THE

INTELLIGENT
REFINERY
DISTILLING
DIGITAL, DRIVING
INNOVATION

BASED ON SURVEY ANALYSIS

FROM ACCENTURE’S 2018
DIGITAL REFINING SURVEY
 BRIEFLY...
• In 2018, Accenture conducted the second Accenture
Digital Refining Survey to understand how refineries are
using digital technologies.

• We also sought to understand what the 170 respondents

believe are the benefits and barriers to adopting digital
technologies.

• Five trends depict where companies are on their journey

to becoming an Intelligent Refinery—and what they can
do to speed it up.

• This report provides further digital insights based on

Accenture’s deep industry practitioner experience.

ABOUT
THE SURVEY
The Survey was conducted by PennEnergy
Research in partnership with the Oil and Gas
Journal on behalf of Accenture. Respondents
were oil refining and gas industry professionals
from a cross-segment of the industry, including:

• Executives and Mid Level Management.

• Business Unit Heads.

• Refinery Managers.

• Refinery Engineers.

• General Oil and Gas Industry Employees.

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 2

 Over the next few years, the transition to a lower carbon
world will offer the global refining industry some
opportunities and a range of challenges.
Potentially, the next decade could see one of the biggest ever global oil demand disruptions, with the
introduction in 2020 of new specifications for bunker fuel oil for the world’s marine fleeti. The global
refining system is also experiencing a boost from the expansion of the petrochemicals industry, where
growth continues to outpace global gross domestic product (GDP). Challenges include more stringent
emissions regulations for plants and fuels as well as newer fuels entering the transportation system such
as natural gas, biofuels and electricity (the production of which all bypass the global refining system).
These challenges mean that refiners need to invest to capture new margins, and make their plants more
efficient and cost-effective.

Competitive pressures are also rapidly increasing for many refiners, with a significant amount of new
refining capacity coming onstream over the next few years. The International Energy Agency (IEA)
expects the global refining system will have to absorb 2.6 million barrels per day (b/d) of new capacity in
2019 alone – the largest annual increase since the 1970sii. Meanwhile, after expanding by 1.4 million b/d
in 2018, global oil demand growth is expected to slow to around 1 million b/d by 2023,iii leading to more
competition for incremental demand.

To remain competitive, refiners need to look at new ways to improve margins, increase the reliability of
operations, and find more agile and speedy responses to market changes. In Accenture’s 2018 Digital
Refining Survey, loss of competitive advantage due to a lack of investment in digital was the number
one risk cited by refiners (with over 67 percent seeing it as a risk – see Figure 1). This concern was
followed closely by worries over the ability to sustain cost reduction and continue reliability
improvements.

FIGURE 1 – Refiners fear loss of competitive advantage from lack of digital investment

TREND 4
LACK OF DIGITAL INVESTMENT
INCREASES RISK
What risks to your business do you see from a lack of investment in
digital technologies? (based on top 3 most important risks)

Loss of competitive advantage 67.4%

Lack of ability to continue to reduce

costs/increase margins 64%

Increasing plant reliability issues 57.7%

Lack of agility to react & optimize

due to market dynamics 41.9%

Loss of workforce/talent 24.4%

Lack of ability to respond and transition

to new energy developments
21.7%

Lack of ability to react to

natural disasters 9.3%

Other 1.2%

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 3

2
 THE MARGIN OF THE FUTURE
Refiners today understand the impact digital can have on their business and most believe it can deliver
greater value in operations. In Accenture’s digital refining survey, 80 percent of refiners reported that
digital is adding up to $50 million in value to their business and 75 percent stated that they intend to
spend more on digital over the next three to five years. However, there is potential for even more value
from digital improvements (the survey showed that over 60 percent of refiners believe digital could
support more effective and efficient plant management in their refining portfolios).

In the future, data democratization will mean that refineries will be even more connected and
transparent throughout the value chain – which has implications for existing operating models and the
breaking down of traditional functional silos. A more “intelligent” refinery will use digital investment to
continuously sense demand, drive more automated and better forecasting and optimize against
real-time operational situations and enable the refinery to react optimally to changing market dynamics.

Ultimately, a refinery can make a theoretical maximum margin from a barrel of crude, but this number is
always dependent upon the crude assay supplied and the complexity of the refinery operations. While
getting the crude feed is reliant upon the hydrocarbon supply chain (which is bound by supply routes
and market dynamics), the ability to source, plan and refine material can be drastically improved through
a more real-time and connected use of process insight to meet the constraints of product commitments
and processing capability. Where there is potential, product yields can be shifted to capitalize on
incremental spot prices. And while no refinery can change the direction of its operations very quickly,
any slight improvements in yields or margins through process and workforce efficiencies and
optimization can make a significant difference in this increasingly competitive space.

