Business Hilights

Tracking Nigeria's Headline Business News Online

SPE 66

Can indigenous players survive as AI, digitization takeover oil operations?

Ad 2
Ad 3

The ongoing 2019 Nigeria Annual International Conference and Exhibition of the Society of Petroleum Engineers (SPE) in Lagos, has raised serious concerns on the ability of local players to catch-up with trending innovations in the oil and gas industry.

Analysts say the central theme for this year’s summit; ‘Artificial intelligence, big data and mobile technology: Changing the future of the energy industry,’ poses a challenge for indigenous startups who may have built their operation based on the traditional analogue systems when modern technologies driven by Artificial Intelligence (AI) has taken centre stage.

This may have been the background upon which the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, said on Monday that it had become increasingly difficult to make investment decisions in oil and gas projects in Nigeria.

According to him, “The emergence of Artificial Intelligence had altered the dynamics of operations by providing quicker processes and interventions in the conduct of petroleum operations.

“Today despite the opportunities that exist, investment decisions in oil and gas projects in Nigeria have become increasingly difficult to close out. This, I believe, is driven by unclear fiscal terms of various production contracts and the delays in the passage of the lingering petroleum legislation.

Continuing, Kyari argued that “The effect is for investors to opt for alternative portfolios when making financing decisions. We, therefore, need to collaborate to ensure the timely resolution of contractual issues and the passage of the necessary petroleum legislation.”

NNPC Kyari
New GMD of NNPC, Mele Kolo Kyari

Giving instances on the level of technology adoption at the Corporation, he said whereas NNPC is wishing to hit national oil reserve to 40 billion barrels by 2025 and improve crude oil production to three million barrels per day, he stressed that “To achieve this ambition, huge investment is required across the value chain.”

“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.

“We have to open up the midstream, complete all critical gas development projects targeted to deliver about three billion standard cubic feet of gas per day to gas market; ensure the close-out of investment decision on NLNG Train Seven and improve domestic utilisation to improve power generation and industrial growth.”

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.