Digital technology key to reducing crude oil production cost, say FG

The federal government says the deployment of digital technology is key to reducing the Unit Operating Cost (UOC) of crude oil production in Nigeria to $10 a barrel by December 2021.

Mr Bitrus Nabasu, Permanent Secretary of the Ministry of Petroleum Resources, made the statement on Monday during the Nigeria International Petroleum Summit (NIPS) underway in 2021 in Abuja.

The Nigerian News Agency (NAN) reports that the theme of the summit is “From Crisis to Opportunity: A New Approach to the Future of Hydrocarbons.”

Nabasu said, “As demand for energy grows at an astronomical rate, the quest to deploy innovation and technology to keep pace with demand increases.

“The oil and gas industry is using these innovations and trends to increase operational efficiency and reduce costs.

“Most oil and gas companies are running overtime and over cost. The use of digital technology can help businesses manage overspending and operations, meet deadlines, and ultimately increase overall productivity.

According to him, with the uncertainty triggered by the COVID-19 pandemic, the oil and gas industry’s current goal is to maintain sustainable profitability.

He said some of the digital technologies and innovations that have helped in this regard include Artificial Intelligence, Big Data and Analytics, Robotics and Automation, 3D Modeling, Cloud Computing, Blockchain Technology, among others. other.

“These technologies are not cheap. Without a doubt, deploying innovation comes at huge costs, but the companies that make it a priority reap the rewards.

“According to a McKinsey study, effective use of digital technologies in the oil and gas industry could reduce capital expenditures by up to 20% and upstream operating costs by 3-5%.

“Therefore, digital technology should be placed at the heart of the industry’s business strategy,” Nabasu added.

In addition, Ms Betty Ugona, Director of Innovation, Research, Technology and Innovation Division, Nigerian National Petroleum Corporation (NNPC), said that digitization was one of NNPC’s strategies for reducing high operating costs.

Ugona said the division was created to provide research support to the NNPC following the impact of the COVID-19 pandemic on crude oil production and how best to overcome challenges.

For his part, Mr Michael Zhaung, Managing Director of Huawei Nigeria, said that Huawei is determined to digitize the oil and gas industry in Nigeria.

He said Huawei will continue to partner with oil and gas companies in Nigeria to provide real-time monitoring of oil and gas infrastructure to reduce vandalism and oil theft. (NAA)