Siemens states benefits of digital revolution for oil and gas industry

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Tuesday Aug 22,2017  8: 57 AM

Siemens Nigeria Limited has advocated the need for Nigeria’s oil and gas industry to embrace digital revolution in its facilities, saying that such an action could propel the country from the shadows of persistent underperformance to become a global energy powerhouse.

This will be a catalyst for industrialisation and growth in many other economic sectors too, said Onyeche Tifase, chief executive officer of Siemens Nigeria.

According to her, digitalization in the energy sector involves the better use of data to manage and control multiple operations as it drives efficiencies in energy management and automation systems.

Tifase said what is even more important is the fact that workers in a digital industrial environment enjoy a massive increase in skills and productivity.

“Digital development is not confined to new oil and gas facilities. Existing oil and gas infrastructure, from pipeline to refinery, can easily be upgraded to digital automation. This means that Nigeria’s ageing oil refineries in Port Harcourt, Warri and Kaduna can be optimized with digitalization,” she said.

The Siemens boss who said these facilities were built as early as 1978 explained that they could be made far more efficient and productive, thereby significantly reducing Nigeria’s dependency on imported petroleum products.

The benefits of this investment would be measured in billions of dollars, she said.

Effective integration of digital technologies she stated could reduce capital expenditure in the oil and gas sector by up to 20%, cut upstream operating costs by up to 5% and downstream costs by up to 2.5%.

According to her, Nigeria’s best approach will be a combination of local skills and knowledge, and the expertise and experience of a proven international partner able to deliver digital technologies and automation, together with traditional instrumentation and controls, across the entire energy value chain.

This, she explained further, supports backward integration of skills and technical competence in Nigeria’s limited skilled workforce.

A recent PwC report suggests that by the end of 2019 Nigeria could assume the status of the largest producer of refined petroleum products in Africa. The projection sees Nigerian exports exceed 300,000 bpd by 2019 – up 350% from 2016 production of 65,000 bpd.

In this scenario, Nigeria becomes an international trading hub similar to Australia, Russia, Europe and the US Gulf Coast, while the entire West Africa region becomes energy self-sufficient by 2019, thus eliminating the need to source refined oil products from the US and Europe.

She stated that despite dwindling crude oil sales to the West, West African demand for Nigeria’s crude oil is set to rise dramatically. The region annually consumes 22 billion litres of petrol, and Nigeria’s domestic market accounts for 17 billion of those litres, yet the country still imports around 80% of this energy.

“With 37.2 billion barrels of proven oil reserves, Nigeria could easily meet this demand locally through modernisation and continued exploration. The country’s refining capabilities are currently underperforming and notoriously inefficient, due to lack of maintenance and underinvestment in technology”, she said.

“Port Harcourt refinery, for example, has capacity for 150,000 bpd of oil production but has been running at just 10% capacity for the past three years. This is mainly due to its reliance on 1980s technology now regarded as obsolete in the global oil and gas sector”.

The consequence is lack of preventative and reactive maintenance, inaccurate forecasts and allocations, and soaring energy costs.

Onyeche Tifase stated that instead of being a threat to the workforce, digital technology redefines the role of the worker, and it has the potential to bridge the blue and white-collar worker, to create what is termed the ‘grey-collar’ worker. Humans and machines are therefore not competing for jobs, but working together to create a new type of talent, which is a vital component to sustained sector growth and maturity.

“In the near future, Nigeria’s oil and gas operations will have real-time access to data at the click of a button, from any location on earth. This essentially connects a team of global experts collaborating in real-time to drive improvements in exploration and extraction, health & safety, pipeline security, distribution, refining and transportation of the finished products”.

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