Chinese technology for digital oilfieldby Yasmin Helal on Dec 7, 2016
Could you explain the concept of digital asset management?
Digital Asset Management entails installing sensors to all your vehicles, wells and any other asset that you might have in the field or elsewhere, connecting them all to the devices that can track the information and sending it back to one command and control system. The recorded data will be sent to the cloud, from which you can analyse all this information and take decisions. These decisions could be automatic decisions taken by the system, an alarm for mechanism to prompt you, or something predictive to build future expectations.
How big would you say the scope of DAM is in the region?
From the perspective of digital transformation in general, because digital asset management is just a part of it, I think maybe there is 25%-30% penetration in the regional market. So the opportunity here is really big. In fact, I think from a digital transformation point of view the oil and gas industry is actually behind other sectors, compared to the banking industry or even to the government services or a lot of other industries.
There are a number of reports that detail investments and transformation happening per industry and the level of maturity and actually the oil and gas sector appears at the bottom of it. Hence, I think the opportunity is very big here. And I think that Digital Asset Management can help resolving the issue of the pressure created by the low oil prices.
Could you talk about some of the clients in the region whom you have offered DAM solutions?
Speaking about the Middle East in specific, we have top three clients here. We are working with ADNOC. We have also started recently with ADMA-OPCO for whom we have implemented some systems. According to them, our systems helped them reduce operational expenditure by 30%. Aramco is another reference for us, again under digital transformation. The Kuwait Oil Company is another one of our digital transformation clients.
What are some of the digital solutions that you are showcasing at ADIPEC?
As a result of the pressure from low oil prices, I think the biggest trend today in the oil and gas industry is to ‘do more with less’, or increasing productivity while reducing cost. The simplest answer to this is the digital transformation. So we have a number of solutions that we are showing at ADIPEC this year that can help organisations achieve this target.
What role can Digital Asset Management play in achieving Operational Excellence?
If you cannot manage your assets, you cannot manage your business. If I am talking about digital transformation efforts to digitalise the oilfield, DAM is definitely a part of it but it is just one point. Of course, you can manage your assets but can do so by different methods including manual, half-automated, or fully automated. And I think that today, we are at a point where it has to be fully-automated for best results. The technology is there and it is up to us to leverage from it or not.
This is the new era, everyone was talking about the cloud, now the new era of cloud or the cloud 2 era as some might call it is the industry plant. So, on the cloud, you will have a lot of solutions and renovations coming from different industries and the number will be limitless.
In the oil and gas field there is a big need for such technology as it is behind other sectors like I previously mentioned, and we are all under pressure because of the dip in oil prices. The very simple logical answer today is digital transformation. Therefore, I expect digital transformation will grow very fast in the coming couple of years for sure.
In your opinion is digitalising operations helping the upstream sector reduce operational costs?
I wouldn’t say that Digital Asset Management in particular is doing that so much. If you are talking about digital oilfields or about complete digital transformation and complete automation, then yes. I gave you the example of ADMA, the number they reported is 30% reduction in Operational Expenditure. So asset management is good but it is not limited to just that. Rather, it’s about the complete digital oilfield and the complete digital transformation; applying different technology.
Where in the regional industry is digital technology more prevalent?
Its prevalence usually depends on the wells. But you can find it in Saudi Arabia, Kuwait, the UAE, and partially in Oman.
How has the decline in oil prices created new opportunities for Huawei?
Research has shown that the number of layoffs in the oil and gas industry until 2020 is expected to increase to reach 5 million, which is a huge number. The good news, however, is that the expected new jobs that will be created will reach around 2.1 million by that time, but those jobs will entail different profiles and requirements.
Now if the number of jobs in the sector will decrease by 3 million people in 2-3 years, who is going to replace them? The only answer is automation and utilising digital transformation to automate the tasks that are done today manually by individuals.
The reduction in oil prices is putting pressure on organisations to reduce their cost, and to reduce cost they have to reduce the number of resources that they have. To do this, they have to automate the tasks that individuals are doing, which can be done by acquiring new and modern systems to automate the existing jobs. I believe this will have a positive impact from a technology and a solutions point of view.