Digital transformation

Gazprom Neft’s digital transformation covers its entire value chain. It is intended to improve flexibility and efficiency in business management, based on data and digital twins of assets. The company is developing in-house solutions in artificial intelligence (AI), the Industrial Internet of Things (IIoT), robotics, unmanned aerial vehicles (UAV or drones), and other Industry 4.0 technologies.

Digital transformation’s impact on our business

2020 was a difficult year and will be remembered for market instability and the impact of COVID-19 on production processes. Nonetheless, our digital transformation efforts delivered a significant business impact in 2020. The cumulative economic benefit of new technologies and redesigned business processes totalled about ₽15 billion since 2019. Lower oil prices led to a more thoughtful use of funds and fewer high-risk investments.

Gazprom Neft digital transformation strategy, as approved by its Board of Directors in 2019, consists of a set of major programmes to change the company’s technological and operational processes. Each of these programmes is intended to deliver key economic and business impacts in the medium and long term.

Implementing a product-based approach

In 2020, the company piloted a product-based approach withing its Asset of the Future, Talent Management and Production Control Centre (in oil refining) programmes. The company is planning to roll out these new methods to its other assets in 2021. Another focus area was developing and implementing a product-capability matrix, with the following already in place:

  • a role model for product and programme teams;
  • a skill matrix for key roles within the teams; and
  • a skill development programme for these roles.

The teams have embedded a requirements management service, including a corporate task tracker and a Wiki, in their day-to-day activities.Over 4,000 employees implementing digital transformation programmes and IT projects across the company already use this tool in their everyday work.

The product-based approach affords flexibility so that the business can be self-regulating and remain cost-efficient in unstable market. This approach also focuses and localises the resources necessary to achieve the company’s goals within a short timeframe.

2020 milestones
For more details, see “Technology leadership”
  • The company’s chosen approach to digital transformation proved to be effective and valuable in 2020.

  • The cumulative economic benefit from our digital transformation programme and projects (for examples, see respective division data) totalled about ₽15 billion.

  • Completed the transfer of digital technologies (unmanned aircraft technologies, robotic process automation, artificial intelligence, etc.) from hypotheses to integration into business processes.

  • The principles of a product-based approach have been embedded into the management framework of the Asset of the Future digital transformation programme. This product-based approach has been tested in several other business division-specific digital transformation programmes, including Talent Management and Production Control Centre.

  • Technological Competency Centres started delivering services to business customers within the company (3D printing equipment, providing aerial surveillance and remotely monitoring the quality of installation supervision using augmented reality technology).

  • The organisational transformation and modernisation of the IT cluster will maximise the efficiency of resource utilisation at Gazprom Neft, enabling the consolidated development of digital solutions and service support for them. For more details, see “Technological Development”

  • Gazprom Neft was the first Russian business to join The Open Group international consortium, which develops technology standards.An association of over 700 innovative IT and smart energy companies (Amazon Web Services, Google, IBM, Microsoft, NVIDIA, ExxonMobil, Chevron, Equinor, BP, Shell and Total) under the Open Subsurface Data Universe Forum.

  • The company joined the Russian Association for the Development of Additive Technologies.

  • The company submitted its proposals for the draft Russian Oil and Gas Industry Robotic Process Automation Framework, currently under development by the Ministry of Energy and the autonomous non-profit organisation Digital Economy, with input from Russian oil and gas companies.

  • The centre contributed to the establishment of associations supporting the activities of AI Alliance Russia as well as the Artificial Intelligence in Industry science and education centre. AI Alliance Russia was listed as an organisation for professional and public accreditation of higher-education and continuing-education programmes.

  • Two joint ventures were formed with major market players – X-Holding (NEDRA, New Digital Resources for Assets) and Zyfra (Digital Industrial Platform) – to develop digital solutions and platforms.

  • Digital barriers were created to protect personnel against COVID-19. For more details, see “2020 challenges”.

  • Centre for digital transformation Zifergauz – a shared space for process and cross-functional teams – was opened.

  • With its 30 training programmes, the Digital Transformation Department has been established at the Corporate University, from which over 2,000 employees have graduated so far.

