The Role of U.S. Innovators in Technology-based Exploration
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From Artificial Intelligence (AI) and the Internet of Things (IoT), to Big Data Analytics and Electronic Monitoring, the U.S. oil and gas industry has long been recognized as an industry leader in technology and energy innovation. Accordingly, U.S. operators and oilfield service (OFS) companies can serve as key partners and facilitators of technology transfer to their African counterparts, as the continent holds significant room for digitalization, particularly for legacy fields that account for 30% of African production. To date, Africa’s upstream space has been slow to adopt digital and automated technologies, owing to the industry’s reliance on highly technical, physical processes, strict health and safety regulations and challenges in integrating digital technologies with legacy systems, among other factors.
For African and global petroleum markets, COVID-19 has accelerated the need for digital rollouts, in part because companies have had to adopt digital tools for remote work, thereby positioning technology as a means of coping with transformational changes facing the industry. Furthermore, digitalization and optimization of oilfield assets have emerged as principal cost-cutting mechanisms, as oil and gas companies continue to face threats to efficiency, sustainability and profitability.
Well integrity, enhanced oil recovery, manufacturing execution systems, cloud computing – such digital applications are capable of uniting real-time data with advanced analytics to improve decision-making and boost efficiency and sustainability, especially as the need to allocate capital to assets with the highest returns and operational efficiencies becomes more pressing. Not to mention that investments in proprietary technologies can provide new and alternative sources of revenue for OFS companies, who then license these technologies to operators.
One way that American companies have been able to pilot new digital technologies is by forming partnerships and facilitating knowledge transfer with artificial intelligence and software companies. Baker Hughes, for example, has been an early adopter of IoT technologies, pioneering a digital platform known as “Predix” to analyze vast quantities of data recorded by sensors. To market the software and accelerate its integration of AI into oil field operations, the American OFS company forged a strategic partnership with software provider C3.ai. Leading IOCs then signed on to adopt the Predix system, with BP expanding its use on platforms in the Gulf of Mexico and Shell reaching a three-year agreement to implement the C3 platform across its operations.
Baker Hughes’ sizable investment in C3 signals the degree to which digitalization is emerging as an increasingly important – and highly profitable – link in the oil and gas value chain, offering the ability to extend the economic lifespan of maturing assets, help make improved drilling decisions and expand existing discovery potential. According to a 2020 study by Boston Consulting Group, going digital can unlock significant value for the upstream industry, translating to a 50-60% reduction in data interpretation time and cost in exploration; 20-30% faster well delivery and more productive wells for drilling programs; up to 70% reduction in engineering hours plus higher-value field concepts in field development; a three to five percent increase in production; and 20-40% reduced maintenance cost in operations. For African operators and OFS companies, digitalization is a long-term process in which they can no longer afford to lag behind.
Energy Capital & Power (ECP) – in partnership with the African Energy Chamber’s U.S.-Africa Committee – invites U.S. companies, investors and organizations to participate in the first-ever U.S.-Africa Energy Forum (USAEF) (December 9-10, 2021, Houston, Texas), introducing American companies to African opportunities. To learn more about how U.S. firms can advance the agenda of sustainable, long-term investment in African energy, please visit www.energycapitalpower.com. To sponsor, speak or attend USAEF 2021, please contact Senior Director James Chester at james@energycapitalpower.com
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