Emmanuel Addeh writes on how the Integrated Data Services Limited, a subsidiary of the Nigerian National Petroleum Corporation plan to key into the directive of its parent company to minimise its unit operating cost to $10 in the coming months.
If anything, the deployment of geophysical technology in the oil and gas industry has been a major game changer in exploration, production and enabling greater access to affordable energy supply.
Indeed, seismic survey technology has been one of the greatest driving forces behind energy exploration and development revolution in the last few decades, aiding in drilling in the oil sector, from where Nigeria earns most of its revenue.
Essentially, the use of seismic data leads to more efficient oil and gas extraction, requiring fewer wells while increasing the production of hydrocarbons and deploying the data collected to produce maps or models that help in exploration and production.
Experts in the field find and develop oil and natural gas deposits onshore and offshore, locate mineral and precious metal mines among others to provide critical information and useful data for the benefit to industry operators.
Given the critical role played by data in the sector, the Nigerian National Petroleum Corporation (NNPC), established the Integrated Data Services Limited (IDSL) in 1988 to provide hydrocarbon exploration services in the local and international oil and gas industry.
A child of the merger of the National Hydrocarbon Reserves Evaluation Centre (NHREC) and the Seismic Data Processing Department (DPD), IDSL says it prides itself as providing seismic data, processing, interpretation and reservoir management services to a wide range of clients from wholly owned to multinationals.
The vision of the company, it says is to be the centre of technological excellence in the provision of geophysical, geological, reservoir engineering and data storage and management services in the global oil and gas industry, leveraging on the best talents in Nigeria and internationally.
It currently operates a 100 per cent wholly owned seismic acquisition crew and in joint venture with multinational oil and gas servicing companies in Nigeria.
With operations in the Chad Basin, Niger Delta areas, including Edo, Delta and Ondo States, IDSL’s Data Processing Centre (DPC), located in Port Harcourt, is touted to currently have the largest processing capacity in Nigeria.
Given its strategic role in the industry, IDSL has again been given the marching orders by its parent company, the NNPC, to make the difference, given the current downturn in the oil market and moves to reduce unit operating cost of production by the corporation to about $10.
The confidence in the IDSL by its parent company may not be misplaced, given that in the last audited financial report by the NNPC, IDSL was one of the most impactful subsidiaries, with revenue increasing significantly.
With a growing list of major customers, the company which offers upstream sector geophysical and petroleum engineering services in the oil and gas industry, has already seized the gauntlet, leading the discussions on ways to meet the directives of its parent organisation, which recently maintained that the status quo was no longer sustainable.
To this end, the IDSL says that deploying accurate industry data in tackling the current inefficiencies in the corporation, will help reduce the current high Unit Operating Cost (UOC) of production.
A recent webinar tagged “Leveraging Data Democratisation to Improve Asset Management Efficiency” offered the IDSL leadership the opportunity to outline the strategies in place to meet the new directive.
At the web conference, organised to brainstorm on the directive by the Group Managing Director, NNPC, Mr. Mele Kyari, to reduce the high cost of crude oil production in the country, the Managing Director IDSL, Mr. Ayebateke Bariwei, stressed that the problem could be tackled by the massive use of accurate information.
He explained that the IDSL data management process involves data acquisition, data processing, storage and management, stating that its application could be in the upstream, midstream or downstream sectors of the industry.
He stressed that the impact of the Covid-19 pandemic, fluctuating oil price and high operating cost had led to potential losers and winners, noting that depending on decisions taken to ameliorate the impacts , the oil and gas industry could either lose or win.
The IDSL boss noted that the company had keyed into the GMD’s directive in June instructing the emplacement of industry-wide cost containment measures, including aggressive capital allocation to prioritise low cost oil production, putting measures in place to ensure cost discipline, plus renegotiating down contracts.
Others measures, he said were resetting cost structures, re-evaluating capital expenditure and allocation as well as achieving $10 production cost without jeopardising growth.
On revenue optimisation, he noted that the GMD also directed aggressive execution of initiatives aimed at conserving cash and diversification of portfolio to non-oil businesses to cushion the effect of future crash in crude oil price.
Bariwei explained that Kyari also instructed that thenceforth things must be done differently, which would include addressing perennial issues associated with operational inefficiency, adoption of technology to enhance productivity and reduction of waste.
To achieve operational excellence in the oil industry, the corporation, he said had also embraced “TAPE” , which is an acronym for Transparency, Accountability and Performance Excellence.
He noted that operational excellence involved understanding what customers want and driving internal efficiencies to meet those expectations.
The IDSL MD said the quality of data remains very important, positing that achieving operational efficiency would involve restructuring data acquisition and management strategies, democratising right data to stakeholders for informed business decisions, leveraging on digital technologies and analytics to derive actionable insights from asset data.
