An Inside Look at Anadarko Petroleum’s Digital Transformation

Abstract

In 2014, Anadarko Petroleum had just a single data scientist in its ranks. Today, it has almost 20 of them working at its headquarters north of Houston. They are joined by a couple dozen more software developers, geophysicists, and reservoir engineers who together make up the independent producer’s Advanced Analytics and Emerging Technologies (AAET) group. The initiative evolved from a slide deck put together just over a year ago to become the “spearhead for technological transformation in the company,” said Sanjay Paranji, the vice president of technology at Anadarko and head of the AAET program. It is a sign that things can move swiftly in this industry, and for the group to be successful, it must keep up the pace. The ambition that Paranji shares with the industry’s other transformation leaders is to undertake rapid experimentation to uncover the advanced hardware and software that can be scaled across hundreds or thousands of wells. The longer that job takes, the more wells get drilled and produced without the benefit of new optimization technologies. This justifies why the AAET group uses a very different blueprint compared with all other business units at Anadarko. Management operates with a light touch, emphasizing a high degree of autonomy among its project teams; too much intervention and the cultivation of creative brainpower yields less and less. The group also moved into a reinvented workspace this year, designed specifically to spur collaboration. Even the words routinely used by the staff stand apart from industry jargon: scrums, sprints, and MVPs, or minimally viable products. The heart of the recipe involves combining roughly equal parts of Anadarko’s recently recruited data science talent with its experienced petrotechnical workforce. The idea is to get petroleum engineers to learn all they can about data science, and for data scientists to learn all they can about petroleum engineering. “That’s our magic,” says Paranji. “We offer them complex problems, which gets the juices flowing—and that gets them to want to stay here.” Innovating Through Failure and Cupcakes To keep the digital train moving, Anadarko uses what is known as a scrum approach—a term borrowed from rugby where teams push the ball toward the goal together. Four to five people make up each scrum team, of which there are eight to 10 working on various projects at any given time. Their mandate is simple: prove within 2-week sprints that an MVP is on course to make a meaningful impact, or should be dropped. As the ubiquitous startup mantra goes, fail often and fail fast. “To be stuck on something based on a sunk-cost bias for 6 months, and you’re trying to press on despite the fact that you have limitations in your approach, that’s a bad sign for us,” Paranji said. “You try an approach, it doesn’t work, you put it to bed, reformulate the problem, and then go after it with a different method.”