Advances in remote connectivitySeptember 1, 2020
Safwat Hakam, country director at Rockwell Automation, talks to The Energy Year about shifts the company has seen in the wake of the dual shock and why mergers and joint ventures can be expected in the post-Covid-19 environment. Rockwell Automation supplies automation controls, information solutions and drive systems within the oil and gas industry.
How have Rockwell’s operations been affected by the dual shock of Covid-19 and the oil price drop?
This situation is unprecedented; we have never seen anything like it. It is truly a dual shock: the lockdown due to the pandemic, the social distancing that many governments are trying to implement to protect people, and the absence of the ability to meet face-to-face with customers – and all of this coupled with the oil price drop. We have definitely seen a slowdown in the economy and in projects.
In oil and gas, there is a re-evaluation to determine the most important things that need to be done and the things that will help save costs, improve productivity and increase remote connectivity. It’s also about being more productive in dealing with things other than the conventional projects and stock.
The impact of the crisis is even greater in the infrastructure industry than in oil and gas. There is a huge slowdown as people cannot go to sites. At Rockwell, the message we try to give to our customers differs based on the type of customer. For industrial companies that are trying to embrace remote connectivity, we have taken an initiative, in partnership with PTC, to offer a combined solution through the FactoryTalk InnovationSuite, software that can help optimise people, products and processes.
This is software we use for augmented reality, which improves the experience of providing remote support and interacting with people at the site. We have taken the licence for this particular software and offered it for free to the market from the beginning of March until August 31. We help them download, install and use the tool. All this was to help the customer to be smarter in managing their sites and in dealing with unexpected breakdowns or shutdowns.
They can test how they could use their experts in the best way without having them be present physically. We work very closely with the governments in the area, so we are very much aware of the lockdown measures they take and we respect those. All of us are working from home now.
On top of this, we take great care of our people’s health, safety and wellbeing. Even when governments started to ease the restrictions, we tended to be more cautious if we saw that cases were still going up. As per our internal rule, we don’t go to the workplace until there is a sharp decrease in daily registered cases.
How prepared are the region’s NOCs to use digitalisation to manage the current challenges?
This varies from country to country and industry to industry. If we take it all across the board of the countries that I manage, the international or large national companies were well prepared even before the pandemic. They knew about the digitalisation journey that is coming, Industry 4.0. Some of them were in a very advanced stage of evaluating how this could fit within their operations.
Even before the pandemic, one of our big Saudi customers in February 2020 had a very clear roadmap for implementing things like augmented reality, industrial data centres, putting all their applications in the cloud and virtual connectivity between the planning team and production. For these customers, they only had to reprioritise or speed up what was planned when the crisis hit, but the level of impact was not that great.
Speaking of smaller local companies, they were not considering digitalisation, not feeling the need for it at that time. Now with the pandemic, they feel the hit and they know they need to move in this direction. From a country point of view, Saudi Arabia and Egypt are very advanced in this journey and there are a lot of customers working on solid execution plans. Bahrain is catching up; many changes are happening there. We have seen in recent months efforts toward digitalisation and moving to cloud services and virtual reality.
Lebanon is a particular case because of the political issues, so it is hard to make an assessment. Jordan is a bit behind in this journey, but we are sure that all the customers and countries can catch up. People have realised that we can still run the business while at home. This is one thing we have learned at Rockwell: Even though we have shifted our ways of thinking, of operation, of communicating with customers, we are still running the business.
It is putting a lot of pressure on us as individuals to learn new ways to be able to connect with customers virtually. For example, we used to do many events for our customers and with the lockdowns we had to cancel them, but we have not cancelled the provision of updates to our customers. We have done two virtual events, inviting more than 200 customers, giving the same presentations we would give in a physical event, receiving customer feedback, asking questions and even scheduling one-on-one sessions.
We have seen great customer and partner attendance, along with a strong positive response and feedback related to all our virtual events and programmes. Building on this foundation, we will continue communicating and co-operating in a virtual environment – bringing teams together, strengthening our relationships with our customers and ensuring that Rockwell Automation is ready to provide the support they need in these difficult times.
How do you see your business faring between upstream and downstream?
Historically, Rockwell has been strong in the downstream industry. As for upstream, our monitoring and control systems for wellhead and upstream applications, and our digital oilfield capabilities have been very popular in the industry. We are one of the pioneers in these areas. We recently made a joint venture with Schlumberger called Sensia, mainly focusing on digital oilfields. This has been identified as a hot topic for Rockwell and we are putting a lot of focus on that.
Speaking of downstream, our products fit very well within the applications of downstream and petrochemicals. We have been a preferred supplier of many companies in the area, such as SABIC in Saudi Arabia. We have framework agreements with most, if not all, petrochemical companies in the area. Even before the era of digitalisation, we were one of the three vendors worldwide with software for advanced process control.
This was created to increase the efficiency of process automation in petrochemical plants. Most of the installations in Saudi Arabia are based on our software solutions. Approaching those customers from the angle that they know us historically as a software supplier, we can talk to them about digitalisation and analytic solutions that can help them. Beyond just improving the efficiency of the process, it can also improve the overall effectiveness and reliability of machines and the maintenance plans they have, moving from periodical to preventative maintenance.
In Egypt, we are very well considered in this area. It is different from the Middle East: Most of the oil companies in Egypt are the internationals. They are already very well connected to Rockwell globally, which makes it even easier to talk to them.
How will the market move forward in the post Covid-19 environment?
It will move forward with mergers and joint ventures. The players are big names, so acquisitions would be tough deals to conclude. The market is very dynamic and there is a big need for solutions at the moment. Speaking of the companies able to provide digital oilfield solutions, Baker Hughes is again separate from GE. There are still questions around whether it is going to continue alone or in a joint venture.
Rockwell identified that going alone into the digital oilfields market would be tough and would require a lot of effort and investment, so we created a joint venture with a big name, Schlumberger. I believe that service companies will be pursuing mergers and joint ventures much more, in order to create entities better positioned to offer total solutions to oil companies.