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CDO interview: Andrei Belevtsev, Gazprom Neft

Russian oil giant will harness the latest technologies right across its business, says chief digital officer

Russian oil giant Gazprom Neft has embarked on a major digital transformation programme in a bid to harness the latest cutting-edge technologies.

Its transformation includes the introduction of internet of things (IoT) technologies, blockchain, creating digital twins of facilities and utilising machine learning.

Andrei Belevtsev, the company’s newly appointed chief digital officer (CDO), says in an exclusive interview with Computer Weekly that the challenge goes way beyond selecting the right technology.

“We realise that digital transformation is a response to business challenges, but the business culture needs to change so that people can learn to live with new technologies,” he says.

The IT and business parts of the organisation need to change so that new products can be created quickly with the support of the latest technologies, says Belevtsev.

Gazprom Neft’s IT department has already undergone a major change as it embarks on the transformation project, with its focus shifting from purchasing IT from established suppliers to developing the company’s own systems.

“We have been collaborating with some suppliers, such as IBM, as well as harnessing GE’s experience, but the majority of development tasks are most likely to be implemented in-house as we don’t see a ready-made solution that satisfies our requirements in the market at this point,” he says.

One component of the company’s digital transformation will be the development of a digital platform for data storage, which will also be made available to other companies.

“This is a long, strategic task,” says Belevtsev. “At this point, we are formulating key principles that digital solutions should comply with. For instance, one principle is that a platform or a system could be owned by a customer, but data should be owned by the company.”

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Digital technology is being implemented across Gazprom Neft’s entire business, which includes oil exploration, extraction, processing, transportation, sales and supply.

One key advantage, says Belevtsev, is that digital technologies enable the company to experiment and use trial and error without having to work with physical objects.

“Thanks to digital technologies, we can create ‘digital twins’ of various objects and experiment with them, then projecting the results of those experiments to the actual physical space,” he says. “This is one of the most important advantages that digital technologies bring to traditional businesses.”

In this way, digital twins of deposits, oil wells, plants or production facilities can be created.

Another area where digital technology could come in handy is the supply chain, he says. “We have a solution that allows us to monitor all supplies of our products with a very high degree of precision, based on data analysis,” says Belevtsev.

“I strongly believe that high-quality work with data will allow us to attract partners for such tasks as predictive analytics, optimisation and machine learning based on datasets that we will accumulate.”

Another technology that Gazprom Neft is seriously considering is blockchain. “Blockchain, as a distributed network that is transparent for all participants, can increase the speed with which parties engage with each other,” says Belevtsev. “This is of critical importance in processes such as refueling at airports.”

Some experiments in that area are already under way, he adds, although the specific areas for blockchain implementation have yet to be decided.

Blockchain is not the only “buzz” technology being tried out by Gazprom Neft. It also plans to use IoT technology in the control of oil extraction and processing.

“The richer the ecosystem, the better the product is for all consumers”
Andrei Belevtsev, Gazprom Neft

“Any oil processing plant has tens of thousands and, ultimately, hundreds of thousands of smart sensors throughout the refining facilities, all connected to each other,” says Belevtsev. “More and more elements of the technological process are being connected to smart sensors and begin to communicate with each other, ensuring that all production procedures can be observed.”

Similarly, Gazprom Neft’s drilling control centre enables company employees based at its main headquarters in St Petersburg to observe in real time the operations of drilling rigs located hundreds or even thousands of kilometres away and, if necessary, make corrections based on the company’s own mathematical models.

At the same time, employees at the efficiency control centre can observe the entire production and supply chain in real time. “This is possible because all items of equipment are part of an IoT ecosystem,” says Belevtsev.

Digital technologies are applied across all stages of the company’s business process, from oil exploration right through to petrol sales at filling stations, and digitisation of the company’s internal processes is also on the table.

Belevtsev says Gazprom Neft also plans to collect and store huge amounts of data related to the company’s business, to be processed later using algorithms for machine learning and AI.

Dealing with huge datasets also raises the issue of data security, which Gazprom Neft is ready to address. “The company takes a very broad view of cyber security – not just in terms of data security, but in terms of all the solutions we develop,” says Belevtsev.

The company’s ultimate ambition is to become a leader in the digital space, blazing a trail for others to follow, he says.

“We believe digital platforms should be created as open source solutions,” says Belevtsev. “We are taking our first steps, aimed at creating a technological core independently, but at a later stage, we are open to all kinds of collaboration in developing the digital space.

“It could be with equipment suppliers as well as other production companies. The richer the ecosystem, the better the product is for all consumers.”

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