15 July 2013
This is a draft document. As it is a work in progress it may be incomplete, contain preliminary conclusions and may change. You must not rely on, disclose or refer to it in any document. We accept no duty of care or liability to you or any third party for any loss suffered in connection with the use of this document.

1 Project Background
1.1 Brief Overview
1.2 Background
1.3 Executive Summary
Project Scope
Project Approach
Expert Elicitation
Surveys
Validation Workshops
Stakeholder Engagement
2 Business Drivers and Challenges
Value Chain – Minerals
Value Chain – Energy
2.1 Mining Industry Feedback
2.1.1
Costs
2.1.2
Decline in productivity
2.1.3
Shortage of skills/ higher skill sets
2.1.4
Community engagement
2.1.5
Capital project deceleration
2.1.6
Health and safety
2.1.7
Technology investment
2.1.8
Economic uncertainty
2.1.9
Business drivers and technology requirements (mining)
2.2 Energy Industry Feedback
2.2.1
Delivering projects on time and budget
2.2.2
Optimising productivity
2.2.3
Costs
2.2.4
Skills shortages
2.2.5
Creation of a business case for new investment
2.2.6
Community engagement
2.2.7
Health and safety
2.2.8
Business drivers and technology requirements (energy)
3 Current ICT Capabilities
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2

3.1 ICT Capability proven in the Minerals Sector
3.2 ICT Capability proven in the Energy (Oil and Gas) sector
4 Future Opportunities
4.1 Planning
4.2 Communication
4.3 Technology
4.4 Automation
4.5 Management
4.6 Graphics
4.7 Geology
4.8 Exploration
Appendix A
Business Drivers
Appendix B
List of Interviews
Appendix C
List of ICT Capability Maps
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3

Project Background
This industry-led project, driven by the Australian Information Industry Association (AIIA) in partnership with the South Australian Department for Manufacturing, Innovation, Trade,
Resources and Energy (DMITRE), aims to facilitate the development of an innovative ICT industry in South Australia - an industry that provides key technologies to the minerals and energy resources sectors underpinning their sustained productivity, safety and environmental performance.
Specifically, this project aims to develop a series of “pathways” that demonstrate the role that the South Australian ICT industry could play in the minerals and energy resources sectors, with a time horizon of 2025.
Deloitte is proud to have worked with the AIIA and DMITRE on this project to facilitate information gathering and validation of the current business needs of the minerals and energy resources sectors.
South Australia is home to Olympic Dam, the world’s largest uranium deposit, fourth largest copper deposit and fourth largest gold deposit, and the site of Australia’s largest underground mine. Additionally, the South Australian Middleback Ranges have a substantial iron ore deposit with over 102 megatons (MT) of Hematite and Magnetite.
South Australia is also a leading destination for copper, uranium and iron ore exploration, attracting one third of Australia’s copper exploration, almost a quarter of Australia’s uranium exploration, and two thirds of Australia’s iron ore exploration outside of Western Australia.
Recent discoveries of oil and the resurgence in unconventional gas drilling in the Cooper
Basin have the potential to drive expansion of the South Australian petroleum industry.
Along with the potential for offshore developments in the Otway and Bight Basins, South
Australia stands on the verge of substantial growth, with opportunity in the medium term for growth in the generation of oil, gas and unconventional gas production.
In addition, South Australia’s track record in manufacturing, defence and aerospace has provided a powerful platform for innovation and expansion in ICT (Information and
Communications Technology).
More than 1,100 ICT companies contribute to business growth across a range of South
Australia's key industries as well as responding to customers around the world.
1.
What will the minerals and energy resources sectors look like in 2025 and what technical, social, political, environmental and economic conditions will they be operating in?
2.
What challenges and opportunities will these conditions present?
3.
What role could ICT have in addressing these challenges and opportunities?
Through a series of structured interviews, workshops, round tables and surveys, we have addressed these questions.
4

Project Background
We aim to develop a baseline for the current and future industry challenges, an understanding of the demand side drivers and supply side capabilities, and an assessment of current technologies and future technology areas that will support the sustainable growth of these vital industries for South Australia and the nation.
5

Project Background

The scope for the AIIA and Deloitte in this project is to deliver a report on the current business drivers and challenges for the Minerals and Energy resources sectors.

