Managing the Impact of COVID19 on Business Operations: Focus on Oil and Gas Sector
By Mojeed Aluko
September 21, 2020
The COVID-19 pandemic has affected the Oil & Gas industry in several ways. The price of oil has crashed from $64.37 per barrel to $40.50 per barrel and the outlook for the rest of the year is for oil prices to remain below $40 (US EIA, 2020). Against this backdrop, according to the International Energy Agency, the cost of oil production in Nigeria remains high when compared to that of other oil-producing countries, thus compounding the challenges faced by the oil and gas industry in this region.
This article examines how indigenous Oil & Gas companies are adapting their infrastructure requirements by leveraging solutions from Data Center and Cloud providers to improve operations, save cost on legacy equipment and enhance business resilience against the drop of oil prices and improve responsiveness to market changes. With case studies from Seplat, Lekoil and JMG, this paper will also highlight critical strategic decisions that indigenous Oil & Gas companies can make to further boost the efficiency of their operations as they navigate the current landscape and adapt to the new realities of doing business.
INFRASTRUCTURE CHALLENGE IN THE OIL & GAS SECTOR
The Oil and Gas industry has taken advantage of innovative technologies like mission critical supply chain and asset management applications, device networking, predictive maintenance, remote monitoring and smart oilfields technology to continually improve production efficiency, and ensure operations run safely. As a result, many Oil & Gas companies have invested in self-owned data centers and high-computing systems to manage the large volumes of data generated from day-to-day operations, in addition to exploration activities.
Aside from the high initial capital investment required to build a datacenter and associated operating expense to maintain infrastructure and manpower required for electricity, cooling, networking and security, these organizations run the repeated risk of having equipment and infrastructure that cannot expand or scale without purchasing and installing additional devices.