ADIPEC Roundtable Whitepaper

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BIG DATA TECHNOLOGY ADOPTION AND ENGAGEMENT IN THE OIL AND GAS INDUSTRY ROUNDTABLE HOST Within the oil and gas industry, Big Data is helping to deliver dramatic improvements in competitiveness, efficiency and health and safety, and it is transforming the way companies are structured and integrated. But the industry faces the challenge of a data deluge. It has been estimated that the oil and gas industry uses just 1-5 per cent of the data it has access to. The true value of all of the data gathered by energy companies can only be realised if it is shared with the private sector, as it is the private sector that will come up with solutions to further reduce operational expenditure and drive more value from each barrel of oil. His Excellency Mohammad Sanusi Barkindo Secretary General OPEC But while the industry must be prepared to embrace non-traditional partnerships - working with the technology giants, such as Microsoft, Google or Amazon - to fully leverage advanced digital technologies, such as Big Data, many national oil companies are reluctant to share data and they are at risk of being left behind it they do not begin to open up. With the connection between transparent data and secure sustainable energy supply only expected to grow in the future, data accuracy and uniformity is an issue that needs to be addressed. Within the energy sector, there are multiple entities publishing open source data and they each have their own definitions and models for recording and estimating data. This can lead to confusion and distortions when driving data insights. OPEC has shown the way forward on data sharing. Its Big Data project makes the production supply and stocks data of all its members from 1960 onwards available digitally. The new data tool, which also includes structured and unstructured data from other sources, is intended to be of value to economists, environmental agencies and academic researchers, strengthening the capacity to address challenges within the industry and shedding more light on the energy transition under way. The industry must also address the skills gap related to Big Data. Growing awareness of climate change and the demonisation of the hydrocarbons industry is making it harder to attract young people to oil and gas, but technologies such as Artificial Intelligence, Machine Learning, Robotics, Blockchain and Big Data provide a path to reconnect with this generation. Investing in the right people must be a priority for energy companies. 8 www.adipec.com/roundtables
BUILDING A PATHWAY TOWARDS THE TRANSFORMATION OF THE WORLD’S ENERGY MIX ROUNDTABLE HOST Dr Daniel Yergin Vice Chairman IHS Markit Defining what energy transition means is in itself a challenge. It has many different dimensions and is interpreted differently by national oil companies, energy majors, policymakers and environmentalists. In this context the oil and gas industry has an important role to play by leading the conversation on energy transition to broaden the debate, and manage expectations around what can be achieved and how quickly. In order to better manage public opinion, the industry must be more transparent about its operations. Oil and gas companies need to create a credible narrative, that resonates with people, to communicate how they can be an effective and necessary partner in a balanced energy mix that includes oil and its derivatives, gas, waste-to-energy, nuclear and hydrogen alongside renewables and as yet undeveloped energy sources. However, the conversation will need to be different depending on geography and socio-economic circumstances. At present, the energy transition conversation is dominated by the OECD countries. But the challenges faced in Africa and the developing economies of Asia, where poverty reduction and opportunity creation, not decarbonisation, are the priorities, must be factored into the debate. Demonstrably curbing emissions and utilising renewables to power oil and gas operations would make it easier to convince people that there is a role for hydrocarbons in the future. In the future, all industries and companies will have to disclose their emissions and access to investor capital will become constrained if they are not being seen to be actively decarbonising. To mitigate the impact, oil and gas companies should be investing in renewables to complement their operations wherever possible. Climate change is an emotive issue, and over simplification of the issue has resulted in oil and gas companies being held responsible for global warming. At the same time, consumers are not fully informed about the cost implications of the energy transition. There needs to be greater transparency about the costs of the different sources of energy. There is a need for industry and government to work together to provide the accurate information people need to make informed decisions. Advanced digital technologies have a crucial role to play in the fight against climate change, in particular in providing the transparency needed to enable better decision making. They could help the oil and gas industry become leaner and greener by making carbon emissions more transparent. This information could then be transformed into consumer knowledge, allowing people to understand how much energy they are consuming, what it is costing and encouraging them to curb their demand. 9
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