Cenovus joins Big Oil’s push into Big Data with Amazon and IBM deals
CALGARY — Big Oil is continuing its push into Big Data as Cenovus Energy Inc. has struck deals with tech giants Amazon Web Services and International Business Machines Corp. in an attempt to harness the power of cloud computing and lower its costs.
I don’t want this to be our grandfather’s industry
Ian Enright, Cenovus vice-president and chief information officer
“I don’t want to run our grandfather’s IT shop. I don’t want this to be our grandfather’s industry,” Ian Enright, Cenovus vice-president and chief information officer, said of the Calgary-based company’s plans to move its data out of two local data centres and into Amazon Web Services’ cloud following a deal struck over the summer.
The oil and gas producer is also planning to use Amazon’s cloud computing power to process and analyze its data and run other software programs in a move the company says will lower costs and allow it to better understand the “millions of data points” produced by its steam-based oilsands plants.
“Running machine learning and analytics against these things, as other industries have found, we really feel we’ll be able to enhance our operations and our efficiency,” Enright said.
“Right now, we’re just scratching the surface of the value of that,” he said.
Cenovus did not announce the deal with Amazon when it was struck, but described a broader push at the company to adopt new digital technologies and cut costs. In an interview Enright said the company ran a “bake-off” between cloud computing providers in late 2018 and picked Amazon this year for its big move to cloud computing.
In fact, a series of recent announcements indicate that more Calgary-based oil and gas companies are turning to cloud computing and big data in an attempt to modernize their businesses as the energy industry is trying to shed its reputation of being laggards when it comes to adopting digital technologies.
This month, oilsands rival Suncor Energy Inc. announced a similar partnership with Microsoft Corp. to migrate its data, computing power and processes to the Redmond, Wash.-based company’s cloud services and overhaul many aspects of its business.
While oil and gas companies have been pilloried for being digital laggards, large Calgary-based oil and gas companies have been quietly integrating new digital technologies in a bid to cut costs as they’ve been pressured by low oil prices, a lack of export pipelines.
In 2017, Calgary-based pipeline giant TC Energy Corp. began migrating its data and computer processing onto Amazon’s cloud services and that move to cloud computing is now 90 per cent complete, said Eric Gales, Amazon Web Services country manager for Canada.
TC Energy did not respond to a request for comment.
As we enter the next chapter of digital reinvention, the oil and gas industry is primed for transformation
Ross Manning, IBM’s vice-president, Canadian energy industry
Gales said he’s seen a major change in large companies’ attitudes towards digital technologies in the past four years and said the pace of adoption has increased dramatically.
“Four years ago, I was still having conversations with customers about ‘why?’ Now, it’s about ‘Where do I start?’” Gales said.
Now he said, many of the major companies in the Canadian oilpatch have a “cloud strategy” because “the case for the cloud has been made.”
At Cenovus, Enright said he believes the move to Amazon’s cloud computing service will allow it to run multiple data analyses concurrently — something it wasn’t able to do previously — and also cut down the amount of time it takes to analyze that data.
“When you go to the cloud to look at reservoir simulations or modelling our greenhouse gas improvements, things like that, we can model many things simultaneously,” Enright said.
For example, when Cenovus struck its $17.7-billion deal to buy ConocoPhillips Co.’s Canadian assets in 2017, it took the company nearly four months to acquire the computer servers it needed to process the data for the deal.
As the company integrates more of its processes into Amazon’s cloud, Enright said he’s confident the company could process the same volume and complexity of data in under three weeks.
On Monday, Cenovus also announced a deal with IBM in which the Armonk, New York-based tech giant will implement a suite of new software programs at the oilsands producer.
Enright said the technology will run in the cloud and is part of the broader push to cloud computing and faster decision making aided by digital technologies.
“As we enter the next chapter of digital reinvention, the oil and gas industry is primed for transformation, with companies turning to new platforms that will maximize the value of their assets, lower operating costs and continue to improve on their sustainable operations,” IBM’s vice-president, Canadian energy industry Ross Manning said in a release.