This report also delivers an ICT capability map aligned to the current needs of the mining and energy resources sector which identifies the gaps between capabilities for collaborating and partnering on ICT projects.
Between April and July 2013, we have undertaken a number of activities, as shown in Fig 1:
Stakeholder interviews with Mining and Energy companies, Research organisations,
Industry associations, government, METS,
EPCM
Business Drivers for Minerals and
Energy Sectors
Proven/
Potential ICT
Capabilities
Surveys of ICT and other technology companies (Global,
Australian and South
Australian based), research organisations
Identify opportunities to improve the ICT capability within Minerals and Energy Resources Sector
Fig 1: Project approach
Interviews were conducted with executives from companies in the Mining and Oil and Gas industries to establish their key business drivers and to understand the challenges that are currently being faced in the Minerals and Energy resources sectors.
This has enabled us to consider the potential for IT based solutions to address these challenges.
A survey was developed and sent out to the ICT service providers who are members of the
AIIA Mining and Energy Resources Special Interest Group to validate their current capabilities and to identify potential capabilities that these companies may seek to develop.
The aim was to guide them in identifying opportunities for partnering and collaborating on projects and to identify any gaps that may currently exist in service provision.
Validation of the key findings was undertaken in small workshops, which had representatives from “major players” of the ICT industry and relevant Mining and Oil and
Gas industries.
6

Project Background
A range of stakeholders were engaged as part of these activities and were selected from these groups:

Mining and energy companies (Major, Junior and Explorers)

ICT and other technology companies (global, Australian and South Australian based)

Research organisations

Industry associations

Government

Major mining equipment, technology and services (METS) suppliers

Engineering, procurement, and construction management (EPCM) companies
In addition to development of a set of scenarios to 2025 on the possible role of ICT in the minerals and energy sectors by CSIRO, the Deloitte/AIIA team were tasked with identifying issues and opportunities in the Minerals and Energy Resources sectors that can be addressed in the short-to-medium term.
This provides an opportunity to bring organisations together that can address these issues and opportunities with the aim of delivering value within the Minerals and Energy resources sectors.
An outcome from this process is the building on the shared sense of opportunity that exists currently, and the development of relationships across Government, the research sector, the
ICT industry and the minerals and energy sectors.
This can be used to create an environment that will position South Australia as a national and international centre of excellence in the delivery of global ICT for the Minerals and Energy
Resources sectors.
Stakeholders who were involved in the interviews and surveys were from both the supply and demand side as shown in figure 2.
7

Project Background
Fig 2: Stakeholders across Industry sectors (Supply and Demand), from Mining and Oil & Gas
8

Business Drivers and Challenges
Interviews with Mining and Oil & Gas Companies
Interviews were conducted with a range of key stakeholders of the Mining and Oil & Gas industries to understand the key business drivers and the challenges for their industry in both the short term and for the future. The structured interviews provided an opportunity for the stakeholders to express their current issues, capabilities and their need for solutions for the future.
To frame their responses and to align our work with the longer term pathways being considered by the CSIRO, value chains for the minerals and energy resources sectors were presented during the interviews.
These value chains are presented below:
Value Chain – Minerals
Value Chain – Energy
These interviews focused on establishing the stakeholder’s position in the industry value chain and then exploring their current and future challenges.
The key questions to understand the current state were:

What major projects and innovations (ICT focused) are you currently executing or planning to execute?

What is the primary driver behind these projects: productivity, safety, environment or something else?

What do you see as the key challenges/issues for your company and the industry in general over the next 12 months?

What do you see as the biggest near-term opportunity for your company/industry from an ICT perspective?
9

Business Drivers and Challenges
The key questions to understand the future state were:

When you think about your industry in 2025, what do you think will be the biggest change from the industry today?

What factors do you think will drive these changes?

What will be the key challenges/issues for your industry through to 2025?

What are the main technology developments that are needed to address these challenges in that timeframe?

If you could only invest in one area of innovation – what would it be?
 Through the ‘Exploration’, ‘Approval’, ‘Design’, ‘Production’ and other stages of the value chain, where does ICT need to play a bigger role in solving problems for your industry and why?
Within each sector we present the challenges that were raised and propose potential solutions that were presented by technology firms, AIIA members and the Deloitte and CSIRO teams.
In this report we focus on technology and business solutions that are available today.
10

Business Drivers and Challenges
The outcomes of the interviews for the Mining industry are described in this section.
The executive interviews helped us understand the business drivers and challenges across the value chain. It is evident that ICT could potentially affect all aspects of the Multifunctional productivity equation defined as Capital (K), Labour (L), Energy (E), Material (M) and
Services (S). Many of the challenges that are currently being faced by the industry can be addressed in the short term by improving ICT capability and engaging more broadly with the
ICT sector.
Capital
(K)
Services
(S)
Labour
(L)
Materials
(M)
Energy
(E)
MFP=
Fig 3: The Multifunctional productivity equation
The remainder of this section provides a summary of the business drivers as identified in the interviews.
The graph below summarises the key business drivers for the Mining industry weighted by frequency of reference.
Technology investment
9%
Economic uncertainity
3%
Costs
23%
Health and safety
11%
Capital
Project deceleration
11%
Community
Engagement
12%
Skills/ Skill sets
14%
Productivity
17%
Fig 4: Business Drivers of the Mining industry
11

