Commentary ENERGY & OFFSHORE | Staff Reporter, Singapore Published: 7 hours ago
Oil & Gas 4.0: Digital opportunity knocks for SingaporeBY GEOFFREY CANN
Of all the mega trends that are impacting the oil and gas industry, the wave of digital innovation sweeping across the landscape is amongst the most intriguing – and offers significant potential for Singapore to play the role of innovator and disruptor at the forefront of what’s been dubbed “Oil & Gas 4.0”.
The oil and gas sector is being reshaped by fundamental changes in demand and new technologies. Growth in demand is shifting to the Middle East, Africa and Asian economies and away from Europe and North America. Since anything that can be digitised will be digitised (start-ups and capital markets will make sure of that), it is only a matter of time before the effects of digital innovation are felt in oil and gas.
Singapore, of course, is one of the world’s leading oil trading and refining hubs supported by downstream industries that are pillars of its economy. Even if it has not been entirely immune to recent challenges, Singapore has made clear that its overarching goal is to be a leading digital economy that continually reinvents itself.
Factor in a world-class digital infrastructure which has attracted the planet’s top tech companies, the quality of talent that comes through its educational system, plus the government’s commitment to initiatives like the Singapore Digital (SG:D) movement – and the ingredients are there for a major contribution to the digital transformation essential to the future of O&G.
The country’s potential to lead this industry-wide transformation is well reflected in recent initiatives and innovation in just one sector vital to oil and gas – shipping and maritime technology. Earlier this year, the Maritime and Port Authority (MPA) launched its new Maritime Innovation Lab (MIL). Autonomous ships are a key element including both creating the technological port infrastructure that will allow Singapore to receive such ships in the future and the initiation of autonomous vessel projects with various companies, amongst them ST Engineering and Keppel Singmarine.
The purpose-built MIL will enable the test-bedding of innovative services and intelligent operations. It also further supports and encourages R&D amongst industry, regulators and the research and technology communities across the O&G spectrum.
Overall, the oil and gas industry can harness the effects of digital technology both directly in the business and indirectly through the adoption of digital technologies in other sectors.
For example, as 3D printing improves as a technology, suppliers will offer high-quality 3D printed parts for oil and gas equipment, lowering costs, shortening the time to repair and accelerating the time to value for resource production. Printing a part locally also lowers greenhouse gas emissions through a reduction in shipping costs. Applied across manufacturing globally, 3D printing could transform entire supply chains whilst simultaneously delivering a reduction in fuel consumption.
Different responses to digital technology may be appropriate depending on where in the value chain a company participates. A technology company selling software to greenfield oil installations will need to respond more quickly to this technology than a pipeline operator that has long contracts and a captive market, for example.
Regardless of competitive position in the value chain, companies will eventually face a new digitally enabled market entrant. Since wait and see is not an option, companies can harvest the hard-to-digitise profit pools in the industry, abandon the market or defend their position. These are clear and present opportunities and Singapore’s oil and gas and offshore marine companies – as well as others who can see where their expertise fits– can and should be leading these types of innovation.
Integrated oil and gas companies are amongst those in a unique position to manage digital change. The operations of these companies cover the whole oil and gas value chain, across the “upstream,” “midstream” and “downstream” sectors—i.e., everything from the discovery and tapping of the crude resource to the refining and distribution of the product to consumers. By participating in many segments of the industry, these players can more readily detect the arrival of creative new digital solutions and the conditions that enable these new solutions to take hold.
With visibility of the entire chain, and blessed with vast holdings of data on the industry, they have also have latent assets to harvest for insight, value and competitive advantage.
According to Accenture, as many as 10 distinct technologies are likely to disrupt the oil and gas sector: analytics, artificial intelligence, augmented/virtual reality, mobility, robotics, cloud computing, the Internet of Things, advanced computer modelling, 3D printing and blockchain. Interestingly, local start-up BeeX received funding from the National University of Singapore’s Graduate Research Innovation Programme earlier this year to commercialise its autonomous underwater vehicles (AUVs) – programmed with artificial intelligence – that could replace the bulky remotely operated vehicles currently used by the offshore oil and gas industry.
Major players in the oil & gas sector are already moving to explore and develop these digitisation opportunities. ADNOC (Abu Dhabi’s National Oil Company) has integrated the 10 technologies cited by Accenture into its own “Digital & AI Strategy” to prepare for the “Oil & Gas 4.0” moment. This transformation initiative, announced at the 2018 ADIPEC conference was, unsurprisingly, a dominant theme again when the industry recently gathered at ADIPEC 2019 where Singapore was significantly represented as one of 29 international pavilions and with nearly 30 exhibitors.
There is a significant amount at stake. Accenture’s analysis indicates that digital transformation could unlock more than US$1.5 trillion in new value for the global industry. The benefits include everything from increased revenue, as a result of increased production and reduced downtime, to increased capital efficiency, via improved asset use and capital reduction. Cut production costs and overheads would result in reduced operating expenditure; reduced asset risks and improved health and safety programs would dampen down operational risks; and sharing data across integrated companies would create fresh insights and value.
Today, Singapore is well-placed to grasp and build on these opportunities, with the established capabilities and potential to be a key driver in the digital transformation of oil and gas. Collaboration amongst industry, government, academia – and the leveraging of the country’s brightest minds – have always been amongst Singapore’s strengths and will be crucial in an oil and gas sector that must invest in re-shaping, recalibrating and re-inventing itself.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
Do you know more about this story? Contact us anonymously through this link.
Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.
To get a media kit and information on advertising or sponsoring click here.
sentifi.com
Singapore Business Review Sentifi Top themes and market attention on:
Geoffrey Cann
Geoffrey Cann is a consultant, author, publisher and broadcaster about digital transformation in the oil & gas sector. A former partner with one of the Big 4 consulting firms, Geoffrey has over 30 years of experience advising the oil and gas, energy and technology companies to help create lasting value. His clients include very large integrated oil companies, downstream petroleum refiners and marketers, pipeline companies, fracking services, drilling and completions services, logistics, LNG projects, and many more. Most of his work over three decades has been at the intersection of a business problem and a technology solution, and since 2013, the impacts of digital technologies and the oil and gas industry.
Recent Posts
See all posts from Geoffrey Cann »
See all posts on Energy & Offshore »
See all Contributors »
Contact Information
ST Engineering's orderbook hits all-time high at $15.9b Small-cap stocks to gain ground over privatisation surge The region's finest exporters celebrate at The Asian Export Awards ST Engineering bags 15-year maintenance service contract for Japan Transocean Air 
UOB ties up with solar power firms for energy packages Billionaires invest $46m in Australian solar farm connecting to Singapore Senoko Energy denies seeking loans to weather oversupply issues Top three oil & gas stocks averaged total return of 105.3% QTD
Sign Up For Newsletter
Thought Leadership Center
AIA SINGAPORE: DOING THE RIGHT THING, IN THE RIGHT WAY, WITH THE RIGHT PEOPLE, AND THE RESULTS WILL COMEHealthcare inflation leads to new rules for insurance
Meet the trailblazing humanoid robots in AIA Singapore's customer service centresin association with
GROW YOUR BUSINESS WITH THE RIGHT BANKING SOLUTIONS FROM STANDARD CHARTEREDHow businesses should cope amidst a sluggish economic outlook
STEPPING OUT: How businesses can be globally competitive for overseas expansionin association with
Follow Us
Sponsored Links
- How to make the first 5 seconds of a phone call count
- Want to train your retail and front-line sales staff to sell better?
- Run your business without fussing over your financial and corporate needs
Most Read
- Daily Briefing: Carousell's value surges to $850m after merger; HR exec salaries to hit $300,000 in 2020
- Two GLS housing sites at Canberra Drive put up for tender
- Chinese court dismisses Weixin claim against OUE Lippo
- Golden Agri-Resources sinks into the red with $12.52m loss in Q3
- Chang Sau Sheong of SP Digital wins Executive of the Year for Utilities at SBR Management Excellence Awards 2019
- Carro, NTUC Income launch pay-as-you-drive insurance
- 92% of investors wary of firms using misleading accounting: survey
- NETS, PayNet launch cross-border debit payments service
- Deliveroo to offer reimbursements to e-scooter riders for new vehicles
- Chart of the Day: Marina Bay takes up a third of upcoming office supply
Case Studies
Bestinet Sdn Bhd bags Technology Case Study of the Year at the SBR Asian Business Case Studies Awards 2019
Festo Southeast Asia bags Industrial Automation Case Study of the Year at the SBR Asian Business Case Studies Awards 2019
Adventus Singapore Pte Ltd bags IT Services Case Study of the Year at the SBR Asian Business Case Studies Awards 2019
Daimler Financial Services Africa & Asia Ltd bags Financial Services Case Study of the Year at the SBR Asian Business Case Studies Awards 2019
CoAssets Pte Ltd bags Financial Technology Case Study of the Year at the SBR Asian Business Case Studies Awards 2019
Commentary
Energy & Offshore Oil & Gas 4.0: Digital opportunity knocks for Singapore BY Geoffrey Cann
HR & Education Transforming Singapore's next generation of leaders: Best practices and strategies for development of future leaders BY Prof Sattar Bawany
Residential Property PropTech: Beyond the Classified Section BY Yves Luethi and Nelson Lau
Information Technology Authentication processes set to become a competitive lever in banking BY Conal Campbell
HR & Education The Future Skills That Singapore Needs Are Already Here BY Kyle Hegarty
Markets & Investing Re-thinking Reputation for businesses in Singapore, and achieving ‘surplus' BY Timothy Gan
Markets & Investing Investment theory deconstructed BY Richard Yeh
Financial Services Strengthening Finance Governance of Modern Businesses BY Terry Smagh
Information Technology Personalised user experiences – what's the secret sauce? BY Rick Seeto
Markets & Investing How US Trusts Can Benefit Hong Kong & Singapore Residents BY Emily Georgiades
Healthcare Restoring care in Singapore's healthcare – with AI BY Yoke Choo
Information Technology Businesses in Singapore Are Starting To Get Their IT Diets Right BY Fang-How, Lim
HR & Education How to introduce simple, inexpensive wellbeing policies that work BY Kirsty Dougan
Events Calendar
Dec 03 Malaysia Technology Excellence Awards 2019 Shangri-La Hotel, Kuala Lumpur, Malaysia Dec 03 Malaysia International Business Awards 2019 Shangri-La Hotel, Kuala Lumpur Apr 07 SBR Asian Business Case Studies Awards 2020 Singapore Apr 16 SBR Technology Excellence Awards 2020 Singapore
