18 Jun Oil and Gas Trade Show Leaves Me Wanting
I went to the Global Petroleum Show with high digital hopes, and came away pretty disappointed. The vast majority of suppliers to the industry are just not in the game.
The Global Petroleum Show
For readers outside of Alberta, the Global Petroleum Show is an annual trade show and industry gabfest held in Calgary, Alberta, in late spring. There’s good reasons for timing – it’s stopped snowing, the ground has thawed and the Canadian industry has largely retreated from the field under the onslaught of the spring’s harvest of black flies and mosquitos.
I hadn’t been to this event in several years as I had been living in Brisbane, so it was high time to check it out. The show is enormous – multiple football fields of booths and displays of downhole tools, valves, motors, pumps, pipe, safety gear, scaffolding, and everything in between. It takes a few hours just to walk the aisles (and I walked them all), let alone engage with any booth operators on their wares.
The show even includes an outdoor component where big iron holds court (or in this case, tarmac). Think heavy trucks, drill rigs, massive motors, live welding displays, cranes, mats, tanks, incinerators. Basically, everything you need to discover and then produce on-shore oil and gas.
Given my passion for helping oil and gas create and embrace a digital future, and since much innovation in the industry originates with suppliers to the industry, I was on a fruitless hunt for great examples of digital innovation.
Digital Innovation at the Show
Digital innovation has lowered costs and improved efficiency in industry after industry. It has already unlocked disruptive new business models in oil and gas. The IEA forecasts that digital solutions available today could raise asset utilisation rates by 10-15% and expand reserves by 5% (a big upside). Industry observers for the better part of 5 years have been pointing out how the oil and gas industry is well behind other sectors in digital innovation.
Finally, tucked away on the floor of the Round Up, the smallest pavilion that takes the form of a miniature Roman gladiator arena with tiered seating all around, I stumbled on the digital suppliers, furthest away from the front entrance. No single technology class offers as much upside to the industry as digital innovation, yet they’re given the smallest space at the back of the store.
I found some good stuff. One outfit offered a sea can (shipping container) that contained crypto mining computers. By converting waste gas at the well head into power, they create a new revenue stream for producers. Guild1 had a huge booth (as big as Saudi Aramco’s presence) on the role of blockchain in streamlining the world of royalties, land title and contracts. Hydip from Australia has introduced their tank gauge and cloud-based monitoring solution to the North American market. Arundo with their artificial intelligence solution had a corner unit.
A single trade show may not be a reliable way to take the digital measure of an industry. On the other hand, this is the biggest show of its kind in Canada, held in the largest oil and gas city, and attracts attendees from around the planet. It should be a reliable barometer of the state of the industry.
Few purely digital innovations
I was expecting to see much more floor space given over to digital innovation. The Round Up was cozy and pleasant, but frankly, ignoring the network technology and wireless shops, there were only a handful of booths dedicated to true digital innovation. If you were at all digital, you really stood out.
Near zero digital content elsewhere
At heart, the GPS is clearly a hardware show, presenting booth after booth of dumb iron, with suppliers eager to share the cleverness of their latest metal creations in the pursuit of petroleum. There’s a need in the industry for sturdy metal objects and things made of cement. But I struggled to find anyone who had given thought to how their hardware played in a digital world.
There was near zero presence of wireless sensors and how all that iron would survive in a world of the internet of things. Very little signage and poster space spoke to cloud solutions, big data analytics and blockchain-based trust. I found few, if any, displays of smart hardware and how it plugged into cloud computing, analytics and machine learning.
There were a couple of aerial drone players, but not the super serious ones from Lockheed Martin and Boeing (the kind of drones that fly in all conditions, at night, near silent, over long distance, carrying big payload, and sporting names like Predator and Stealth). I couldn’t find any other robots or autonomous technologies.
A conversation with one of the booth reps, a young woman, about why I wasn’t seeing any digital innovation on display summarised the situation. She sighed, and said that she had been trying to convince her company to invest in digital sensors, but with no success. We both agreed that digital smarts on her company’s kit would unlock new operational and commercial business models.
It’s clear to me that the suppliers to the industry are still pretty committed to some outdated orthodoxies about the industry:
- That only humans play a role in supervising equipment
- That autonomous gear doesn’t cut it in the sector
- That the internet of things does not apply to oil and gas
This is really tone deaf to the messaging coming from the top of the industry on the role of digital innovation and profoundly risky to the future of these companies given how fast digital is moving.
Advice to Suppliers
Alberta and Western Canada are host to hundreds of suppliers to the oil and gas industry, but as a group, they are not taking part in the digital wave. This is a shame because Canada has the educated workforce, the technology infrastructure and the penetration of digital in place to exploit. The universities and community colleges are already offering to train up the workforce, and youth are looking for inspiring new leaders with different ideas about the future.
Here’s my take aways from a few hours spent at the Show.
If you’re a pure digital play to the industry, think about taking a booth at one of these trade shows. Believe me, you will not have a lot of competition, at least for the next couple of years, and you will be a magnet for young talent.
If you’re on the Board of an incumbent supplier to the industry, you should be asking your management team what are they doing about digital innovation. The incumbents are not responding to the rising digital wave of change. Given how behind everyone else appears to be, you have a tremendous opportunity to move into a category of one by incorporating digital innovations into your offerings.
If you’re in management, seek out the more youthful of your company and ask them how they think digital innovation could transform your wares. Every company has its share of digital experts – they’re probably younger, newer hires, and have grown up with a mobile phone in their hands. They may well be found working everywhere but in IT.
Management and Boards should spend some time getting familiar with the key technologies that will define the future of the industry. These include cloud computing, the internet of things, blockchain, artificial intelligence and its offshoots (advanced analytics and machine learning), digital reality, autonomous technology and 3D printing. Individually and in combinations, these technologies are upsetting other industries that bear strong similarities to oil and gas.
Managers should be wary of the start ups. They’re not encumbered with legacy ideas about the role of people in the business model, their technologies are more clean slate, and they are fast moving. Broaden your market sensing to spend more time in the startup world of incubators, accelerators and venture capital.
Finally, if you’re an employee, ask your management what their stance is towards digital. If you get a vague and non-committal response, if you don’t see investments in digital innovation, if you don’t hear about innovation teams forming, ask yourself whether your career has a plausible future with no digital in it.Share this ...