Portfolio of digital transformation tools and processes

Digital platform: services and partnerships to develop digital solutions

The PaaS digital platform is our technological base providing services to build out the digital landscape. The programme includes three service packages: data services, services for the continuous delivery of new functionality, and integration services. Over 30 tools enable data collection from an array of sources, improve data quality and confidence in the data.

The platform reduces new digital product lead time to two weeks, while continually delivering working-product increments. This adds another 23% to the base impact of digital transformation programmes (thanks to regular, iterative delivery of business impacts), while cutting the costs of solving various organisational issues and finding necessary resources. Having a uniform, standardised set of technologies and approaches is also important for working with external development teams, otherwise each contractor will use their usual solutions, which can cause additional friction.

A total of 16 services were launched on the platform over the year. The platform developers use open-source software extensively, tailoring international best practices and proven solutions to company needs. Over 200 digital project teams are already using the platform’s services.

A task of such magnitude cannot be accomplished single-handedly, instead, a 125-member cross-functional team is working on it: platform development is supported by all business units of the company to maximise impact for the business in the shortest possible timeframe. The platform will only produce real results if all stakeholders are engaged. Both the IT and business units, as well as Gazprom Neft subsidiaries, are involved in rolling out and running the platform.

One of the digital platform’s services is the Consta system, an open-source solution that standardises user access and creates digital product interfaces. Consta is available to front-end developers, designers, testers, analysts and other specialists involved in interface development, free of charge.

Digital technology services

aerial surveillance

The company’s expertise in aerial surveillance with unmanned aircraft has enabled the rapid rollout of a construction site aerial surveillance service at all Novy Port project sites, as well as at the Chayandinskoye and Pestsovoye fields. In total, 15 major construction sites used aerial surveillance last year. Plans for 2021 include support for seismic surveys, aerial laser scanning of licence blocks and geophysical surveys.

3D printing

The 3D printing service is a further effective procurement tool enabling smarter inventory management. The service model involves companies ordering materials and equipment, Gazprom Neft Procurement taking care of procurement activities, and Gazprom Neft Digital Solutions in charge of reverse engineering, engineering and design documentation, and quality control. A whole ecosystem is being created at the company to enable the full-scale development of additive manufacturing.

remote monitoring

The service allows for the remote monitoring of various activities (installation supervision, remote control of operations, audits) on construction sites using augmented reality technologies.

Digital Technology Vision

Digital Technology Vision is a tool to plan the implementation of promising digital technologies and launch new digital initiatives across the company value chain.

The Digital Technology Vision includes continuous benchmarking against best practices used by global technology leaders to implement digital technologies. Benchmarking results determine Gazprom Neft’s position and feed into decision-making on whether to pilot prioritised technology use cases at the company. As at the end of 2020, the Digital Technology Vision had helped to identify over 1,100 promising use cases for digital technology across the company value chain, synchronise use cases with Gartner to receive their third-party expert reviews, analyse over 900 benchmarking cases, and launch an external Digital Technology Vision portal to communicate the company vision and current status of digitalisation to external markets.

Digital R&D projects

This is a key part of the corporate digital innovation management system, developed to improve the efficiency of digital solution implementation and reduce risks and uncertainty. These projects give the company an edge over the market when identifying and implementing innovative solutions.

In 2020, project teams from the Digital R&D Centre completed 139 R&D projects, despite COVID-19-induced changes to their investment and organisational processes. Hypothesis conversion was as high as 52%.

Partnerships

In April 2020, Gazprom Neft closed a deal to establish NEDRA, a joint venture. The JV implements projects in the interests of Gazprom Neft, develops marketable digital products for the industry using state-of-the-art AI systems and advanced data processing algorithms to support managerial decisions, and integrates its products on an open E&P platform. New digital products will focus on centralising the management of operations and using AI to create digital twins.

In November 2020, Gazprom Neft and Zyfra established Digital Industrial Platform, a joint venture to develop a digital industrial platform for continuous-production facilities in the oil and gas industry. The platform, which combines all systems, sensors, data processing algorithms and applications into a single solution, uses the Industrial Internet of Things and big data (the storage and processing of large volumes of structured and unstructured data) to collate, analyse and verify data and pass validated data to process control systems. The ZIIoT Industrial Internet of Things platform, Zyfra’s digital services for oil refining and Gazprom Neft’s process control solutions for the oil and gas industry formed the technological base for the joint venture.

