Oil, gas sector must embrace tech to remain relevant


As the world shifts to cleaner and renewable forms of energy, the oil
and gas sector industry in Africa must embrace technology in order to
drive efficiencies, improve sustainability, unlock alternative revenue
streams and transform operations.

This is the advice of a technology executive, Titilayo Adewumi, who
noted the oil and gas sector was facing an existential threat, and
technology was key to help transition the industry to a future beyond
the barrel.

Adewumi, Systems Applications and Products (SAP) Managing Director for
West Africa, was responding to questions from CAJ News Africa.

“Companies in the region’s oil, gas sector are confronted by a
singular question: is there a future beyond the barrel? Can the sector
optimise its performance, drive greater sustainability outcomes, and
pivot into new revenue streams?” Adewumi queried.

“The oil and gas sector is absolutely critical to West African
economies. Crude oil production in the region reached 1,8-million
barrels a day in 2021, with Nigeria, Ghana, Cameroon, Ivory Coast and
Niger leading the way,” he added.

While West Africa is the oil hub, there are vibrant sectors in Central
Africa (Cameroon, Chad, Congo, Equatorial Guinea and Gabon) while
Angola, in the Southern African region, is the second largest producer
in the continent after Nigeria.

Mozambique, in the southern region again is on the cusp of a liquefied
natural gas boom while in North Africa countries include Algeria, Egypt,
Libya and Sudan with South Sudan the only East African nation with
abundance of oil and gas.

Adewumi said while the world was transitioning away from fossil fuels,
the oil and gas sector would continue to play a vital role in the
continent’s economic growth.

He cited the McKinsey data that suggested Africa’s energy demand could
grow by 30 percent by 2040. This is well ahead of growth in global
energy demand of around 10 percent over the same period.

“The oil and gas sector will be central to supporting the continent’s
growing energy demands. However, there is no doubt that the sector must
improve its sustainability efforts and leverage technology to more
efficiently manage its operations, assets, and people,” Adewumi said.

He said there were abundant digital transformation opportunities for the
oil and gas sector provided they embraced readily available technology.

“Arguably the greatest opportunity for West Africa’s oil and gas sector
is the adoption of technology to drive efficiencies, improve
sustainability, unlock alternative revenue streams and transform their

Based on SAP’s work providing digital technologies to leading oil and
gas companies in the region, he said there are three key opportunities
for the sector to help transition to a future beyond the barrel, which
comprise becoming a sustainability leader, scaling new capabilities with
the cloud as well as smarter operations with intelligent asset

“Oil and gas companies face huge threats to their business model as the
world shifts away from fossil fuels toward more sustainable, clean
energy sources,” the executive said.

“However, it is a significant task to completely change business models
without it having a severe impact on companies’ productivity and
profitability,” Adewumi said.

A report by Oxford Economics and SAP identified a small group of oil and
gas companies that followed sustainability best practices, improved
their sustainability outcomes and enhanced their brand reputation.

To become a sustainability leader, oil and gas companies must invest in
data analysis, construct a model that measures actions against
performance throughout the company’s sustainability goals and capture
accurate data to inform company leaders of carbon output.

“The return on investment for becoming a sustainability leader is
significant,” Adewumi said.

The Oxford Economics and SAP report found that sustainability leaders
enjoy robust bottom lines, are substantially more likely to experience
profit margins in excess of 10 percent and have increased opportunities
for significant long-term value for the business, people and society as
a whole.

Cloud computing is hailed as offering oil and gas companies a
significant boost in agility, allowing downstream and process sectors to
leverage technologies for more efficient and optimised operations.

“By streamlining and scaling cloud capabilities as needed, oil and gas
companies in the region can build nimbler corporate structures and
unlock additional efficiencies, which can make a significant difference
to such a labour-intensive industry,” Adewumi explained.

SAP credits its S/4HANA Cloud offering for unlocking a wide range of
solutions designed for greater efficiency.

This includes upstream contracts management to maximize asset usage and
productivity, commodity management solutions that integrate procurement
and sales into core financial and logistics processes, and solutions
aimed at improving bulk transportation, inventory management and
operational decision-making.

“Technologies such as intelligent asset management – a suite of
solutions that brings collaborative asset intelligence to maintenance
and operations – must be enhanced to meet the changing operational
objectives and efficiency requirements that oil and gas companies are
subject to,” Adewumi said.

Companies that have adopted intelligent asset management unlock powerful
predictive capabilities are best placed to avoid unexpected downtime due
to breakages.

SAP reports its Asset Intelligence Network allows oil and gas companies
to collect and track equipment information in real time, with internet
of things (IoT) connected devices integrated to a cloud-based business
network for maximum transparency and control.

Adewumi reiterated that by embracing technology and leveraging key
solutions to improve operational efficiency and sustainability, the West
African oil and gas sector can continue to be a valuable player in the
region’s economic growth and development.

“With new capabilities and greater agility, the sector could unlock
opportunities to exploit new revenue streams for customers across the
value chain,” he concluded.

– CAJ News


SAP Managing Director for West Africa, Titilayo Adewumi

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