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Oil companies explore new technology for major projects

Old Economy companies in the oil and natural gas industry are increasingly breaking from their stodgy image and going high-tech.

An ocean-based oil rig doesn't exactly conjure images of the World Wide Web, yet Old Economy companies in the oil and natural gas industry are increasingly breaking from their stodgy image and going high-tech.

Billion-dollar oil giants Texaco and Occidental Petroleum are reviewing proposals for software to make production and maintenance of complicated oil rigs more efficient. Among the contenders that have submitted proposals is Redwood City, Calif.-based start-up PointCross, a developer of Web-based project management software dubbed Orchestra.

By commissioning Web-based software, the oil companies hope that construction of massive oil rigs, pipelines and power plants will go more smoothly and cost less. The project management software promises to keep everyone in the project working on the same set of designs, including the latest changes.

"Most companies don't have a central repository where all interactions are logged," said Shree Nath, PointCross' director of product technology. "When an email is generated from Orchestra, it is automatically logged into the context of a project. Any correspondence is maintained as a threaded discussion. You can trace how decisions were made; you can backtrack to how a certain decision was made."

Old Economy oil and gas companies have been among the slower industries to adopt new software technologies. As such, they have missed out on the promised cost-cutting and time-saving benefits. However, as oil becomes increasingly difficult and expensive to find, the companies say a quick return on their investment is forcing them to modernize.

At Texaco, project engineers are reviewing software packages to manage the construction of a $3 billion, sea-based oil-processing vessel off the coast of Nigeria. The vessel will stretch to one-fifth of a mile in length and approximately one football field in width, and it will house 100 full-time employees, 75 million barrels of oil and dozens of processing equipment pieces.

Texaco senior project engineer Brian Kaar said he plans to invest in software to curtail problems that have plagued projects like this for years. In addition to PointCross, Kaar said that other companies being considered include Intergraph and Cimage Enterprise Systems.

"A big problem is working on different revisions of projects. One team is working on an old revision of a project, and that leads to a lot of field reworking," he said. Often, Kaar said, one set of plans making its way through an approval chain is lost or temporarily misplaced.

"In the past, the collaboration efforts have dealt strictly with faxes, DHL packages and constant phone messages," he said. "It's exceedingly messy because you got so much information going to so many different places that it slows down the project...and it almost guarantees that you're going to have some miscommunication on certain issues."

Furthermore, project management software lets engineers easily locate specific information several years later.

"For example, if a pump goes down, a lot of time the information that you can get in the past on that pump would be located in big books that (engineers) couldn't easily get to, and that information may or may not be precise," Kaar said.

Hope for the future
Landing a contract for Texaco's approximately $3 billion project would be a huge boon to PointCross, a small company with about 30 employees and no signed customer contracts. Executives would not disclose the potential value of the contract.

The company landed its first round of funding in February from Skyblaze Ventures and is negotiating for additional funds. Chief operating officer Pradeep Anand said "smart angel" investors including Vijay Vashee, a vice president at Microsoft, and Raj Mashruwala, executive vice president of Tibco, have also invested in the company.

Despite this backing, PointCross must still prove its sustainability and technology in a market that disfavors young technology companies. Texaco's Kaar admits he is nervous to invest in such a young, untried company.

"One of our major concerns going with (PointCross) early on is the safety of our data if they go belly-up," Kaar said. "But they expressed a willingness very early on to give us their code should that happen so we could go ahead and maintain that data ourselves."