Business Drivers and Challenges
Stakeholder interviews indicated that increases in costs have resulted in significant increase in infrastructure investment and have had an impact on productivity.
Cost increases include labour, material, energy and water shortages. Cost increases are having an impact on organisations along the entire value chain.
Stakeholders stated that the biggest challenge for their company or for the industry in general was access to funds for innovation to drive operational cost reduction.
Potential Solutions:
Analyse operational costs: Business intelligence systems and data analytics tools help to determine costs behind operations. This can help organisations to isolate hidden costs both at an enterprise and at a functional level.
Automation: Automation technology has reached a usable stage in the mining industry. For example automated trucks have helped to improve productivity and safety, and reduce labour costs.
Improve asset efficiency using analytics: Asset reliability data can be used to determine maintenance programs. These can help to prevent unexpected failure of major components and also improve safety and productivity.
Streamlining pit to port supply chain: Streamlining the pit to port supply chain helps to prevent delays and increase throughput, which in turn can help to reduce costs and improve efficiency.
Stakeholder interviews indicated that there was a decline in productivity of mining assets due to deeper natural resources, lower yielding resources, inadequate infrastructure, mismatch of labour and capital and commodity price volatility.
Access to ore deposits that are simpler to extract is reducing and there is a need for improved technology systems to accurately discover deeper ore deposits under hard cover and differentiate them from worthless minerals.
Total factor productivity is low in Australia when compared to other developed countries.
Potential Solutions:
Implement innovative technologies: Being able to better understand the grade and extent of ore bodies in the earth will help to enhance productivity.
Analyse operational costs: Business intelligence systems and data analytics tools help to determine costs behind operations. This can help organisations to isolate hidden costs both at an enterprise and at a functional level.
Automation: Automation technology has reached a usable stage in the mining industry. For example automated trucks have helped to improve productivity and safety, and reduce labour costs.
Streamlining pit to port supply chain: Streamlining the pit to port supply chain helps to prevent delays and increase throughput, which in turn can help to reduce costs and improve efficiency.
12

Business Drivers and Challenges
Stakeholder interviews indicated that the skills shortage companies are facing is due to a number of factors.
As use of technology in the Minerals sector increases, there is a dramatic change in the skills requirements for personnel. This skills requirement change is further compounded by the remote locations of mines and worker hesitation to relocate for prolonged periods of time or to use a “fly in fly out” approach.
The labour gaps continue to rise even though companies are pursuing a range of strategies to mitigate these challenges.
Additionally it is difficult to find qualified EPCM (engineering, procurement and construction management) suppliers.
The sector’s skills shortage crosses both countries and functional skills which is an added complication to securing the requisite skills.
This situation is threatening the long term sustainability of future projects.
Potential Solutions:
Remote operations: Remote operations enable companies to monitor and control operations from remote locations. This can lead to fewer people at a dangerous location such as the extraction site, which can help to reduce accidents and hence improve health and safety. Additionally it can help address shortages of skills, and issues associated with having staff at extraction locations such as staff lower morale, and health and safety. There is the potential in the future to have mine sites that are fully remote operated with no on-site staff.
Operating models: In order to have better control over labour and productivity, mining companies should consider creating operating models supported by workforce plans before construction commences. These models can help to determine how many people are needed during the project lifecycle, and can later be applied to human resources sourcing frameworks which can assist in determining where to source the labour from, whether it can be grown internally or needs to be outsourced to meet growing needs.
Cross training: Some companies have tackled skills shortages by training staff to carry out different operations. Comparing the enhanced skills of the existing staff pool to all required skills can help to identify skills that need to be outsourced as they cannot be grown internally.
Training local talent: To ensure business continuity, mining companies can train local talent to carry out key job functions which can help to fill labour gaps and contribute to the development of skills in local, and in some cases emerging, economies.
Exploring labour driven acquisitions: In some cases the benefits of a specifically trained workforce cannot be ignored. Some mining companies are engaging in mergers mainly to close the talent gaps and ensure access to specific skills.
Stakeholder interviews indicated that there is a growing need for higher levels of transparency and operational sustainability in addition to the standard practice of conducting an impact assessment.
13

