The Egyptian oil and gas sector has been walking a path for digital transformation in order to boost the sector’s potential and attract investments. Egypt Oil & Gas Newspaper has interviewed a number of petroleum experts who played a role in the digitalization program, which comes as the seventh pillar (P7) of the Ministry of Petroleum’s modernization project.

Initial attempts

The attempts to digitalize the Egyptian oil and gas sector have been going on for a few years, and it starts to bear fruit. “Since the inception of Egypt’s Oil and Gas Modernization project in  2016,  the  Ministry  had  a  leading vision for leveraging the transformative power of digital transformation to enhance the sector value chain activities, and support unlocking its full value,” according to Osama Mobarez, Undersecretary for the Minister’s Technical Office.

“The digital transformation program has evolved throughout the course of the sector’s modernization journey, where phase 1 of the digital transformation program primarily focused on utilizing data to support decision making and increasing data flow across the sector entities,” Mobarez added.

Information is perceived as the new oil, and therefore “The ministry is currently undertaking several projects involving the 5 pillars encompassing the digital transformation portfolio set by the Ministry to achieve a comprehensive digital transformation process,” Ashraf Bahaa, EMC Chairman and Managing Director, Digital Transformation Program Sponsor, noted.

Additionally, Agiba Petroleum’s General Manager of Information Technology and Communication, Field Development Projects Group Manager, Mohamed Abouelmagd, stated that “P7 started the task with wide implementations of ERP in sector’s companies to improve business process and control Companies assets. In 2021, the P7 continue its mission with ERP Implementations in Addition starting to build an executive commend center which will monitor the oil & Gas value chain.”

Vision 2030

The digital transformation of the oil and gas sector comes in line with Egypt’s sustainable strategy and Vision 2030. “The oil and gas sector is one of the main contributors to the GDP and hence comes its importance. The project aims to optimize the overall production and reduce the operational costs affecting the overall ROI and directly impacting the quality of life which is the first objective of the vision,” Ahmed El Saeed, Supervisor of the Information Technology and Digital Transformation department at the Ministry of Petroleum and Mineral Resources, , Operations and Command Centers Projects Group Manager, explained.

“Data Analytics and performance indicators helped monitor the quantitative targets and the impact of digitalization on the economic and environmental aspects of sustainable development strategy (SDS)  – Egypt vision 2030.” Mona Gamal El Din, EGPC’s CEO Deputy Assistant of transportation and products distribution for automatic control and monitoring systems, Studies and Consultation Manager, Digital Transformation Projects Management Office agreed.

“The Ministry’s digital transformation program main objectives perfectly align with the programs and projects set by Egypt’s vision 2030 to drive all Egyptian institutions into digital ones to enhance efficiency and transparency and to establish Egypt as a global digital hub,” Osama Salem, Digital Transformation Program Manager, and Business Development General Manager at the Petroleum & Process Industries (ENPPI), stated.

“The Ministry’s digital transformation program main objectives are to create a digital transformation strategy and an execution plan for the entire oil and gas sector, so as to avail real-time data and business intelligence at an executive level to support decision-making and crisis management, including linking the Egyptian General Petroleum Corporation (EGPC), the Egyptian holding companies and their affiliates under a unified network. Through such an approach, the Egyptian oil and gas sector shall be digitally transformed and shall gain a competitive edge for the digitally-enabled businesses, increase business value through optimizing operations, increase companies and businesses agility, and create new business opportunities through cross-industry partnerships between Oil & Gas companies and Technology Companies,” Osama Salem added.

Ahmed Ghassan El Mobasher, EGPC’s CEO Deputy Assistant for Planning and Projects, ERP Projects Management Office, agreed, saying that “digital transformation in Egypt is an essential part of the national strategy towards achieving Egypt Vision 2030 for sustainable development aiming at transforming Egypt into a central hub for communications and technology at the regional and global levels.”

