Anadarko’s Digital Legacy Offers a Template for Others

Abstract

Up to the time of its takeover by Occidental Petroleum, Anadarko was known as one of the biggest cheerleaders of the industry’s so-called digital transformation that is banking on new software technologies to expand tight margins. Last year, Anadarko opened its doors to share the story of how it put together a new 50-person team of data scientists, software developers, and petrotechnical staff to realize this vision—known as the Advanced Analytics and Emerging Technologies (AAET) group. The group’s man-date boils down to looking for new ways to solve old problems. Oxy has not shared many details on how it will combine the two companies based in the Houston area, which means it is unclear whether its digital priorities will marry up with the work of its newest addition. And with the integration process now officially under way, Anadarko has offered this final look at what the AAET group has been able to•accomplish.• “We think 80% of Anadarko’s capital program is affected in some way, shape, or form by using AAET,” said Sanjay Paranji, the company’s chief technology officer and leader of the digital group. As evidence of the scale of internal adoption, he added that 70% of the company’s petrotechnical staff use at least one of the new data analytics and aggregation platforms that the group built since it was formed in 2016. Behind these high-level numbers is a layered strategy that Anadarko has used to solve the great “buy vs. build” challenge that all companies diving into the ever-expanding digital landscape have had to struggle with. The overriding philosophy is broken into three parts: Initiatives with the highest potential impact on the bottom line are developed largely internally. This has led the company to install its own electronic drilling recorders on the rigs it operates and design software that can classify rig states to benchmark rig equipment (e.g., drill bits, rotary steerables) and crew performance. Anadarko has also internally led the development of large analytics and field surveillance platforms that have been rolled out to its biggest deepwater and onshore shale assets. And in this same bucket is a major project to increase the resolution and quality of geologic and geophysical data sets. To avoid reinventing the wheel, the company evaluated around 250 technology startups each year to see if their wares matched the company’s priorities. More than 500 of Anadarko’s plunger lift gas wells in the DJ Basin are now controlled through edge devices made by a Silicon Valley startup called Kelvin Inc. The operator launched projects with an Austin-based startup called Seismos, which uses acoustic signals to evaluate hydraulic fracture performance in horizontal wells. For digital projects, or pieces of projects, that represent less potential value, the company has turned to crowdsourcing, also known as open innovation. More than 2,000 people from around the world have helped Anadarko create phone apps, an internal Wikipedia-like portal to educate employees and other components of larger analytics projects. The company’s new mud log analysis program was designed by a Brazilian police detective who specializes in bank fraud.