Today, maintaining oil production in the region requires the adoption of advanced technologies and many oil refineries need significant modernisation. The global gas sector is highly competitive, and to survive in this increasing crowded and fast-changing environment, Middle East companies need to be leaner, more efficient and able to adapt quickly to customer needs. Therefore, to be exemplary in operational excellence, companies are implementing flexible and integrated software technology to overcome complexity and accelerate profitability. The need to standardise across operations, improve safety and reliability is more crucial today to remain profitable. Optimisation is no longer a choice – it is a necessity.

In a survey that AspenTech conducted of 161 organisations this summer, results showed that 50 per cent of capital planning and estimating groups are dissatisfied with current practices. The survey went on to explain that most of these organisations still use Excel even for very large and complex projects, and a startlingly high per cent use manual data handover between departments. The time for innovative business processes is now.

The rapid capital projects business evolution, due to macro-economic pressure, will force much more agile reaction times, and those companies that change quickly will be the winners. Most executives in the engineering, procurement and construction (EPC) industry and their clients know that the current downturn in capital projects workload is a critical time to drive innovative business processes, but they are frustrated at resistance in estimating leadership. This has some urgency, because the window to invest in change is already beginning to show signs of narrowing. Improving organisational performance in the areas of bidding and front end project execution will most certainly be a strategic topic in many oil and gas, chemical and engineering contractor boardrooms in 2017.

Implementing better estimating software technology, combined with more collaborative business processes, will provide a huge opportunity for improvement in capital projects, such as driving down capital costs on projects by up to 25 per cent. One of the leading oil majors has shared results of their first two projects completed using this approach, which proves that these results can be obtained. The question is whether executives will have the courage and leadership to force bid leaders, estimating leaders, and Feed engineering leaders to think laterally and apply new approaches.

Let’s look at some of the key areas on which the industry needs to focus significantly in order to stay ahead of the game:

• Knowledge capture in software is going to be increasingly crucial in 2017 as is transparency between client and contractor: A good example of this, is how model-based estimating will be a competitive advantage due to the waves of experienced senior estimators retiring and EPC firms under a great deal of pressure to produce accurate and precise capital equipment estimates and related bids. Organisations need to implement an advanced model-based estimating system to achieve the efficiency, agility, speed and accuracy required to successfully capture a company’s unique proprietary costing basis and project cost history to ensure a competitive advantage. Additionally organisations need to embrace full transparency between owners and contractors in this estimating realm. By doing this, EPC leadership will find that they will be able to still safeguard their proprietary “secret sauce” in cost estimating, while reducing risk due to good will and communication with their clients.

• We also expect to see fast conceptual design in oil and gas during 2017: Exploration and production (upstream) companies that we are working with have become extremely serious about capturing prior designs and templates, and mixing and matching best available project examples in an effort to speedup time to first oil and to reduce overall Capex and risk. We are seeing more and more organisations move from talking about modular and template-based design to putting these concepts into action. Companies that get ahead of this curve will have a cost and profit advantage in this challenging environment. Integrated and model based software systems will play a key role in enabling organisations to take leadership positions in this area.

• Linear planning (LP) tools sidelined by rigorous process simulation software: Refineries run on very tight profit margins. Refinery planners are pressured to ensure profitability amid a wide variety of feedstock, and they need flexibility options as to the types and quantities of products they can produce. To sift through all the possible options, these planners traditionally have used LP tools. However, the issue here is that the refinery model used by these LP tools are only valid within a specific operating range of the refinery. Additionally, these tools do not have the ability to auto update, making them outdated and ineffective. As a result, many refineries are turning to rigorous process simulation software that can accurately simulate key refinery equipment such as reactors and distillation units. With the use of the analytical capabilities in these advanced software solutions, refineries can also simulate scenarios around the operating point of the refinery which allows them to provide the data required to update the planning models used by LP tools. The updated planning models make the LP tools effective for planners in determining profitable operations plans.

• Plants will be increasingly optimised in real time – accurately, without shut downs, with Adaptive Process Control: Software solutions such as Advanced Process Control (APC) optimises production by using models based on actual plant process data. Unavoidably, as process changes occur, the actual plant behaviour deviates from the modeled representation resulting in lost benefits over time. Companies utilising APC technology will have the tools to update models in the background while simultaneously optimising the plant. This enables much more frequent updates and accurate models resulting in sustainable APC benefits over the entire lifecycle of the controller. The world’s largest and most profitable energy and chemical companies are using APC to achieve best-in-class APC benefits and practices.

• There are three recent Supply Chain Management (SCM) trends that are gaining traction:

• Cloud for oil, gas and petrochemical companies is hitting the mainstream: The first SCM trend of note is an increased interest from companies to move towards hosting supply chain solutions in the cloud. Although cloud hosting services have been around for a number of years, there have been two main concerns expressed by process manufacturing customers – the first related to security and the second related to uptime/accessibility. Both issues are now being alleviated by advances in technology, bringing the ROI and innovations available from managed hosting to process manufacturers.

• ERP supply chain planning solutions too limited for future supply chain planning and scheduling applications. The second significant trend is customer movement away from ERP based supply chain planning and scheduling systems due to the limitations of these tools. Many companies are re-engaging with best-of-breed supply chain planning and scheduling vendors to find better solutions to either replace or complement existing planning and scheduling technology.

• Project thresholds for funding are rising. Finally, due to increased uncertainty around today’s economic conditions and project implementation risks, companies are demanding higher ROIs, faster payback periods, and greater Net Present Value (NPV). We are seeing companies that are embarking on their second or third supply chain planning and scheduling projects to replace legacy systems that no longer meet their needs.