WEBVTT - Oil Majors Going Digital: Personality Test 0:00:00.040 --> 0:00:01.960 Hi, everybody. So a few months ago, I was in 0:00:01.960 --> 0:00:03.640 a class at my gym and a friend of mine 0:00:03.640 --> 0:00:05.240 comes up to me and says, Hey, have you heard 0:00:05.240 --> 0:00:08.680 a BP launch Pad? I'm getting recruited by them. I hadn't, 0:00:08.720 --> 0:00:10.360 so I texted another friend of mine who works at 0:00:10.400 --> 0:00:14.040 BP to find out if he'd heard about it. No, nothing, anyway. 0:00:14.080 --> 0:00:17.000 Fast forward three months later, BP launch Pad has made 0:00:17.000 --> 0:00:19.520 its debut and is billing itself as a quote scale 0:00:19.560 --> 0:00:22.720 up factory, taking innovations made in BP, putting them in 0:00:22.840 --> 0:00:26.320 this incubator to become standalone businesses and or business units 0:00:26.320 --> 0:00:29.080 of BP. The first to come out of launch Pad 0:00:29.160 --> 0:00:31.680 is a business called LIT that's l y t t. 0:00:32.120 --> 0:00:35.600 Apparently LIT stands for listening Norwegian. They describe it as 0:00:35.640 --> 0:00:38.560 sort of a Shazam for boreholes, listening down the well 0:00:38.680 --> 0:00:42.400 to identify conditions and potential problems. The strategy of going 0:00:42.440 --> 0:00:45.880 after technologies to optimize operations is not unique to b P. 0:00:46.159 --> 0:00:49.040 It's definitely not alone in this. Most, if not all, 0:00:49.120 --> 0:00:52.000 oil majors are going all in on digital technologies to 0:00:52.080 --> 0:00:56.000 optimize operations and keep costs down. Exactly where they focus 0:00:56.040 --> 0:00:58.280 their attention and strategy seems to be influenced by the 0:00:58.320 --> 0:01:00.960 personalities of the companies them else or at least the 0:01:00.960 --> 0:01:03.640 exacts in the companies. What do I mean by that? Well, 0:01:03.720 --> 0:01:06.320 we brought in two BENF analysts to help us unpack that. 0:01:06.520 --> 0:01:08.920 We've got Claire Curry, who leads benfs coverage of all 0:01:08.959 --> 0:01:11.640 things digital, along with Hannah Davenroy, who wrote the report 0:01:11.680 --> 0:01:14.840 we're gonna talk about today, Digitalization Strategies of Oil Majors, 0:01:14.959 --> 0:01:17.839 published on June nineteen. BEANEF clients can find this report 0:01:17.840 --> 0:01:20.039 by a quick search on benf dot com, the BENF 0:01:20.040 --> 0:01:22.720 Mobile app, or benf Go on terminal. Please note that 0:01:22.760 --> 0:01:24.960 BENF does not provide investment or strategy advice, and you 0:01:25.000 --> 0:01:26.640 can hear the full disclaimer at the end of the show. 0:01:26.760 --> 0:01:28.960 I'm Mark Taylor, head of product for BENF, and you're 0:01:28.959 --> 0:01:34.920 listening to switch down the BENF podcast. Claire, Hannah, Welcome, Hi, 0:01:35.120 --> 0:01:36.920 Hi Mark, thanks for coming in. Thanks so much for 0:01:36.959 --> 0:01:38.440 having us today. When I was reading this, I was 0:01:38.480 --> 0:01:40.679 thinking why, you know, like, why does an oil company 0:01:40.680 --> 0:01:43.160 want to be a tech company? Should we just start there? Hannah? 0:01:43.160 --> 0:01:45.160 How about you sure we can start there? I think 0:01:45.280 --> 0:01:49.720 oil companies are seeing the value of digital technologies in 0:01:49.800 --> 0:01:53.360 spaces like consumer but there's a lot of disruption to 0:01:53.400 --> 0:01:58.080 their core business also, So you see oil companies diversifying 0:01:58.200 --> 0:02:02.320 into the power sector, and you see them wanting to 0:02:02.360 --> 0:02:06.000 shrink their cost of operating their core business. And one 0:02:06.000 --> 0:02:10.000 way that they're achieving this efficiency is by applying digital 0:02:10.000 --> 0:02:14.480 technologies to track data across their business operations. So an 0:02:14.480 --> 0:02:18.679 oil company will see places for improvement in in their 0:02:18.720 --> 0:02:22.079 business and think that the collection of data through sensors, 0:02:22.080 --> 0:02:26.040 through comms networks, and through large aggregating platforms like cloud 0:02:26.040 --> 0:02:30.680 computing will actually enable them to make better business decisions 0:02:30.760 --> 0:02:35.480 about how to allocate their capital and how to better 0:02:35.560 --> 0:02:38.640 manage their their operating costs. Does it seem like it's working. 