Digital technology commanded significant attention at this year’s edition of the Abu Dhabi International Petroleum Exhibition & Conference (Adipec), and not least through the presence of a dedicated Digitilisation Zone at the event.

“Data is the new oil,” announced the UAE’s Minister of State for Artificial Intelligence (AI), Omar bin Sultan al-Olama, during a conference session at Adipec 2018. “We are at the beginning of industrial use of AI and Internet of Things (IoT) in the sector.”

The impact of AI on the oil and gas sector is estimated to be $2.85bn by 2020, according to Al-Olama, and that is “only the start”, he noted.

Making the cut

Adipec was attended by local and international technology majors, such as Microsoft, Honeywell, ABB and Schneider Electric, as well as startups, all offering competitive solutions in AI, IoT, blockchain, robotics and drones. An opinion shared by many of the smaller players, however, was that the oil and gas industry is a lot tougher for them to crack.

“One of the main issues is the scale of the [oil and gas] companies,” says chief operations officer for Block Gemini, Tony Lauriola. “You are dealing with multiple decision-makers and you have to go through a lot of layers of bureaucracy.”

While certain forms of technology like AI and IoT have fared better, regulations make it tougher for drone and robot manufacturers to prove their reliability. “It is the ‘unknown’ factor that makes it difficult for drone companies,” says inspection manager at Texo Integrity, Gordon Cook.

“You have the security issues and perceived dangers. It is particularly difficult in the Middle East, where you have stringent air traffic monitoring,” he continues, adding that his firm is in talks with the UAE Interior Ministry and operators such as Abu Dhabi National Oil Company and Saudi Aramco. Cook believes that getting the bigger companies on board is key to redefining the rules.

The startup players highlight a fundamental difference separating them from the more established technology majors: real industry experience. Several of the smaller firms come from an oil and gas background, having worked in the sector before they identified the opportunity for a solution offering.

“The fact that you are coming from the inside of the industry’s belly, as compared to a non-oil and gas industry company, gives you a clear advantage,” says head of engineering at Simulytica, Tim Baker. “You could have all the Big Data, but if your analytics are not based on the fundamental scientific principles of an oil and gas company, how can you effectively make use of that data?”

Working in harmony

Several startups have formed partnerships with large-scale technology companies, either on an individual project or on a long-term basis. This enables the startup to utilise the latter’s market position and existing software.

Companies such as Taqtile and Blackstone eIT run their products using Microsoft’s cloud computing service Azure and its augmented reality technology HoloLens. This allows them to offer turnkey solutions.

“We have been speaking with guys involved in hardware, who can obtain data for us,” explains Baker. “Another specialist can help in better extraction of the data, and our software can help in analysing this procured data. There seem to be opportunities for collaboration.”

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However, not all startups want to go down this path, choosing instead to remain independent. “I would not say no to a collaboration with a big partner,” says concept designer and founder of Previse Studio, Sachin Rasane. “But I am confident in my product’s worth as a standalone solution.”

Rasane says that a change in mindset is necessary. “Decision-makers from top companies should visit the smaller stands [at Adipec] first. We are offering good products at competitive rates, but are not recognised because of the mindset against smaller companies.”

Changing times

Block Gemini’s Lauriola says the presence of forward-thinking “digital officers” in oil and gas companies has helped to make dealing with the operators easier, as both parties now understand the benefits of deploying a particular technology.

While it has always been somewhat challenging for a smaller player to enter the market, Simulytica’s Baker says that this is “flipping around” thanks to digitalisation. He adds that simplification of the digital process has made it easier for operators to feel comfortable working with players offering “an alternate viewpoint”.

In addition, the oil and gas sector is following the lead of other industries, such as automotive sector, which has a successful track record of adopting digital technology to improve productivity.

“It is a cultural thing – the digital community is seen as a fast-paced, young community,” says Baker. “There seems to be a growing acceptance that you do not need a huge corporate infrastructure to deliver great value.”