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Enron Mail |
Headline: "Oil and Gas IT Investment Remains High, But More Operationally
Focused, Concludes an Industry Survey to Be Presented at Interactive Energy Conference, Dec. 5" HOUSTON, TEXAS, November 14, 2001 - After a period of widespread shoot-at-anything-that-moves investment policy that followed the ERP, Y2K, and e-business boom, oil and gas firms remain aggressive investors in information technology (IT), but their selections are much more focused on tangible results, according to the recent findings of researchers at Booz Allen Hamilton and Zeus Development Corporation. The two firms have joined in a research project to interview information officers at many of the world's leading energy firms to understand how they are currently managing IT investment. A final report will be presented at Interactive Energy, Wednesday, Dec. 5. "Management are scrutinizing their IT investment opportunities more closely to ensure they return short to medium-term positive cash flow," reports Bob Nimocks, president of Zeus. "For this reason, they're also very interested in finding ways to extend current investments in ERP, e-procurement, data warehouses and other recent applications." The researchers have found that investment policies vary widely from sector to sector. In the oilfield services and exploration and production sector, IT management have maintained or increased their capital budgets from last year, continuing to look for technologies that can lead to large reserve additions or improvements in production. "The impression is that there is still a lot to be gained from such technologies as reservoir imaging, data integration, knowledge management and inter-organizational collaboration," Nimocks said. "The integrated majors continue to spend significant resources in these areas." Downstream refining and petrochemical management, on the other hand, have no choice but to cut their IT budgets in the face of very tight operating margins. "Anything more than a year, we don't even bother asking," said an IT director at a large petrochemical processor. "We're at the bottom of our business cycle - at least I hope we are. Out capital expenditure budgets are down about 15% this year compared to last, and last year was down about 15% from the previous." With deregulation, gas and power competitors are in the midst of one of the most profound changes to their industry since its inception. Management are very interested in technology to improve their competitiveness within wholesale and retail markets. However, the Enron financial crisis seems to have spooked the industry for the time being. Researchers are finding differences cut across organizational sizes as well. Smaller and mid-market firms have cut more quickly in reaction to downturns in market conditions. Larger firms remain more committed to long-term plans. Many larger firms have changed their governance systems to ensure investments are made with direct benefits. "A year ago we didn't have to worry about costs," reported one information officer of a mid-sized independent with upstream and chemicals operations. "Now we do." She explained data warehousing remains a high priority for both business units, but other new initiatives, such as wireless implementations, have been reduced to small pilot studies. About the Survey Delegates of Interactive Energy will receive the full report of Booz Allen Hamilton and Zeus Development Corporation's survey of information technology (IT) development in the energy sector, including a review of the applications where energy management are currently investing. Staff are working to interview energy-company information officers (CIOs) as well as representatives from supplier firms and public sector organizations around the world to determine priorities in IT development, changes in the levels of capital spending, key trends, and innovations in governance. The results will be presented during a special presentation at the conference on December 5th. Interviewees who participated in the survey are invited to attend the session to discuss the conclusions and meet other participants. About Interactive Energy Interactive Energy will be held at Houston's George R. Brown Convention Center, Dec. 4-7. The annual conference and exhibition covers information technology (IT) advancements in the energy industry and features numerous case studies of technology implementations, new software demonstrations, business plans and special workshops. Conference Sponsors of Interactive Energy 2001 already include Enermetrix (www.enermetrix.com) SAIC (www.saic.com), AT&T (www.att.com), Microsoft Corporation (www.microsoft.com), Luminant Worldwide (www.luminant.com), Unisys (www.unisys.com), Conchango (www.conchango.com), Proclarity (www.proclarity.com), Silicon Energy (www.siliconenergy.com), Avocent (www.pixelvision.com), Documentum (www.documentum.com), Appropria (www.appropria.com) and Oracle (www.oracle.com). Supporters include PR Newswire, Energy Central, TIPRO, Techxans and the Houston Business Journal. About Zeus Development Corporation: Celebrating its tenth year of incorporation, Zeus Development Corporation is a privately owned research consultancy offering strategic and business development information through reports, monthly periodicals, databases, consulting services and conferences to the energy industry in the areas of information technology and downstream natural gas development. For more information, contact Ms. Whitney Casso, 832-200-3718 or wcasso@zeusdevelopment.com <mailto:wcasso@zeusdevelopment.com<. Greg.Whalley@enron.com
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