Business Drivers and Challenges
Community stakeholders expect fair wages, skills training, access to advanced technologies, modern healthcare and education for families.
Some companies have started focusing on social engagement in order to increase transparency and operational sustainability.
Potential Solutions:
Embed sustainability into internal processes: There is a need for corporate social responsibility to be embedded into operations. This includes embedding sustainability key performance indicators throughout the minerals value chain.
Micro economic analysis: In order to engage with community stakeholders and keep them involved, there is a need for companies to monitor their economic variables and ensure effective sharing of resources and knowledge.
Social media strategy: Mining companies can use a social media strategy to interact with communities on a more intimate level. This can help companies discuss their position on key issues with local communities and keep them engaged.
Stakeholder interviews indicated that with commodities such as copper there is a need to be aware of the finite nature of deposits. Fewer deposits are being found and therefore exploration is increasingly becoming high risk, low return due to a decline in deposit grade and an increase in the depth of deposits being harvested.
The challenge is to use profits to build technically more challenging mines that can yield high grade deposits.
Potential Solutions:
Capital allocation programs: Capital allocation programs help companies to prioritise their project pipeline based on a project’s growth prospects, profitability and ability to yield shareholder returns. These help companies decide which projects to pursue and which to defer, and can be supported by a range of portfolio management solutions.
Governance frameworks: Effective governance processes can help companies to improve the assumptions they use to calculate project costs and returns. Effective and rigorous processes that document past lessons learned can assist in making more robust and well considered investment decisions in the future. This rigour enhances the relationship between finance and operations, and also strengthens project management.
Quality assurance programs: These programs help mining companies to manage
EPCM contracts, monitor construction, control spending and confirm that targets are met throughout the minerals value chain.
Stakeholder interviews indicated that the nature of the industry and the remote locations of many operations drive a continuous need for enhancing safety management systems in order to build a safer work culture.
14

Business Drivers and Challenges
There is a move to remote operations which helps to improve safety by removing people from hazardous locations.
Potential Solutions:
Revisiting prevention strategies: Analytics systems help organisations get clearer insights on accidents, causes and consequences, which often provide information which was previously unknown to the organisation. These help organisations to look into relationships and causal factors that have not been identified previously.
Remote operations: Remote operations enable companies to monitor and control operations from remote locations. This can lead to fewer people at a dangerous location such as the extraction site, which can help to reduce accidents and hence improve health and safety. Additionally it can help address shortages of skills, and issues associated with having staff at extraction locations such as staff lower morale, and health and safety. There is the potential in the future to have mine sites that are fully remote operated with no on-site staff.
Automation: Automation technology has reached a usable stage in the mining industry. For example automated trucks have helped to improve productivity and safety, and reduce labour costs.
Stakeholder interviews indicated that Mining companies are investing in technologies with the aim of improving operational efficiency and reducing labour costs.
In spite of focusing on innovation, they suffer inefficiencies by often failing to integrate core “back of house” technologies and sharing data across their businesses.
This results in decision making being reactive rather than proactive.
Innovative projects that are currently being executed include:

Searching for new ore deposits using geophysics and drilling

Magnetite grinding technology improvements

Pit to port quality control for magnetite using magnetic sensors

Fully autonomous mining in the pit

Collaboration centres
Potential Solutions:
Programmable logic controllers (PLCs): PLCs help mining companies to automate processes. Extending the use of PLCs can help to improve safety and accelerate production.
Supervisory control and data acquisition (SCADA): These devices enhance remote operations by collecting information from regional sites and feeding it back to a central location. This can be used to reduce labour costs and improve plant performance.
IT/OT convergence: By eliminating the silos between information technology and operational technology, organisations can share information which enhances end-toend performance.
15

Business Drivers and Challenges
Stakeholder interviews indicated that slowing of China’s economic growth has had an effect on commodity prices and corporate investment. China sees Australian exploration and development costs as higher (more stringent approvals, more conservative standards, longer approval granting and approval processes).
Approvals and development take longer than in the cases of other countries such as
Canada. Also being considered are higher risk and greater return countries such as those in West Africa. Therefore mining organisations are focusing on existing investments before making additional investments.
Potential Solutions:
Multi attribute decision analysis: Data analysis that is based on key performance indicators (KPIs) and sensor data with sufficiently high numbers of data points can help mining companies to more accurately model and hence better predict future market movements.
Predict outcomes using game theory: Game theory can be used in the mining industry to develop scenarios that can drive project decisions that are more accurate and more sensitive to influencing factors.
Analyse operational costs: Business intelligence systems and data analytics tools help to determine costs behind operations. This can help organisations to isolate hidden costs both at an enterprise and at a functional level.
16