Not only the digital transformation program, but the objectives of the modernization project go in line with Vision 2030. Dawlat Hashem, EGAS Assistant Chairman for Communication & Information Technology, ERP Projects Group Manager, noted that “the modernization project’s main goals are sector governance and accountability, as well as supporting financial sustainability and fiscal balance.”

“The ERP pillar support in the implementation of the ERP system and maximize the benefits of the existing one to be able to achieve MOP vision to reach a real-time integration between all holding companies, their affiliate companies, and MOP,” she added.

Adapting to technology

The Egyptian oil and gas sector is not new to technology; it has been operating digitally for 60 years. “The oil and gas is a technology-based industry as all industrial sites apply automation and control technology in operation,” according to Inas Osman, EGPC’s Chairman Assistant for Information Technology and Communications, IT Infrastructure Projects Group Manager.

The sector has been working on adapting to new technologies, paving the way for the digital transformation goals. “Luckily enough, the sector has developed a growing appetite for adopting technology more than ever before. This plan was divided into two main parallel routes. The first was to launch a sector-wide technological infrastructure upgrade project, making sure that all gaps that could hinder digital transformation was addressed and resolved. Its second route was to utilize high-end technologies in huge data analytics, artificial intelligence and predictive analytics solutions which would enable precise and correct information decisions (data-driven), resulting in better operational visibility, and leading to increased profitability, and the achievement of the sustainability goals of the petroleum and gas sector,” Heba Kassem El Serafy, the Gulf of Suez Petroleum company (GUPCO)’s Assistant General Manager for Information Technology and Telecommunications, Data Analytics Projects  Group Manager, explained.

The petroleum sector further adapts to technology “by setting the appropriate roadmap and with the help of specialized consultants.” This way “the sector is adopting the philosophy of business transformation, not just digital transformation. Through which work methods are developed to eventually lead to the integration between them, in order to obtain the complete information in real time in order to make the right decision at the right time,” according to Wael Hendawy, ECHEM’s General Manager of Systems, Information and Communications, Agreements Manager – Digital Transformation Projects Management Office.

Nourishing digital culture

The digital transformation of the petroleum sector is not only about using digital methods in operation, it is a culture to be spread among people. “The digital transformation process and the cultural change that make it successful is a multi-stage process that requires in-depth planning and keen follow-up. Therefore, while implementing a sector wide digital-transformation program, building a digital culture within every company is a necessity to drive sustainable action and create value for all stakeholders,” according to Bahaa.

In order to ensure a digital-oriented culture across the oil and gas sector, several directions have been followed. “First direction is to build proficient human capacity across the sector who will be capable to grasp and utilize these new emerging technologies and lead the digital transformation journey of the Egyptian Oil and Gas Sector. On this regard, in-company digital transformation teams have been established within several Sector companies to initiate the change management process towards building a digital-oriented culture and ensure the sustainability of the digital transformation process with the Egyptian Oil and Gas Sector. The second direction is to always be acquainted and familiar with the latest proven technologies in the field of digitalization. This is achieved by building and maintaining a partnership with world-class technology providers and constantly engaging them in the different technology-related projects within the sector,” Bahaa noted.

Challenges facing P7

Every successful project is faced by challenges and obstacles that can hinder it, but if they were dealt with in the right way, they can sharpen the project and enhance its progress. The digital transformation pillar is likewise. Bahaa suggested that “the main facet that has the biggest impact on having a successful and sustainable digital transformation process is the sector leaders and executives’ support.”

“Digital transformation needs sector leaders support throughout the entire digital transformation journey. During the change management process, organizations and people tend to fall back to the conventional way of doing business, and without the sector leaders and executives constant support to realize the digital transformation no progress would have been achieved,” Bahaa explained.

In order to solve this challenge, it has become crucial for the oil and gas sector to ensure a digital-oriented culture and spread digital awareness among its people. “That is why the digital transformation program is keen on establishing digital transformation teams within each sector company that will oversee the full digital agenda. The digital transformation teams shall be the foundation of a truly changing culture through every company within the sector and shall support the digital transformation flow through the management hierarchy right down to every front- line employee so that the full organizational pyramid is tuned towards digital,” Bahaa said.

