Phil Murray, Chief Executive Officer, Petrotechnics, UK
Phil Murray, CEO and founder of Petrotechnics discusses the role his company’s enterprise software can offer the oil and gas industry. He expresses his vision for this product, which can increase wrench time and create great efficiencies through organising work patterns better. His account details also the challenges his company faced in developing this software, and its role beyond solely the oil and gas industry.
Before founding Petrotechnics you worked with BP for a decade. What brought you to the realization that a holistic, safe and integrated work planning system was required?
It was not a single moment, but back in 1990 most of the computers used were housed in basements and operated on by technicians and specialists. PCs were arriving, but were often used by only the most senior staff. It was my opinion that this technology was transformational and that it could change, in particular, operations in the oil and gas industry. At that point, the oil and gas industry was made of ‘wooden derricks and iron men’ but this technology offered a real chance to improve on this already formidable industry.
I was eager to demonstrate the value of this technology and to do so I remortgaged my home. Since then, the theme of Petrotechnics has been seeking to improve operations through creative thinking and innovation. An understanding of the technology and of the business domain are two qualities that are rarely seen together. Petrotechnics, however has always maintained this expertise and many in the company are ex-OIMs, production officers, or supervisors from a wide array of industries. Taking forward technology and a creative view with regard to new solutions is key, as long as solid deliverables are achieved. Petrotechnics’ systems govern 85 percent of the work in the North Sea and work with supermajors across the globe: without our business’ systems, work would be far slower.
Delivering better ways of working is Petrotechnics’ key aim, and the company’s early work was pioneering, but it was not motivated by a single event, more the idea that emerging technology, particularly computer technology offered the ability to deliver great benefits to the oil and gas industry.
Speaking of innovation, Petrotechnics’ approach was obviously at the beginning very novel and original. Yet in 2013, the company was a finalist in the New Tech Development awards; what is still generating that originality and innovation within the company?
The business has taken its experience forward continually, but there have been a couple of defining moments for the company. Approximately 12 years ago, the enterprise decided there was a particular niche organizing frontline work. The business had previously made systems that had done well, but this space became a particularly important aspect for the business to target. Petrotechnics history was made delivering solid, reliable products and services; for the company to grow, we simply needed to replicate this success; it is a case of ‘back to the future.’ Fifteen years ago, the business launched the Integrated Safe System of Work (ISSOW). The first individual who was introduced to this system did not say they did not like it, nor that it would not work; but that it was illegal! Interestingly, he stated was that certain items of work had to be signed off, but the law states they simply have to be approved- which means ISSOW systems were, and are legal indeed.
To gain market penetration, Petrotechnics focused first on its own back yard in the North Sea to build relationships with the major oil companies before seeking to export the products after. Over the past ten years the business has won many awards, not solely for technology either. These include: Outstanding Contribution to Health and Safety in the North Sea, Outstanding Contribution to Health and Safety in the Gulf of Mexico, Software Product of the Year (2007) and HR Manager of the Year and Growth Strategy of the Year awards.
Whatever the company does, the aim is to be the best at it. This is reflected from ten years of growth for our business products, and has seen a move from our product being dismissed as illegal to being utilised across 85 percent of North Sea operations, and being deployed globally.
The UK has always been good at innovating, but also in gearing products towards export. Setting up a business in Aberdeen is not about working solely in this city. From day one, any new business should include a plan to go international.
As with any other business, we’ve evolved with the market and their demands. By listening to our customers and the recent focus in the UKCS market on preventing Major Accident Hazards, Asset Integrity and reduction of Hydrocarbon releases, we’ve been able to remain innovative in our offerings by ensuring our new products consider overall operational risk and how to better manage that- and change the safety-productivity dynamic. Fast forward 15 years later- we’ve realised ISSOW is just a step in managing operations more is required to manage such complexities of frontline operations. This realisation and ability to continually adapt is what keeps us original and innovative.
ISSOW solutions; are they more applicable in basins like the North Sea- is this why you have such a high prevalence here?
The North Sea is simply home base for Petrotechnics, and does lead in some means of thinking, particularly in safety and efficiency. Our next product play is very much into the North Sea, but we always retain an eye for broader export. The reason for this is that humans are the same across the world. Necessity and economic requirement mean that our product is ubiquitously useful. Our company is looking for that universality of application from an industrial perspective.