Business Drivers and Challenges
Interviews with the executives of the mining industry helped us to understand the business drivers and challenges across the value chain.
The challenges can be addressed with significant changes to the ICT capabilities in the sector which could lead to economic development across the Minerals sector.
Fig 5: Business drivers and technology requirements – Mining
17

Business Drivers and Challenges
The outcomes of the interviews for the Oil & Gas industry are described in this section. The graph below summarises the key business drivers for the Energy sector weighted by frequency of reference. The remainder of this section provides a summary of the business drivers as identified in the interviews.
Maintain health and safety
10%
Delivering projects on time/ budget
20%
Community engagement
13%
Creation of new business case for investment
13%
Skills shortages
Optimising productivity
17%
Costs
14%
Fig 6: Business Drivers of the Oil & Gas industry
Stakeholder interviews indicated that the Oil & Gas industry is currently in the processes of completing “mega-projects” in Australia. Delivery of these projects ontime and on-budget is critical to the ongoing viability of operations.
Some oil and gas exploration projects are capital constrained, and there is hence a critical need for effective project management and execution.
Potential Solutions:
Capital allocation programs: Capital allocation programs help companies to prioritise their project pipeline based on a project’s growth prospects, profitability and ability to yield shareholder returns. These help companies decide which projects to pursue and which to defer, and can be supported by a range of portfolio management solutions.
Governance frameworks: Effective governance processes can help companies to improve the assumptions they use to calculate project costs and returns. Effective and rigorous processes that document past lessons learned can assist in making more robust and well considered investment decisions in the future. This rigour enhances the relationship between finance and operations, and also strengthens project management.
18

Business Drivers and Challenges
Improve asset efficiency using analytics: Asset reliability data can be used to determine maintenance programs. These can help to prevent unexpected failure of major components and also improve safety and productivity.
Stakeholder interviews indicated that there has been a considerable decrease in the volume of resources with deeper natural resources, lower yielding resources, inadequate infrastructure, the inconsistent nature of investment, commodity price volatility and a mismatch of capital and labour.
Many companies are focusing on new exploration to build a future pipeline of opportunity for which the efficiency of the supporting exploration needs to be improved.
Future energy project portfolios will include an increased proportion of unconventional gas projects. New reserves will be more difficult to delineate, develop and extract. Therefore, more efforts are required from a dwindling workforce to maintain and improve productivity.
Potential Solutions:
Implement innovative technologies: There is need to develop and implement innovative technologies to remain competitive, enhance productivity and reduce costs.
Capital allocation programs: Capital allocation programs help companies to prioritise their project pipeline based on a project’s growth prospects, profitability and ability to yield shareholder returns. These help companies decide which projects to pursue and which to defer, and can be supported by a range of portfolio management solutions.
Streamlining reservoir to port supply chain: Streamlining the reservoir to port supply chain helps to prevent delays and increase throughput, which in turn can help to reduce costs and improve efficiency.
Improve asset efficiency using analytics: Asset reliability data can be used to determine maintenance programs. These can help to prevent unexpected failure of major components and also improve safety and productivity.
Stakeholder interviews indicated that cost is one of the biggest business challenges for the oil and gas industry, driven by Australia’s high cost structure, an inconsistent global market for methane, a slowdown in capital acquisition programs and technical challenges around the extraction of coal seam gas.
Collaboration between competing projects is at a low level, which is contributing to excessive costs, duplicate investment and differing approaches.
There are significant increases in construction costs due to an increase in drilling costs, labour and materials.
Energy and water shortages have resulted in an increase in infrastructure investment.
Slowdowns in capital acquisition programs have resulted in a struggle to maintain technology capabilities in the areas of communication and security systems.
19

