IDSL Spearheads NNPC’s Operating Cost Reduction Target

Managing Director IDSL, Mr Ayebateke Bariwei

Emmanuel Addeh in Abuja

The Integrated Data Services Limited (IDSL), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has said that deploying accurate industry data in tackling the current inefficiencies in the corporation, could help reduce the current high Unit Operating Cost (UOC) of production in the corporation.

Speaking during a webinar tagged “Leveraging Data Democratisation to Improve Asset Management Efficiency” it organised to brainstorm on the recent 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 impact, 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 explained 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 and posited that achieving operational efficiency would involve restructuring data acquisition and management strategies, democratising right data to stakeholders for informed business decisions and leveraging on digital technologies and analytics to derive actionable insights from asset data.

Quoting the World Economic Forum (WEF), he noted that as much as $600 billion could be unlocked in the upstream oil and gas industry from data through digitalisation.

For processes, he advocated optimising workflow, streamlining processes through automation, reengineering asset management work plan and optimising resources to reduce wastages, saying that workers in the oil and gas industry must now have a service, collaborative and accountability mindset if they must get a new set of results.

According to him, “Data democratisation is the practice of making the right data available to the right people at any time. The benefits include removal of bottlenecks in accessing quality data, fosters virtual work environment, and encourages centralised storage of data.

“It accelerates data retrieval for enhanced decision making, amplifies productivity via instant access to trusted and reliable data anytime. It motivates creations of a single source of truth for enterprise information and operationalises transparency in decision making”

In her contribution, 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 digitised.

“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).