On the path to emissions reductionOctober 13, 2021
Ado Oseragbaje, vice-president for sub-Saharan Africa at Baker Hughes, talks to The Energy Year about the pace and characteristics of the energy transition in sub-Saharan Africa and how the company can support clients in reducing emissions and developing marginal fields. Baker Hughes is an energy technology company with operations in more than 120 countries.
What elements have been key to attracting and retaining investment during the Covid-19 period?
Some countries have managed the Covid-19 crisis better than others. Those who performed well did so by partnering with all major stakeholders, and in the energy industry, being sure to work in partnership with business, enabling them to execute their plans effectively. Also, the clarity of fiscal frameworks has been a determinant of this. This has really made a difference in how investors perceive a given market and approach decision making.
A clear, concise and favourable fiscal framework in times like these is key when making investment decisions. In addition, clear and consistent communication is critical, particularly to the investment community.
But how do you do this correctly? Some countries channelled a clear and coherent message, which matched the actions of their different regulating bodies and agencies. In these cases, the clarity allowed investors such as banks and IOCs to continue investing. One big lesson learned has been the importance of communication during a crisis of this magnitude. Hence, regulators and governments need to learn to accurately communicate their plans and actions to create an environment of confidence for investors.
At what pace and in what ways will the energy transition take place in sub-Saharan Africa?
Sub-Saharan Africa offers a great opportunity to materialise the energy transition. If we were to look at internet or mobile phone penetration, for instance, the advancement in these areas is even greater than in the “developed world,” as we went past the 1.5G and 2G directly to 3G. Many African nations bypassed the fixed line telephony and adopted GSM directly, meaning theirs was a technological leapfrog. This is, partly, because installing conventional hard-wired infrastructure would have been uneconomic and time consuming.
Now, let’s apply the same rationale to the energy spectrum: developing a fixed mega-grid would take too long and would be too expensive. It is here where new technology and alternative sources of energy will be needed to create more efficient and cleaner energy systems.
Many countries in Africa can bypass the full fossil fuel phase by going directly into renewables, and that is already happening. In Ethiopia, for example, they are installing wind and already have hydro. Moreover, countries like Kenya and Uganda have a blossoming geothermal industry. Solar energy, as in mini-grid and off-grid solutions, is also taking off in different parts of East and Southern Africa as well.
What we need is a blueprint that considers all these different technologies to create a cohesive tapestry that allows us to bypass the fossil fuel age and go directly into the renewables era. Nevertheless, we must understand that the energy transition means different things to different people in different places, and is adapted to the needs and resources of each nation.
The first and most important step in the energy transition is decarbonisation and emissions management, which means moving away from high carbon fuel sources like coal and firewood into natural gas as an initial transitional phase. If we look at the transportation system, it is still a long way away due to the number of vehicles on the roads and the lack of or the limited railway network and other expansive mass transportation systems. However, some bold initiatives are being taken in countries like Nigeria, with the implementation of autogas, for example.
In the final analysis, for Africa to continue to develop, we need energy as the basis of industrialisation. Yet we must leverage the option of more sustainable and cleaner energy to propel this process.
What technologies is Baker Hughes introducing to reduce emissions in sub-Saharan Africa?
As a company, we are positioning ourselves to lead through the energy transition, deploying high-efficiency, low-carbon solutions to help our customers achieve their emissions-reduction targets. In January 2019, we made an industry-leading commitment to reduce emissions from our own operations to net-zero CO2 equivalent by 2050. We plan to grow along the gas value chain and emerging energy sectors and will continue to develop products and services to help the industry lower its carbon footprint, while reducing our own emissions.
As for technologies, our CCUS (carbon capture, utilisation and storage) venture is quite new but it is an important emissions reduction technology that can be applied across the energy system. CCUS is the capture of CO2 emissions from industrial processes, including oil and gas development, or directly from the air, that are then transported from where they were produced and stored underground in geological formations. We are currently looking at industries and players that could apply this game-changing technology.
As for Flare IQ – our latest flare control solution, which reduces methane emissions, ensures high-efficiency flare combustion and reduces steam usage in flare systems – we have a project ongoing in the feasibility study stage. Also, we are looking at projects where we could capture that flare gas and repurpose it for power generation.