Business Drivers and Challenges
Potential Solutions:
Analyse operational costs: Business intelligence systems and data analytics tools help to determine costs behind operations. This can help oil and gas companies to isolate hidden costs both at an enterprise and at a functional level.
Improve asset efficiency using analytics: Asset reliability data can be used to determine maintenance programs. These can help to prevent unexpected failure of major components and also improve safety and productivity.
Streamlining reservoir to port supply chains: Streamlining the reservoir to port supply chain helps to prevent delays and increase throughput, which in turn can help to reduce costs and improve efficiency.
Stakeholder interviews indicated that the shortage of skills in the industry is due to the need to relocate workers to remote areas, a declining willingness to adjust to different working conditions, rising labour costs and a competitive operating environment.
There is also a current low of experienced people in the 35-45 age bracket and the upcoming retirement of many experienced people presents a knowledge transfer issue.
There is increasing demand combined with a decreasing supply of talent. As use of technology increases there will be a dramatic change in the required skill sets.
Potential Solutions:
Operating models: In order to have better control over labour and productivity, oil and gas companies should consider creating operating models supported by workforce plans before construction commences. These models can help to determine how many people are needed during the project lifecycle, and can later be applied to human resources sourcing frameworks which can assist in determining where to source the labour from, whether it can be grown internally or needs to be outsourced to meet growing needs.
Cross training: Some oil and gas companies have tackled skills shortages by training staff to carry out different operations. Comparing the enhanced skills of the existing staff pool to all required skills can help to identify skills that need to be outsourced as they cannot be grown internally.
Training local talent: To ensure business continuity, oil and gas companies can train local talent to carry out key job functions which can help to fill labour gaps and contribute to the development of skills in local, and in some cases emerging, economies.
Exploring labour driven acquisitions: In some cases the benefits of a specifically trained workforce cannot be ignored. Some oil and gas companies are engaging in mergers mainly to close the talent gaps and ensure access to specific skills.
Attract young talent : There is a need to invest in universities and TAFEs to ensure that they continue to produce qualified people with engineering and IT skills of sufficient quality to satisfy the requirements of oil and gas companies.
20

Business Drivers and Challenges
Stakeholder interviews indicated that the regulatory environment is seen as complex, difficult to interpret and poorly understood by many in the oil and gas industry.
Due to the success of unconventional gas in the US, other nations are moving from natural gas to unconventional gas. However the environmental impact and cost of infrastructure is high.
There is a need for exploration efficiency to be enhanced to respond to global pricing complexity, high labour and construction costs, and to realise opportunities arising from innovation and technology advancement.
Potential Solutions:
Exploration efficiency: An integrated model from reservoir through to ship can help to enhance exploration and operational efficiency.
IT/OT convergence: By eliminating the silos between information technology and operational technology, organisations can share information across the value chain which can enhance plant performance.
Multi attribute decision analysis: Data analysis that is based on key performance indicators (KPIs) and sensor data with sufficiently high numbers of data points can help oil and gas companies to more accurately model and hence better predict future market movements.
Stakeholder interviews indicated that there is a growing need for higher levels of transparency and operational sustainability in addition to the standard practice of conducting an impact assessment.
Community stakeholders expect fair wages, skills training, access to advanced technologies, modern healthcare and education for families.
Some companies have started focusing on social engagement in order to increase transparency and operational sustainability.
Potential Solutions:
Embed sustainability into internal processes: There is a need for corporate social responsibility to be embedded into operations. This includes embedding sustainability key performance indicators throughout the energy value chain.
Micro economic analysis: In order to engage with community stakeholders and keep them involved, there is a need for companies to monitor their economic variables and ensure effective sharing of resources and knowledge.
Social media strategy: Oil and gas companies can use a social media strategy to interact with communities on a more intimate level. This can help companies discuss their position on key issues with local communities and keep them engaged.
21

Business Drivers and Challenges
Stakeholder interviews indicated that the nature of the industry and the remote locations of many operations drive a continuous need for enhancing safety management systems in order to build a safer work culture.
There is a move to remote operating centres which help to improve safety by removing people from hazardous locations.
There is a focus on providing secure and reliable communications for offshore plants, as well as security systems.
Potential Solutions:
Revisiting prevention strategies: Analytics systems can help organisations get clearer insights on accidents, causes and consequences, which often provide information which was previously unknown to the organisation. These help organisations to look into relationships and causal factors that have not been identified previously.
Preventive maintenance: Effective maintenance processes can help to reduce unanticipated breakdowns which lead to unplanned costs and production delays.
Remote operations: Remote operations enable companies to monitor and control operations from remote locations. This can lead to fewer people at a dangerous location such as the extraction site, which can help to reduce accidents and hence improve health and safety. Additionally it can help address shortages of skills, and issues associated with having staff at extraction locations such as staff lower morale, and health and safety. There is the potential in the future to have mine sites that are fully remote operated with no on-site staff.
22

Business Drivers and Challenges
Similar to that of the mining industry, interviews with the executives of the oil and gas industry helped us to understand the business drivers and challenges across the value chain.
The challenges can be addressed with significant changes to the ICT capabilities in the sector which could lead to economic development across the Energy sector.
Fig 7: Business Drivers and technology requirements - Oil and Gas
23

