The oil and gas industry, like many others, is taking advantage of advances in information technology (IT) to improve business performance through systems standardization, integration and automation.

These efforts help realize both efficiency (e.g., reductions in process time or cost) and effectiveness gains (e.g., optimizing recovery or adding reserves) and also help address broad industry challenges such as developing more technologically demanding resources, adapting to changing personnel demographics and addressing the proliferation of high-frequency data.

The purpose of this article is to share ExxonMobil’s approach and progress in this area.

The opportunity
Figure 1 depicts the upstream-wide systems integration opportunity that ExxonMobil is

Figure 1. The overlapping elliptical areas represent broad domains of activities within a large integrated oil and gas company and its affiliate family. (Images courtesy of ExxonMobil)
pursuing. The three elliptical areas represent broad domains of activities within a large integrated oil and gas company and its affiliate family. Subsurface focus is on understanding and managing reservoirs and makes use of advanced technologies for subsurface imaging and modeling, drilling, and producing oil and gas. Surface activities involve the construction and management of the facilities required to safely gather the produced hydrocarbons. Here safety and process control are key considerations. The business domain represents the back-office systems required to support the many other functions associated with the efficient running of a large multinational company and its affiliates.

Managing a field or asset is a long-term undertaking which may span decades. Lifecycle activities will range from exploration through construction of facilities to long-term production and field management. At ExxonMobil the primary responsibility for managing the asset will transition through separate upstream companies, each charged with delivering functionally excellent results. As represented by the horizontal arrow in Figure 1, there is a need for IT systems to not just support the activities associated with the current phase of the lifecycle but to provide for seamless transition across the upstream companies as the asset matures.
The vertical arrow represents another dimension of the integration opportunity. Each of the domains will have many internal processes which can benefit from IT systems integration; however, there is also a need for integration across the domains, where business value exists, as shown by the overlapping areas.

Integration of subsurface and surface activities holds potential for effectiveness gains — more oil and gas produced. This is an area of significant industry attention as evidenced by digital oilfield initiatives. Integration between surface and business domains addresses a different opportunity. Here the focus is on efficiency and cost reduction.

Approach and progress
The integration opportunity described above is complex, and the strategy must satisfy both the internal needs of functional groups and the broader, longer-term needs for integration across functions and throughout the lifecycle of an asset. Global standardization efforts are underway at ExxonMobil in all three areas represented by the ellipses. Subsurface work processes use a standard Upstream Technical Computing System (UTCS), which was implemented by affiliates globally after Exxon and Mobil merged in 2000. Surface operations use a standard “suitcase” of applications, implemented in all green fields and retrofitted to brown fields based upon business justification. Business systems are being standardized around global implementation of SAP.

The approach to broader integration is systematic and incremental as shown in Figure 2. The hierarchy of system components builds successive layers of standardization and integration, beginning with foundational infrastructure and moving up to more process-oriented initiatives. Business and IT strategies must be aligned throughout; however, business engagement becomes more critical as one moves up the layers.

Standardization of corporate technical databases, together with clean-up, consolidation and implementation of data quality assurance processes, requires business ownership and accountability. Once reliable access to quality data has been established, standard work processes can be implemented, integrating input from various technical disciplines and automating the process to capture efficiencies and effectiveness gains.

The above approach builds on established strengths and a long-term view of asset
Figure 2. A hierarchy of system components builds successive layers of standard-
ization and integration.
management. This has enabled ExxonMobil to consistently deliver results, operational excellence and a continual focus on cost management. The strategy delivers the necessary balance between global foundational IT standards which facilitate integration across companies where needed and work process-oriented solutions to meet the internal needs of the upstream functional organizations.

Critical success factors
The systematic execution of the strategy described above across a multinational and multifunctional family of affiliated companies is a significant undertaking. Prior to the merger, both Exxon and Mobil had implemented standardization strategies for upstream technical computing. The merger imposed an additional level of urgency to the need for internal standards and provided an opportunity to learn from these prior efforts. The deployment of the initial standard technical computing system took approximately 2 years and resulted in a US $100 million reduction in annual costs. This gives some indication of the benefits to be gained; however, effecting such change requires a disciplined approach. Several factors are critical to success.

Business-driven vision and IT partnership. A shared vision and roadmap between business and IT management is critical to ensure that all parties are aligned and committed to achieving a common vision of what the future work environment looks like, when it can be realized and at what cost. Due to ExxonMobil’s functional structure, multi-disciplinary and cross-company teams are typically chartered to develop this shared vision and roadmap and document the business case for change. Proposed solutions need to be scalable to ensure the most cost-effective approach to managing a diverse asset base.

General interest oversight. Functional organizations are purposely focused on their objectives for an asset while it is under the stewardship of that company. Thus, a general interest perspective is required to ensure that the most cost-effective performance is achieved over an asset’s lifecycle. Ensuring this general interest perspective requires different approaches for different levels of the integration hierarchy, shown in Figure 2. At the foundational IT level, corporate-wide IT service line owners are responsible for stewarding global standards. At the technical application and data levels, business owners are responsible for identifying and justifying improvements, usually through multicompany representation. At the work process level, business process owners are responsible for identifying and justifying improvements, usually through multidisciplinary and multicompany steering teams. Finally, at the strategic level, senior business executive oversight exists through an IT governance board.

Program/project management. Effective project management is critical. All IT projects greater than 6 work months in effort are required to use an ExxonMobil gated project management system that includes a business gatekeeper to ensure business engagement and support. As systems evolve and become more complex, groups of projects need to be managed as a program of work to ensure dependencies are understood and managed. Projects focused on standardizing, integrating and automating work processes require business leadership with a supporting IT subproject.

Provider strategies/partnerships. ExxonMobil’s work environment must integrate commercial IT products and internal proprietary technologies and applications. A well-defined provider strategy is required to ensure the optimum balance between vendor and internally developed components.

Commodity or industry-developed solutions are used where the technology is broadly available and focus is on total ownership cost. Distinguishing elements are a mix of internally and externally developed tools that provide competitive advantage. In the case of externally developed tools the focus is on strategic relationships with key vendors which provide access to application programmer interfaces (APIs) and involvement in deciding on future functionality. Internally developed applications deliver proprietary ExxonMobil technology.
Management of organizational change. Key to the success of any work environment initiative is the ability to help the organization make the necessary behavioral changes to realize full value from these initiatives. The business must again play a key role in identifying and managing these changes. There are many published methodologies to address change management. The key is recognizing the need to do so and finding an approach that works within one’s organization.

Conclusion
ExxonMobil’s global functional organization paired with commitment and the ability of ExxonMobil affiliates to execute global standards provide a unique framework upon which to integrate and leverage standard work processes, tools and technology across its upstream
companies and disciplines. This framework allows ExxonMobil’s upstream to achieve competitive advantage through systems standardization, integration and automation. Significant progress has been and is being made in upstream business, surface and subsurface systems. Integration across these domains, where business value exists, is underway, with enterprise-wide integration a logical next step.

Editor’s Note: Exxon Mobil Corporation has numerous subsidiaries, many with names that include ExxonMobil, Exxon, Esso and Mobil. For convenience and simplicity in this article, the parent company and its subsidiaries may be referenced separately or collectively as “ExxonMobil.” Abbreviated references describing global or regional operational organizations and global or regional business lines are also sometimes used for convenience and simplicity. Nothing in this article is intended to override the corporate separateness of these separate legal entities. Working relationships discussed in this article do not necessarily represent a reporting connection but may reflect a functional guidance stewardship or service relationship.