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Epsis - Encouraging companies to connect the "dots"

Updated: Feb 6, 2019

Henrik Wigers Larsen, CTO at Epsis Knut Kvalheim, CFO at Epsis

Acquiring more data and analyzing it in detail is of key importance to the oil and gas sector. However, as companies gather more data, the challenge of integrating such information into their operations also becomes bigger. “Companies cannot evolve at an optimal rate if the

information is kept in silos,” says Henrik Wigers Larsen, CTO at Epsis. “Information has to be available for the production, maintenance, and other units in the company in order to enhance decision making processes,” adds H. W. Larsen. Epsis, being established in theearly 2000s, believed that there would be ample room for substantial improvement if more data was gathered and analyzed with proper tools. “When the company was founded, we thought that there was not enough data to perform operations,” he explains.

After 70-80 operations around the globe, Epsis noted that there was enough data, but it was not fully utilized. Therefore, Epsis focused on improving business processes and organization by linking the existing data with the people and operations. “There was a need for some sort of “glue” in the system to put the available information to use,” says H. W. Larsen. The CTO comments that Epsis created a different way of using information in order to improve the communication between teams. “After 15 years, we still hold our initial view, maybe even more so than before, when there was no communication at all. Even though the situation has improved, the challenge still remains,” he adds. The company encourages effective collaboration by breaking down obstacles in communication in order to face such challenges. Epsis proposes an improvement in collaboration systems to achieve the best results. “Gathering more data by installing more sensors will not solve the problem. Data needs to be complemented by cross-discipline communication,” states H. W. Larsen.

In Epsis’ view, the adoption of new technologies, systems, and processes depends more on the company than the region. “Regional differences include bureaucracy, different rules and regulations. It is challenging for us to do business in certain countries, but we are working on an interesting project in Kazakhstan,” says H. W. Larsen. Small niche providers such as Epsis usually follow larger companies instead of establishing offices abroad. “One of the major operators is one of our clients and we follow them to foreign markets,” adds H. W. Larsen.

Digitization trends have motivated the oil and gas industry to gather more data, install more sensors and equipment, create autonomous systems and robots, it is exploring the opportunities offered by VR and artificial intelligence. However, Epsis might be the odd one out when comparing its approach towards exploiting opportunities in the market to other companies. “Companies are trying to create anything they can think of using the latest and advanced technologies,” says H. W. Larsen. “From our perspective, the trend should be more balanced; by utilizing existing applications and information, they should be trying to solve the problems of today and not the problems of the next year or the next five years,” emphasizes H. W. Larsen.

Every oil and gas project has different characteristics and each case must be studied in order to determine how to optimize the connection between systems, processes, and people. Epsis’ value proposition is to “connect the dots” of the projects to overcome communication challenges. “There are many sources of data within the companies and they usually try to connect them by using some data integration layer and view everything through a platform or a dashboard,” says H. W. Larsen. He considers this approach to be fairly successful in the short term but mentions that the systems may not be flexible enough to cope with the changes in the long term. “The main issue lies in the communication between disciplines. In a broader sense, linking cross-company “dots” is highly probable; it is necessary to create more visibility and transparency internally and externally,” adds H. W. Larsen.

One of the main goals is to establish integrated operations in oil and gas projects. However, considerable differences exist when providing support in greenfield and brownfield projects.

In brownfield projects, companies such as Epsis have to cope with existing facilities and infrastructure. “We have been participating in a large onshore field in the US consisting of roughly 800 wells, and if you have a large amount of equipment already in place, it is very difficult to install state-of-the-art sensors,” says H. W. Larsen. Technology companies have to work within fixed boundaries and under these circumstances, the possibilities to make substantial changes are limited. On the other hand, in greenfield projects, it is possible to create a new operating philosophy starting from square one, bringing in all the ideas to follow a specific path from the beginning. “In brownfields, it is required to be more creative in order to work with existing equipment and facilities, whereas in greenfields, you have the possibility to do things completely differently,” adds H. W. Larsen. The team at Epsis hopes that greenfields will be operated differently and that their systems will be more connected than in brownfields. “It takes courage to change the way we work. Technology will solve nothing if you are not willing to operate differently,” says H. W. Larsen. The CTO and Epsis put strong emphasis on this message for the industry.

However, encouraging a somewhat conservative oil and gas industry to change may prove to be challenging. “Our approach is very similar to other players in the industry: money talks,” says H. W. Larsen. “We encourage companies by explicitly stating the amount of resources they would save or by how much the revenue would increase were they to modify the way they operate,” says the CTO. Epsis focuses on building trust; clients have to be confident that the change will be worth its value and will scale projects up to capture value in the future.

One of the main advantages of Epsis’ services is that the entailed risks are down to the minimum. “Our services may entail a small financial risk rather than an operational one because we are not providing new production equipment or tools that can pose safety hazards,” says H. W. Larsen. He adds that projects today are often stopped not because of risk, but because people often do not attempt to analyze them.

When new technology is introduced, issues related to the older generation in the company may arise if they are not able to cope with such changes, resulting in losing valuable human capital. “It is necessary to find balance between technology and employees to avoid losing people with deep knowledge of the industry,” emphasizes H. W. Larsen. Knut Kvalheim, the CFO at Epsis, acknowledges the validity of the CTO’s argument and illustrates this situation with an example from the inside of their company. “There are many people in top management that have been in the oil and gas industry for many years and younger generations are evolving alongside the industry,” says K. Kvalheim. “Important changes are happening at Epsis; we try to connect the capabilities of younger generations and the knowledge gathered by the top-management,” he adds.

The fall of oil prices created a better business environment for Epsis to promote its integration services. “Companies have been motivated to work more efficiently in order to cope with the challenges of reduced income and Epsis is able to support them

by integrating operations,” says K. Kvalheim. The company is aware that the oil and gas industry is transforming into a more comprehensive energy sector, but it is not currently involved in the transition. However, H. W. Larsen believes that whenever an oil company migrates to the renewable energy sector, it will retain its operation philosophy. “It will be challenging to operate within the electricity infrastructure proficiently if the companies were not operating efficiently in the oil and gas sector,” says H. W. Larsen.

Nevertheless, any company involved in operations can benefit from Epsis’ solutions regardless of their line of work. “We imagine that we would find similar challenges in the electricity industry, but it may be easier to target companies that have a sole focus on new markets because they are more open to innovative solutions,” concludes H. W. Larsen. In essence, the “dots” need to be connected in order to coordinate the

different disciplines.

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