This project was aimed at identifying the current capabilities of ICT companies to support
Minerals and Energy Resources companies.
These capabilities were identified by developing a survey which was issued to ICT companies. The results were then collected and analysed.
The survey was constructed by identifying specific “ICT Capabilities” that were required by the Minerals and Energy Resources Sectors.
69 ICT Capabilities were identified using the information from the interviews conducted and
ICT industry publications that identified current and future capabilities that aligned to this information.
In addition, the survey was constructed so that respondents could identify additional ICT capabilities that they considered relevant.
The total 73 identified capabilities are listed below:
Planning Communication Geology
1. Strategic Planning
2. System/ disaster recovery
3. Decision support systems
4. Operational business intelligence
5. Supply logistics
6. Interpretation systems
7. Supervisory control and data acquisition systems (SCADA)
8. Programmable logic controllers (PLC)
9. Manufacturing & execution systems (MES)
10. Demand analytics
11. ERP
12. Social Media
13. Collaboration
14. Community engagement
15. Radio communications
16. RFID
17. Communications infrastructure
18. Employee communications
19. Performance management dashboards
20. Employee training solutions
21. GIS asset management
22. Geological modelling
23. Smart drilling
24. Resource mapping sensors
25. Seismic monitoring analysis
26. Blast design
27. Mine Design
Technology Automation Exploration
28. Mobile apps
29. IT security
30. Predictive analytics
31. Biometrics
32. Cloud computing
33. Tracking and tagging system
34. Telerobotics
35. Surveillance system
36. Data centres
37. Virtual reality
38. Technical Data Management
39. Automated control systems
40. Automated transport
41. Unmanned autonomous vehicles
42. Simulation
43. Remote blast initiation
44. Remote management
45. Real time monitoring
46. Optimisation
Management Graphics
58. Knowledge management
59. Transport management
60. Workforce management
61. Information technology (IT)/ Operations technology (OT) integration
62. Process quality monitoring/ management
63. Expenditure monitoring
64. Health and safety solutions
65. Integration
66. Augmented reality
67. Interactive 4D (place
– time)
68. Desktop virtualisation
69. 3D scanners
70. 3D printers
71. 3D interfaces
72. 3D exploration
73. 3D graphical software
47. Mineral analysis
48. Ore body evaluation
49. Grade estimation
50. Intelligent sensors , detection sensors
51. Value of mine product
52. Volume of mine product
53. Location of mine product
54. Analysers
55. Resource planning sensors
56. Environmental sensors
57. Environmental monitoring and analysis
24

The survey was aimed at understanding where respondents have:

Proven the use of an ICT capability in either the Minerals sector or the Energy (Oil
& Gas) sector

Identified the potential future use of an ICT capability in either the Minerals sector or the Energy (Oil & Gas) sector
In order to determine the ICT capabilities across the high level value chain, the responses that were provided to the service providers to choose from were:

No capability in the responding organisation (no response required)

Respondent has a proven example of the ICT capability in the Minerals sector

Respondent has a proven example of the ICT capability in the Energy (Oil and Gas) sector

Respondent has a proven example of the ICT capability in both sectors

Respondent believes there is potential to prove the ICT capability in the Minerals sector

Respondent believes there is potential to prove the ICT capability in the Energy (Oil
& Gas) sector

Respondent believes there is potential to prove the ICT capability in both sectors
In addition to the responses, comments were requested where a capability had been chosen.
The survey was issued to members of the AIIA Minerals and Energy resources Special
Interest Group and other companies that had been involved in the ICT roadmap project.
25

Exploration and feasibility
Support services
Approval process
Design, prequalification and tendering
Collaboration
Constructionphase 1
Operation
Mobile apps
Optimisation
Mobile apps
Knowledge Management
Optimisation
IT Security
Decision support system
Operational Business
Cloud computing
Simulation
Communications infrastructure
Real time monitoring
Communications
Radio communication
Radio communication
Supply logistics
Supply logistics
Sensors in drilling
3D interfaces
3D Graphical software
Health and safety solutions
Information technology (IT)/ Operations technology (OT ) integration
Mine closure and rehabilitation
GIS Asset management
Expenditure Monitoring
Mine design
Environmental monitoring and analysis
Employee communications
Fig 8: Current ICT capability – Mining
26

Exploration
Unmanned autonomous
Intelligent sensors, detection sensors
Approval process
Design, project management and tendering
Collaboration
Well site establishment
Production
Mobile apps Mobile apps
Knowledge Management
Optimisation Optimisation
IT Security
Decision support system
Operational Business
Cloud computing
Simulation
Supply logistics
Real time monitoring
Communications infrastructure
Radio communication
Supply logistics
3D interfaces
3D Graphical software
Surveillance system
Information technology (IT)/ Operations technology (OT ) integration
GIS Asset management
Expenditure Monitoring
Well design
Environmental monitoring and analysis
Integration
Well closure and rehabilitation
Technical data sharing platform
Fig 9: Current ICT capability – Oil and Gas
Survey responses helped us to better understand what technology developments will be required to address these challenges by 2025.
27

