Digitalization is set to revolutionize African national oil companies (NOCs) by overcoming infrastructural, regulatory and political challenges. By investing in tailored digital solutions and developing local talent, NOCs can significantly boost efficiency, decision-making and production, contributing to their nations' economic progress.
ADESHINA ADEBUSUYI, Regional Business Development at James Fisher AIS
African NOCs are facing a delicate balance. They are striving for significant production ambitions, while simultaneously nurturing local talent and navigating regulatory changes.
This push for an increase in production means that African NOCs have historically overlooked, or not gained the fullest benefits from, the latest tools and software that could expedite production levels and, in turn, support progress of their local economies—until now. This scenario is poised to change, as digitalization emerges as a transformative force, ready to address the unique challenges of African NOCs by offering tailored solutions that streamline operations, enhance decision-making, and promote sustainable growth.
THE DIGITAL HORIZON
When looking to bring their digital potential to life, NOCs in Africa face a range of challenges that stem from the geographical, infrastructural, political and economic diversities of the continent.
Issues, such as patchy satellite connectivity and the need for on-premises servers, highlight the broader infrastructural hurdles. These challenges are exacerbated when considering the remote nature of FPSOs, for example, often many miles offshore, complicating communication across these vast regions.
Compounding this is the national vested interest in production performance. Considering the intrinsic link between NOCs and their country’s government, political change is also a journey for companies to navigate. For example, in Nigeria, while oil has always been central to the economy, it recently took the limelight during the 2023 elections, with further investment to boost production by introducing incentives and streamlining efficiencies. Moreover, there's a notable focus from the government on increasing transparency and tackling corruption within the sector, which has, until now, hindered foreign investment and efficient operation of NOCs.
While this doesn’t necessarily act as a barrier to the success of an NOC, it adds another layer to address, keeping up with regulatory and personnel changes that impact policy and strategy.
STRATEGIC DIGITAL INVESTMENTS
For NOCs navigating the intertwined challenges of infrastructure and broader policy, a focus on production typically comes out on top. This emphasis become even more apparent when considering output levels against potential for growth over the past few years. But this era is also forcing operators to adopt a revitalized approach to improve margins and prioritize efficiencies, with a laser focus on increasing profits.
Unsurprisingly then, African NOCs are also increasingly scrutinizing their digital investments, focusing on the cost-benefit ratio and the real value delivered by new technologies. Some of those who have already made the digital leap have had their journey derailed by technology vendors, who didn’t put their customers first.
It’s all too easy to provide an off-the-shelf program that doesn’t consider existing work processes, pass it onto your client and leave them to get on with it, but it will rarely lead to success. In fact, more often than not, it leads to a costly solution left to collect digital dust, by no fault of the person who bought it.
A consultation process that allows suppliers to understand the nuances of an individual or team dynamic ensures that programs can be tailored from the development stage through to the integration stage. This is all while educating and coaching internal teams on the changes required to get best use out of their new investment.
NOCs also can get better value moving forward by consolidating data management systems to avoid silos and duplication of tools and software. The concept of "vendor lock-in"—where companies cannot extract their data from a single supplier—can be overcome by advocating for open platforms that allow greater flexibility in managing and utilizing data across various systems.
AIS’ R2S digital twin application (Fig. 1) is one such platform, reducing risk for the NOC from the get-go, ensuring that data are not trapped, and can be easily accessed and connected with a whole host of existing systems, ensuring full flexibility and scalability for employees to use data, as they need it.
The digital shift also will see NOCs showcasing more of their operations and data than ever before, with an increasing need to embrace transparency. In a time where increasing output is high on the agenda, planning and maintenance routines must be planned robustly. In the past, assets could be down for extended periods, but digital and data-driven strategies now reduce the duration of shutdowns, turnarounds, and outages, enhancing utilization and maintaining high production levels.
FOSTERING LOCAL TALENT
Beyond the technology itself, the success of digital strategies significantly depends on the people behind them. African NOCs must prioritize local recruitment and the development of in-house digital skills. They’re also often rightly bound by local content requirements. By collaborating with local educational institutions and training centers, NOCs can ensure a steady pipeline of skilled professionals, who are well-versed in the latest digital tools.
While training and education are important tasks for the workforce of today, NOCs must also consider the workforce of tomorrow. Gen Zs, who are already looking for positions, are digitally literate, acting as a driving force in their own right, demanding the latest technologies to support them in their day-to-day roles. For many African NOCs, this means cultivating a digital-first attitude now, where decision-making is increasingly data-driven, and innovation is encouraged.
Therefore, the integration of digital tools should be accompanied by strategic planning and continuous training. This ensures that employees are equipped with the know-how to not only accept new technologies, but also excel in using them to achieve business (and economic) goals.
ENVISIONING A DIGITAL FUTURE, TODAY
As African NOCs carve their digital maturity pathway, the focus should be on creating resilient, adaptable and forward-thinking strategies, investing in emerging technology solutions, the development of local talent, and fostering a culture of innovation and adaptability. At AIS, we’ve seen around the world how digital solutions have the power to revolutionize the way NOCs operate, making them more efficient, agile and prepared to meet future challenges. With the right approach, digitalization can transform potential into progress.
In doing so, they will not only boost their operational efficiencies but also reap the fullest benefits from their abundant natural resources, playing a central role in the economic development of their respective nations and the wider continent. WO
ADESHINA ADEBUSUYI works in Regional Business Development at James Fisher AIS. He is an oil and gas engineer with a bachelor’s degree in chemical engineering, as well as a master’s degree in oil and gas engineering from the University of Aberdeen, UK. He has over 15 years of professional experience, working both offshore and onshore in the oil and gas industry. Mr. Adebusuyi joined James Fisher AIS in 2019. He consultatively engages with asset owners, operators, and key stakeholders in the energy sector to deliver rapid and cost-effective digital transformation for industrial assets across Africa and the Middle East. He is passionate about further developing local in-market capability to support knowledge transfer efforts.