P7 Teams, decision-makers

Once P7 was adapted, a digital transformation team was formed. “The formation of program 7 team responsible for the digital transformation of the oil & gas sector according to the minister’s decree brought together an elite team from across the oil and gas sector whether from the ministry of petroleum, the holding companies and the affiliated companies,” El Saeed stated.

The digital transformation team “acts as a link between the three layers to ensure smooth business transition and helps support the digitalization objectives,” he noted.

The P7, which has five sub-pillars, “focused on reaching the final goals and that is satisfying the needs to build a unified command center, involving state of the art technologies such as artificial intelligence, advanced data analytics, big data analysis, using case analyses, data visualization …. among many others,” according to El Saeed. All these goals have “alignment with the fourth industrial revolution, which aims at achieving autonomous decisions making across the different decision levels available in the sector, by which the needed data for making a decision is left at the palms of every decision maker in every affiliate company, central command point, holding company, and of course MOP eventually,” he explained.

Bahaa also confirmed that the ERP and executive command center, as well as the other main projects undertaken by the ministry “encompass the digital transformation portfolio set by the Ministry to achieve a comprehensive digital transformation process.”

Active projects supporting digitalization

In order to walk the digital transformation path, the Egyptian oil and gas sector has undertaken several projects. “These projects encompass the entire sector activities from upstream, midstream to downstream activities,” El Mobasher stated.

“The project I want to emphasize upon is the establishment of comprehensive ERP systems at EGPC, and national sector refineries,  project that is within the final phase and will be launched soon. This emphasize comes from the importance of the ERP systems to the digital transformation portfolio of the Egyptian oil and gas sector,” he noted.

Bahaa also confirmed that the ERP and executive command center, as well as the other main projects undertaken by the ministry “encompass the digital transformation portfolio set by the Ministry to achieve a comprehensive digital transformation process.”

El Mobasher described the ERP systems as the digital transformation platform, saying that “ERP technology provides an over-arching system that seamlessly link with any industrial control systems and is capable of maximizing the business value chain from the enormous information feed now available from the industrial control systems and technologies to the ERP systems and business intelligence technologies.”

“By providing the accurate architecture to link, ERP systems has the capability of bringing revolutionary changes in various processes of modern business. ERP software integrates all aspects of your business operations, leading to greater efficiency, speed, and customer satisfaction. Also, ERP gives decision-makers access to much richer data and allows greater insights into every stage of the Oil and Gas value chain. This is in turn makes businesses more agile, and better able to respond to, or even anticipate, the market dynamics,” he explained.

Potential agreements & digitalization infrastructure milestones

When it comes to digitalization, the oil and gas sector makes sure to partner with expert digital solutions’ providers to deliver the best outcome. “Collaboration is a key factor for success, especially to seize all available opportunities for creating more value in Egypt’s oil and gas sector. This has always been, and will continue to be, the philosophy adopted by the Ministry of Petroleum and Mineral Resources, and is evident in the longstanding and prosperous partnerships with IOCs, global service companies and world-class technology providers,” Mobarez stated.

“Through continued collaboration and positive engagement with the sector partners, including major IOCS, service companies and technology providers, Egypt’s oil and gas sector is fully embracing digital transformation and creating synergies within its domain to support realizing the sector’s vision and ambitions,” Ahmed Osama, Strategy and Technical Affairs Unit Head, Technical Office, Ministry of Petroleum and Mineral Resources, agreed.

Hendawy further explained that “the purpose of contracting agreements is to achieve the best solutions with better prices and services. In this context, agreements have been concluded with a number of international companies, among these companies: SAP, AVIVA, Schneider, OSI Soft, and others. A study is underway to conclude agreements with other companies in the areas of software, hardware and specialized systems.”

On digital milestones, Osman stated that “digital transformation projects differ in requirements according to the type of application, number and type of users.” She added that “EGPC initiated a number of Datacenters renovation and infrastructure upgrade in its affiliated companies. This also included increased communication bandwidth and information security controls. IT facilities and infrastructure are now ready to host and operate the running projects.”

