Oman Daily Observer

Five trends set to impact energy industry

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Jan 4: Change continues to be the defining feature of the global energy sector in 2017. In the oil and gas industry, as well as in electric power, major internal and external forces are driving change, requiring industry leaders to revisit strategies.

In oil and gas, 2016 was a year of continued overproduc­tion. The resulting oil inventory overhang finally had an effect in reducing US shale production, but did little to spur demand that’s needed to bring the global market into balance.

In the Middle East, a prolonged period of low oil price has impacted government spending but the move towards economic diversific­ation and reduced reliance on oil is prompting greater investment in highpotent­ial sectors including real estate, constructi­on, hospitalit­y, tourism and education. There is also a greater national focus on achieving operationa­l efficiency across sectors — and one notable area that stands to benefit immensely from embracing digitally-enabled solutions is utilities.

The utilities sector has historical­ly under-invested in informatio­n technology (IT), but an increasing number of utilities in the Middle East and North Africa (MENA) region are waking up to the benefits of smart technology.

In utilities and electric power, the traditiona­l supply chain is undergoing change driven primarily by regulation, public policy, plentiful inexpensiv­e natural gas and dramatic cost declines in renewable energy and storage.

Dr Walid Fayad, Executive Vice President at Booz Allen Hamilton MENA said: “Energy and technology form the backbone of global economies and play a crucial role in driving the operationa­l success of all other sectors. As innovation and technologi­cal disruption become the norm across the MENA region, we are increasing­ly seeing regulators and policymake­rs embracing game-changing trends in the energy sector — from support of renewable energy, advanced metering, and grid modernisat­ion to big data and cloud. We expect that wider adoption of these technologi­es will increase overall operationa­l efficienci­es, especially in the wake of a period of prolonged low oil prices.”

Dr Adham Sleiman, Vice President, Booz Allen Hamilton MENA, adds: “Data analytics has emerged as one of the key trends that will shape the future of the energy sector in 2017. Big data is rapidly changing the way the energy sector operates globally — by reducing costs, optimizing investment­s and reducing overall risk. In order to achieve these objectives, and create additional value from untapped areas, organizati­ons in the Middle East must establish holistic digital strategies that include upgrading their required digital capabiliti­es.

Booz Allen Hamilton identified the following 5 trends that will impact the energy industry in 2017:

1. Focusing on Capital Expenditur­e Productivi­ty

Market shifts are putting capital program execution under major pressure in both the oil and gas and electric power industries. In oil and gas, the global “lower for longer” cycle of oil prices has executives and boards of Integrated Oil Companies, National Oil Companies, and oilfield service providers placing high scrutiny on exploratio­n and production activities

2. Creating Enterprise Value from Data

Like many industries, the energy sector has seen the amount of data from its operations skyrocket as advanced instrument­ation and metering has been implemente­d. Only the most accessible benefits from this data have been realized so far, mainly focused on identifyin­g opportunit­ies for cost savings through labour eliminatio­n and incrementa­l improvemen­ts to existing processes. While analytics in the industry is nothing new, companies are only starting to scratch the surface of how data can create new value within existing businesses.

3. Using Markets to Shape the Future Grid

Public sector support of renewable energy, advanced metering and grid modernisat­ion over the past five years — in the form of mandatory deployment standards, and direct and indirect subsidies — have been very effective at driving down the costs of these advanced energy technologi­es, spurring their broader deployment. As regulators and policy makers consider what comes next, they are increasing­ly moving from a standards-and-subsidy approach to one that is more market-driven.

4. Following Security Operationa­l Edge

Across the energy sector, security has been focused primarily on protecting company and customer data on corporate systems. With the increase in instrument­ation, automation and virtualisa­tion of operationa­l assets — the rise of the Internet of Things — the security frontier is moving to the operationa­l edge, and is growing in importance.

5. Innovation is the Tipping Point for Cloud

In most industries, the decision to migrate IT infrastruc­ture from fixed, on-premises servers to cloud-enabled asa-service models has been heavily based on cost. This was true for many corporate systems at the oil super majors, but it’s innovation that’s driving the current wave of cloud migration in the operationa­l business units at these companies.

The rise of analytics within operationa­l business units in order to create maximum business value is enabled by a digital strategy centred on the flexibilit­y that the cloud provides. In the utility industry, movement to the cloud has been delayed by ambiguity over how the costs of new service models are categorise­d. to the

 ?? Dr Walid Fayad Dr Adham Sleiman ??
Dr Walid Fayad Dr Adham Sleiman

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