Speaking to New Energy Magazine, Mr. Vuong Quan Ngoc said that digital transformation will support and promote business model shifting, optimize operating methods and enhance the operational management capacity of the Vietnam Oil and Gas Group (Petrovietnam). At the same time, as one of the locomotives of the economy, Petrovietnam has the responsibility and capacity to take the lead in digital transformation, contributing to the spread and successful implementation of the national digital transformation program.
PV: Can you evaluate the position and role of digital transformation in the development of Petrovietnam?
Mr. Vuong Quan Ngoc: The oil and gas industry plays a vital role in the global economy, providing energy and raw materials for many manufacturing, transportation and industrial sectors. The global oil and gas market has increased from 6.99 trillion USD in 2022 to 7.33 trillion USD in 2023, with a compound annual growth rate (CAGR) of 4.9%. The market is forecast to reach 8.67 trillion USD in 2027.
A survey by PetroVietnam shows that most of the oil and gas fields currently operating in Vietnam have entered the final stage of their life, with exploitation periods ranging from 15 to 36 years. Therefore, oil and gas production from existing fields is forecast to continue to decline by 5-8% in the following years. Meanwhile, gas consumption continues to increase.
According to the draft National Energy Development Plan, gas production is expected to exceed crude oil production in the 2021-2025 period with an average output of 11.1 billion m3/year. Power plants are expected to need to mobilize up to 16 billion m3 of gas for 2025 and 30 billion m3 for 2030. Therefore, the problem is not only to optimize operations but also to develop new oil and gas projects, which is extremely necessary to meet energy needs in the medium and long term.
According to DxReport on “Digital transformation trends in the oil and gas industry, towards sustainable development” conducted by FPT Digital, to thoroughly solve the above problem, there is only the path of comprehensive digital transformation on the value chain from upstream to downstream of the oil and gas industry. In the world, digital transformation in the energy sector has brought many successes: saving costs, improving quality and productivity, increasing operational efficiency, promoting labor safety, opening up new business opportunities and sustainable growth.
PV : Are there any numbers or methods to demonstrate and clarify the benefits of digital transformation, sir?
Mr. Vuong Quan Ngoc: Digital transformation can be considered a key determinant to address challenges and improve the competitiveness of businesses in the industry as well as between the Oil and Gas industry and other economic sectors. Research from McKinsey shows that up to 60-90% of the daily operations of the Oil and Gas industry can be supported by artificial intelligence (AI) or machine learning and oil and gas businesses can improve performance by 6-8% with data optimization.
To make it easier to visualize, let's look back at some stories about digital transformation in the Oil and Gas industry around the world. A typical example is BP's success story in improving productivity and cutting costs through digital transformation.
BP, one of the world’s largest energy companies and the third largest globally, is a multinational oil and gas company headquartered in the United Kingdom. BP is undergoing a fundamental digital transformation with clear objectives to enhance competitiveness and create deeper engagement with its employees.
BP has focused on a number of different areas of technology in its digital transformation. AI is used to visually link information, identify connections and new workflows, and create a picture of how to protect natural resources. Robots have been used by BP to inspect and maintain offshore equipment since 2017. This is expected to cut inspection costs in half by 2025 and has reduced costs associated with mining services by 90% since 2022.
Digital technology is also playing a key role in finding and extracting oil and gas at lower costs. In 2019, BP announced that it had successfully used its new Wolfspar seismic equipment to discover more than 1 billion barrels of oil in place at the Thunder Horse field in the Gulf of Mexico. The APEX Digital Twin project, launched in 2017, has optimized system processes, reducing the turnaround time from 24 hours to 20 minutes. In 2018, APEX added 19,000 barrels per day to BP’s base production.
BP has established a Digital Innovation Organization (DIO) to monitor and assess the development of new technologies affecting energy supply and demand and propose appropriate responses. In addition, BP also focuses on developing people in the digital age. In 2018, BP organized a new leadership skills training course for 2,000 of its managers. In addition, BP invested half a billion dollars in industrial startups.
By using new technology to detect sand and leaks in oil wells, BP saved $100 million. BP’s comprehensive digital transformation not only improved operational productivity but also helped the company significantly reduce costs, while ensuring sustainable growth in the future.
