GIS in the Petroleum Industry—Senior Management Overview

1. GIS in the context of management information systems
The pace of information management change continues to grow. Often, just as a large organization is able to effectively employ a new technology, it is almost time to replace it.

While this may be the case for particular elements of computer based hardware or software, it is certainly NOT the case in terms of the fundamentals of the information management process.

Good information management practices and systems deliver reliable data, in an efficient manner to the required business processes, and are central to the effective running of the enterprise. These general principles are steadfast, and are provided for by a relatively small collection of "enterprise employed technologies." Increasingly, over the past five years, senior management and their data management staff, have realized that spatial data forms a coordinating bond, central to almost all the critical business processes, and have made Geographic Information Systems (GIS) a fundamental part of the overall Management Information System (MIS) architecture.

2. The current status of GIS use in the petroleum industry
Petroleum companies have traditionally invested quite readily in information technology (IT) over the years, throughout many portions of their business operations. In the past five years a significant proportion of that investment has been directed at the "spatial data component," such that at the present day some of the larger independent and National Oil Companies (NOC's) are the leading exponents of "spatial data management" and the effective use of GIS.

This development is perhaps inevitable, due to the relatively high investment by these companies in their IT infrastructures and the very significant reliance that their business processes have on those spatial data. Virtually all petroleum business operations, from regional geologic exploration, through field appraisal and development, and from product distribution, facilities management and environmental modeling, to retailing or commercial and domestic supply, rely on fundamental spatial data components, mapped in the context of these employed systems, into "spatial business objects."

This is true for many other industries but the petroleum companies have been (comparatively) expeditious in the employment of appropriate GIS technologies to effectively manage these data and use them to better understand and plan their critical business processes.

As of today, most major petroleum organizations are involved in varying programs of data consolidation, compression and conversion, in order to more cost effectively and efficiently manage their integrated information archives. Due to ESRI's advanced, pro-active technology program in relation to GIS, and by paying specific attention to the precise business requirements of the petroleum companies, ESRI is the de-facto leader for spatial data management in the petroleum industry.

Presently, 35 out of the top 50 petroleum companies (Petroleum Information Weekly list, December 1995) use ESRI software and most of the majors use it almost exclusively for the management of their spatial data; increasingly, in an integrated information management context, as described below.

Many petroleum companies have effectively employed GIS for some considerable time and the larger independents and NOC's often have many hundreds of licenses, but in some organizations GIS was not seen as part of the central MIS structure. Rather, it was still seen as aligned only with "digital mapping" or "CAD." With a continuing education program at all levels, and a growing understanding of the fundamental importance of spatial data to all business processes, this is now changing and GIS technologies are becoming accepted to "mainstream IS."

With this acceptance comes the realization that it is possible to leverage the development experience gained in some departments across wider portions of the business and to utilize the data not in a departmental or "project context" but as a "corporate asset." Thus, we are seeing the development of GIS specialists within the centralized Information systems departments who can advise on the effective implementation of spatial data management technologies across the breadth of business operations.

In support of the petroleum companies employment of GIS technology, ESRI has developed a broad ranging team of petroleum-experienced information management staff and continue to encourage the development of a user driven, self-funded and very active Petroleum User Group (PUG). We even have a T-shirt! In fact, the business use of ESRI technologies in petroleum has grown so much over the last few years that there are now 46 independent companies supplying services related to ESRI software products specifically tailored to the petroleum market. These companies increasing independent success point to a continued expansion in the use of the technology and a tendency in the client oil companies to predominantly follow a "buy, not build" policy in relation to specific application design.

ESRI essentially concentrates on supplying the underlying generic spatial data management technologies; both at the physical database implementation level and in supplying a generic toolbox for petroleum focused applications development, by association with an independent set of business partners.

By this scheme ESRI allows the commercial market-place to regulate the pace of applications development and the cost is shared through the user community. Every-day communication within the user community is supported by a dedicated, ESRI- supported, subscriber only Petroleum Bulletin Board (PUG-L) and all the normal forms of local and centralized support infrastructure (e.g., technical support, training, etc.).

3. Future trends
There are essentially five functions that are central to effective GIS use. They are:

1. Digital Cartography
2. Computer-Aided Design
3. Database Management Integration
4. Image Processing

and central to all of these

5. Spatial Analysis

The user community differs in its focus of demand and therefore an integrated and broad ranging program of product development is required: servicing all of these principal functions. All five are, of course, important in some context to petroleum and the challenge for ESRI is to continue to effectively manage an extremely close coupled core product suite which provides functionality across all these sectors and, at the same time, develop specialist tools in some of these areas for the more advanced members of the user community and the future of the business as a whole.

4. Three-fold development path
The core GIS product ArcInfo provides sophisticated (and modular) GIS functionality to the spatial data professional in all of these five functional areas; and allows him/her to effectively manage a company's "project focused" spatial data in the context of particular modeled business processes.

ArcView provides desktop spatial analysis capability for the end-user community: generally, in an engineered "applications context." Many of the world's leading data vendors are now supplying their products using ArcView GIS as a front-end viewing tool. Several of the major oil companies are following suit; delivering access to the "corporate spatial data archive" on the desktop via simple-to-use desktop graphical user interfaces (GUIs), built using ArcView GIS.

In terms of development priorities for the industry at large, the two product suites described above occupy a good portion of the overall development effort and will continue to do so for some time to come. However, once the major companies had accepted that the spatial data was central to the business processes as a whole, then the issue of full data model integration became very large indeed.

The requirements in the context of business data integration are essentially concerned with the physical implementation of the database and the description of the logical business model as well as the delivery of suitable tools to perform such integration in today's heterogeneous computer environment. There are major on-going developments in all three of these areas at ESRI.

• ESRI is working with the petroleum industry standards authorities (e.g., POSC and PPDM) and major commercial software vendors to implement effective logical business models.
• ESRI continues to develop effective desktop application level technology that is compliant with general computer industry trends and practices (e.g., client server- architectures, open systems, and so forth), which are used by the 3rd developers to build petroleum focused applications.

5. Summary
In summary, ESRI has, by design, engineered the leading spatial data management tools for the petroleum industry, and is endeavoring, through a very active development program and a close working partnership with the leading industry players, to provide products which closely fit the industry's business needs.

ESRI encourages you to take a renewed look at this important MIS technology component in the near future and will make suitable arrangements to accommodate such an analysis if you so desire.