0:02:38.840 --> 0:02:41.520 It's hard to say. I think oil companies are very 0:02:41.600 --> 0:02:45.119 much in the early stage of scaling digital projects from 0:02:45.400 --> 0:02:49.640 proof of concept or pilot projects to their operations across 0:02:50.000 --> 0:02:54.600 their enterprise um and I can't imagine it's a clean transition. No, 0:02:54.880 --> 0:02:57.720 especially since you have to remember that oil majors have 0:02:57.880 --> 0:03:01.240 hundreds of thousands of employees across many many countries, and 0:03:01.280 --> 0:03:04.840 so coordinating these efforts on a culture level as well 0:03:04.880 --> 0:03:08.200 as sort of a business organization level, it's quite difficult. 0:03:08.440 --> 0:03:09.840 So we see a lot of oil companies that are 0:03:09.840 --> 0:03:12.840 actually setting up new departments and teams both within their 0:03:12.840 --> 0:03:15.920 core business but also in their venture capital arms to 0:03:16.120 --> 0:03:20.880 encourage collaboration on this on on these digital technology projects 0:03:21.320 --> 0:03:26.040 UM across different types of their their their employee groups. 0:03:26.160 --> 0:03:28.000 Is this more of a venture play for these oil 0:03:28.040 --> 0:03:30.000 companies now or is it part of their core strategy. 0:03:30.040 --> 0:03:32.040 It's very much part of their core strategy. We check 0:03:32.400 --> 0:03:36.160 how oil companies make their their venture investments, and in 0:03:36.200 --> 0:03:38.920 a lot of cases, especially with the European oil majors 0:03:39.320 --> 0:03:42.160 like BP and Shell, a lot of their focus has 0:03:42.160 --> 0:03:46.760 been on on diversifying into power assets. While they do 0:03:46.920 --> 0:03:53.480 make pretty substantial investments into digital startups, it seems like 0:03:54.240 --> 0:03:58.240 this is often to access the technology UM for for 0:03:58.320 --> 0:04:02.920 pilot projects and then how up these businesses have access 0:04:02.960 --> 0:04:06.600 to the domain knowledge, the oil assets, how the business 0:04:06.600 --> 0:04:09.200 operates UM in order to give them a better understanding 0:04:09.240 --> 0:04:12.640 of the industry. Innovation is really hard. You look at 0:04:12.840 --> 0:04:16.560 Google right innovative tech company. They really struggle to spin 0:04:16.600 --> 0:04:19.680 out startups and spin out new technologies that really work. 0:04:19.720 --> 0:04:21.800 They've had a series of very public failures of just 0:04:21.920 --> 0:04:25.200 getting innovation and new tech right you think about like 0:04:25.400 --> 0:04:27.960 X on VP Shell they have hundreds of thousand employees 0:04:27.960 --> 0:04:31.120 are often lifers. Oil companies are very siloed, so you 0:04:31.200 --> 0:04:33.719 have the I T team does it T the guys 0:04:33.720 --> 0:04:35.240 on the oil rigs or on oil rig for a 0:04:35.320 --> 0:04:38.320 month they don't speak. And what companies that Hannah has 0:04:38.320 --> 0:04:41.200 been writing about, like Equanore so in Um kind of 0:04:41.240 --> 0:04:43.720 the North Sea, have been trying to get those guys 0:04:43.720 --> 0:04:47.560 on the oil rig to become I people. And they're 0:04:47.600 --> 0:04:49.920 doing sprints, They're doing scrums, are things that like your 0:04:49.960 --> 0:04:53.120 product team knows well. They're beginning to spin out apps 0:04:53.440 --> 0:04:56.120 to put onto this cloud platform they've built, and it's 0:04:56.160 --> 0:04:59.240 the operations guys doing it, and I T is kind 0:04:59.279 --> 0:05:02.000 of beginning talk to them and support them. So it's 0:05:02.000 --> 0:05:04.120 actually really cool. It sounds slow and it's hard to 0:05:04.120 --> 0:05:06.320 measure benefits, but these are companies that are the biggest 0:05:06.320 --> 0:05:08.920 in the world, often the slowest, most old fashioned, and 0:05:08.920 --> 0:05:12.400 they're actually doing some really interesting innovative things. It's got 0:05:12.480 --> 0:05:13.840 to be so hard. It's got to be so hard, 0:05:13.880 --> 