Teekay adopted Proscient software across its operations worldwide. Does your international strategy rely on feeding through international operators, or to what extent is it proactive?
Part of building a relationship with the majors is that one can do business with them and expand with greater ease into other locations where they operate. It is to be remembered that Aberdeen, as a centre of excellence does not only export technology from the North Sea, but people as well. As they move overseas, they bring concepts- like that of ISSOW technology with them.
Petrotechnics has also opened offices in Houston, Saudi Arabia and in Singapore as centres from which to leverage business advantage. This is expensive, but having people on the ground able to understand the local business culture helps. The language you speak is important in our particular business, but in that, I am not referring so much to the local dialect as to speaking in the terms of an operator, of an OIM or of a supervisor. One must speak the language of oil field operations. English helps, but the most important thing is not to talk about ‘bits’ and ‘bytes’ but in terms of ‘risk’ and ‘major hazards’ – terms understood better in the oil and gas industry.
The North East of Scotland prides itself historically on its robust, tangible mechanised expertise and more recently its advancing subsea and advanced engineering capabilities, but now in terms of software, to what extent is Aberdeen a hub of excellence for software development?
Petrotechnics visited Silicon Valley about five years ago, just after we had won the European Growth Strategy Award. Following our visit, I returned, and decided to change tack.
What the award had done was recognise the early part of our strategy, which was to take a disruptive innovation and build it into a product, which had proved very successful. The next stage of development was to create an enterprise scale system, something which sat well across the customer’s operations. This business is the only instance of a company which has deployed a system across every operation in the world’s largest oil company. Instead of resting on that success, Petrotechnics had to build on this success; it had to create a bigger product, filling a bigger niche. There was a gap in some of the world’s biggest enterprise systems, maintenance management and planning systems. Some of our enormous clients were working with huge software companies, but Petrotechnics saw a niche, and wanted to fill this space.
At that time, Petrotechnics did not have a clear enough understanding of how to create enterprise software. There were no companies in Aberdeen that created enterprise software and there were few companies in Scotland that programmed this software. From the start, this level of ambition required our enterprise to look further afield for help, support and even people- hence the trip to Silicon Valley.
The entrepreneurs over there were intrigued by our vision. The contacts made there included Ram Shriram, the founding investor in google and Gordon Eubanks previously of Symantec. We were advised building an enterprise software company in Scotland would be difficult.
This is because Aberdeen does not have nearly the level of industrial support that might be desired for an enterprise software company. The whole support network is not here in software, and for this reason Petrotechnics has had to ensure that its network looks to wider Scotland and beyond. Aberdeen is a great place to build an oil field services company or a technology company but creating enterprise software does have its challenges.
Petrotechnics is however, determined to succeed here despite acknowledging some challenges of the location. All our software developers are all based here in Aberdeen; the creativity, technology and domain knowledge they have is best held close to our heart of operations. What the business has had to do, however, is locate a Vice-President of Product Marketing and Management- he is an American based in Madrid. We needed a Vice President of Sales with global experience- and our business found such an individual in Shropshire. Access to the best expertise was very important, and the business has located such expertise far afield, ensuring our senior employees can work on a remote basis if necessary. This distribution of some of the company’s senior staff is difficult, but it is not nearly as problematic as not having the right personnel working for the business.
Sentinel PRO©, was an earlier a product you rolled out across a supermajor’s entire operations both on time, and on budget; yet you describe it as a ‘disruptive technology’: yet companies clearly see the value in your product- what is the key offering that attracts your clients?
Sentinel PRO© was a disruptive programme when it emerged 15 years ago. In technology, yesterday’s disruptive innovation is today’s commodity system. From being a pioneer, Petrotechnics now finds that there are many companies offering systems similar to Sentinel PRO©. The business realised that the future lay in something more ambitious; an overarching enterprise system about five years ago.
This new product required development of new technology, yet the business had to retain the values and attributes that had brought it forward previously. Proscient is the new product, and fills this enterprise space, managing not only how work is undertaken safely, but how the broader operational risk is managed, how the execution of ‘planning work’ is completed. The industry spent, and spends millions on maintenance management and planning systems, yet was still inefficient.
