Q&A: How ADNOC aims to lead digital transformation for oil and gas

As senior vice president, digital function, at Abu Dhabi National Oil Company (ADNOC), Abdul Nasser Al Mughairbi is harnessing big data and emerging tech like blockchain to lead digital transformation at the state-owned oil giant  — the largest company in the United Arab Emirates.

Al Mughairbi started his career in 1990 as an operations engineer at ADNOC Gas Processing (AGP), Abu Dhabi’s natural gas company and an ADNOC subsidiary. He held various positions in AGP’s processing plants and pipelines division, becoming senior vice president in 2013. He moved to ADNOC Group HQ as digital unit manager in the Executive Office Directorate in 2016.

During the World Energy Capital Assembly conference celebrated in London last week, CIO Middle East spoke to Al Mughairbi about the digital transformation he’s leading at ADNOC and the challenges of retaining young talent in the oil and gas industry. Here’s an edited transcript of the Q&A.

What are the CEO’s top priorities for you in the coming year? How do you plan to support the business?

Our CEO’s [Sultan Ahmed Al Jaber] main priority is to really change and transform ADNOC into a more agile, more forward thinking and much better organisation. He has said several times that we want to lead Industry 4.0, Oil and Gas 4.0. We want to be able to use our data and resources to optimise our operations. He’s said multiple times that we cannot control the price of oil, but we can control our costs, and we can control what we produce. His vision has always been to transform us into a very technical, forward-thinking, leading company. This is why digital fits right there with his vision: we are enabling the organisation to establish this vision.

You’ve mentioned ‘Industry 4.0’, something of a buzzword and an ambiguous concept. What does Industry 4.0 mean for you and ADNOC?

It is an ambiguous concept because for every industry it’s different and it means different things. But for us Industry 4.0 is utilising data and technology to really transform our business, to make it more efficient, and to empower our people. It’s very much about using technology to build internal capabilities within the organisation: utilising this technology to optimise our operations, become more sustainable, safer and more profitable.

Can you give any examples of the digital transformation that you are leading at ADNOC?

ADNOC is 14 companies that are linked together. These 14 companies produce oil, gas, petrochemicals, refining and fertilisers. The digital transformation that we have launched at ADNOC consists mainly of [utilising] big data to optimise our operations, across the whole organisation. What do we do? We have a digital transformation office, we have digital transformation teams in every operating company, and all of them are working within a clear roadmap that we built for every company on how to optimise their operations in digital. Every company is in a different stage or time frame of evolution – some are still at the very basic [stage], others are very advanced.

We work with [each] individual company to make the advanced ones more advanced, and the ones that are starting to help them speed up their digital transformation, starting by using more automation, using more data, bringing in the right data platform.

Last year, ADNOC collaborated with IBM to pilot a blockchain-based automated system to track the quantities and financial values of each transaction among ADNOC’s operating companies. Can you tell us more about this project?

It started as a proof-of-concept (POF) because we wanted to learn blockchain as well. We started the project in 2018. So for six months, we used IBM hyper-ledger technology between two companies. We tested that: saw how it worked with our current business processes, how to match it. Then we added a third company. Now we have three companies fully functioning. What was previously done through hydrocarbon transfer accounting, is now done 100 percent through blockchain. Now we have the mandate to scale it across the 14 companies [that make ADNOC] and beyond that to customers. But first we have to learn. So internally we are doing it. It is creating a lot of transparency and speed. So it’s a capability that we’re building in the organisation. Blockchain brings a lot of transparency between companies. Some of these companies have international shareholders in it. They all have access to the same platform and are able to check in real time how much product they’ve earned and how much product they’ve lost as we put the whole thing in blockchain. Very few companies in the world can actually say that they measure everything and measure all the outputs. I think we’ll be able to say that in a year or so: that we can measure everything.

What were the greatest challenges during the implementation of the project?

Number one: trust. Stakeholders’ trust in the IT system. Our metres had discrepancies in them so we needed a more realistic metering system. We had to fix these discrepancies, make these metres equal, make them approve, make them accurate so we can depend on them. That’s the baseline that we have to build tomorrow.   

The difficulties were the people in the hydrocarbon accounting team mainly. Because all of a sudden something that would take them two weeks in a month to do, it was done instantaneously. So there were lots of questions of, what is my job next. But in the end, there are other tasks that people within the organisation can do. We are a huge organisation so we never fire anybody.

Do you recycle talent then? Upskill it?

We just recycle. Now we need less people to do this, those people move into another area. Upskilling, enabling people to do more, to do what they couldn’t do before. People who were spending 15 days on hydrocarbon accounting can now spend time on planning execution, finding problems, solving issues, etc. When we looked into our system with the hydrocarbon accounting, we found that some of it is very old. Staff had to go and take the reading, write it down by hand, transfer it to documents, lots of stamping and verification… With blockchain all that has reduced dramatically.

What are your priorities for 2020? Which projects are you working on?

Right now we are scaling up a few of our projects, such as the predictive maintenance platform that we started testing in 2018. Now we are doing it at full scale. Right now we have about 100 compressors on predictive maintenance and we are moving that by the end of 2020 we’ll have 500 of them on predictive maintenance. That means we stop time-based maintenance and we do prediction on time of failure, and we operate based on that, saving on maintenance costs, uptime and production. 

Blockchain is another target for us next year: a comprehensive sustainability platform for real-time measurements. A sustainability platform that is critical for the organisation.

One of the key digital transformation initiatives in the coming year is actually developing people and digital mindsets. That is, upskilling current employees and attracting younger guys that are digitally savvy. That’s our challenge.

Is it a challenge because young people might opt for careers in startups or Silicon Valley firms?

Exactly. But ADNOC has a good reputation in the region. We are cutting edge, we allow people to be themselves at work. We don’t have a lot of competition in the area; people want to work with us. The problem is retaining talent. There’s a lot of people coming and then leaving after two or three years because they don’t find themselves doing interesting things.

What do you think is the key to retain talent? What would you recommend your colleagues?

Listen to them. You cannot have young people fit the old model. Oil and gas is changing and I think the young generation will change oil and gas. We have to accept their new ways of working. They cannot fit in the same frame we’ve got, to be like us. I think there’s going to be a massive cultural shift in the future of oil and gas as the younger generation comes in. They are more environmentally aware. They think of sustainability. They think differently. And I love it. I think it would be great. Could be a good change.