AN INSIGHT-DRIVEN REFINERY
While the digital maturity of refiners appears to The areas where digital is having the most
be increasing (in the 2018 survey, 48 percent positive impact for refiners are in maintenance
of refiners rated themselves as mature or and reliability processes (56 percent) and
semi-mature in digital technology deployment production scheduling and planning (50 percent)
compared to 44 percent in 2017) there is no with other areas like trading or supply chain seeing
widespread use of digital technologies and, a comparatively small impact as yet (see Figure 2).
as yet, little use of more cutting-edge digital
technologies. Many refiners still consider
themselves as relatively immature when it
comes to deploying digital technologies.

The survey shows that refiners remain focused

on investing in technologies such as advanced
48%
process control, analytics, Internet of Things (IoT)
and cybersecurity tools. Meanwhile, the focus on
cloud and mobility are declining as these
technologies reach maturity. However, the In the 2018 survey, 48% of refiners rated
impact of emerging technologies such as Artificial themselves as mature or semi-mature in
Intelligence (AI) blockchain and robotics is still digital technology deployment
compared to 44 percent in 2017.
relatively weak (some of these technologies were
not even a focus in the 2017 survey).

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 4

 FIGURE 2 – Most refiners are yet to see potential value from digital technologies

TREND 3
MOST REFINERS ARE YET TO
REALIZE POTENTIAL VALUE
Which of the areas in your refining operations are digital
technologies having the most positive impact?

56.4% 50.0% 47.1% 27.9% 23.8% 22.1%

Maintenance and Production planning Production Health, safety and Energy Engineering and
reliability and scheduling execution environment Management capital projects
(HSE)

18.0% 15.1% 13.4% 4.1% 3.5% 4.1%

Quality Trading Hydrocarbon Non-Hydrocarbon Don’t know Other
Management supply chain supply chain

More intelligent refineries are starting to use analytics

at scale, and are quickly linking this information to the
planning and execution processes in the refinery.
Using data from sensors in the refining process plant. Tracking the movement of workers
is not new; electronic signals and data process around the plant removes the need for tedious
analysts have existed for over a decade. The and time-consuming paper-based processes.
Intelligent refinery can link real-time information But more than that, the connected worker is
and predictions on equipment performance to the more visible—generating data that can be used for
impact on their planning and scheduling activities, compliance and health and safety improvements.
enabling more insightful and profitable decisions
to be made much faster. Meanwhile, using more advanced technologies,
such as machine learning and AI, will allow
Knowing what to do and when to do it, is refineries to better monitor the state of equipment.
now critical for all refineries. A key goal is to For example, predicting fouling on the crude unit
systematize new ways of working in refineries, heat exchangers is generally beneficial, but
since this ensures continuous knowledge planning the bundle washing to ensure optimal
retention and development. Mobile tools enable maintenance and capital spend according to
workers to consistently use and improve market demand is a potential game-changer for a
procedures, perform more value-added actions, refinery. The same processes can improve the
and reduce risks to health and safety. For performance of critical equipment across the site,
example, electronic passes for workers takes a which means that the refinery plan is always
relatively simple technology and substantially aligned to true and real-time processing capability,
increases the operational effectiveness of the not just its assumed performance.

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 5

 Such technologies are also providing insights analytics pervasive in operational decision-making.
into major cost factors such as energy Over time, once data science methods continue to
consumption, enabling significant cost be trusted and engineers start to adapt to change,
efficiencies to be realized. work processes can be redesigned to take
advantage of insights, thereby making
A rotation to digital refining will require autonomous closed-loop processes a reality.
fundamental changes. At the most basic level In this way, refiners will be able to turn the data
companies will need big data platforms and they capture into knowledge, insight, and
visualization tools to house and process the ultimately value.
real-time sensor data needed to make more
dynamic decisions. As digital maturity grows and
data science methods start to be adopted and
scaled, refiners will need new skills in the form of
data engineers and data scientists to make

A NEW SKILL BASE

One key challenge to becoming a more intelligent
refinery is competition for new skills.
Our survey shows that workforce skills are Refining leaders need to address digital skills gaps
becoming increasingly important for refiners, and redeploy people whose roles are being
with 50 percent more respondents citing lack replaced by automation and technologies like AI.
of workforce skills as the greatest barrier to By retraining employees already familiar with their
successful digital adoption in 2018 than in 2017 operations, as well as enabling more collaboration
(see Figure 3). Digital natives do not generally between humans and machines, refiners can not
exist in refining operations and refiners need to only save time and money but accelerate their
hire outside their organizations for skilled people, digital transformation.
develop training programs for incumbents to
reskill, or look to third-party partners to help them
along their digital journey.

With the complication of the aging demographics

of the global refining industry, the move to
intelligent refining is imperative both to capture
50%
and institutionalize experienced workers’
know-how in the new ways of working and to
leverage senior personnel to train new digital
workers – namely machines. Our survey shows that workforce
skills are becoming increasingly
important for refiners, with 50
percent more respondents citing
lack of workforce skills as the
greatest barrier to successful digital
adoption in 2018 than in 2017.

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 6

 FIGURE 3 – Workforce skills are important for successful digital adoption

TREND 5
WORKFORCE SKILLS ARE
INCREASINGLY IMPORTANT
Which barriers, if any, prevent the successful adoption of digital technologies
in your organization? Please select all that apply.

