Even as Indian software companies are crying over the falling spends of their clients in the oil and gas vertical, Cisco, a global networking major that works with many energy companies, sees a new emerging trend. Nal Gollagunta, Managing Director (Commercial Sales) of Cisco India & SAARC, who spoke to BusinessLine on the sidelines of a CII conference in Chennai, says these companies have only shifted their expenses to operations that can render cost efficiency. Excerpts:

You serve a lot of clients in the oil and gas space. What is the picture you see? Do you also seeing them cut IT spends as many Indian IT services companies claim?

Oil and gas is a cyclical industry. Currently, they are in a phase where oil prices are low and when that’s the case, the industry restricts activities to areas that make sense from a profitability perspective.

For example, upstream players are not likely to be going to ‘hard to reach’ areas for exploration, as cost of production goes up… so the emphasis now is on improving efficiency, utilisation and safety.

This could be in efficient extraction methods of oil and gas, better asset utilisation and management, as well as employee productivity.

It could enhance oil-recovery techniques, help in automation and remote management of production processes, detect or respond to leakages, pilferage, rig downtime, etc.

It can also improve project outlay estimates through real-time data management and edge analytics.

We hear of oil and gas companies cutting their discretionary spend. What is this ‘discretionary’ spend companies are referring to? Is spending on digitisation now unavoidable?

A few years ago, digital spends would have been called discretionary, because at that point in time, there was very little clarity on what to expect out of the digital initiatives. But today, many forward-looking oil and gas firms believe they can gain competitive advantage by harnessing digital technologies.

We have seen an increase in spends on digitisation across the board by both upstream and downstream players. They are digitising their oil heads – the place where drilling happens – to monitor how much capacity is there, digitising pipelines to monitor flow and leaks, and digitising the safety and surveillance mechanism along the pipeline. In the refinery space, most of the work is happening around process automation, predictive maintenance, and digital asset tracking that could help reduce downtime and improve efficiency.

Oil companies are using cloud technologies to leverage benefits of digitisation. How do they do it?

Oil and gas operations are field-intensive and by leveraging cloud, these companies can cut up-front costs and divert those budgets to digitisation and IT innovation.

Traditional IT models are not only expensive but also limit users to custom software and applications, thus delaying adoption of new tools that can give you a competitive edge.

Regardless of the size of an organisation, oil and gas companies are heavily dependent on ecosystem partners, service organisations, and individuals residing outside their physical/IT infrastructure.

Has digitisation made inroads into Indian oil companies? How do they compare to players elsewhere?

Yes, oil and gas leaders in India clearly understand the potential of digitisation. The current downturn represents an inflection point for Indian oil companies, and they are looking at digital technologies to become more hyper-aware, predictive, and agile that will enable oil and gas firms to innovate faster and achieve their desired business outcomes.

For example, ESSAR Group deployed a dynamic server platform for real-time access to data and analytics. This has strengthened business performance by giving them the ability to crunch data and uncover trends and patterns for better planning and forecasting.

They are also accessing intelligence to determine how to redirect the business, based on events, customer relationships, product plans, and market variations.

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