THE
global oil and gas industry is undergoing a period of unprecedented change and
disruption. Falling crude oil prices have put immense strain on the entire oil
value chain, while the increasing availability and affordability of renewable
energy sources means oil & gas is no longer the de facto choice for energy
generation.
An African perspective on
oil & gas
In Africa, where the oil
and gas industry drives the economic engine of several of its largest
economies, the need for innovation in the oil and gas value chain is critical
to its continued growth and success. By the end of 2013, Africa was estimated
to have 228 billion barrels of oil-equivalent, with oil making up 56% of this
and gas accounting for the remaining 44%, according to EY.
The US was until recently
the largest buyer of African crude oil, but exports dropped from a high of 1.8m
barrels a day in 2005 to only 274,000 in 2015. There is hope that the new
administration's policy changes could herald an era of renewed oil exports to
the North American market.
According to PwC, one of
the key areas oil and gas companies should focus on if they are to weather the
storm is in exploiting new technology to innovate, minimise costs and extract
further value from existing infrastructure. And of all the emerging
technologies, IoT presents the greatest benefit to the oil and gas sector.
The Internet of Oil &
Gas
The oil and gas industry
has long been at the forefront of automation and technological disruption.
However, IoT is poised to completely revolutionise the industry, from
extraction to operations to customer engagement. Connected devices open
opportunities for oil and gas companies to improve safety, increase efficiency
and ensure visibility across the value chain.
A Morgan Stanley report
estimates that there's a global market of $100bn for autonomous vehicles in the
trucking and logistics industry. With only a 50% penetration of IoT, the global
manufacturing industry can see a potential cost saving of $500bn. In fact, IDC
estimates that IoT revenue in Africa and the Middle East will reach $114bn by
2020.
Oil and gas companies
have taken note of the potential of IoT and are investing vast sums into IoT to
achieve improved uptime, ensure predictive maintenance, reduce the cost of
compliance, and transform business practices. Asset uptime and maintenance has emerged
as the key initial driver of interest in IoT: an ARC strategy report found that
60% of respondents named reduced asset downtime as the catalyst for their
interest in IoT.
Fleet management stands
to benefit greatly from IoT: construction contractor Essar Projects uses GPS
and RFID systems to monitor equipment movement, fuel levels and consumption,
achieving a 5% saving on maintenance and a 10% saving on fuel costs. The
ability to use sensors to track equipment performance and proactively manage maintenance
is helping oil and gas companies to ensure optimum equipment uptime.
Making IoT work for oil
and gas companies
As sensors and connected
devices continue to permeate every aspect of the oil and gas value chain,
companies will start generating unprecedented volumes of data. SAP solutions
powered by the SAP HANA platform enables companies to extract valuable insights
from this data. Oil and gas companies can get real-time information from
multiple locations, including information on location awareness, project
status, environmental factors and safety.
Environment, health and safety
management professionals can mine employee data - including social media - to
identify key risks to operations, while public information that forms part of
the big data lake can be used to determine public sentiment on oil and gas
operations.
Caution must be taken in
terms of data security, as recent malware examples have shown control systems
can be attractive targets for intruders wishing to harm or interrupt
production. It is equally important that the correct technology partner is
chosen: IoT brings together data from hardware, sensors, devices, apps,
telematics and connectivity to the cloud. The software vendors that connect and
process all this data need to have the depth of experience to reshape business
processes to allow oil and gas companies to fully enjoy the benefits of IoT.
However, the real value
of IoT for the oil and gas industry lies in connecting operational
infrastructure to broader business software. In-memory computing combines IoT
data with business transactional data in a single shared database, in real
time. This allows oil and gas companies to gain real-time insight into key
operations and asset performance indicators, equipping business leaders with better
decision-making capability and opening the door to streamlined business
processes and entirely new business models.
For oil and gas companies
ready to transform their operations through IoT, the benefits are
unquestionable. Choosing the correct technology partner that has the depth of
industry experience and the robust cloud-based in-memory platform needed to
bring the benefits of IoT to life is essential to their success.
by Pedro Guerreiro,
Managing Director: West Africa at SAP Africa
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