Planning resources

The digital transformation program has an integrated strategy, which together with “programs and their key activities are aligned with the various stakeholders in the planning stage with clear roles and responsibilities for each; ensuring resource allocation is done as early as possible. During implementation, reporting dashboards ensure everyone is updated with progress and any issues are addressed before they jeopardies program completion,” Hashem noted.

Moreover, Hashem pointed out that several “key design, resources planning and project management systems are used throughout the phases of the digitalization program, and a strategic work track that is receiving a lot of executive attention is the development and training of the sector’s human assets in technology leadership roles to ensure continuity and future-proof the project’s strategic outcomes.”

ECC Support senior executives

Digital transformation measures, especially command centers, have great impact on the development of the oil and gas industry. Osama Salem suggested that such an impact can be feasible thanks to “the value that command centers can bring into the oil and gas industry, where an immense amount of data and information covering all sector operations can be collected, monitored, analyzed, and processed further to drive the business value chain.”

Therefore, the Egyptian petroleum sector’s digitalization objectives include establishing command centers “to provide an umbrella for centralized decision-making and crisis management support with the vision of enhancing operation efficiency, optimize operation and respond to market dynamics. The Command Centers shall host several advanced technologies that leverage artificial intelligence, big data, predictive analytics, and other advanced technologies to help realize the Ministry’s vision towards a digitalized sector,” according to Osama Salem.

Technology & Software

Digitalization of the oil and gas operations is a significant approach to enhance field performance.“Oil & Gas value chain has a wide operation technology landscape responsible for running the core operational services. Our commitment is to provide the command centers with real time automated data to reflect one single version of truth and build a complete picture of the Oil & Gas Value chain to support decision making processes.” Abouelmagd said.

The digital transformation team is committed “to provide the command centers with real time automated data combined with the IT data to reflect one single version of truth and build a complete picture of the Oil & Gas Value chain to support decision-making processes,” he pointed out.

“Egypt’s oil and gas sector applies technology across all its value chain activities, from exploration and production activities to refining and petrochemicals,” Ahmed Osama stated, setting the Egypt Upstream Gateway (EUG) as an example.  “The sector is also implementing multi-client and seismic survey projects to support in unlocking Egypt’s full potential of oil and gas resources through applying sophisticated data processing and interpretation. The sector is similarly expanding use of the latest technologies across the other value chain activities to continuously improve performance and add more value,” he added.

Using the right software can take the digital transformation journey to success. “The digitalization program employs various high-end engineering and analytics applications for asset integrity management, predictive maintenance and 3d modeling, while ensuring process optimization and full integration between all solutions,” El Serafy noted.

The oil and gas sector adopts a flexible strategy that meets business goals, “while avoiding environmental impacts and eliminating process bottlenecks, maximizing throughputs and revenues, increasing process flexibility, and minimizing emissions. All this should be done provided that the targeted return-on-investment goals of each company are met with no safety issues nor suboptimal production rates,” she explained.

Midstream, downstream digitalization

The digital transformation program goes beyond upstream and field development. “The digital transformation process is widely deployed across the entire sector and aimed at the entire business activities, including upstream, midstream, and downstream activities, as the ministry strategy is aiming at delivering a comprehensive digital transformation for entire Egyptian Oil and Gas Sector. This is evident in the various digital transformation projects across the entire sector,” Bahaa said.

One of the digital solutions adapted in this level is installing GPS on fuel trucks. “A central control room at EGPC is actively tracking more than 4000 fuel trucks types all across Egypt, beside monitoring system at each marketing and transportation company tracking its owned trucks, through a GPS monitoring and tracking system comprising of GPS devices installed on board each vehicle and a central control application,” Gamal El Din, noted.

Thus, the digital transformation pillar significantly affects several levels of the industry as it aims to develop the different operations of the oil and gas sector. Following the integrated digitalization strategy will help the Egyptian oil and gas sector to be sustainable, while it meets the goals of the country’s vision 2030.