0:05:17.080 because I find communication and getting adoption of new tech 0:05:17.200 --> 0:05:19.719 just in our small area of Bloomberg is hard. I 0:05:19.760 --> 0:05:22.080 can't imagine it could be any type of easy on oil, 0:05:22.120 --> 0:05:23.400 you know, with all these guys on the oil rig, 0:05:23.520 --> 0:05:26.279 especially because they have legacy systems. Right some oil majors 0:05:26.560 --> 0:05:29.839 will leave unnamed, you know, have one or two partners 0:05:29.880 --> 0:05:35.000 they do everything with. And these traditional enterprise software companies 0:05:35.080 --> 0:05:39.720 are not innovating around digitalization IoT AI, and so if 0:05:39.760 --> 0:05:41.680 you're a big oil major, what do you do? You 0:05:41.680 --> 0:05:44.800 have this multimillion dollar contract with a big RP company 0:05:44.800 --> 0:05:46.560 that served you well, but they're not doing what you 0:05:46.560 --> 0:05:48.200 want to do? Do you rip them out? If you 0:05:48.279 --> 0:05:51.280 do that, that's huge. I don't know how you do that. 0:05:51.320 --> 0:05:54.680 I don't know how a company really changes so significantly 0:05:54.720 --> 0:05:56.360 their partnerships, which is kind of what some of these 0:05:56.360 --> 0:05:59.880 guys are thinking about doing a slow breakup I know, yeah, 0:06:00.160 --> 0:06:02.360 and hiring to write I mean then they no one's 0:06:02.400 --> 0:06:04.120 doing this. How many companies are trying to hire a 0:06:04.200 --> 0:06:07.240 data scientists right now? If your data scientists you want 0:06:07.240 --> 0:06:09.920 to like a Google or Exon in Texas, well, that's 0:06:09.960 --> 0:06:11.960 like different. Maybe that's an easy joy to make, but 0:06:11.960 --> 0:06:13.919 it means that it's hard to hire the right people, 0:06:14.040 --> 0:06:16.840 the right talent. I think that these oil majors struggle too, 0:06:17.120 --> 0:06:20.960 is making sure that they are retaining the technology and 0:06:21.000 --> 0:06:24.200 talent in house. So you hire people that that may 0:06:24.240 --> 0:06:27.520 eventually leave, but you want to make sure that the 0:06:27.560 --> 0:06:30.239 people who are working on these projects will be able 0:06:30.279 --> 0:06:34.640 to sustain the scaling of the technology to completion. So, 0:06:35.160 --> 0:06:39.359 for example, BP, as Claire mentioned, has an interesting approach 0:06:39.400 --> 0:06:43.320 to this. They have set up an internal business group 0:06:43.360 --> 0:06:47.239 called BP launch Pad and BP Launch Pads entire goal 0:06:47.880 --> 0:06:51.920 is to hire small teams both externally and internally, to 0:06:52.080 --> 0:06:56.440 take promising technology and scale it across the company, as 0:06:56.480 --> 0:06:59.520 well as start to commercialize this technology and sell it 0:06:59.560 --> 0:07:02.400 to its years. Which is an interesting approach because you 0:07:02.480 --> 0:07:07.080 see oil companies that are very protective of their intellectual 0:07:07.080 --> 0:07:09.359 property and of the data that they collect and what 0:07:09.400 --> 0:07:12.280 they end up doing with that data. Obviously, if you 0:07:12.360 --> 0:07:16.800 are able to achieve big efficiency games through these digital projects, 0:07:16.880 --> 0:07:19.520 that is very valuable to your business and you might 0:07:19.520 --> 0:07:21.680 not want to share that with your peers. But we 0:07:21.760 --> 0:07:24.960 also see that commercializing technology is a way to scale 0:07:25.000 --> 0:07:27.840 it across across the business. So is their goal in 0:07:27.880 --> 0:07:30.920 sharing with their peers getting better data to make their 0:07:31.040 --> 0:07:34.120 themselves more efficient or is it just simply a revenue 0:07:34.160 --> 0:07:37.240 stream a lot of its um marketing incomes. I think 0:07:37.440 --> 0:07:39.560 maybe this is be being cynical. I think a lot 0:07:39.560 --> 0:07:41.360 of this stuff is if you're a big oil major, 0:07:42.080 --> 0:07:44.160 there's a lot of disruption. As Hannah said, you're dealing 0:07:44.200 --> 0:07:45.920 with that. He might go into power. You're dealing with it. 0:07:46.040 --> 0:07:49.120 Maybe the threat of electric vehicles with regulation