“On behalf of my dynamic GMD of NNPC, Mallam Mele Kolo Kyari, who is driving this move to make sure that unit operating cost is greatly reduced to maximum of about 10 Dollars per barrel. It is my great pleasure to welcome you to the maiden edition of this Webinar Series on Data Democratisation.
“The seasons we are in are critical not just within our location but all over the world. It is affecting everybody and so we have to do things differently in order to be afloat in every aspects of our lives; health wise, business wise and any other area.
“It is against this backdrop that we have gathered this day to see what others are doing, what we intend to do to make sure that we survive this season” he said in his opening speech.
He continued: “When we came on board the management of this great company we chose to “Run to Exceed” with TAPE: a mantra agenda of the GMD of NNPC, which stands for Transparency, Accountability and Performance Excellence.
“We can assure you that whatever job you give to us with our partners, we will do it transparently and accountably, we will make sure we exceed whatever key performance indicator that you give to us” the IDSL boss said.
He posited that the IDSL has the capability to carry out seismic data acquisition, data processing, data interpretation as well as application of the interpretation in the reservoir engineering, field development plan, abandonment and whatever you want us to do in the oil industry, subsurface etc.
Bariwei explained that in every aspect, data storage and management is the central core that connects all others saying that if this aspect of the business is not taken care of, the industry may not have something to hand over to generations ahead to effectively function, appraise and keep it going.
“The problem of the present pandemic, COVID-19, is not something to doubt; it’s real. We have studied the industry and the world economy at large to understand that there are potential losers and winners.
“The likes of tourism and leisure, aviation and maritime, automotive, construction and real estates, manufacturing, finance services and education fall under the potential losers’ category.
“With tourism and leisure and aviation topping this category while on the other side we have agriculture, e-economy, information and computer technology, personal and healthcare, food processing and retail and medical supply and services.
“At the top of this half is the medical supply and services and food processing and retail. Interestingly, the oil and gas industry seem to fall in-between” he said.
Bariwei recalled: “During the NAPE Conference of June 10th, the GMD, NNPC, while addressing delegates on the way forward, expressed the need to look at how we can operate, the desire to minimise cost, putting cost containment measures.
“Also aggressive capital allocation to prioritise low cost oil production, putting measures in place to ensure that cost discipline includes to renegotiate down contracts and other business obligations.
“ At the end of the day, we want to make sure that unit operating cost is brought to as low as 10 dollars per barrel without jeopardising the growth of the industry” he reiterated.
In terms of revenue, the MD stressed that the target was to optimise through aggressive execution of initiatives aimed at conserving cash, diversifying of portfolio to non-oil business to cushion the effect of future crash in the crude oil price.
“Operational Excellence, according to PwC, is the foundation for organisational transformation that unlocks full business value by understanding what customers want and driving internal eﬃciencies to meet those expectations.
“There are five core areas to achieve operational excellence and they are: People, Organizational Structure, Technology, Process and of course Data, which is central to them all.
“We need to have the people as a team work to ensure that the data we have is effectively utilised, we need processes to manage the data.
“We also need to apply technology and organisational drive – the system has to be driven by a structured organisation and in IDSL we have that under the leadership of the present GMD, NNPC” the company helmsman noted.
While appreciating all participants, he noted that despite the current situation, he believed that to bring unit-operating cost to a maximum of 10 dollars per barrel was doable.
In her intervention, the General Manager, Joint Ventures, National Petroleum Investment Management Services (NAPIMS), Martina Atuchi, explained that the purpose of data was to aid decision making.
She added that accurate and timely data was critical to the survival of the oil and gas industry, stressing that though a lot of data was already available, access and right deployment remain challenges.
“We have long years of data, but what are we doing with it. Although the DPR data is skewed, we commend them. I appeal to the DPR to expand it to production data and fully digitalised.
“We should be able to access data from any location, especially we that are in the national oil company. We need to democratise it. But in NAPIMS, we have seen figures that don’t align with proposal. We have to standardise our data and information reporting system.
“We need to make investment and management decisions with these data. To be afloat we need to reduce cost. The only way to reduce cost is to synergise. We are negotiating costs down. We are getting to 10 dollar per barrel.
“We are using technology to help predict what will happen. We can control many things with technology. The militants are also relaxing. Before the end of the year, we will get to the $10” she said.
Other participants during the event were General Manager, Operations, Oriental Energy Resources, Mr Augustine Ekeigwe and Asset Optimisation, Digital and Technology Manager, SNEPCo, Abdulrahman Mijinyawa.
Also represented were the Head Upstream Monitoring and Regulation, Department of Petroleum Resources (DPR), Mr Enorense Amadasu as well as Mr Tunde Ehizojie, General Manager, Exploration and Development, Nigerian Petroleum Development Company (NPDC).