Editor's Letter: A digital reality
Digitalisation is not a far-fetched fantasy-it is, or it should be, a daily reality for the oil and gas industry
It is easy to get swept up in the hype surrounding digitalisation. Media headlines are a sea of buzzwords: internet of things, blockchain, automation, artificial intelligence, drones… and so on. In fact, many of those words are repeated in this issue of Oil & Gas Middle East.
But technology is ultimately the means to an end. When a company executive announces an investment into automation technology, they are really announcing an investment into efficiency and productivity using that technology.
Optimisation is a shared goal across the industry—despite rising oil prices, energy companies remain focused on keeping costs low and productivity high.
Digitalisation can be an extremely effective tool for optimising operations, as attendees of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2018 are sure to see at the event, with digital innovations on display from exhibitors that range from small startups to energy supermajors and their services providers.
As one of the landmark oil and gas events of the year, ADIPEC is generally a good time to reflect on industry trends and market movements. Last year, during ADIPEC, Brent crude prices hung around the $61 per barrel mark. As of writing, Brent sits at $72 per barrel, after a bull run that peaked in early October at a four-year high of $86 per barrel.
Industry activity has bled across the value chain, as key players move towards fullstream operations—most notably companies like Saudi Aramco, which launched engineering studies with Total to build a giant petrochemical complex in Jubail, and signed 15 MoUs worth $34bn at the Future Investment Initiative Forum, many of which involved downstream and localisation projects.
Localisation initiatives like the In-Kingdom Total Value Added program (IKTVA) are pushing international companies to restructure their supply chains and move manufacturing to the Kingdom.
Our cover interview for this month sits at the crossroads of these developments—Lorenzo Simonelli is the chairman and CEO of digital-focused fullstream oil and gas company Baker Hughes, a GE Company (BHGE). He talks about the potential that transformation, not only of the digital variety, holds for the region, and how BHGE has positioned itself in the market in the year since it was formed.
And what a year it has been for the upstream sector, marked by projects to expand and redevelop operations for oil and gas companies, advances in technology and a changing market. In our November issue, we speak to industry leaders who will be at ADIPEC this year, to catch up on their work in the past year and to see what is in store for them at ADIPEC and in the year ahead.