Digital transformation ‘paramount’ for Africa to reap the benefits of oil & gas boom

African countries have been making the headlines over the past few years thanks to the oil and gas industry, however, the region is lagging behind in its digital uptake, which is putting at risk its ambition to become a gas-powered economy by 2030. Nigeria is one of the countries actively working to harness their oil and gas potential while digitalisation is perceived to be a solution to break down the barriers to oil production in the region, according to James Fisher AIS, a digital services provider championing digital adoption for oil and gas assets in Nigeria and West Africa through its digital twin technology.

A report, published by environmental research group Urgewald in partnership with multiple organisations across Africa and Europe, showed that total capital expenditures (capex) for oil and gas exploration in Africa rose from $3.4 billion in 2020 to $5.1 billion in 2022.

Areas covering 886,000 km2 have been licensed since 2017 for new oil and gas exploration in Africa and out of the 45 African countries, where the oil and gas industry is currently looking for new finds, 18 are ‘frontier countries’ including Namibia, Uganda and Somalia that have little or no existing oil or gas production.

When it comes to Namibia, its Orange Basin was made even more popular after Shell made its Graff-1 light oil discovery in Block 2913A, and TotalEnergies made its Venus-1 discovery in Block 2913B. While Shell and TotalEnergies have initiated further activity on their respective blocks off Namibia, BW Energy is also developing the Kudu gas field and Galp secured an extension in June 2022 for an exploration licence located offshore Namibia close to these discoveries.

On the other hand, Nigeria’s efforts to bring new investments into the oil and gas sector and boost production by tapping into the country’s deepwater hydrocarbon potential are hammered home not only by a mini-bid round for seven offshore blocks but also by the production sharing contracts (PSCs) for six offshore licenses, which were inked with oil majors last year.

Moreover, the renegotiated PSCs were revealed less than a month after President Muhammadu Buhari unveiled the Nigerian National Petroleum Company (NNPC), a development which saw the firm officially transiting into a limited liability entity as enshrined in the provisions of the Petroleum Industry Act (PIA).

Recently, NNPC signed a memorandum of understanding (MoU) with Norwegian Golar LNG to build a floating LNG plant in Nigeria. Regarding other recent development in the Nigerian energy sector, the TotalEnergies-operated Ikike field off Nigeria started production last year. This field was tied back to the existing Amenam offshore facilities through a 14 km multiphase pipeline.

While Nigeria is said to be on the brink of a big oil and gas infrastructure boom, which could enable the country to unlock the economic prosperity residing in its natural resources, lifting millions out of energy poverty by augmenting domestic supply as well as boosting exports, this raises the issue of finding a way to overcome barriers to digitalisation.

To this end, Offshore Energy obtained insights from Adeshina Adebusuyi, Regional Business Development Manager (Africa and Middle East) at James Fisher AIS, who believes that digital transformation in Africa is moving forward by leaps and bounds, with Nigeria leading the charge as home to the highest number of technology hubs in the whole continent.

This coupled with global initiatives, such as the Biden Administration’s ‘Digital Transformation with Africa’, is expected to enable significant growth in the continent’s digital infrastructure. Despite the spike in digital technology developments, Adebusuyi emphasises that Nigeria’s energy industry is lagging behind its global peers in using digital technology within the oil and gas industry, jeopardising its goal of turning into a gas-powered economy by 2030.

“Most oil and gas decision makers will have at least one story to tell of how they were sold a vision of digital transformation only to be left with an inferior product and no support to assist with implementation. These purchases not only failed to contribute any productivity or financial improvements; but in many cases, did not solve the issues that they were bought to resolve. It’s become an all too common pitfall, engineered by unscrupulous salesmen that are only in it for the win,” explained Adebusuyi.

As a result, distrust and hesitance have risen to the surface in regard to adopting new innovations that would have a positive impact on production, maintenance, resourcing, construction, etc., creating an element of doublethink for workers in the industry, as many have ambitions to mirror their global peers in digital innovation but are hesitant to do so due to their past experiences, Adebusuyi points out.

Even though Nigeria has been hampered by a lack of oil and gas infrastructure, James Fisher AIS’ Regional Business Development Manager claims that progress is being made as a result of President Buhari’s ‘Decade of Gas Initiative’, alongside the long-awaited reforms delivered through the Petroleum Industry Act.

“While industry leaders elsewhere are benefiting from the latest innovations in digital twins, data analytics and preventive and predictive maintenance, many Nigerian workers are still struggling to piece together their maintenance schedules from incomplete plant plans and records kept in Excel. Employees waste a lot of their time looking for data which has been siloed into several systems and documents, or worse, has not been captured at all, residing solely in colleagues’ memories,” added Adebusuyi.

Although the pace is slow to pick up speed, large infrastructure projects such as the Dangote Refinery, the 614km-long AKK natural gas pipeline, and several LNG plants are anticipated to be commissioned over the coming months and years. Aside from this, the state-owned refineries in Port Harcourt, Warri, and Kaduna are being rehabilitated, scaling up the Nigerian economy.

For Adebusuyi, digital twinning is perceived to be a blueprint for overcoming the gaps in Nigeria’s digital transformation journey for the oil and gas sector, since without this, the country will continue to trail its global peers. While domestic supply and exports are slated to ramp up, James Fisher AIS’ Regional Business Development Manager underlines that a new approach to digital transformation is needed to mend the rift created by digital disillusionment.

“Collaborative partnerships with an innovative ethos offer a compelling alternative to previous digital transformation attempts. Built on mutual trust and understanding, they can wash away the hesitance and disenchantment of the past, revealing the almost limitless opportunity of a digital future. James Fisher AIS’s rollout of its R2S digital twin technology is one example of how Nigeria is benefitting from a different approach,” elaborated Adebusuyi.

Furthermore, James Fisher AIS believes that a consultative-style process with emphasis on solving the company’s problems even where there are no clear solutions is the way forward. This requires a shift from the traditional business model relying on “quickfire sales of point solutions” to a focus on establishing long-term partnerships with oil and gas companies in a bid to jointly solve complex issues through consultative engagements, “encompassing design thinking methodologies and data science techniques.”

“With the investment almost equal for both partners, Nigerian oil and gas companies can have renewed confidence in adopting emerging technologies such as data analytics, digital twin and predictive maintenance. A consultative approach also lends itself to being scalable and adaptable. Those hesitant to give digital transformation another try can start with a small amount of change – and then scale that change up on the back of success,” outlined Adebusuyi.

James Fisher AIS’ Regional Business Development Manager underscores that companies, which have taken the leap towards adopting digital twins, have the capability to present 2D data, visual data, and real-time data in a real-world context, allowing teams from various departments to “plan better and swiftly make important operational decisions. Data that was once siloed, outdated and disconnected has become useful, robust and accurate, providing visibility to the remotest of assets through a visually immersive information experience.”

As James Fisher AIS sees the creation of opportunities for knowledge transfer as the final piece of the puzzle to enable Africa’s oil and gas industry to champion its digital transformation journey on its own terms, the company is delivering a training school in Angola working to equip new industry recruits with the digital skills needed to overcome Nigeria’s digital transformation gaps to operate oil and gas assets efficiently.

In addition, the firm opened its headquarters in Lagos, expanding the team in Nigeria to give companies direct access to digital transformation experts that are attuned to the region’s specific needs and understand its digital heritage.

“Overcoming the gaps in digital transformation through collaborative partnerships will be paramount if Nigeria is to fully benefit from the forthcoming boom in oil and gas infrastructure and be considered as an industry heavyweight on the world stage,” concluded Adebusuyi.

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