EVOLUTIONARY ADAPTATION
Oil and gas has long been slow on the uptake in terms of technologies. But this is set to change, especially in Oman, as technologies bring about greater returns with lower costs.
Oil and gas has always been seen as a slow adapter of technology, especially as other labor-intensive industries have grown more and more digitalized. However, this stereotype is increasingly fading, with oil and gas companies introducing a myriad of different technological changes into their way of doing business. The change couldn't come any sooner, as the COVID-19 pandemic forces more and more industries inside, and oil prices continue to drop with the increasing glut in the market.
Oman is quickly realizing the usefulness of today's technology for its own oil and gas prospects. Today, around half of Oman's oil reserves are made up of heavy oil, out of which, according to Oman Times, only 2% is extracted, due to the heavy costs and technology needed for its production. Furthermore, Oman's oil and gas market has had a rocky five years, though its market saw a bit of resurgence during 2018. Unfortunately, quarantines put in place across the world to stem the pandemic have come at a blow to oil markets; the situation was not helped by the short-lived Saudi-Russia standoff in March 2020. As such, current prices of oil have left smaller Omani players strapped for cash. Still, the country's stability in the middle of a volatile region makes it an attractive place for investors to pin their hopes on. For companies to best take advantage of the current situation, exploration, extraction, and production costs must be kept as low as possible. It is in this area that technology is of particular usefulness.
Halliburton's Country Vice President Zeinoun Klink explains in his TBY interview that technology is particularly advantageous when working in older fields: “The majority of oil (in Oman) comes from mature fields that have been producing for a while beyond their peak, and technology is needed to boost productivity." As such, the company has been expanding and perfecting its enhanced oil recovery (EOR) processes to help customers make the most of their fields. Another key technology comes in the form of smart technology, both in the drilling and other oilfield processes. Klink says that geosteering technologies provide 3D overviews of drilling in real time, thus allowing for “optimal well placement in the thinnest reservoirs and access to the productive rocks to enhance recovery."
These geosteering technologies form part of the smart technology push in the sector. Especially important for keeping the industry sustainable will be smart drilling, which will aid companies in understanding when, where, and how to exploit fields, especially in exploratory phases. Meanwhile, the deployment of smart oilfield technology will allow companies to obtain critical data in real time, without any lag. Not only will this allow operators to make decisions faster and better, but it will eliminate the need for contractors to be on-site to fix any problems. This will become increasingly important as the extent of quarantine measures globally expands.
Oil and gas companies are also turning to online sharing platforms to create open pools of sector knowledge and expertise. As Murtaza Jariwala, CEO of Vanguard Oilfield & Engineering Services, explained in his TBY interview, companies in the sector often rely on internal knowledge or consultants to provide the solutions needed to overcome challenges. However, thanks to platforms like OGES, researchers and experts in universities and on the ground can connect and collectively solve problems. This increased sharing should also influence R&D in the sector as well. According to a TBY interview with Sohail A. Mikrani, Deputy General Manager of Maktoom, “to get most return from the well, we must strike an optimal balance between production cost and production performance; by investing in R&D, we can do so."
McKinsey Global Institute's 2020 new technologies report estimated the economic impact of advanced oil and gas exploration and recovery techniques to stand at USD100-500 billion by 2025. Furthermore, it estimates these technologies will bring between 3.6 and 6.2 billion oil-equivalent barrels of oil and gas by that same year. Even with the virus's impact still unknown, increased technology in the sector will help the industry globally reach these numbers. But, in order for companies to best utilize technology's inherent exponential growth advantage, changes should be brought in sooner rather than later.
EVOLUTIONARY ADAPTATION
TABLE OF CONTENTS
Focus: Future foreign policy
Friends to all, enemy to none
In championing the late Sultan Qaboos' non-interference foreign policy, the new ruler of Oman, Sultan Haitham bin Tariq Al Said, is determined to work for friendship and peace, justice and harmony, and coexistence and positive constructive dialogue.
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David Kalife, CEO, Oman Oil Marketing Company (OOMCO)
Despite Oman's fuel market slowing down, OOMCO increased its sales volume of lubricants by 36% in 2019 and is constructing a greenfield bunker terminal at the Port of Duqm. The company has transformed while growing its expertise in Marketing and Digital.
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Azzan Al Busaidi, CEO, Ithraa
Azzan Al Busaidi is an expert in competitiveness and economic growth. He was appointed CEO of Ithraa in 2019 after 17 years spent covering managerial roles in the organization. Al Busaidi was previously Ithraa's director general of planning and studies and is a strong advocate of the potential of digitization. He holds an MBA from the University of Strathclyde and a BSc in Economics from Sultan Qaboos University.
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Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion & Former Chairman, Oman Chamber of Commerce and Industry
Private Omani companies will be able to benefit greatly from the Fourth Industrial Revolution by enhancing their local value-added strategies and upskilling the workforce.
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Tahir Bin Salim Bin Abdullah Al Amri, Executive President, Central Bank of Oman (CBO)
The Central Bank of Oman's job is to ensure there is adequate liquidity in the system and that banks remain robust and resilient to meet the credit requirements of all segments without undermining financial stability.
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Capital markets
CMA and MSM are supporting Vision 2040 by providing financing to government companies that intend to go public, financing expansion of existing and new IPOs, and widening the investors base in Oman by enhancing and developing the investment funds and insurance industries.
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Khalid Al Balushi, CEO, Khazaen Economic City
International investors and business owners can benefit from Khazaen Economic City's strategic location and its close proximity to the main gateways of the country to import, process, manufacture, distribute locally, and export their goods and services.
read articleFocus: Port 4.0
Destined for greatness
Investments in world-class infrastructure have generated huge rewards for Oman. The goal now is to leverage technology as a disruptive enabler, build human capacity across the public and private logistics sectors, and drive operational efficiencies to build an integrated logistics business environment that is benchmarked against the world's best.
read articleFocus: Gap in tourism services
All bases covered
An amalgamation of local companies and unique experiences in Oman has created an original flavor that is further differentiating Oman's tourism offering from other countries and in the process attracting scores of tourists from all across the world.
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Engineering design
Renardet Engineering Consultants and Design Unit Engineering are recognized experts in their fields. While the former is an international company strongly committed to excellent engineering consultancy services and environmental practices, the latter is an Oman-based team of architects and engineers that incorporates local culture and traditions.
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Construction materials
Oman's construction sector is facing a host of challenges, but Hempel Paints and Al Maha Ceramics are confident that a mix of forward-thinking business models, unique products, and strong government initiatives will help them through turbulent times and generate positive returns in the long run.
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Salim Razvi, CEO, Oman Academic Accreditation Authority (OAAA)
Focusing on higher education institutional accreditation, program accreditation, and the updating and maintaining of the Oman Qualifications Framework, OAAA is helping further advance higher education in the Sultanate.
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