emissions and 0:07:49.120 --> 0:07:51.400 so forth. A lot of the really big companies. I 0:07:51.400 --> 0:07:53.960 think you're thinking about it like this is great pr 0:07:54.200 --> 0:07:57.560 We are doing something new, innovative. We're using AI. Every 0:07:57.600 --> 0:08:00.600 partnership we announced with Google gets tons of hits. We 0:08:00.680 --> 0:08:03.480 love talking about this at conferences. Our CEO now can 0:08:03.520 --> 0:08:05.760 go and talk about this new thing we're doing, and 0:08:05.800 --> 0:08:08.600 it gives us a view of it just makes people 0:08:08.680 --> 0:08:11.520 feel like we're the reasonally new and even innovative, and 0:08:11.560 --> 0:08:14.120 if it helps to reduce safety concerns, right, which a 0:08:14.120 --> 0:08:15.760 lot of this stuff is about safety of the minimum 0:08:15.760 --> 0:08:17.400 and who work for them. A lot of it's about 0:08:17.400 --> 0:08:20.480 CEO two emissions and tracking that better. It's about completing 0:08:20.520 --> 0:08:23.800 wells faster, which is an environmental bonus. So that's my 0:08:23.960 --> 0:08:27.440 cynical opinion. I think Hannah would probably a bit more 0:08:27.680 --> 0:08:29.640 positive about their views, but I think I mean, I 0:08:29.640 --> 0:08:31.520 guess you wrote about it. Well, it sounds to me 0:08:31.600 --> 0:08:35.160 like it's also definitely revenue streams, maybe marketing within paer 0:08:35.200 --> 0:08:38.800 groups in a way to engage more with customers who 0:08:38.880 --> 0:08:42.240 are using your downstream products. So we see a lot 0:08:42.320 --> 0:08:46.439 of the outward facing technology that oil majors are developing 0:08:46.600 --> 0:08:48.680 in the form of mobile apps that allow them to 0:08:48.840 --> 0:08:52.319 communicate better with their customers, to track retail sales at 0:08:52.360 --> 0:08:56.560 their at their petrol stations, um and that type of 0:08:57.000 --> 0:09:01.360 data collection and point of communicytion with their customers is 0:09:01.400 --> 0:09:04.400 something that they see as as very valuable both consumers 0:09:04.400 --> 0:09:06.920 like you or I who would drive the drive our 0:09:06.960 --> 0:09:11.560 cars to a gas station me neither actually, or they're 0:09:11.600 --> 0:09:15.839 they're larger commercial customers, like in like in maritime applications. 0:09:16.160 --> 0:09:20.120 So another example of this is Shell has recently spun 0:09:20.200 --> 0:09:24.040 out an application for its maritime customers called Acuport that 0:09:24.200 --> 0:09:28.679 forecasts lubricant needs for ships entering and exiting ports so 0:09:28.720 --> 0:09:31.360 that they can better better organize their supply chain to 0:09:31.440 --> 0:09:34.080 meet the needs of their customers. Where the customers are 0:09:34.120 --> 0:09:36.360 and when they need that lubricant, so'll be waiting for 0:09:36.400 --> 0:09:41.760 them when they when they dock exactly pretty cool. So 0:09:41.800 --> 0:09:44.240 if the oil companies can become tech companies, why is 0:09:44.280 --> 0:09:48.280 this not spreading into other areas like utilities, which sort 0:09:48.320 --> 0:09:50.960 of put that out. I think my gut is utilities 0:09:51.040 --> 0:09:54.760 days themselves tech fans. I mean Portugaist the oil sector. 0:09:55.160 --> 0:09:57.560 The oil companies were technology companies in sort of about 0:09:57.559 --> 0:10:00.920 a decade ago. Due to I am Gen oil press 0:10:00.960 --> 0:10:04.160 crashes and consolidation, a lot of them basically said, okay, 0:10:04.280 --> 0:10:06.160 we're not going to own a tech we just want 0:10:06.200 --> 0:10:09.360 Baker Hughes or Haliber not Smerdy to own this for us. 0:10:09.400 --> 0:10:11.719 So now a lot of them actually really they own 0:10:11.760 --> 0:10:14.079 the oil field and they have employees and they kind 0:10:14.080 --> 0:10:15.960 of have the name of whatever it is. But actually 0:10:16.080 --> 0:10:18.680 the technology of the exploration and the digging up of 0:10:18.720 --> 0:10:22.000 the commodity is actually on the oil field services companies. 