Lack of adequate data inimical to oil, gas sector growth —Stakeholders

Digital revolution is beginning to take over global economy and this came to the front burner during the recently concluded Nigeria Annual International Conference and Exhibition (NAICE), organised by the Society for Petroleum Engineers (SPE) in Lagos. In this report,  OLATUNDE DODONDAWA examines the role of Artificial Intelligence (AI) in the oil and gas sector operations and how prepared operators are to embrace what seems to be game changer in the sector.


Stakeholders in the oil and gas sector have submitted that the oil and gas sector is moving towards the advancement of artificial intelligence, big data as well as mobile technology.

In his presentation, titled  “Digital Transformation and Emerging Trends in Artificial Intelligence: Implications for the Energy Sector and Future Outlook”, the Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo), Mr. Bayo Ojulari, said digital was one of the mega trends re-shaping the energy system.

He stated that the development is changing the landscape with technology becoming faster and cheaper over the past decade.

According to him, “the cost of censors has dropped from $1.30 to .60 cents while the cost of processing power has equally dipped 50 times alongside cost of Megabytes (MB) of cloud infrastructure which also dropped by 20 times.”

He added that exponential growth in technology, data and capability enabling unprecedented transformation as well.

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He disclosed that massive investment in oil and gas over the years has generated enormous data which can be leveraged upon to transform operations and create new business models.

“Market analysts have identified digital technologies as a significant safety and environment value contributor by lowering emissions and water usage to the value of $460bn to industry and society, avoiding oil spills by 230,000 barrels (bbl) of oil and improving  safety performance over 20 per cent reduction in accidents and injuries,” he said.


 Addressing challenges associated with use of data

Chairman, SPE Nigeria Council, Mr. Debo Fagbami, stated that, big data is a key enabler of exploring business insights and economics of services in the petroleum sector.

He, however, maintained that the challenges associated with the wave created by big data in our industry would stem from the fact that big data in itself is a complex terrain.

According to him, “obvious challenges would come during its integration with existing business processes and methodologies as well as the uncertainties created by management of large and complex data by an industry only beginning to adopt it.

“Added to this would be the in-house talent gap as well as the complexities associated with migrating existing data into a big data structure suitable for use in the artificial intelligence terrain.  Synchronising data across multiple data sources and user groups or function also create a challenge and added to this would be costs associated with migration and providing solutions for specific scenarios and end-user applications.”

He admitted that big data and AI in the energy industry would open doors for new talent as well as cross-training and skills conversion which is not unfamiliar territory for petroleum engineers to explore and exploit.

He opined that, as more organisations recognize the importance of big data as a means of realising and entrenching competitive advantage, it would be used as an in-road to gain insight and make more informed decisions.


Tackling data security problems

Fagbami explained that big data in itself presents a powerful means of storing large amounts of data that can help analyze, examine, observe trends and irregularities within a system or network.

“Big data analytic tools can be used to identify and combat a cyber-security threat which remains a concern for most organizations today. Having an in-house structure and talent pool that is adequately equipped to utilize the concept of big data for business process enhancement as well as to protect the system is a fantastic bargain for any serious organization,” he said.

He further stated that cyber threats remain a clear and present danger and oil and gas companies generate and store large volumes of data on a daily basis in support of the energy value chain from exploration to production and a threat to any remains a threat to all, hence the responsibility lies with all industry players to ensure that standards are set to utilize robust analytical tools to combat the threats imposed by cyber-crime.


Looking beyond data

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, in his address stated that he agreed with the theme of this year’s conference, especially at this time that the industry is becoming increasingly ambitious and also challenged.

“No doubt, the emergence of artificial intelligence has altered the dynamics of the industry’s operations by providing quicker processes and interventions in the conduct of petroleum operations, adding that, this also is on the back of big data that provides the platform for an effective AI system.

“The combination of AI and big data are complemented further by mobile technology that enables real time access to information and the execution of apparently complicated operation from remote locations. Today, single data platforms exist that link large amount of information to create robust decision support across variety of industry operations which include; to grow reserves, increase production at the lowest possible UTC, compete for market with emerging alternative production sources.

“Others are; to take market position in renewable energy and address the challenges posed by regional security issues, market volatility, activities of vandals and saboteurs and oil thieves and pirates,” he said.

He noted that, the industry is beleaguered by other issues that are not necessary technology driven. These, he said, include; issues associated with fiscal regime which would have to be addressed in order to accelerate investment across the value chain.

“Today despite the opportunities that exists, investment decisions in oil and gas projects in Nigeria have become increasingly difficult to closeout. This I believe is driven by unclear fiscal terms of various Production Contracts and the delays in the passage of the lingering petroleum legislation.

“The effect is for investors to opt for alternative portfolios when making financing decisions. We therefore need to collaborate to ensure the timely resolution of contractual issues and the passage of the necessary petroleum legislation,” he said.

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