Introduction: George Steel never imagined he would end up running an oil industry dot com, and cheerfully admits that he has learned an awful lot since May when he was appointed CEO and president of UpstreamInfo.com.
He explains to Andrew McBarnet how his company intends to harness the power of the Internet to benefit an industry desperate to drive down costs and increase efficiency.
Global big hitters such as Chevron, Raytheon and EDS are the kind of partners any start up company would like to have on-board.
It's one reason why George Steel believes that UpstreamInfo.com will be one of the winners in the race to be a Web-enabler for the oil industry.
Steel is also convinced that the company has something distinctive to offer in an increasingly crowded and somewhat confusing marketplace. 'We want to be The Internet Portal for the upstream oil business by aggregating information and applications.
Upstream professionals will be able to have data and applications at the end of a browser in the office, when traveling, wherever they happen to be - and they only pay for what they use.'
In Web language, UpstreamInfo.com is positioning itself to serve both as a B2B information portal and as an application service provider (ASP) at the same point, something which no other company is offering on the same scale, according to Steel.
The key to the UpstreamInfo.com business model is that the company intends to store and manage all its customers' geoscience and engineering data as well as provide the applications to use and manipulate the data.
This sounds like a tall order, but there is a significant pay-off. The company believes that its so-called 'thin client' solution overcomes the bandwidth issues that potentially frustrate the electronic transmission of large volumes of data over the Internet, such as a 3D seismic survey.
Most of the contending companies in the application service provider (ASP) marketplace for the E&P sector have been working on the principle that remote operation of some data-intensive software applications will require the use of private data lines, such as the fibre optic network in Houston run by Phonoscope.
Extending such a network worldwide is regarded as a long term project which UpstreamInfo.com plans to bypass.
The scenario that Steel presents runs something like this. Explorationist heads off for business meet in Singapore.
An unexpected call from the boss suggesting the sale of an asset in India, needs some input on its prospectivity. No problem.
Explorationist simply hooks up to the Internet from hotel in Singapore, and through the browser at the UpstreamInfo.com portal brings up the relevant data and a well decline curve application, and then proceeds to do the evaluation with help of interpretation software also on hand at the Internet site.
Reports back to boss, problem solved, interpreted data stored for future reference.
It is an awesome vision. 'We see the time when upstream guys simply arrive at work, log on to the portal and do all their work. Everything they need will be there - lease data, well data, seismic data, etc, plus applications from different software vendors to meet their requirements.'
Steel admits that you're talking about a revolution, and that folks in the oil industry are taking their time getting their heads around the system which, in his view, should be a 'win-win' situation for users as well as suppliers of data and applications, not to mention UpstreamInfo.com as the Web-enabler.
The company's 'value proposition' to the petroleum industry has all the right buzzwords with a promise of reduced costs of up to 50 percent over five years, a 25-30 percent improvement in productivity and a 20-50 percent cut in the decision-making cycle time.
The obvious savings come from paying only for what you use, making use of an IT infrastructure without having to own it, plus the simplicity and efficiency of having solutions and applications available via the Web.
Steel believes that the majors and supermajors will be keen to come on board. 'The big oil companies have had a lot of pain from the analysts about their performance and criticism about their slowness to get on the Internet.
Our industry partner Chevron has in fact been one of the leaders in embracing the Web. We think we can give other companies the capability to change their business model, restructure and get their costs down.'
As well as being an 'anchor tenant' and founding father of UpstreamInfo.com, Chevron is using the services of the company on a paying basis and it must augur well that Texaco is merging with Chevron.
Steel would like to get some kind of hold on the operation of national oil company repositories for oilfield data. Currently Schlumberger and Petroleum Geo-Services (PGS) have won most of the business worldwide.
PGS management recently said that it was considering a divestment of its data management business. This could mean that PGS operations with national oil agencies in Norway, Brazil and Russia, among others could be up for grabs.
Last month UpstreamInfo.com took a big step forward by launching its first high-speed data center in Houston equipped with parallel Web hosting servers as well as networking, security and storage technology to ensure that customers have uninterrupted and immediate access to their data.
A number of other centers will be established around the world in the coming months. Steel agrees that in theory this proliferation should not strictly be necessary and that all access could be relayed via Houston.
'It is mainly about the security and a perception in people's minds about where data should reside. There may also be a local content issue to which we have to respond.'
Even though it has only taken UpstreamInfo.com five months to be up and running, Steel would like to be further ahead. He is hopeful that a number of key companies will sign up in the near future either as providers of data or applications to create a bigger market for the site.
On the data side the portal currently posts limited offerings from Brazil, the Gulf of Mexico and Canada, but the company has been talking to the main seismic contractors with the expectation that they will in due course make their non-exclusive data libraries available on the portal.
Meantime Phillips Petroleum is about to list data in 40 countries around the world through an exclusive arrangement with Geodata.
As far as applications go, Steel has been very encouraged by the early response from some of the major players in the geoscience and engineering software applications.
So far, Magic Earth, a commercial spin-off from Texaco's technology lab, has listed its very successful and innovative GeoProbe visualization application with the company and Houston-based geoscience company Fairfield Systems has also offered some applications.
UpstreamInfo.com cannot escape the survival question-mark which hangs over all new Web-based ventures. Whether it prospers or withers on the vine will depend on the validity of the original concept and, assuming that it meets a market requirement, its ability to deliver what it promises.