Complementing this is another Baker Hughes’ venture, Avitas – its Lumen Sky and Lumen Terrain solution offers immediate detection of methane leaks and reduces leaks and fugitive emissions. Using drones and ground-based technologies to monitor methane, they protect and preserve the conditions of well sites, refineries, processing facilities, petrochemical plants and pipelines. As soon as a leak is detected, Lumen quantifies the rate of leakage and identifies the location by streaming real-time data. A dashboard alert enables operators to quickly collaborate and take immediate action. With the vast terrain of installation and energy infrastructure on our continent, we believe that Baker Hughes’ portfolio of technologies will be of immense value to operators.
In similar terms, we have been working with SEPLAT on the ANOH project, supplying them with an aeroderivative turbine, which is highly power-efficient. This translates into less gas usage. These machines will be the first of their kind in sub-Saharan Africa.
Similarly, we are deploying the NovaLT turbine in Angola. These types of turbines can be deployed either as part of rotating equipment for gas production or to drive industrial gas power. The NovaLT family of gas turbines minimises the total cost of ownership for 5-20 MW machines in power generation and mechanical drive applications while being highly efficient.
Fuel is the largest source of independent generation, so products like NovaLT will enable a lot of the diesel generators to be swapped for gas generators, reducing the CO2 footprint.
How is AI revolutionising Baker Hughes’ approach to the energy industry?
Technology and digitisation make up an ever-more-important part of business. Covid-19 simply accelerated these dynamics, crystallising the Fourth Industrial Revolution. In recent years, as the world’s energy needs and our industry evolved, we’ve strategically developed expertise not only in our core business but also in the area of digital technology and software as transformation enablers. We have formed collaborations with technology leader C3AI, creating a JV called BHC3.ai. Through it we bring real digital transformation to the oil and gas sector through AI, bringing together data science expertise and software development expertise.
BHC3.ai helps us embrace optimisation, predictive maintenance and reliability improvements by taking a large amount of data and analysing it to then predict and assess when and how a particular piece of equipment could fail. In turn, this allows us to proactively intervene and prevent certain issues such as operational downtime and other glitches that would otherwise limit system efficiencies. We are currently developing a pioneer project along these lines with a client in Nigeria.
During the past year with the challenges of the pandemic, we have proven that remote operations are the way forward. One can support rig activity without sending as many people as we used to. We have broken conventional boundaries, demonstrating in Nigeria and elsewhere that in the face of lockdowns, rigs can continue operating from remote sites. This equates to fewer people travelling, less CO2 emissions, overall cost reductions and more expertise operating from each remote centre. This change in paradigm has yielded a very positive impact and results.
How involved is Baker Hughes across the value chain in Nigeria?
When it comes to the upstream, we were the first to support the companies that grew out of the first marginal field bid round in 2003. We have been involved in the development of these initial fields and we continue to support those customers.
As for the development of the upcoming marginal fields, we will also be involved. You see, we have a deep technical domain in reservoir, as well as well construction and production operations. Baker Hughes is one of the only companies that can provide marginal E&P players cost-effective solutions and technologies.
As for downstream, we are also deeply involved. For example, the Dangote Refinery already has our machines installed; we were part of that project from the start. We also have our footprint in the other major refineries in the country. This means we are deeply embedded throughout Nigeria’s oil and gas infrastructure.
To what extent has Baker Hughes supported local content in Nigeria?
When you look at local content and the history of Baker Hughes, we are a leading supporter and advocate of local content in Nigeria. We are one of the few companies that is able to sell and license its proprietary technologies to indigenous companies, which is a huge differentiator and a very different way of doing business. Over the years, we have seriously invested in manpower capability and infrastructure, which has been reflected in value addition for the industry and the country as a whole. In sum, Baker Hughes has been a pioneer when it comes to devising ways to support the local industry. We have multiple sites in the country which provide support for our diverse customer base using our world-class Nigeria talents whilst also enabling the development of a network of small businesses, vendors and partners in the process. We are proud of our contributions to the nation’s economy and energy industry development.