Cover story: How digital technology (and digital natives) can find a place in the oil & gas industry
Our Young Oil & Gas Professional of the Year 2018, Mohammed Al-Ghazal, talks about digitalisation, cybersecurity, and why the industry needs young professionals
When Mohammed Al-Ghazal left his job as a foreman at Saudi Aramco in 2013 to pursue postgraduate studies at the University of Southern California, crude oil prices were over $100 per barrel. When he returned to Aramco in 2015, oil prices had plummeted to $46 per barrel.
“The plunge in oil prices was a challenge at the beginning,“ Al-Ghazal says in a phone interview from Dammam, Saudi Arabia. “But at the same time, it was a chance for the birth of startups and new technologies that were built around cost containment.”
It was innovation as a product of necessity. “When oil was $100 a barrel, [digital innovation] wasn’t a priority,” says Michael Purkiss, general manager of Proserv Abu Dhabi, an energy-focused technology services company. “Everything was fine, so there was no impetus to change.”
Still, Al-Ghazal recalls feeling impressed by the oil and gas technologies that he saw at Aramco in those days. His interest is not surprising—Al-Ghazal was raised in the Saudi Arabian city Al-Hasa, home to the world’s largest conventional oil field, Ghawar. He has never been too far from the oil and gas industry.
But when he came back home from studying in the United States, he found an unfamiliar landscape waiting for him. The industry had shifted towards more complex formations that required new extraction techniques—a trend that is expected to continue as ‘easy’ and conventional resources diminish and producers look towards unconventional resources and technically challenging reservoirs.
“It’s difficult to understand these new formations and how to best listen to them, because all of the old techniques were built for conventional resources,” Al-Ghazal says. “They don’t fit with these new resources because they have different properties.”
He maintains that this has led to a shift in focus towards completion, hydraulic refracturing and multistage refracturing, which can restore well productivity after it has already been fractured. He also notes that it is less costly to extract more from existing fields than it is to develop operations in new fields.
Cost and time efficiency are daily concerns for Al-Ghazal—as a drilling and workover operations supervisor at Aramco, Al-Ghazal has to make sure that projects are on time and on budget. Easier said than done.
He believes one industry trend is key—Al-Ghazal is a strong believer in digitalisation, which advocates integrating digital technology into oil and gas operations to make them more efficient, less costly and safer. He has conducted research and worked on projects involving machine learning, downhole monitoring systems and cybersecurity.
But the rush towards a digital future has exposed vulnerabilities in oil and gas operations. When these oilfields were designed and built, decades ago, the primary safety concern was a tangible one.
“The concern used to be physical security,” Al-Ghazal says. “You wanted to have these systems gated, you had limited entry, limited access. That was the focus when they were working on the blueprints and designing these systems. That was the threat.”
Now, cybersecurity has emerged as a key issue for oil and gas companies. While on-site safety remains a concern for oilfield operators, it is supported by decades of experience and protocol. As a relatively new problem for the industry, cybersecurity exists in a grey area without the protection of industry standards. In 2016, Deloitte reported that the energy industry was the second most prone to cyberattacks.
“We have a large volume of data flowing every day, going through our systems from field to office, from engineering office to corporate business and vice versa,” says Al-Ghazal. “Any interruption in our data can cause loss either in time, money or safety.”
He admits that without cybersecurity measures, digitalisation can be counterintuitive, essentially putting sensitive parts of the operation online without protection and leaving oil & gas operations open to attack from several fronts.
“The more connected points you have, the more vulnerabilities you have,” says Evan Kerr, senior security consultant at Restrata. “As we increase interconnectivity, we increase potential avenues of attack.”
Although Al-Ghazal believes that oil and gas companies are investing in cybersecurity, he says that globally, the industry isn’t doing enough to counter cyberattacks. The real issue is fitting new technology into old oil & gas operations.
“One of the major challenges that oil and gas companies are facing is that they need to make adjustments and replace older parts to accommodate the safety instrumentation systems and cybersecurity solutions,” Al-Ghazal says.
For older oil and gas operations that are not already connected to supervisory control and data acquisition (SCADA) systems, technology which automates some processes and gathers data in real-time, retrofitting facilities with new technology can seem risky and costly.
In the long-run, automation is expected to cut costs for hiring and maintenance while optimising production—a proposition that might appeal to the oil & gas professionals who recall the days of $40 a barrel oil prices. But Purkiss says that cybersecurity is a key concern for operators who approach him, looking to digitalise. He notes a recurring question: “Can it be hacked?’”
Securing digital oilfields is no easy feat. With a whole field of connected components, there are many potential points of entry.
“You cannot adopt a strategy where you paint everything with the same brush, you need to analyse the components,” Al-Ghazal says. “You find the right cybersecurity for each function, and this is going to change for each component.”
Even when the right cybersecurity measures are in place, there is another looming concern for the oil and gas industry, which often relies on contractors: third parties.
Kerr explains it with a simple hypothetical case: If an oil company running a refinery outsources its physical security to another company, and the third party has a data breach, the oil company’s information on billing, number and placement of security guards, operational plans and procedures, and other sensitive information could be exposed because a contractor didn’t have the right cybersecurity in place.
To Al-Ghazal, the solution lies in leveraging the knowledge and experience of digital natives. Just as new technology must fit into old operations, new, digitally skilled talent must find a place in this famously conservative industry.
But the talent gap persists. In an attempt to remain competitive during the industry downturn, major oil & gas producers went through massive downsizing and capex cuts. They became leaner, but now face a shortage of skilled workers to carry their work forward.
At 30 years old, Al-Ghazal is a rarity in the industry, he’s part of the 21% of oil and gas employees that are under 34. Almost half of employees in oil and gas are above 45, according to GETI Report 2018.
“Crucially, a lot of people made the bridge in the skills transfer to other sectors, so out of oil and gas and into things like power generation and power distribution,” says Albert Kahlow, regional director of the Middle East at hiring consultancy Airswift.
“A lot of younger engineers and graduates coming out of university with engineering degrees didn’t enter the industry because it was so well-known that it was in a downturn, so people straight away chose a different career path,” Kahlow adds.
Al-Ghazal says that the industry’s need for young digital natives is critical, and notes that many companies are seeking employees with digital skills in addition to core petroleum engineering skills. Kahlow agrees—he has seen an uptick in oil and gas hiring for cybersecurity and related roles.
As oil prices recover and upstream oil and gas companies continue to invest in digitalisation to remain relevant, Al-Ghazal believes that youth will create workplaces that are more efficient and competitive.
“The future, as we say, belongs to the digital engineer,” Al-Ghazal says.