Nigeria’s investment-starved oil sector looks to big tech

The possibility that oil rigs could operate like UBER taxis and technology tools like artificial intelligence and robotics could be implored in wells and reservoirs to evaluate their potential is driving oil sector operators to discuss the future of an industry starved of investment dollars.

This is why the organisers of the Nigeria Annual International Conference and Exhibition (NAICE), the Society of Petroleum Engineers (SPE) Nigeria, said that the petroleum industry was moving towards the advancement of artificial intelligence, big data as well as mobile technology and operators need to catch up.

“The opportunities of big data hold unlimited potential. Will the energy industry tag along or be left behind? Can the energy industry harness big data for its benefits? These are genuine questions we really need to ask ourselves. Big data has come to stay and the old industry has outlived all the other dinosaur industries,” the conference organisers say this is what they want to address.

This year’s theme is “Artificial Intelligence, Big Data, and Mobile Technology: Changing the Future of the Energy Industry” and had in attendance industry operators and experts drawn from various fields.

Leye Falade, general manager Production at Nigeria LNG Limited, in his presentation harped on the critical aspect of limited skill in the country.  “We need to review and identify the skills we need that would help us move with the new changes. The skills we need for technology has to be enhanced as technology is changing our world and has come to stay.”

Without investments to take investment decisions on critical projects including the Bonga South West project among others, the required skill to compete in the emerging tech-driven oil sector will be lacking. This will continue to cede the market for talent to operators outside Nigeria

Yet technologies like artificial intelligence and blockchain technologies are on the rise. Oil giants BP, Shell, Norwegian-owned Equinox (then Statoil), had announced plans to develop a blockchain-based digital platform for energy commodities trading as far back as 2017.

In oil trading, blockchain can be used as a shared database that updates itself in real-time and can process and settle transactions in minutes using computer algorithms, with no need for third-party verification. Experts say the benefits are enormous including cutting the cost of oil trading.

In February this year, American oil giants such as ExxonMobil and Chevron, agreed to form the first industry blockchain consortium to set up a digital ecosystem for physical post-trade processing.

Analysts say the benefits of blockchain in the oil and gas sector are enormous. Through blockchain, crude oil transactions can be digitized, ensuring enhanced security, improved transparency, and optimized efficiency. It can also offer improved data storage.

It can foster the development of a cryptocurrency pegged to oil which could be a viable replacement for traditional financial transactions. This cryptocurrency could enable direct transfer of value between various parties in the industry without the need for a trusted intermediary like a bank.

Governments could better regulate the industry because all the transactional data is stored on a blockchain network, which can be accessed in real-time for taxation, hydrocarbon tracking and environmental impacts.

However, in Nigeria blockchain technology for the oil sector has not been developed. It only finds application in cryptocurrencies and tracking goods by the Nigerian Customs Service.

Melee Kyari, the group managing director of the Nigerian National Petroleum Corporation (NNPC) in his address said the combination of AI and big data are complemented further by mobile technology that enables real-time access to information and the execution of apparently complicated operation from remote locations.

“We have to attract investment to deploy improved technology in the exploration and production of hydrocarbons from inland as well as the ultra-deep offshore basins,” Kyari said.

Yet Nigeria is not creating the right fiscal and regulatory environment to attract these investments. Critical regulations including the Petroleum Industry Bill have been stuck in the national assembly for over a decade and negotiations to reform outdated fiscal terms making little progress.

“We need to collaborate with relevant stakeholders to ensure the timely resolution of contractual issues and the passage of the necessary petroleum legislation,” Kyari said.