Further development of the ecosystem in 2020 led to the creation of a seamless procurement process for teams implementing digital initiatives, which proved to be easy to use and clear for the company’s business units. Now, the whole process takes just seven working days.

Artificial intelligence

Gazprom Neft and St Petersburg City Administration established the Artificial Intelligence in Industry science and education centre. The Artificial Intelligence in Industry association was founded in 2020 to support the centre in achieving its full operations potential. Its main purpose is to find solutions to the more complex problems facing the oil and gas industry, as well as those of other industries. The association will bring together Russia’s leading technical educational institutions: Higher School of Economics, ITMO University, MEPhI, Skoltech, St Petersburg Electrotechnical University, St Petersburg Polytechnic University, St Petersburg State University and State University of Aerospace Automation.

In 2020, Gazprom Neft, Mail.ru Group, MTS, Sberbank, Yandex and the Russian Direct Investment Fund established the AI-Russia Alliance to promote artificial intelligence and accelerate the development of education, research and the application of this technology in Russia. Gazprom Neft is the only industrial company in the alliance. The alliance was listed as an organisation for professional and public accreditation of higher-education and continuing-education programmes.

The alliance has already carried out professional and public accreditations of the AI programmes at over 30 higher-education institutions, with 10 institutions set to receive the alliance’s public acknowledgement that the quality of their educational programme is up to standard.

The AI Works library on the AI Russia website has become one of the most visited resources dedicated to AI implementation and use. The library also runs the AI Awards for the most effective AI implementations and the best business solutions.

3D association

Gazprom Neft was one of the founders of the Association for the Development of Additive Technologies (3D printing), along with Additive Technologies Centre, Almaz – Antey Air and Space Defence Corporation, Rusatom – Additive Technology, Tekhnomash (Roscosmos) and VIAM state research centre. Gazprom Neft actively participates in the work of Technical Committee for Standardisation 184 (TC 184) on 3D technologies.

Robotics

A draft Oil and Gas Industry Robotic Process Automation Framework was prepared by the Digital Transformation of the Oil and Gas Industry working group, with contribution from the Ministry of Energy of Russia, Gazprom Neft and other Russian oil and gas companies. The framework is expected to improve operational safety and efficiency, enable the implementation of projects that were not feasible before, and create new, high-tech jobs.

Unmanned aircraft technologies

Drones were the technology of the year for Gazprom Neft, with 70 different uses cases identified across the company. Drones can be used for a wide range of applications, from cargo delivery to oil and gas fields to construction and infrastructure monitoring, and from exploration to identifying locations for filling stations.

The company opened Tsifergauz, our centre for digital transformation, in St Petersburg (officially launched in Q1 2021). The centre is a shared space for cross-functional teams working on industrial digital transformation projects and strategic digital transformation offices at company divisions. It is focused on seeking out solutions to improve traditional business processes and boost performance with cutting-edge technologies. The centre features technology laboratories dedicated to AI, video analytics, robot and drone control, 3D printing, VR/AR, testing new services, and developing industrial gadgets and telemetry sensors. Tsifergauz is also home to the headquarters of the Artificial Intelligence in Industry science and education centre.

Digital Transformation Department

The Digital Transformation Department was established at the Corporate University to train and develop Gazprom Neft managers and employees and includes seven departments:

  • Digital Literacy;
  • Programme, Product and Project Management;
  • Software Development;
  • Data and Business Analytics Management;
  • Digital Technologies;
  • Artificial Intelligence; and
  • Architecture Management.

In 2020, the Digital Transformation Department prepared 30 training programmes delivering the expertise needed to boost process performance. Over 2,000 employees have been trained so far.

In addition to this, Gazprom Neft, the Higher School of Economics, and Yandex developed the modular programme Business Thinking in Digital Reality.

Plans for 2021

The first three-year phase of the Digital Transformation Strategy will be completed in 2021. Plans for the period:

  • create detailed plans for the Strategy’s second implementation phase (2022–2024);
  • develop a digital strategy for support functions (Administration Division) and update the portfolio as necessary to achieve the goals outlined in the strategy;
  • develop a process to manage digital transformation risks;
  • roll out the product-based approach; and
  • implement green measures with a core focus on cutting greenhouse gas emissions.