several solutions from different vendors at the same time.
When these platforms are unable to communicate with each other, a new problem emerges.
The increasing use of data platforms that are unable to connect other creates information silos or cloud silos. Like any other information silo, cloud silos hamper growth and efficiency and lack synergy that may lead to duplicated work and missed business opportunities.
Cegal's cloud solution is called Cetegra, formerly known as GeoCloud. It's a vendor-agnostic, high-performance platform tailored to meet the challenging requirements of petro-technical workloads.
Cetegra facilitates a scalable workplace for the future, integrates with any vendor, and is adaptable to any end-user requirement. The platform enables true cross-border collaboration and global access to data and applications. Moreover, it provides a digitalization hub for data consolidation and workflow automation. Cetegra can integrate with and optimize existing IT solutions or tailor to a brand-new cloud strategy.
The benefits of the cloud are significant. But cloud migration is rarely a smooth ride. In many cases, it will be advantageous to leverage the experience of a partner that has worked with the cloud for several years and also knows the specific needs of the E&P industry. At Cegal, we are happy to help you develop and execute a cloud strategy for your company.
The cloud is capable of leveraging opportunities that traditional IT solutions cannot, including reducing capital expenditures and operational expenses, increasing security, and leveraging new tools, technologies, and solutions to improve operations.
Also, being in the midst of a crisis, the cloud's valuable contribution to business continuity should not be underestimated.