Cost of digital deployment

49.8%
50.0%
Lack of clear strategy 38.4%
relating to digital 43.0%
36.0%
Data security concerns 37.8%

Lack of clear business case

38.4%
36.1% An increase
Lack of workforce skills and 22.2% in excess of
subject matter expertise 33.7%
50%
Resistance to adopt digital 24.1%
solutions 33.1%

Lack of internal ownership

23.2% 2017
29.1%
2018
Lack of maturity of digital 14.8%
technology 26.7%
Lack of digital delivery 21.7%
capabilities in order to scale 17.4%

A MORE SECURE REFINERY

As levels of digitization increase in the refinery so
does the risk of cyberattacks.
Many refiners still lack awareness of cyberattacks—28 percent of the survey respondents said
they are seeing more or significantly more such attacks than in 2017, while 33 percent of
respondents said they don’t know how many attacks they are experiencing.

Despite the fact that digital means refiners might become more susceptible to
cyberattacks, digital can also offer some protection. The integration of the
information technology (IT) and operational technology (OT) landscapes (coupled
with the increased focus on true endpoint cyberattacks) means digital architectures
must encompass a holistic perspective of the IT-based systems and the underlying
industrial control system. By understanding IT and OT vulnerability areas and by
incorporating smart IoT devices, securely authenticated communication protocols,
and real-time threat surveillance tools, companies can ensure they know about
incidents immediately and can respond swiftly. As companies transition to more
connected operations, it is even more critical for employees to appreciate and
adopt best practices in operational cybersecurity.

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 7

 FIGURE 4 – Cybersecurity is becoming more of a concern in refining

FURTHER INSIGHTS
CYBERSECURITY – A CAUSE
FOR CONCERN?
Are you experiencing more or fewer attempts than last year?

Significantly more 6.40% TOP 5 NUMBER ONE CONCERNS

OF CYBER ATTACK IMPACTS
More 22.09% Operational Impact 37.79%

Impact on Workforce Health & Safety 22.09%

The same 30.81%
Environmental Impact 12.21%
Less 5.23% Data Breaches 8.72%

Commercial Impact 6.40%

Significantly less 2.91%
It appears cyberattacks are rising
and/or they are not being
Don’t know 32.56% adequately measured

ROTATION TO DIGITAL
Digital should not be thought of as an independent
strategy, but as an enabler of business strategy.
While refiners face even greater competitive pressures in the coming years, if digital can be
implemented at pace and scale there is value to be captured. The ability to reduce costs, increase
plant up-time and safety, and improve refinery margins are at risk without companies targeting their
investments on this rotation to the new.

THEREFORE, REFINERIES SHOULD:

• Be relentless about focusing on value in terms of • Invest in people to reskill and adopt the new
both benefit realization and new ways of working. ways of working.

• Develop directionally correct strategies and an • Ensure that leaders lead – no transformation
evergreen use case roadmap. can be undertaken without visible leadership
from the top.
• Invest in new digital platforms and tools for
foundational capabilities.

THE INTELLIGENT REFINERY – DISTILLING DIGITAL, DRIVING INNOVATION 8

Authors About Accenture
Tracey Countryman Accenture is a leading global professional services
company, providing a broad range of services and
Managing Director – Refining
solutions in strategy, consulting, digital, technology
and Industry X.0, Global Lead and operations. Combining unmatched experience and
Tracey oversees Accenture's Industry specialized skills across more than 40 industries and all
X.0. strategies and implementation, business functions—underpinned by the world’s largest
focusing on the chemicals, metals, delivery network—Accenture works at the intersection
mining and oil and gas industries. of business and technology to help clients improve their
performance and create sustainable value for their
stakeholders. With 477,000 people serving clients in
Richard Holsman more than 120 countries, Accenture drives innovation
Managing Director – Resources to improve the way the world works and lives. Visit us at
Digital, Global Lead www.accenture.com.
Richard leads the digital agenda
globally across the chemicals, metals,
mining, oil and gas, and utilities Note
industries for Accenture. Based on survey analysis from
Accenture’s 2018 Digital Refining Survey

Andy Coward
Managing Director – Refining References
Digital Plant, European Lead i
“New rules on ship emissions herald sea change for oil
Andy helps downstream oil and gas market”, May 17th, 2018, Reuters, © 2018 Reuters, via
operators and services companies Factiva
change their business operations to
more digitally driven structures.
ii
International Energy Agency, Monthly Oil Market Report
October 2018, © 2018 OECD/IEA -
https://www.iea.org/oilmarketreport/reports/2018/1018/
Elfije Lemaitre
iii
International Energy Agency, The Oil Report 2018,
Managing Director –
Forecast and Analysis, October 2018, © 2018 OECD/IEA -
Downstream Energy,US Lead
https://www.iea.org/Textbase/npsum/oil2018MRSsum.pdf
Elfije helps downstream clients
successfully navigate large scale

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Senior Principal – Energy #digitalenergy
Research, Global Lead
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