Leveraging Artificial Intelligence, big data in oil, gas exploitation
Beyond vandalism, the oil and gas sector faces challenges on multiple fronts. Embracing artificial intelligence (AI) has been described as one of the measures to address them. How prepared is the Nigerian oil and gas industry for this innovation? FEMI ADEKOYA writes.
Alongside volatile prices, new competitors emerging in the energy sector, and increasing global pressure from both public and private stakeholders around sustainability and environmental issues, the oil and gas sector needs to address peculiar challenges in their areas of operation with technology.
With global concerns heightened through several trade issues and sanctions, oil firms are beginning to explore modern technologies to maximize their efficiency and revenue.To some operators and industry observers, these challenges are all surmountable with the right approaches.
While the utilization of artificial intelligence has proved to be beneficial in several sectors such as healthcare, manufacturing, retail, and agriculture, the introduction of AI in oil and gas companies, might help the fortunes of the sector.
According to the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, technology will permit the industry to test new ways of achieving better results.He however added that the validity of such endeavours will depend on the availability of quality data which will ultimately support the deployment of AI with the overall effect of delivering more efficient/cheaper solutions.
Speaking at the just concluded Nigeria Annual International Conference (SPENAICE2019) organised by the Society of Petroleum Engineers (SPE) Nigeria, Kyari said NNPC will leverage technology and innovation to achieve the goal of building energy company of global excellence.“We are determined to improve transparency, accountability and the overall performance of our businesses to deliver maximum value to 180 million Nigerians.
“Technology and innovation will therefore continue to shape the way we do our businesses, especially in the deep offshore and other hard-to-operate environments.“We have to attract investment to deploy improved technology in the exploration and production of hydrocarbons from inland as well as the ultra-deep offshore basins”, he added.
On some of the projects embarked upon by the corporation, Kyari stated the need to open up the midstream, complete all critical gas development projects targeted to deliver about 3Bscfd to gas market, ensure closeout of investment decision on NLNG Train 7 & improve domestic utilization to improve power generation & industrial growth”
Today, NNPC with our Partners are driving the National aspiration to grow the National reserve to 40billion barrels by 2025 and improve crude oil production to 3Million barrels/day. To achieve this ambition, huge investment is required across the value chain”
Dealing with data silos
ACCORDING to EY, one of the issues to tackle when embracing AI is that of data silos.This is particularly so in the oil and gas sector, where local storage of data and long, complex value chains mean individual businesses — or even units within a business — may lack a holistic view of the data they need to improve their operations.
Upstream organizations may need data or insights generated from data from midstream or downstream units, and vice versa, to really understand how opportunities and threats are evolving — and respond quickly and appropriately.Without consolidation of the industry’s data, AI-enabled solutions will only ever be partial, and fail to deliver maximum value to the organization – or to the value chain as a whole.
Kyari affirmed this position saying that data platforms exist that link large amount of information to create robust decision support across variety of industry operations to grow reserves, increase production, compete for market & take market position in renewable energy.
Chairman, SPE Nigeria Council, Debo Fagbami, stated that the industry has been generating data in the last seven years.“Big data will help us to scrutinise the available information as well as offer opportunities to address challenges in the industry. This and other issues are what the conference seeks to address”, Fagbami added.
For Kyari, there is need for collaboration between relevant stakeholders to ensure the timely resolution of contractual issues and the passage of the necessary petroleum legislation.
The Acting Director, Department of Petroleum Resources (DPR), Ahmad Rufai Shakur, said the development of a robust automation process by the agency has positively impacted on the oil and gas industry in Nigeria.He said the DPR Integrated Automated progamme and AI framework is hinged on technology adaptation, AI, adding that the opportunities have created collaborations to drive big data availability and analytics to support informed decision making and enhancing national business planning and execution.He said the Oil and Gas Industry Service Permit System (OGISP), has been able to reduce the turnaround time for licensing, licensing renewal for all categories of service providers in the industry from an average of three weeks per application to a record time of 72 hours.
Enhancing efficiency and profitability
ON a return on asset (ROA) basis, oil and gas consistently under-performs. The EY noted that on a spectrum that ranges from the high teens (tobacco, railroads, and alcoholic beverages) to the low single digits (health care, consumer discretionary and financial) oil and gas has an ROA of around 7.5%.
Oil and gas (and other commodity industries with low ROA) companies are traditionally built on tangible assets like drilling rigs, pipes and refineries. Industries with high ROA are built on intangibles like brand and intellectual property.
“Oil and gas companies can change that equation. They can bring more data and more sophisticated analysis to bear on their business, leveraging and extracting additional value from their assets — and AI can help”, EY added.
Permanent Secretary, Ministry of Petroleum Resources, Dr. Folasade Yemi-Esan, said in recent years, the industry has undergone rapid change, particularly with reference to the proliferation of new technologies by operators in order to meet the challenges of the emerging digital economy.She said there is a general slow pace with which the oil and gas industry is adapting technologies such as Artificial Intelligence (AI), cloud computing and Industrial Internet of Things (IoT) for their operations and that is especially so in Nigeria.
According to her, the oil and gas industry needs to embrace digitalization to fast track the capacity and the potential of the industry by 2040.“On the part of the ministry, we are driving parastatals to ensure that we acquire reliable data and we are doing this through policy on transparency and efficiency. We are working with OPEC and back home, we are working with the National Bureau of Statistics (NBS) and Department of Petroleum Resources (DPR),” she said.
She urged stakeholders to partner with the ministry and its agencies to enhance Nigeria’s capacity in the area of data development and management in the oil and gas industry.She added that awareness of Artificial Intelligence has consistently been on the rise since 2011 and its utilization has transformed several sectors such as health care, manufacturing, retail, telecommunication and agriculture, but however stated that its impact in the oil and gas industry is yet to match the aforementioned sectors.
According to her, the AI market in oil and gas is estimated to reach approximately $2.85 billion by 2022, growing by compound annual rate of 12.66 per cent. This growth is due to the adaptation to big data technology hence, AI requires big data for efficiency. Delivering his presentation on the theme, “International perspectives on Artificial Intelligence, Big Data and Mobile technology: Changing the future of the energy industry” by the 2019 SPE International President, Sami Alnuaim who is also the Department Manager, Petroleum Engineering Application Services, Saudi Aramco, said in the global Gross Domestic Product (GDP) and prosperity indices, Africa indices still remains the lowest.
Citing the International Energy Agency (IEA) in 2018, he said 620 million people in Africa do not have access to electricity and almost 730 million people depended on traditional biomass for cooking.For oil and gas companies to generate income, EY cited the need to put the data generated by their own assets to work with AI and use it to improve efficiency.
“This increased efficiency will translate to greater predictability in exploration, accuracy in drilling and completions, efficiency in production, reliability in maintenance, throughout refining, and optimization in transportation and distribution”, it added.Deployed effectively, AI technologies could have a transformative effect on the industry, ultimately allowing oil and gas organizations to build smaller, more elite teams, that can help deliver value more effectively and efficiently, and position for growth. With success recorded in many industries, Nigeria can leapfrog and leverage big data for economic development.
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