Petrobras puts people at the heart of its digital transformation

Published: 1 July 2019

• Digitalization is one of six strategic pillars for the Brazilian oil and gas operator

• It has already conducted international benchmarking on digitalization

• 2019 will bring decisions about which digital technologies to pursue

• Embracing change will be the key enabler says the initiative’s leader

Petrobras, Brazil’s national oil company, is driving forward an ambitious digital transformation to speed up decision making to reduce cost, become safer, and be more productive and compliant with regulations. 

The company’s corporate strategy states that it will ‘prepare Petrobras for a more competitive environment based on cost and scale efficiency and digital transformation’.¹ It aims to ‘incorporate the vision of digital transformation in the routine of the employee’. Identifying and prioritizing digital solutions for cooperation, innovation and the workforce are part of a multi-billion-dollar investment by Petrobras in infrastructure and research and development (R&D). 

Already underway, the digital transformation is a complex and challenging initiative. The company has 63,361 employees across the oil and gas value chain – from wellhead to petrol pump and refinery – and in other energy industries. The initiative crosses its operations and support departments, from engineering to legal, human resources, and others.

This change depends critically on people, according to its leader, the mechanical engineer Dr Augusto Borella. He said: “This is a human journey, and it is particularly tough for those responsible for it. People fear change, but once they understand it, they embrace it. We need to change fear to inspiration.”

Many digital technologies are being considered to promote nimbler cost-effective operations

The transformation is targeting value generation through implementation of consolidated and emerging digital solutions, and new ways of collaboration and innovation. It will be enabled by automation, big data, cloud computing, artificial intelligence, high-performance computing, and the Internet of Things. As one example, Petrobras is assessing potential uses of blockchain technology for supply chain transactions, trading and regulatory compliance.

Dr Borella said: “The goal of the digital transformation initiative is to change how we achieve results. We want to use digitalization to reduce the cost of both internal and external transactions down towards zero. Digitalization will be responsible for incremental advancements in Petrobras. This will involve being able to make data-driven decisions from real-time information, and with zero latency if possible.”

It is about operating nimbly, economically, safely and sustainably at current and likely future oil prices, amid increasing regulation and growing competition from renewables in a decarbonizing world. The sector is showing signs of relaxing cost controls but companies are still vigilant over spending, according to DNV GL research which surveyed nearly 800 senior oil and gas professionals.

Digitalization tops the oil and gas industry’s R&D agenda in 2019

Petrobras is among many oil and gas companies ramping up the strategic application of digital technologies to adapt to the changing competitive landscape. Digitalization tops the oil and gas industry’s R&D agenda globally in 2019, according to DNV GL’s research (Figure 1). Well over half (60%) of respondents expect their organization to increase spending in this area in 2019. The top three priorities globally all relate to data sharing, integration, and access, with data quality and availability being a key area of focus.

Digitalization also leads R&D priorities for Brazil’s wider oil and gas industry. DNV GL’s research shows that more than two thirds (69%) of respondents in Brazil see embracing digitalization as key to increasing profitability. Of those surveyed, 58% expect to increase investment on it in 2019, up from 41% a year ago. Process automation, cloud-based applications/databases, and data platforms are the most cited high priorities.

Similarly, Dr Borella says challenges for Petrobras include defining and assuring data quality, integrating processes and databases, and managing information and knowledge.

Laying foundations and choosing digital technologies

Seeking to explore the potential of the latest advances in digital technologies, Petrobras launched its digital transformation initiative in December 2017. In 2018, its management team employed a series of digital innovation methodologies to stimulate the process. “The idea was to see what projects would be the best fit for different purposes,” Dr Borella explained.

Petrobras managers also conducted international benchmarking, including interviewing digital experts from companies in the energy industry and other sectors, such as banking, aerospace and automotive. The company aims to have an external review of this benchmarking completed by mid-2019. Overall goals this year include defining the technology routes for various Petrobras business areas to follow, and quantifying the potential benefits of change.

“This is the year to make choices, define the best of them, and hopefully put in place the roadmaps and numbers quantifying the impacts that they will have,” said Dr Borella. “We will have roadmaps for all the teams involved in the digital transformation in various areas of the business.”

In the future, Petrobras can improve upstream and downstream asset integrity management and predictive maintenance, he added: ”We want to enhance and understand better the application of artificial intelligence and will need to train more Petrobras people in it. We also need to improve our understanding of cyber security and associated policies.”

Managing change for digitalization benefits

In his role, Dr Borella must convince other business areas within Petrobras that the digitalization process will benefit them. Forty-two other managers are the key to driving the initiative across the company.

“It is a tough task for those responsible,” he said. “Machines and software can take over operational work that humans do, but people can also use them to empower themselves and their activities. The technology enables creativity and innovation, problem solving, relationships and dealing with complexity.”

For example, Petrobras has been exploiting machine learning in real time for more than a decade to analyse pressure while drilling. Software developed by Petrobras receives information on well drilling in real time, identifies risk situations and alerts drillers to operational problems. Dr Borella puts the associated savings from this at more than USD100 million.

The company now needs to build on such successes, he said: “Our managers need to be able to show people what the new activities will be, and we will create paths for innovation. As part of the cultural change, we are trying to create managers who know how to do that and help people embrace the change."

Digitalizing critical safety functions

Petrobras and DNV GL have signed R&D collaboration agreements to develop two cloud-based computational tools to address real-time management of critical safety functions in the oil and gas industry. One initiative will be dedicated to assessing the reliability of blow-out preventers, and the other addresses integrity barriers for subsea wells in operation. Dedicated R&D teams from DNV GL in Rio de Janeiro and Oslo are partnering with experts at Petrobras’ research centre, CENPES, to develop the tools.

References

1. ‘2040 Strategic Plan and 2019-2023 Business and Management Plan’, Petrobras, 5 December 2018 

Further reading

• Snam looks to data science for improved gas transport
• National Grid boosts data use to keep gas flowing

Disclaimer: 

DNV prides itself on providing accurate information but makes no claims or guarantees about the accuracy, completeness or adequacy of contents in this publication, and disclaims liability for any errors or omissions. The authors’ views here do not necessarily reflect DNV’s views.