The 'data on demand' idea for the company came from Glen Breed of consulting company The Information Store, which is a founding partner in UpstreamInfo.com providing much of the industry-specific expertise in web-based solutions for the petroleum industry.
Breed did much of the groundwork in bringing together the major backers of the company and was instrumental in bringing Steel in as CEO.
Steel's own experience in the field was on his own admission limited at the time he took over the company reins.
However, his top management experience goes back 10 years or so to when he was head of EAME operations of Halliburton Geophysical Services, at the time the biggest geophysical contracting company in the world.
He subsequently became the company's last president based in Houston before it was taken over by Western Geophysical (now part of Baker Hughes and soon to be merged with Schlumberger's Geco-Prakla in a new venture, Western Geco).
Two years as a vice president of independent oil company Snyder Oil followed before he returned to the geoscience-related sector as president of Scientific Software-Intercomp (SSI), a reservoir engineering software specialist which was taken over by Baker Hughes.
Steel certainly has the experience not to be phased by the ambitious goal that UpstreamInfo.com has set itself. He emphasizes the scale of resources and expertise brought to the company by its technology partners.
For example, Raytheon, a $25 billion company and major player in defense electronic products, has extensive experience with complex data management systems including some of the world's largest geoscience databases for defense, government and commercial clients.
Up until the early 1990s Raytheon in fact owned a major seismic contractor Seismograph Service, based in the UK, until it merged with Schlumberger's Geco-Prakla.
With the help of EDS, one of the other initial partners, Raytheon has deployed for Nasa the Earth Observing System (EOSDIS) which acquires and distributes the equivalent of 18,000 square miles of 3D seismic data per day.
The resulting data is accessed and analysed by a reported 10,000 scientists and engineers on the Internet every day.
The Nasa system is said to contain some 3 petabytes of data and growing, which equates to all the petroleum data acquired in the Gulf of Mexico over the last 50 years. Big is not a problem is the message, and for UpstreamInfo.com such experience is deemed to be invaluable.
One of its basic propositions is that oil and gas companies need a new solution to cope with the high volume of data generated by latest seismic, reservoir characterization and other sophisticated E&P technologies.
EDS itself reported worldwide revenues last year of $18.5 billion specializing in the global information technology services industry with more than 9000 business and government clients in 50 countries.
The might of Raytheon and EDS may also prove to be important in convincing users and providers of commercially valuable and sensitive data that the Web can be a secure and safe environment.
Steel says that the seismic contractors in particular frequently express worries about data being 'stolen' off the Net, and he notes a more general distrust in the safety of the Web in terms of access control or entitlement.
One stock answer to these concerns is that each piece of data is assigned ownership and only the owner and those designated by the owner can access that particular piece of information.
This is reinforced by SilentRunner technology from Raytheon used by, among others, the FBI and the US Army and Naval intelligence services.
Released data can also be subject to Digital Rights Management, a system of controlling the use of accessed data, for example by time-stamp and restrictions on copying.
The storing and management of the massive amount of data that UpstreamInfo.com hopes to attract could also be an issue.
The company will shortly have a mega center located at the secure premises of either Raytheon or EDS, which are said to be protected for everything from flood, earthquake to nuclear bomb.
The mega center will serve as the ultimate repository for data that will still be accessible from Houston and other data centers.
It has probably taken the most part of $5 million to put UpstreamInfo.com on the road, so the stakes are high. But Steel is convinced that his one stop shop that he likes to call the Yahoo of the upstream oil and gas industry will win the day.
GeoNet's ASP ambitions:
The company that most closely approximates UpstreamInfo.com is probably GeoNetservices.com, also based in Houston, which is the brainchild of chairman and CEO Pat Herbert, at one time vice president of market development and technology, Baker Hughes.
GeoNet has set its stall on becoming the major, neutral and independent ASP in the oil and gas business, both upstream and downstream, providing a broad spectrum of on-demand software applications, remote computing and data management services accessible over the Internet or by private data lines.
The intention is that users can acquire and deploy software on line, thereby saving the costs associated with owning and operating applications.
Currently the company lists around 50 independent software vendors whose applications can be accessed through GeoNet with the user only paying for the time the software is actually used.
GeoNet has collected an impressive array of technology partners including Exodus Communications, Storage Networks, Unisys Corporation, Compaq, Phonoscope, Portal, Xevo Corporation, Savos and Silicon Graphics (SGI).
Depth-imaging over the Web:
Houston-based GX Technology (GXT) recently signed a multi-million dollar, multi-year contract with Texaco to provide a comprehensive range of prestack depth imaging and related solutions, based on its computer intensive Earthwave software.
In itself not that remarkable. However, the company said that it would be using its new Web-based BLink E-Service for online management and delivery of solutions. This is a breakthrough of sorts because GXT believes that BLink is the oil industry's first online, web-based service for advanced seismic imaging.
BLink has an underlying ASP architecture which means that users can remotely run applications such as 3D prestack depth migration and 3D illuminations studies using GXT supercomputer power without the capital cost of owning the computers and software.
GXT also offers desktop collaboration so that in this case Texaco geoscientists can share views of the same data, jointly review and interpret data without leaving their offices.
George Steel and Andrew McBarnet
© 2001 Mena Report (www.menareport.com)
