Baker Hughes CEO on ‘Unsung Hero’ of the Energy Transition

Affordability, sustainability and security of supply: that’s the trilemma facing the energy industry as it navigates the energy transition.

Investment in digital technologies is key to driving the efficiency necessary for a successful energy transition—a concept emphasized by industry leaders at the Amazon Web Services (AWS) Energy Symposium on May 17.

“Efficiency is the unsung hero of the energy transition. And digital can play a key role in driving that efficiency,” Baker Hughes Chairman and CEO Lorenzo Simonelli said.

The International Energy Agency has stated that a 10% efficiency increase in oil and gas operations could reduce CO₂ emissions by 500,000 tons, he said.

“Now, that is significant,” he said. “And it’s with the capability of digital enablement.”

Digital enablement, he said, starts with measuring and analyzing the data. Actions can taken based on the interpreting information, and the process can be iterative, he said.

“It's often said that knowledge is power. I believe that's only a half truth. It is applied knowledge that is power, applying the knowledge that you can obtain through the digital enablement of operations to drive better efficiencies as we go forward,” Simonelli said.

But, he said, it will take a “mix of lots of different technologies,” including digital enablement to create efficiencies. Some of those will require upgrades or new capabilities, he added.

“It's often said that knowledge is power. I believe that's only a half truth. It is applied knowledge that is power. ”–Lorenzo Simonelli, Baker Hughes

“One thing that isn't going to change is the demand for energy,” he said. “How can we ensure that we can meet the energy trilemma of affordability, sustainability and security as we deploy all of this technology? Collaboration is key.”

From the ‘hamster wheel’ to the cloud

Baker Hughes has established a number of partnerships. One of those is with AWS and resulted in the Leucipa product, which can automate field production solutions on the cloud.

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Woodside Energy’s digital innovation journey with cloud computing started with a simple goal of reducing repetition of tedious tasks, said Daniel Kalms, executive vice president and chief technology officer at Woodside.

For many years, Woodside backed up its seismic data on tape every four years.

“After finishing backing up the seismic data, we had to start again,” he said. “We saw moving the storage of our seismic to the cloud was a way to avoid this hamster wheel activity that we did every four years. So we committed to that in 2015 and discontinued tape backups.”

The result was a significant reduction in the manual handling of data.

“We now have over 20 petabytes of seismic data stored in AWS,” he said. One petabyte is 1,000 terabytes.

The operator’s digital journey included other steps, including seismic processing in the cloud.

That “led to the breakthrough in our understanding of Scarborough,” a gas field offshore Australia, he said.

“We were able to interpret, visualize and model the reservoir, and we increased the resource from 7.3 Tcf to 11.1 Tcf of gas. Now that's a 52% increase,” he said, and it led to a final investment decision on the field.

In 2019, Woodside went “all in” on the cloud and moved all of its subsurface computing to the cloud, Kalms said.

Shell collaborated with AWS through the Open Subsurface Data Universe (OSDU) forum.

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Now that the OSDU exists, other oil and gas companies can put their data into AWS in a standardized way, said Jay Crotts, Shell’s CIO and executive vice president.

“Now all the applications that are being built by Baker Hughes or others can actually use that same data structure,” he said.

Ben Wilson, director of product and solutions, energy, at AWS called the OSDU forum a “major step forward for breaking down silos of data, proprietary data formats and schema.”

Shell is also using AWS for high-performance computing to improve efficiencies.

“With the partnership of Amazon, we can use burst capacity in the cloud and actually look at the earth better than we've ever done before. What does that do? It makes us more efficient. We drill in the right spots, we produce in the right spots, reducing our overall carbon footprint,” he said, noting it also is speeding up simulations.

Rather than spending weeks or months on each trial, Shell can now run simulates on Amazon’s high performance computing capacity and “produce better catalysts that make us more efficient in the way that we are producing our hydrogen, which is going to make hydrogen more affordable,” Crotts said.

Knowing when to geek out

And while the technology enables companies such as Shell to be more efficient, he said it’s not the critical success factor.

“Everyone of us here, everyone on the planet has the technology available. AWS provides it, and we can use it tomorrow. Then why are some of these successful and others are not? It starts with maybe the two bookends that's important for this: cooperation and collaboration,” he said.

And as much as he likes to geek out on the technology, Crotts said it’s vital to remember to tie the tech to the value the tech enables.

“You'll know we're successful when we celebrate the business outcome more than the technology we bring. Now that doesn't mean I don't love technology, but when we're all geeking out as the technology people, let's do it,” he said. “Let's make sure that we're focused on that outcome.”

Right now, he said, generative artificial intelligence (AI) is a huge buzzword.

“The challenge is that…[AI] will change the way the world operates. The problem is when will it change and how will it change?” Crotts said.

“A lot of people are comparing it to the early days of the internet,” he said.

While the internet has changed a lot in 30 years, he said, the change with generative AI is “happening about five times” as fast.

“Part of that is the accelerated compute [power] that's available in the cloud to enable this,” he said. “That transformation is going to affect many industries.”

Some people, he said, are simply avoiding generative AI out of fear.

“People should be thinking more about what it can do and err on the side of trying it out, than being afraid to use it,” he said. “Now is the time to give it a shot and say, ‘Hey, what could it do?’”