Around five years ago with Sentinel PRO©, Petrotechnics was gathering data across 85 percent of North Sea operations. Yet because companies were often unwilling to engage with this data further; firstly our business sought to prove the need for this broader software. Petrotechnic’s analysis of the data provided by its Sentinel PRO© programme indicated only 17 percent of work carried out in the North Sea was planned. Some argued with this figure, but no-one will argue that planned work accounts for over 50 percent of work done.
At this moment, our company decided the best means to proceed was to actually build the next generation of software system, to demonstrate what could be achieved in terms of greater efficiency. The intention was to really wake up potential clients to the opportunity holistic management offered, balancing workload against risk. The utility of this system is considered to be such that its use transcends industry categories.
In the time that it has taken to develop this software, the industry seems to have woken up to the need to improve efficiency as paramount. Noting that production efficiency has fallen off a cliff whilst production costs have gone through the roof has caused the industry to look for solutions. The Wood Review for example, looks at means to address these issues in their broadest sense, and OGUK have looked at production efficiency in particular. At the root cause of their recommendations to increase efficiency is an emphasis on improving ‘wrench time’, but the simple fact is that more work must be done with fewer staff. This is entirely about efficiency, not cost.
What is interesting about some of the recommendations coming out of the Wood Review is that there is an understanding that costs are escalating, but there remains less of a comprehensive strategy to tackle these inflating costs. Inefficiency has been tolerated across the industry- this needs to change. Petrotechnic’s offering allows an overview of what work is happening, how it is happening and how that relates to the risk status of the asset one is working on. Most importantly, it allows an understanding of how operational risk is affecting these processes. This can allow better utilisation of staff and other resources, one of the central means to actually start reducing these rising expenses.
Value drives efficiency; cutting costs is shorter term. Previously with CRINE (Cost Reduction in the New Era) platforms were built as cheaply as possible–and statistics support the assertion that platforms built in this era have the worst production efficiency because low cost of construction was aggressively prioritised. The cheapest kit, with an insufficient maintenance budget will always see production fall. The key question is not about cost- it is, to stress again, about efficiency.
Using Proscient systems can increase production efficiency by 20 percent with little difficulty. There is a huge opportunity there, and this is why the industry is starting to realise the potential of our system.
A second factor driving uptake of Proscient software is risk, which the software manages. Risk is different from safety. Sentinel PRO© was developed in an era where the focus was on personal safety and overseeing an individual job. The biggest risks, however, come from small hazards combining – fixating on individual jobs is not always as helpful as one would like and integrated solutions are vital. Risk must be balanced with what is needed to be achieved on the platform at the time- in aging assets maintenance, operation and risk must be coordinated- this is a key reason Proscient is so attractive for potential clients.
What precipitated the recent move of your platform onto an IPAD format?
What is interesting is that the change required to move staff onto using IPADS is less than the change that was required 14 years ago to move clients onto using PC software, when computers were new. That was a radical change in the way they operated, but today the move to the new format is not about changing styles of work but connecting different aspects of work. Displaying the data and information about the way clients work within silos in a highly visual format improves the ability of the client to act on the information. Importantly it allows this action to happen throughout the organisation. Petrotechnics offers companies a common currency of risk, which can be understood throughout the organisation. This allows best alignment of focus between managers and staff operating assets due to this holistic management system. Without connecting staff throughout an organisation, it is not possible to balance work requirements and the risk incurred in taking operations forward.
This need for risk and work to be balanced is recognised in Susan McKenzie’s Strategy for UK Offshore Safety. This new policy direction is something that Petrotechnics fully endorses. Focusing on major hazard risks primarily is the first point of call for addressing real potential problems; personal safety, whilst useful, is something the North Sea is already very good at. It is the broader picture that needs to be considered.
To return to the nub of the question, all these developments mean that easy access to this information is key, and why Petrotechnics is eager to have it available through ruggedized IPAD-type format.
How will Petrotechnics capitalise on this growing appreciation of risk and work balance over the next five years?
The company pioneered safe systems of work, and will pioneer operational performance and predictive risk platforms. The business climate in the North Sea is ideal for the continued adoption of this product at the moment, but we are designing it for use in varying hazardous industries and indeed are soon to announce some significant steps forward in other verticals. Right from the start, this business is seeking export in oil and gas, and diversification into other verticals. The future for Petrotechnics, for this reason holds abundant opportunities.