0:10:22.040 --> 0:10:23.880 So I think a lot of these big oil majors 0:10:23.880 --> 0:10:26.200 still see them all as tech firms because they were historically, 0:10:26.240 --> 0:10:28.120 and they're now not so much. They're more asset owners 0:10:28.160 --> 0:10:30.960 now and traders. I mean Shell. Most of Shell's business 0:10:31.000 --> 0:10:35.079 is now selling stuff. It's not exploring. It's not any technology. 0:10:35.120 --> 0:10:37.680 It's really transporting it to a gas station or selling 0:10:37.720 --> 0:10:40.480 to shipping companies, and so they see those tech firms. 0:10:40.520 --> 0:10:42.760 A lot of them I think have doted scientists anyway, 0:10:42.760 --> 0:10:44.920 because they still like the idea of doing kind of 0:10:44.960 --> 0:10:48.120 geoscience are stuff. Utilities are small at businesses. If your 0:10:48.200 --> 0:10:50.440 utility that has twenty thousand employees, you're not gonna as 0:10:50.440 --> 0:10:53.000 opposed to a hundred thousand employees, You're probably not going 0:10:53.040 --> 0:10:56.520 to be thinking about this. Also, utilities outsourced so much. 0:10:56.600 --> 0:10:59.160 I mean, they really don't mean I don't want to 0:10:59.200 --> 0:11:01.520 diss them. They I don't think really like a grid 0:11:01.520 --> 0:11:05.480 owner necessarily knows as much as like a Schneider Electric 0:11:05.559 --> 0:11:07.840 might do about their grid. And I'll give a little 0:11:07.880 --> 0:11:10.880 bit of a different perspective. I think oil companies also 0:11:11.080 --> 0:11:15.040 have experience working with multiple partners at the same time. 0:11:15.320 --> 0:11:18.079 So if you're doing an offshore project, you might have 0:11:18.480 --> 0:11:21.640 fifty to a hundred different companies that are working with 0:11:21.679 --> 0:11:24.559 you on the execution of that project, everything from food 0:11:24.559 --> 0:11:29.479 services to the technology firm that's providing your underwater vehicle services. 0:11:29.559 --> 0:11:33.520 But I think organizing all of these companies to orchestrate 0:11:33.520 --> 0:11:36.760 a large project is something that oil companies have a 0:11:36.800 --> 0:11:40.640 big advantage here, and and utilities may catch up in 0:11:40.679 --> 0:11:45.880 this project organization and relationship organization, especially with lots of 0:11:46.440 --> 0:11:51.880 small startup vendors, but oil companies have had the advantage 0:11:51.920 --> 0:11:54.000 there for for a long time. At what point do 0:11:54.160 --> 0:11:56.880 oil companies by the startup that they're working with or 0:11:56.960 --> 0:11:58.840 how often does that happen, or do they leave them 0:11:58.880 --> 0:12:02.200 as vendors or we haven't seen that. Match Shell has 0:12:02.240 --> 0:12:04.360 brought up a couple of like distribut entity companies on 0:12:04.400 --> 0:12:07.360 the power side, But with tech and oil, it's kind 0:12:07.360 --> 0:12:11.400 of interesting. I think a lot of oil startups are 0:12:11.559 --> 0:12:14.839 very specific, so they're not doing general AI. They're doing 0:12:15.040 --> 0:12:17.679 AI on this one thing that tends to fail on 0:12:18.000 --> 0:12:21.760 offshore rigs in the Gulf of Mexico. UM. So, as 0:12:21.800 --> 0:12:23.720 Hannah was saying, a lot of oil companies are very 0:12:23.920 --> 0:12:26.480 a lot of oil service providers a very specialist. So 0:12:26.559 --> 0:12:29.160 if you are opening up a new well in West Texas, 0:12:29.200 --> 0:12:31.080 you know who to go to for each of the things. 0:12:31.320 --> 0:12:33.440 There's no one guy that's going to do everything for you. 0:12:34.040 --> 0:12:36.319 I think it seems to be similar with startups. So 0:12:36.440 --> 0:12:39.320 BP might work with Kelvin AI, for instance, on a 0:12:39.360 --> 0:12:42.840 particular field UM that's interesting for them to do AI. 0:12:42.960 --> 0:12:45.000 Put it to maintenance on they might never work with 0:12:45.000 --> 0:12:46.880 them again because a lot of the fields are somewhere else. 0:12:47.280 --> 0:12:49.240 I know if there's a regional play to it too. 0:12:49.360 --> 0:12:52.640 I also don't think the vcs oil companies go for 0:12:52.760 --> 0:12:55.800 acquisition necessarily. But do you have a different view on 0:12:55.800 --> 0:12:57.680 the Hannah, No, I think you're right that that's not 0:12:57.760 --> 0:13:01.480 something we see a lot of companies have focused a 0:13:01.480 --> 0:13:06.199 lot on building out incubation centers for startups that they 0:13:06.240 --> 0:13:10.600 find promising, but often that's to access their technology, not 0:13:11.040 --> 0:13:14.320 um as a separate company, not to not to acquire them, 0:13:14.360 --> 0:13:17.360 I think is what we've seen. Let's go back to 0:13:17.400 --> 0:13:21.120 the PR for a second. So abus, Microsoft is your 0:13:21.520 --> 0:13:24.800 Google cloud, right, they're building themselves as green you know, 0:13:25.000 --> 0:13:27.960 moving us into the future, powering their data centers with 0:13:28.200 --> 0:13:30.960 wind and solar. Yet they are helping on these oil 0:13:30.960 --> 0:13:35.880 companies pump more oil. So is there is there cred intact? Yeah, 0:13:35.920 --> 0:13:37.880 this is a great question because we're actually been having 0:13:37.920 --> 0:13:40.640 some conversations with some some clients about this who want 0:13:40.679 --> 0:13:43.480 to know how much, Yeah, how much is what they're 0:13:43.480 --> 0:13:47.480 doing greenwash and ifs or Microsoft really wants to push 0:13:47.480 --> 0:13:52.920 into renewables force for powering their data centers. But they're 0:13:52.960 --> 0:13:55.680 using the data centers, which is that cloud computing to 0:13:55.800 --> 0:13:58.880 help find more oil, Like, what is what is going 0:13:58.920 --> 0:14:00.440 on there? And how are they commune? Not in a 0:14:00.480 --> 0:14:02.920 PR way, they're not we actually, I mean kind I 0:14:02.960 --> 0:14:04.720 share with me an article a month or two ago. 0:14:04.760 --> 0:14:07.800 Now that kind of slamming aws because at their big 0:14:07.840 --> 0:14:11.199 conferences they say oil is our major target as an 0:14:11.200 --> 0:14:13.560 industry now moving away from consumer we kind of got 0:14:13.559 --> 0:14:16.920 consumering retail down. They're a huge market share owner. I 0:14:17.040 --> 0:14:19.120 want to move into industry. Oil makes sense for us. 0:14:19.120 --> 0:14:21.720 This is what we're going to pursue. Their hiring in 0:14:21.760 --> 0:14:23.800 the head of Google Cloud for energy as an x 0:14:23.840 --> 0:14:27.880 BP guy. They're hiring people from industry, but yet you 0:14:27.880 --> 0:14:29.560 don't see that much in their coms and PR. You 0:14:29.600 --> 0:14:33.120 see a lot of the stuff around renewables procurement. Yes, 0:14:33.160 --> 0:14:36.800 they're they're also a many headed company who can believe 0:14:36.840 --> 0:14:38.200 a lot of things at the same time. And that's 0:14:38.200 --> 0:14:41.440 probably okay. Everyone's like that. Um, I don't know, what 0:14:41.520 --> 0:14:44.160 do you think? King of Oil companies have had some 0:14:44.240 --> 0:14:47.920 of the largest supercomputers commercially in the world for years 0:14:47.920 --> 0:14:50.400 and years and years. So this is the compute power 0:14:50.480 --> 0:14:52.560 that they require, and the and the data storage if 0:14:52.560 --> 0:14:57.880 they require, especially for the seismic exploration data that they acquire, 0:14:58.400 --> 0:15:02.280 is the need to very large. So this is I 0:15:02.320 --> 0:15:05.720 think cloud computing will be the way that these companies 0:15:06.040 --> 0:15:08.760 fill that need eventually and are moving in that direction. 0:15:09.040 --> 0:15:13.720 And quite frankly, if aws, Microsoft and Google don't serve 0:15:13.760 --> 0:15:17.280 these industries, someone else will. And because of the amount 0:15:17.320 --> 0:15:19.400 of data that they need and the compute powever they need, 0:15:19.440 --> 0:15:22.600 it's a very large opportunity for for these cloud computing companies. 0:15:22.720 --> 0:15:24.960 And actually they found power pretty hard. A lot of 0:15:25.000 --> 0:15:27.680 startups and a lot of big tech firms look at 0:15:27.680 --> 0:15:30.320 the utilities first, because power isn't a lot more strained 0:15:30.400 --> 0:15:35.200 from just general market circumstances renewables, etcetera. But regulation has 0:15:35.240 --> 0:15:38.320 really been a stimy. I mean in the US, utilities 0:15:38.320 --> 0:15:40.840 can't pay for cloud computing and rate bas it. By that, 0:15:40.920 --> 0:15:43.520 I mean they can't make a return on the investment. 