The Grand Gala of the Oil & Gas Industry, the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC), concluded recently and like it has done since its inception in 1984, it surpassed expectations. 21 National Oil Companies (NOCs) and 15 International Oil Companies (IOCs) were present at the 4-day conference hosting over 100,000 professionals from 135 countries in balmy Abu Dhabi.
The events were a mixture of talks from 900+ industry speakers with sessions such as CEO Energy Finance Lunches, Ministerial Sessions, Global Business Leaders Sessions, and Women in Energy Sessions. My favourite was a behind-the-scenes short interview with Lorenzo Simonelli, the President & CEO of Baker Hughes (a GE company). This interview was particularly interesting to me as I have been following Simonelli’s career for some time now and find his style of communication and leadership riveting.
Digital Oil Field
When questioned about digital being the new future for Oil & Gas, Simonelli pointed to the challenges that the industry was facing which were being exacerbated by the inefficiency of the sector. Noting the relative position of Oil & Gas vs. other industries’ adoption of technology, he stressed that the industry was “2–3 times more inefficient than other industries”. Adoption and openness to new technology, big data, and advances in materials are crucial to driving efficiencies and consequently growth in the industry.
He touched upon the concept of a digital oil field which would rely on capturing and using data to make informed decisions. According to Simonelli, only c.2% of the data currently being captured is being used. Increasing this figure would allow for already developed algorithms to work their magic and drive better outcomes. The resultant increase in productivity through data analysis would help increase production off a lower cost basis and help the industry withstand the decline of the oil price (and effectively leverage itself for increased profits with an oil price rally).
Adoption in Oil & Gas
Tech adoption within the Oil & Gas sector would also give some ancillary benefits to the sector other than the straightforward efficiency savings and productivity gains, notably changing the image of the sector from a dry old school approach to a high tech and cutting edge sector to work in, attracting young top talent into the sector once again.
As a tech company here at DeepStream, hearing people like Simonelli promoting aggressive tech adoption in the industry is like music to our ears. The concept of digitalising the oil field is also very similar to a previous blog we wrote around our experience with Microsoft Hololens and how it could be implemented. That being said, we also believe that a true breakthrough in efficiency gains needs to be done on a collaborative and network based approach rather than constricted within different industry companies in a silo.
It is important to point out that, like Simonelli, other top Oil & Gas executives are also realising the importance of innovation in the sector. In fact, 94% of interviewed executives mentioned that they had plans in place to collaborate with ‘strategic partners’ over the next 5 years, according to a PwC report. And it is not just executives — according to the World Economic Forum, digitalisation of the Oil & Gas sector could result in unlocking $1.6 trillion of value for the industry, its customers, and wider society.
ADIPEC has been the focal point event for Oil & Gas executives, professionals, and experts for the past 33 years and this year’s conference served to enhance this reputation further. I think it is reasonable to assume that ADIPEC will continue to serve as the beacon for events in Oil & Gas. To put it in Simonelli’s words “ADIPEC has really been able to gather the world’s leaders in this industry…in a discussion about how the industry moves forward”. Perhaps in a few years time we will not all need to fly to Abu Dhabi to take advantage of this gathering, but will be able to do it virtually from our office spaces all over the world!