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The Abu Dhabi National Oil Company (ADNOC) is transforming its business through digital projects that range from deciding where to drill for oil and gas, to helping the company decide where to sell its final products.
The state-owned oil company has driven the United Arab Emirates’ economy since it was founded almost half a century ago, and its head of digital, Abdul Nasser Al Mughairbi, has been driving digital transformation since 2017.
Each day, ADNOC produces three million barrels of oil and processes billions of cubic feet of gas. It has businesses involved in the extraction of raw materials upstream as well as the processing of materials to add value downstream. Add to this the transportation, sales and marketing of oil and gas, and you have a large, complex organisation.
Originally a chemical engineer, Al Mughairbi has worked for ADNOC for 30 years. Although he has programmed, he has never worked in the company’s IT department, but has held many roles in different locations at the core of the business. He now leads a digital team of 30 people within a company workforce of 50,000.
Al Mughairbi says his current role benefits from his time as a business user of IT, more than his experience in coding. “Digital is not IT, but is about being disruptive and finding new ways of doing things,” he says. For example, he says 60% of the issues he deals with are related to people and helping them adapt to new technology.
The company’s decision to implement a digital strategy and appoint a digital leader was spurred by the oil and gas industry 4.0 revolution, which is seeing technologies such as the internet of things (IoT) and artificial intelligence (AI) applied to the sector. Nasser says it quickly became obvious that the company could utilise the huge amounts of data it collects across the group.
“Digital is not IT, but is about being disruptive and finding new ways of doing things”
Abdul Nasser Al Mughairbi, ADNOC
ADNOC comprises 14 different companies, including organisations involved in upstream oil production and downstream refining. Al Mughairbi says these companies are on a single value chain but are operated separately with, for example, their own digital teams. “When we wanted to do a transformation and change into a more progressive company, we realised that there were a lot of silos and people working in isolation,” he says. Al Mughairbi’s team operates at group level.
“Our commitment is to be a company that is transforming and our senior leadership wanted information and wanted to utilise the data,” he says. “This meant breaking silos and one of the best ways of doing this is through digital.”
Before the group-level digital team was created, there was a lot of digital activity in each of the separate companies, but it was being done in isolation. “Through the group digital team, we scaled this up and did it across the organisation,” says Al Mughairbi. “Rather than companies looking for the optimal local solution, we offer the globally optimum solution for ADNOC. Some companies might lose out a bit, but the overall gain for the corporate is better.”
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There was some friction when the digital team was integrated into the company, but Nasser says the team’s relationship with the IT department is now good. “It didn’t start well because at the beginning, the IT team questioned why we did things they were already doing,” he says.
Eventually, they agreed a way forward, which was helped by the fact that most of both teams had worked together for many years, says Al Mughairbi. “We finally agreed that my team would not enter the architecture of the systems of IT – I will leave that to IT, and my team focuses on the application of use cases.”
Al Mughairbi says a good relationship with IT is vital because most of his team’s work is conceptual. “Everything I do has to have IT with it,” he points out. “I have to deploy it, maintain it and interface with the business.”
Once a way forward was mapped out, ADNOC decided to build its Panorama Digital Operations Centre, which brings all the information from across the company into one location.
The centre has a 50-metre LDC screen with over 100 dashboards showing everything that ADNOC does. At the centre, it looks at real-time data and carries out predictive maintenance and predictive analytics. It also deploys digital twin simulation to show people how digital can impact their roles.
The centre, which took six months to build, keeps watch over the entire operation and is automated so it can respond quickly to incidents such as oil or gas leaks.
ADNOC brought all the company’s data into the centre through a data lake, which Al Mughairbi says was the first major project. “This was to create a data science platform using Python,” he says. “We needed the data to be in the ingestion layer so we could use it and visualise it.
“All of a sudden, we had data at our fingertips – real-time data, production data, HR data, sales data and financial data from 64 sites.”
Al Mughairbi says bringing the data in from the organisation’s plants and facilities and into its headquarters allowed the digital team to work more freely and in a more structured way.
One example of how it has used data is the creation of predictive maintenance tools for pumping equipment. This was chosen as one of the first projects because the maintenance of equipment is a huge operational cost, says Al Mughairbi. “Instead of doing time-based maintenance, today it is based on failure analysis, and predictive and diagnostic engineering,” he adds.
In the past, every few months, equipment would be shut down for testing, but now the maintenance policy has changed and this does not need to happen. Al Mughairbi says this strategy has cut maintenance costs by 20%. ADNOC used to spend more than $1bn on maintenance each year.
This project demonstrated to the business that huge gains can be made through digital transformation at a relatively low cost.
Abdul Nasser, Abu Dhabi National Oil Company
Another project saw the creation of a digital simulation of all the company’s above-ground operations. “I use this to create ‘what if?’ scenarios in real time to test impacts,” says Al Mughairbi.
This can help to optimise the value chain, he says, and can also be used to test the impact that a new plant might have. “This helps make commercial decisions and it is AI-driven,” he adds.
Digital even reaches the front line when it comes to seeking out new oil reserves. For example, ADNOC uses AI to support geologists prospecting for drilling locations, using data science to reduce the time it takes to find sites. AI can analyse the geological slides of a bore hole to identify geological structures.
“Geologists used to be able to do maybe 100 [slides] a day, but using AI, 1,000 a day can be completed,” says Al Mughairbi. “These will flag up certain slides to geologists to look at in more detail and verify them.” This speeds up the location of new sites, he says.
Al Mughairbi’s team also introduced blockchain to create a platform for all the different group companies to trade with each other, and in the future, ADNOC wants to extend this internal blockchain to its external supply chain.
But while the buzz of blockchain has spurred ADNOC to act, it is being less pioneering when it comes to the public cloud. Despite a global race into the public cloud, the company currently uses an internal cloud infrastructure because cyber security is a major concern, says Al Mughairbi.
“But we will not rule out public cloud,” he adds. “I believe that companies like Amazon Web Services and Microsoft are better at cyber security than us.” He says ADNOC is evaluating its options as these suppliers build datacentres in the Middle East.
So there is a lot going on for ADNOC’s digital team, but Al Mughairbi says the cost of initiatives is minimal compared with the benefits they bring. “In reality, the investment is good value because I use our data and programmers,” he says.