One of the reasons why the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) has established itself as the biggest and most successful oil and gas exhibitions is that it brings together the global industry’s doyens and magnates. ADIPEC this year hosted one such key decision maker, who let me into her mind to understand how she directs the course of a global corporation.
Being her first time at the mega event this year, Lisa Davis was overwhelmed by the show’s global appeal and seemed intent on engaging in meaningful business with stakeholders. “I’m very impressed and seems like there’s quite a positive mood among those attending and the folks in the booths,” Davis, a member of the Managing Board of Siemens, told me.
Siemens has been exhibiting at ADIPEC for years and Davis considers the event to be a valuable networking platform for the German energy services behemoth as “we offer products and services for every segment of the (oil and gas) business – upstream, midstream and downstream.”
Davis, a composed industry leader who makes crucial calls to drive Siemens’ business globally, says the Middle East is a core area of focus for the management. “At Siemens, we do business in over 200 countries. So we are active in pretty much all countries around the world. Having said that, we are very focussed on the region – the Middle East and North Africa. We see a lot of opportunity in not just energy or oil and gas, but broadly in a lot of other sectors, like infrastructure. So we are very committed to the region.”
For an enterprise dealing in power and automation products and services, the oil and gas industry would quite naturally feature prominently in the business portfolio. Davis mentions that Siemens has strengthened its offering to the energy industry by way of two major acquisitions.
“We are very serious and committed to the oil and gas industry. We have done a lot over the course of the last several years to strengthen our capability in the oil and gas space, through the acquisition of the Rolls Royce industrial business and the Dresser Rand business.”
“Now we have a great portfolio, a very capable team and the capability to leverage the strength of Siemens in electrification, automation and digitalisation and bring that capability to the oil and gas market to support our customers,” Davis says of Siemens’ business strategy. That essentially outlines how the multinational corporation is constantly integrating its specialised offerings to various industrial sectors, such as automotive and food & beverage (F&B) to bring to oil and gas the best of its expertise.
“The company is active in many sectors and so we leverage our engagements with those sectors into another, like say the oil and gas sector. So we try and leverage the best practices across those,” Davis explains.
“We also mobilise experiences; for example we leverage our experience in digitalisation. We have a common offering which we call ‘MindSphere’ which is an open-source platform to offer digital services to our customers – whereby our customers can actually build their own applications. So we have leveraged that across all the sectors we have worked in and our strength lies in that; in helping our customers learn from outside their areas of expertise.”
Siemens has been involved in oil and gas projects around the world and boasts of a clientele that includes major IOCs like BP and Shell and regional NOCs like ADNOC. “We are doing a lot of great work with ADNOC here in Abu Dhabi. So we have a very broad clientele and a very broad portfolio to solve problems. Obviously the foundation of our (products) portfolio is around rotating equipment,” Davis said.
Siemens’ core strength of electrification, coupled with its acquisition of Dresser Rand has significantly improvised its capability to service the LNG sector, as it is now equipped with advanced product models of gas compressors and turbines.
Davis elaborates: “So we are working hard in the LNG space, specifically in the electric LNG space – which implies to the LNG liquefaction space where we offer solutions for fewer emissions and higher efficiency. We have a strong offering in that space, especially in the small-to mid-sized LNG liquefaction plants – which is where the industry is moving towards. We are very active in that area and we are looking to enhance our offering there.”
Clamour for digitalisation
The oil and gas industry, having realised the benefits of digitalisation, is aggressively pressing ahead with digitalising operations and is keenly hunting for solutions that help it optimise the business. Various relevant digital techniques have come into play and those providers that have the necessary acumen and portfolio to fulfil the wants of the upstream sector stand to gain from this trend.
“Everybody is talking about digitalisation and ways to create value to manage data. So we are working hard on that and to help our customers understand the large quantities of data and how to manage them; whether it be through data analytics or diagnostics or other such concepts,” Davis says.
It would be fair to call Siemens’ work over the year in the digital domain as pioneering, and more so due to the fact that the multinational giant has exemplified how digitalisation techniques can be applied to the upstream sector to make projects far more efficient.
“So we have a lot of great examples,” Davis recalls. “For instance, we have been involved in an offshore project in the North Sea where we had taken an offshore platform and operated it completely remotely from onshore – which allowed the owner/operator of the platform to avoid deploying people to the hazardous environment and exposing them to that. So we were able to leverage our (digital) expertise for the company (client) in a more effective way and reduce (the project’s) costs.”
“So there are a variety of different things that we can do to train and implement advanced diagnostics to help our customers manage their assets, to reduce costs and drive efficiency,” she says.
Efficiency is indispensable
It is too obvious not to recognise that the oil and gas industry, in the region as well as globally, is traversing through a tumultuous phase and as such stakeholders across the board have been impacted in multiple ways.
The upstream industry has borne the brunt of the fall of crude oil prices, coercing both major and minor players to reduce their capital expenditure. The negative effects of the decline of oil prices have also been apparent in the number of projects in the upstream sector that have been either put on the shelf or cancelled altogether.
“You are right. We have seen fewer projects recently,” Davis said. “But our business is a mix of new projects as well as maintaining or operating existing ones. We are helping our customers maintain and operate their existing projects. So where we see customers reducing their new projects, we also see them get more and more value from their existing projects.
So we can help our customers do that as well and we do that through improving the reliability of the equipment, increasing the service life of the equipment and reducing the costs. So we are just as focussed on maintaining existing assets as we are on putting new assets on the ground.”
Despite realising the merits of digitalising operations, companies have been coy to adopt digitalisation for want of sufficient budgets. At a time as this, an industry service provider as Siemens – whose core offering to the oil and gas sector is hinged on providing holistic digital solutions, certainly incurs the risk of being stuck in the doldrums created by sub-par oil prices.
“We are finding that our customers in the oil and gas environment today are very interested in looking at new ways to do business. So we are supporting them in that, obviously by driving down costs, improving efficiency, increasing productivity, and so on,” Davis observed.
“We see that oil and gas customers, and even within our own Siemens business, are working hard to reduce costs, improve efficiency and drive productivity and are responding to the marketplace that we are dealing with today.
And finally our customers are willing and eager to do business in a different way and that is allowing us to find new sources of value. And this is creating a very good business from what you may call a difficult environment. But it is also helping create businesses that are more sustainable for the longer term.”
Operational excellence thus has become the order of the day as companies strive to do ‘more with less’ and indulge in an innovative thought-process to optimise their operations. Davis believes Siemens has a key role to play in helping its oil and gas customers achieve optimum operational value.
“When we look at operational excellence, to me it’s about improving performance and safety – which is paramount. It’s also about cost-effectiveness and improving productivity. All of that is operational excellence and that’s something we really focus on.
I gave you the example earlier of the remote operation of the offshore platform (in the North Sea) that helped (the operator) in keeping people off hazardous conditions – so that obviously helps in maintaining safety. So our focus is on operational excellence, not only in what we do but also the value we bring to our customers by making sure that we provide the most reliable and safest equipment.”
With digitalisation gathering steam, international providers of digital and automation services to the oil and gas sphere now form a busy club – whose membership is growing rapidly, and so is competition among the members. Davis however believes that Siemens has what it takes to keep the competition at bay.
“There is a lot of competition and competition is good because it requires and causes us to better our game and improve our services to our customers,” she remarked.
“The oil and gas sector is not as developed or advanced, in comparison to say the automotive industry, in terms of automation and digitalisation. So now we have the opportunity to really bring that expertise to oil and gas to help the industry do business in a different way. And all of that, in addition to our company’s portfolio and capabilities and our many years in the industry, allows us to differentiate ourselves.”
