Is the heavenly reward no longer worth waiting for?

By Sebastine Obasi

Efficiency and improved oil production will only be achieved if stakeholders embrace digital technology, experts in the oil industry have said.

Speaking at the ongoing Nigerian International Petroleum Summit, NIPS, at Abuja, Mr. Bitrus Nabasu, Permanent Secretary, Ministry of Petroleum Resources stated that deployment of digital technology is key to reducing the Unit Operating Cost (UOC) of producing crude oil in Nigeria to $10 per barrel by December 2021. He said, ” As the demand for energy increases at an astronomical rate, the quest for deployment of innovation and technology to keep pace with the demand increases.

“The oil and gas industry utilises these innovations and trends to increase the efficiency of operations and reduce costs. “Most oil and gas companies overrun in cost and time. The use of digital technology can help companies manage over-spending and operations, meeting deadlines and ultimately increasing overall productivity.” According to him, with the uncertainty triggered by the COVID-19 pandemic, the current objective of the oil and gas industry is maintaining sustainable profitability.

He explained that some of the digital technologies and innovations that had helped in this regard include Artificial Intelligence, Big Data and Analytics, Robotics and Automation, 3D Modeling, Cloud Computing, Blockchain technology, amongst others. “These technologies do not come cheap. No doubt, there are huge costs involved in the deployment of innovation, but those companies that make it a priority reap the benefits.

“According to a research by McKinsey, effective use of digital technologies in the oil and gas sector could lead to reducing capital expenditures by up to 20 per cent and operating costs in the upstream by three to five per cent. “Therefore, digital technology should be placed at the core of the business strategy in the industry,” Nabasu added.

Also speaking, Leo Zhang, Director, Energy Business Unit, Huawei, South Africa Region, stated that big oil could see proven reserves run out in less than 15 years if output is not replaced by discoveries. He however assured that in the next 12 years, with information communication technology, ICT, the oil industry will experience massive investments. He listed key enablers to accelerate from investment to production to include, better data acquisition, faster computing and analysis, etc.

Jide Adeola, Partner with PriceWaterhouseCoopers, PWC, believes that global energy mix will be transformed if governments and players in the industry follow roadmap with major milestones. He explained that there is a number of emerging pathways of the oil and sector in the future. “Tomorrow’s energy companies must be digital enabled. “Today, most oil and gas companies are still in their digital transformation towards an envisioned digital enterprise. “Major valuechain participants are adopting various digital technologies,” he added.

Samuel Orji, Digital Energy Expert, stated that digital energy will address the issue of collaboration in the in the oil industry. According to him, benefits of oilfield internet of things, IOT, project include real time monitoring of oil well sites, reduced response to security/health, safety and environment, HSE, events, etc.   

Also speaking, Mrs Betty Ugona, Chief Innovation Officer, Research, Technology and Innovation Division, Nigerian National Petroleum Corporation (NNPC), said digitalisation is one of the NNPC’s strategies to curb high cost of operations. Ugona said the division was set up to provide research support to the NNPC following the impact of the COVID-19 pandemic on crude oil production and how best to overcome the challenges.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.