0:15:44.120 --> 0:15:46.680 If they buy their own data center and build it themselves, 0:15:46.840 --> 0:15:48.800 they can make your return on that super expensive to 0:15:48.800 --> 0:15:50.920 them to do and also why would they hire people 0:15:50.960 --> 0:15:52.880 to do that, It's just not their business. If they 0:15:52.920 --> 0:15:57.680 buy um computing capacity from Microsoft, they don't get any 0:15:57.680 --> 0:15:59.720 return on that. They can do it obviously, but for 0:15:59.720 --> 0:16:02.280 their ahold is it's not a good investment. The same 0:16:02.320 --> 0:16:05.880 with working with some startups on software. They can't rebase 0:16:05.920 --> 0:16:08.720 any software and that's been they say, that's been a 0:16:08.760 --> 0:16:11.320 big barrier. There is some we actually wade about this 0:16:11.400 --> 0:16:13.920 last year. There are some states looking at trying to 0:16:14.000 --> 0:16:16.240 change that in the US, but oil companies aren't really 0:16:16.320 --> 0:16:21.280 hindered by regulation in that sense, they completely. I would 0:16:21.320 --> 0:16:24.600 love to talk about policy because some of the stuff 0:16:24.640 --> 0:16:28.000 that Hannah's found out in a report is really interesting 0:16:28.040 --> 0:16:30.880 about how policy has been a driver for innovation in oil, 0:16:31.440 --> 0:16:34.120 not on the regulation side or actually on the regulation side, 0:16:34.160 --> 0:16:36.760 I guess at that Quanore, but but especially thinking about China, 0:16:36.840 --> 0:16:39.200 for instance, can you share a little bit about kind 0:16:39.200 --> 0:16:42.000 of what Cinepex doing and how Chinese policy has really 0:16:42.000 --> 0:16:46.440 impacted their strategy. Sure, so in China the government is 0:16:46.960 --> 0:16:51.440 very interested in industrial technology and using some of the 0:16:51.480 --> 0:16:54.640 technologies like AI that it's developed in other domains and 0:16:54.920 --> 0:16:57.600 making sure that spreads to some of its valuable businesses. 0:16:58.160 --> 0:17:02.760 So CINEPEC has act really partnered with Huawei in China 0:17:02.920 --> 0:17:07.760 to develop a manufacturing platform and in industrial Internet of 0:17:07.800 --> 0:17:11.880 things based manufacturing platform, and it hopes to sell that 0:17:11.920 --> 0:17:16.399 platform to other manufacturing industries, so like refining, which is 0:17:16.400 --> 0:17:20.000 cinepex main business, but other manufacturers as well in order 0:17:20.000 --> 0:17:23.800 to spread that technology. So China actually identifies market leaders 0:17:23.920 --> 0:17:27.720 in specific industries and mandates that they developed this technology 0:17:27.960 --> 0:17:31.960 that that then they can disseminate to other other companies, 0:17:32.200 --> 0:17:35.320 including their competitors. Do you see that elsewhere? Is it 0:17:35.359 --> 0:17:39.560 just China? Well so, so I mentioned Equino earlier in 0:17:39.600 --> 0:17:43.400 a way that the government in Norway has also been 0:17:43.440 --> 0:17:47.960 pushing a little bit around environmental regulation, pushing UM Equino 0:17:48.080 --> 0:17:50.840 to begin to think about sharing and its data or 0:17:50.880 --> 0:17:53.400 publishing its data. So I could not actually dumped basically 0:17:53.440 --> 0:17:56.280 on the Internet every single data point it has from 0:17:56.280 --> 0:17:59.600 its fields in a way that people can use UM 0:17:59.640 --> 0:18:01.720 and then and build this IoT platform. And I think 0:18:02.359 --> 0:18:04.840 regulation played a part there, and they are beginning well 0:18:04.920 --> 0:18:07.160 I don't know, I mean we think they will begin 0:18:07.240 --> 0:18:10.240 to try and push pays to share too and to 0:18:10.280 --> 0:18:12.840 maybe even use that platform. That's it's not entirely clear 0:18:12.880 --> 0:18:14.600 what their strategy is there, but it sounds like that 0:18:14.640 --> 0:18:17.399 could be something that is regulation driven. And definitely the 0:18:17.520 --> 0:18:20.920 point on data sharing is really important because oil companies 0:18:21.040 --> 