The survey responses helped us validate the current opportunities and capabilities and identify future opportunities. Note that at the time of report completion we had received limited responses from the ICT industry so the charts below are representative of those responses and not broader ICT industry proven capability. The intent is that those ICT service companies who wish to serve the Minerals and Energy Sectors in South Australia will continue to update the capability maps.
The capabilities that are already implemented are denoted as “Proven”. If the service provider has got potential for the capability to be implemented in future it is identified as
“Potential”. The “Gaps” denote that they do not have the capability implemented or have the potential in future.
% of current capability in sector
Fig 10: Future opportunities in Planning
28

% of current capability in sector
Fig 11: Future opportunities in Communication
29

% of current capability in sector
Fig 12: Future opportunities in Technology
30

% of current capability in sector
Fig 13: Future opportunities in Automation
31

% of current capability in sector
Fig 14: Future opportunities in Management
32

% of current capability in sector
Fig 15: Future opportunities in Graphics
33

% of current capability in sector
Fig 16: Future opportunities in Geology
34

% of current capability in sector
Fig 17: Future opportunities in Exploration
35

Interviews helped us to identify the Current business drivers. These business drivers are prioritised based on their frequency.
Technology investment
9%
Economic uncertainity
3%
Costs
23%
Health and safety
11%
Capital Project deceleration
11%
Productivity
17%
Community
Engagement
12% Skills/ Skill sets
14%
The Business Drivers are prioritised based on the interview responses.
Business Drivers
Costs
Productivity
Skills/ Skill sets
Community Engagement
Capital Project deceleration
Health and safety
Technology investment
Economic uncertainty
Response %
40
40
30
10
80
60
50
40
36

Maintain health and safety
10%
Delivering projects on time/ budget
20%
Community engagement
13%
Creation of new business case for investment
13%
Skills shortage
13%
Business Drivers
Delivering projects on time/ budget
Optimising productivity
Costs
Skills shortage
Creation of new business case for investment
Community engagement
Maintain health and safety
Costs
14%
Optimising productivity
17%
Response %
40
40
30
60
50
40
40
37

Organisation
Alliance Resources
Centrex Metals
GLNG
Santos
SRA IT
QGC
Austmine
BHPB
BAE
SolveIT Software
BHPB
INPEX
Woodside
Rio Tinto Iron Ore
Phoenix Copper, Oz
Minerals
Codan
Petrosys
Nova Systems
Interviewee
Andrew Bowden
Exploration Manager
Ben Hammond
Acting CEO
Rob Bridge
CIO
Hugh Banister
CIO
Steven Rowe
CEO
Stuart McIntosh
CIO, QCLNG
Ian Dover
Director
Peter Lilly
Executive Director
Kim Scott
Director - Land & Integrated Systems
James Balzary
Director
Brad Wearn
CIO
Chris Foley
CIO
David Humphrys
CIO
Rohan Davidson
CIO
Paul Dowd
Director, Resources
Donald McGurk
CEO
Jonathon Drake
Regional Manager, Australia
Volker Hersinger
Managing Director
Robert Tait
Lead Consultant
Interviewer
CSIRO
Deloitte / DMITRE
Deloitte
Deloitte
Deloitte / DMITRE
Deloitte
CSIRO
CSIRO
DMITRE
Deloitte / DMITRE
Deloitte
Deloitte
Deloitte
Deloitte
Deloitte / DMITRE
DMITRE
DMITRE
DMITRE
38

Organisation
BAE Systems Australia
Cohda Wireless
Fuji Xerox Australia
Imaginit Technologies
Lockheed Martin Australia –
Security Solutions
National Infrastructure
Services
SRA IT
TRC Mathematical Modelling,
The University of Adelaide
Versadev
Lockheed Martin Corporation
Track IQ
Name
Kim Scott
Director – Land and Integrated systems
Paul Gray
CEO
Peter Hann
National Manager, Mining and Resources
Rob Fischer
Marketing Specialist
Tarshia Weldon
Finance Manager
Paul Chase
General Manager, LMA IS&GS Defence Systems
Dave Howard
National Resource Manger
Steven Rowe
CEO
Associate Professor Bruce Northcote
Director
Timo Bishop
Business Development Manager
Integrated Systems and Global solutions
Director
David Rennison
CEO
39

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