Illustration of AI technology application in oil and gas operations
PV: That is the upstream sector, what about the midstream and downstream, sir?
Mr. Vuong Quan Ngoc : The story of Columbia Pipeline Group applying pioneering smart pipeline technology is a clear illustration.
Columbia Pipeline operates an interstate pipeline that stretches from New York to the Gulf of Mexico. They provide transportation and storage services for local gas distribution companies and natural gas users. However, their pipeline infrastructure faces threats from human intervention, natural disasters, and environmental change. Safety factors are declining due to age (60% of the pipeline was installed before 1970), leading to high annual costs to maintain the network.
Columbia Pipeline’s goal is to ensure the safety of its entire pipeline infrastructure and help operators make informed decisions about pipeline safety and integrity. To achieve this goal, the company has developed intelligent pipeline technology that monitors threats, improves risk management, and provides situational awareness. The company has also integrated data from multiple sources and data attributes to improve monitoring and management efficiency.
The results of implementing smart pipeline technology include the ability to quickly assess threats and alert response systems to help pipeline operators minimize the likelihood of unforeseen events. At the same time, the company has reduced the cost of pipeline construction by more than 20% by adopting digital solutions and increased uptime through pipeline management systems powered by AI and IoT (Internet of Things).
Digital transformation is becoming an irreversible trend in every industry and the Oil and Gas industry is no exception. Research from McKinsey shows that up to 60-90% of the daily operations of the Oil and Gas industry can be supported by AI or machine learning and oil and gas businesses can improve performance by 6-8% with data optimization. .
PV : So, in your opinion, what can Vietnamese oil and gas enterprises learn from the world's digital transformation experience?
Mr. Vuong Quan Ngoc : It can be seen that digital transformation brings optimal efficiency thanks to the data-based operating mechanism. Digital management and operations based on data platforms and AI technology are becoming an important pillar in the Oil and Gas industry, helping to exploit, manage operations and make decisions more effectively. In addition, resource management is also easy and transparent, helping units in the industry to both ensure national energy security and be ready to take the lead in new energy transition trends.
The Oil and Gas industry is a pioneer in the use of high technology, but it is still fragmented, lacking connectivity, and has little dissemination and exchange of experience. Therefore, activities in the Oil and Gas industry value chain can generate billions of data every day, but currently only a small proportion can be exploited in management and production and business operations. Thus, it will take a lot of effort to keep up with the world's digital transformation speed.
Digital transformation is bringing about huge changes in the operations of the Vietnam Oil and Gas industry, promoting optimization, efficiency and integration across the entire value chain. However, digital transformation also faces challenges such as complex systems, information security, cultural changes... requiring long-term investments in finance, human resources and time.
Successful experiences around the world are valuable for the Vietnamese Oil and Gas industry, where digital transformation strategy plays an important role in ensuring sustainable development and improving operational efficiency.
The oil and gas industry in Vietnam has the advantage of applying high technology very early, but digital transformation in the industry still faces many challenges, especially the lack of a continuous data flow within each unit as well as the entire system. Therefore, Vietnamese oil and gas enterprises need to learn from successful experiences in the world, and at the same time make long-term investments in finance, human resources and time to ensure sustainable development and improve operational efficiency in the future.
Petrovietnam's offshore oil and gas exploitation activities
PV : What is your opinion about digital transformation at Petrovietnam?
Mr. Vuong Quan Ngoc: Digital transformation brings optimal efficiency thanks to the data-based operating mechanism, helping exploitation, operational management and decision making become more effective. Therefore, digital transformation will not only support but also promote the process of shifting business models, optimizing operating methods and improving Petrovietnam's operational management capacity.
Comprehensive digital transformation is a particularly important strategy for PetroVietnam. As one of the locomotives of the economy, PetroVietnam has the responsibility and capacity to take the lead in digital transformation, contributing to the spread and successful implementation of the national digital transformation program.
PV: Thank you very much!
Globally, digital transformation in the energy sector has brought many successes: cost savings, quality and productivity improvements, increased operational efficiency, enhanced occupational safety, opened up new business opportunities and sustainable growth.
Minh Khang
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