0:18:24.400 have kept their data very, very close to the core 0:18:24.440 --> 0:18:27.080 of their business for a long time. UM as I mentioned, 0:18:27.080 --> 0:18:32.240 it's very valuable, but there's an increased awareness that actually 0:18:32.280 --> 0:18:37.640 sharing data across different different companies or uh different fields 0:18:38.040 --> 0:18:43.080 might actually illuminate more patterns and really enable more efficiency 0:18:43.119 --> 0:18:46.320 when you're doing something like drilling in the North Sea. 0:18:46.560 --> 0:18:49.240 So if you have data from equanor and and Shell 0:18:49.800 --> 0:18:54.480 on their experience drilling and producing oil, there UM being 0:18:54.520 --> 0:18:58.720 able to integrate that and then UM use that data 0:18:58.800 --> 0:19:01.640 to build your own rolls of what the subsurface looks 0:19:01.680 --> 0:19:04.800 like or what production conditions look like. That's very valuable 0:19:04.960 --> 0:19:08.120 and Equinoar definitely has been on the forefront of opening 0:19:08.240 --> 0:19:10.520 its its field data up to the public and to 0:19:10.680 --> 0:19:14.400 researchers and to its competitors, even UM and I think 0:19:14.400 --> 0:19:17.479 we expect that that will continue, that there will be 0:19:17.600 --> 0:19:24.200 data exchanges and more shared use of technology, both data 0:19:24.240 --> 0:19:27.080 and algorithms in the future future wind future, this year, 0:19:27.160 --> 0:19:30.480 next year, five years. First the oil companies need to 0:19:31.000 --> 0:19:34.000 organize their data. Maybe maybe five years's it. There's an 0:19:34.000 --> 0:19:36.879 interesting trend that's a bit utilities and oil companies are 0:19:36.880 --> 0:19:40.840 similar in a way, and often they react to market conditions. 0:19:40.880 --> 0:19:43.240 And what we've seen in utilities is the most forward. 0:19:43.280 --> 0:19:46.159 The utilities around digitalization are your n ls n g 0:19:46.359 --> 0:19:48.359 s who are in Europe. They have a lot of solo, 0:19:48.400 --> 0:19:50.880 a lot of wind, a lot of customer chain, rooftop 0:19:50.920 --> 0:19:52.959 solar things and regulation and they're the ones that are 0:19:53.000 --> 0:19:55.520 really saying we have to do this tech because if 0:19:55.520 --> 0:19:59.520 we don't kind of screwed. And with oil we've seen 0:20:00.040 --> 0:20:02.679 like the shale revolution in the US and a huge 0:20:03.320 --> 0:20:07.719 rush of small companies that are pretty interesting UM oil 0:20:07.720 --> 0:20:11.360 companies moving into Texas for instance, and being to think, 0:20:11.359 --> 0:20:13.159 how do we get shale out of the ground quicker. 0:20:13.440 --> 0:20:17.080 The amazing technology revolution in the last twenty odd years 0:20:17.160 --> 0:20:20.600 or fifteen years has been the shale revolution. And what 0:20:20.640 --> 0:20:24.120 we've seen is digital technologies be adopted by those companies 0:20:24.160 --> 0:20:28.800 first excellent, slow moving big company. They're adopting cloud computing 0:20:28.800 --> 0:20:32.560 in Microsoft, but in their shale fields particularly. So there's 0:20:32.560 --> 0:20:35.400 some companies who are doing more revolutionary stuff around tech 0:20:35.880 --> 0:20:37.760 in the areas that need it most, which is shale 0:20:38.720 --> 0:20:42.120 right now. UM And to Hannah's point there, I think 0:20:42.119 --> 0:20:44.200 we're going to see data sharing their first We're already 0:20:44.240 --> 0:20:47.280 beginning to see companies, small companies trying to get data 0:20:47.320 --> 0:20:50.520 shared across shale fields, trying to use me blockchain or 0:20:50.600 --> 0:20:54.600 some form of distributed ledger to help companies securely upload data, 0:20:54.800 --> 0:20:58.320 to sell data, to have this platform and this environment 0:20:58.560 --> 0:21:02.200 that for now may only be in Texas because that's 0:21:02.200 --> 0:21:04.159 where it's needed, because all these wells, they just need 0:21:04.200 --> 0:21:06.800 to share so much data what's going on because it's confusing. 0:21:06.840 --> 0:21:10.040 Everyone is different. There's no conventional understanding geoscientist when we 0:21:10.119 --> 0:21:13.480