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Digitization now a critical component in oil and gas industry—Derefaka

Technical Adviser (TA) to the Honorable Minister of State, Petroleum Resources on Gas Business & Policy Implementation, and Program Manager, Nigerian Gas Flare Commercialization Programme (NGFCP), Engr Justice Derefaka, has raised issues of urgent oil and gas industry importance.

Making his presentation in Port Harcourt on Tuesday at the Society of Petroleum Engineers (SPE) Technical Summit, he averred that the way and speed with which businesses are thriving in the digital era (i.e. Apple, Amazon, Google, etc.) have shown that distinction from competition is achieved through the use of an ecosystem that enables data-driven insights. In his lead presentation titled; ‘Insight into Disruptive Digital Transformation Technologies & The Common Enemy in the Oil & Gas Industry in Nigeria’, he argued that the high success rate in sectors driving on digital precision has now shifted the perspective in the oil and gas industry to view digitization as a critical component of core business.

According to him, “The Oil and Gas industry is no stranger to big data, technology and digital innovation.”

“The industry was the pioneers of the first digital age in the 1980s and 1990s. Long before phrases such as big data, advanced analytics, and the Internet of Things became popular. Lately, digital disruption is now seen as a force that is altering the corporate landscape like no other.

NNPC NGA
Fourth from right, The TA to the Minister on Gas Business and Program Manager of Nigerian Gas Flare Commercialisation Programme (NGFCP), Mr. Justice Derefaka and President of the Nigerian Gas Association (NGA), Audrey Joe-Ezigbo, during a recent courtesy visit to the Minister of Petroleum Resoruces, Chief Timiprye Sylva in Abuja.

“Nowadays businesses are not just being driven to transform to meet the demands of digital. Connectivity has shown the potential to empower millions of people, while providing businesses with unparalleled opportunities for value creation and capture.

Engr Derefaka noted that “By 2025, it is anticipated that there will be more than 50 billion devices connected to the internet. This is having a disruptive impact on many industries, including the oil and gas sector, among others.”

Continuing, he explained to the summit participants that “Digital is a key enabler in the oil and gas industry to lessen costs, make faster and better decisions, and to increase workforce productivity.

“The overarching upside is that, the use of technologies now unleashes new hydrocarbon resources and delivers operational efficiencies across the value chain by rapidly shifting from being the legacy enabler to being a game changer.

“On the downside, whereas digitalization could be a source of positive change, there are a number of challenges that need to be overcome to realize its full potential for both business and society. The exponential increase in global information flows have created new risks around data privacy and security and businesses across sectors are grappling with challenges related to changing customer expectations, cultural transformation, outdated regulation, and skill shortages – to name a few.

Gas Edo
L-R: Technical Adviser on Gas Business & Policy Implementation to the Honorable Minister of State for Petroleum Resources/Program Manager, Nigerian Gas Flare Commercialization Programme (NGFCP), Mr. Justice O. Derefaka, (representing the Honorable Minister of State Petroleum Resources, His Excellency, Chief Timipre Silva as keynote speaker); The Executive Governor of Edo State, His Excellency, Mr. Godwin Obaseki; National President of the Nigerian Environmental Society, Prof. Lawrence I. Ezemonye (FNES) Director, NOSDRA, Mr. Oladipo Obanewa at the ongoing 29th National Conference of the Nigerian Environmental Society (NES) with the theme: Narratives of the Nigerian Environment Needs – A Holistic Approach in Benin City, Edo State. Photo: Business Hilights

“These challenges have made the traditional business practices of scanning the environment and managing the emergent information more complicated and difficult; thereby creating higher levels of uncertainty/operational unpredictability.  Aside the positives, digital also connects us all in a web and renders the whole web only as strong as its weakest point – a significant weakness that allows attackers of various sorts to use them for any number of goals.

“This growing complexity even makes businesses more vulnerable as hackers are honing their skills, declaring the cyberspace a battlefield where they choose the time and place of attack as well as the target – hence the attackers have the advantage of surprise. Several of the world’s major oil and gas producers have fallen victim to cyberattacks since 2008.

Some damage was done in each of these cases, but the costs of future breaches will be much higher.

The Minister’s aide noted further that “Successful cyberattacks threaten the competitiveness of the global oil and gas industry, one of the most technically advanced and economically important sectors,” stressing that “Hardly a day goes by without a breach or cyber incident being reported.”

“Understanding what is coming towards the industry will help it to better prepare. In 2020 more than ever, cyberattacks are no longer a question of if, but of how and when our common enemy (hacktivist) will strike. This is a concern that applies to the oil and gas industry.

TA to the Minister on Gas and Program Manager, Nigerian Gas Flare Commercialization Programme (NGFCP), Mr Justice Derefaka (2nd from right) with the Honorable Minister of State Petroleum Resources, His Excellency, Chief Timipre Sylva after an inter-Ministerial Steering Committee Meeting regarding the NGFCP in Abuja recently.

He said “Agreed digital transformation plays an instrumental role in enabling innovation and prosperity globally but a major obstacle to society’s continued path to development are the ever-increasing cyberattacks carried out by malicious actors taking advantage of a borderless playing field, and the challenges to digital trust that this represents.

“This paper believes that enhancing collaboration between public-and private-sector partners, civil society and academia is of paramount importance to counterbalance the trend. In Nigeria, it is the collective responsibility of Government and the oil and gas industry players to take full ownership of the cyber challenge and to work out a remedy together.

“Which is why this paper’s aim is on the readiness approach to offer an understanding of the risk picture, find existing gaps and propose actions to strengthen cyber security i.e. dealing with – How are cyber risks managed in Nigeria? What are the international best practices to tap from? Are employees protecting information assets?

“Are oil and gas operation cyber ready? What is the cyber readiness approach including risk assessment, gap assessment and penetration testing?

In his recommendation, Engr Derefaka called on governments and policy makers in African oil economies to among other things, think digitization with strong cyber security intelligence for sustainable results going forward.