By Teddy Nwanunobi
The Group Managing Director (GMD) of Aiteo Eastern E&P Ltd, Victor Okoronkwo, has declared digitisation is no longer an option, but a fundamental requirement for oil and gas companies to go leaner, as well as to remain competitive in the energy sector.
Okoronkwo, who spoke on Thursday at the 2021 SPE Oloibiri Lecture Series at the Petroleum Technology Development Fund (PTDF) in Abuja, however, pointed out that successful implementation of digitisation would require collaboration across multiple industry stakeholders, including investors, leaders, and even policy makers.
Speaking on the topic, ‘Digitisation: The new paradigm for oil and gas portfolio optimisation post COVID’, Okoronkwo noted that the industry was still grappling with the aftermath of the twin tragedies of the dramatic crash in oil price on one hand, and the collapse in demand on the other hand.
“Both tragedies (were) triggered by the COVID-19 Black Swan. This phenomenon has accelerated new paradigms in portfolio optimisation and supply chain balance in the industry. With the price volatility, geo-political tussle between Russia and Saudi Arabia experienced during the first wave of global COVID lock down, financial leadership and liquidity risk management will remain major areas of focus for upstream oil and gas companies,” he said.
But he pointed out that both digitisation and big data have become key tools for success in the oil and gas industry, adding that the duo would gain even more prominence in a post COVID era.
“The industry is not out of the woods yet, despite the promising trends in price being influenced by OPEC+ production cuts.The unprecedented discovery, approvals, and now application of COVID-19 vaccines, hopefully, should help contain the pandemic, and economies will start opening again.
“The lock down has demonstrated that with increasing speed and capacity in connectivity (like 5G), digital tools are no longer just enabling communication. They are providing, and indeed, accelerating opportunities for value creation and value capture through enterprise integration, communication across multiple social media, remote monitoring, task automation, all to enhance operational efficiency, integrity, and process safety,” he said.
He hinted on how the implementation would be successful, Okoronkwo said, “It will also require reforming existing enterprise data architecture, adoption of cloud computing, internet of things, artificial intelligence, drone technology, social media and a whole lot of other emerging mobile computing and communication platforms.”
He gave reasons for its importance.
“Digitisation will bring benefits like improved efficiency, cost reduction, improved quality management, transparency in decision making, etc. However, digitisation also brings with it some challenges like data privacy and security, upscaling of existing regulations, standardisation across platforms and reskilling of the aging workforce.
“Competitive positioning in the upstream oil and gas sector is hinged on the delicate balance of the tripod of cost, production, and price. Leveraging digital technologies in the post COVID world will help embed this ‘value-for-money’ mindset, companies will, therefore, remain agile and keep innovating, and reinventing their strategies. This is even so important as the industry grapples with acceleration in energy transition, reductions in upstream capex, increasing disruptions of cloud-based computing, sustained influence of OPEC+ on the global market, and so on,” he added.