According to Kentaro Kawamori, chief digital officer for Chesapeake Energy, the language used by the oil and gas industry to describe digital transformation is very different from what has been used in the past.
"It is not about our computing at scale. It is not about AI (artificial intelligence)," Kawamori said. "It's really about doing four things for the business."
Those four things, Kawamori explained, are optimizing operations, empowering employees, transforming assets, and engaging customers and partners.
Kawamori said he considers empowering employees to be "a fundamental shift" for Chesapeake.
"Our employees are burdened by administrative tasks and system inefficiencies," he said, discussing how Chesapeake is driving differential performance through digital transformation recently at the Operational Excellence in Oil and Gas Summit held in Houston. "All of those legacy oil and gas applications that have been around for 20 years now may be conducive to data at an enterprise level, but they do not make individual people more productive."
Chesapeake, Kawamori said, is embracing a "brand new mode" of IT.
"We very quickly iterate solutions now," he said. "We refer to customers as users, and we've started looking at our applications as products. Applications are very point-specific solutions, and products are very large sets of solutions that may encompass multiple applications."
Hackathons and Well Tinder
The implementation of "hackathons," one of Chesapeake's more innovative and successful solutions, resulted in an idea called Well Tinder, named after a "swipe right" dating site.
"It's not hacking in the sense of a malicious hacker trying to get into your system, but hacking in the sense of building something," he explained. "A hackathon is a competition that takes place over the course of a few days, where we sit IT folks and business folks together and give them a set of business challenges or problems to solve."
"What comes out of this is a really interesting mix of collaboration, which begins as almost a forced exercise," Kawamori continued. "What we're doing is merging those two worlds, because it's extremely difficult to educate the business at scale on what's actually possible in this new digitally transformed world."
The pace of change in technology is "unbelievable," Kawamori observed.
"Every single day, technology gets more disruptive, and it becomes harder to keep up," he said. "So, if the people who are technologists struggle to keep up, the people in the field certainly will not be able to look at scale and understand what's possible."
"Well Tinder has really started to drive this 'operate with intention' philosophy," explained Jason Pigott, executive vice president of operations and technical services for Chesapeake. Specifically, teams were challenged to think about operating in the future and how to maximize cash flow by prioritizing well value.
"The idea was, 'What if we eliminated routes altogether?'" Pigott said. "It's really transformed South Texas. Some of their routes had a 50-percent reduction in downtime. They may drive past the five- or 10-barrel- a-day well on their way to a 200-barrel-aday well, where in the past they would just hit both in sequence."
Well Tinder resulted in controllable downtime reduction of 9 percent.
"Because we're optimizing on cash flow, we're just hitting the top wells, and our overtime on just one field alone has gone down by $1 million," Pigott added. "The story for us is not just about doing digital transformation for the sake of doing it. This is where you really start to drive value and transform the company at a scale unlike anything we've seen in the industry."
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