Energy is a hot topic all over the world, but especially in the Middle East. The region’s economies have been heavily dependent on fossil fuels to meet global energy needs thanks to a unique set of factors. This includes large supplies of oil and gas as well as the pivotal role of hydrocarbon wealth in its economic development since the 1970s. Another factor is the particular social contract in the region where energy has been considered a public good to be provided by governments.
One company that is actively closing the circle on the role of natural gas in sustainable energy is Crescent Petroleum, the region’s oldest and largest privately owned upstream energy company.
“The energy system today needs natural gas to produce affordable and reliable power. Gas produces half the carbon emissions of coal and one third less carbon dioxide than oil for electricity generation,” said Jayakrishnan Ramaswamy, director of business process and systems at Crescent Petroleum. “Crescent Petroleum is applying technological enhancements to produce gas more efficiently and with a lower carbon footprint.”
Ramaswamy was speaking in reference to its recent implementation of the industry-specific solutions in SAP S/4HANA that are helping boost the company’s data quality, productivity, operational efficiencies, cost control, and sustainability reporting.
A pressing need
Although the region has been a leader in the development and application of renewable energy to enable a lower carbon energy system, there is still a sizable gap between the potential of renewable energy and the rising demand of a growing population. Natural gas will be central to power needs for the long term.
The 2050 energy strategy of the United Arab Emirates (UAE), for example, targets an energy mix that includes 44% renewable energy, 38% gas, and the remainder based on clean coal and nuclear sources. The country recently updated its National Energy Strategy to include several new goals in addition to carbon neutrality, including:
- 50,000 new green jobs by 2030
- Tripling its renewable energy capacity to 14 GW by 2030
- Raising the percentage of clean energy in the total energy mix to 30% by 2031
Ramaswamy pointed out that the United Nation’s Sustainable Development Goals (SDGs) are at the heart of the company’s sustainability efforts. Crescent Petroleum was one of the first oil companies to become carbon neutral thanks to progressive reductions in overall emissions from its operations and the offsetting of the remaining emissions. The company’s operations in the KRI have enabled the region to avoid 52 million tons of CO2 emissions since 2008 by replacing diesel and fuel oil with natural gas for power generation.
A strategic solution
“We believe operational excellence and sustainability go hand in hand,” Ramaswamy explained. “That’s the underlying premise of the energy transition, and this is where SAP comes into the picture in terms of ensuring we have the right data.”
Crescent Petroleum’s strategic road map began in 2020 with the first global implementation of the SAP S/4HANA Oil & Gas solution, supporting plant maintenance, procurement, project systems, finance, human resources, and other functions. During the second phase of the project Crescent Petroleum worked closely with SAP Services and Support to implement the SAP S/4HANA Oil & Gas solution for upstream hydrocarbon accounting and management.
The phase-two implementation was completed in a record 12 months, according to Ramaswamy. Crescent Petroleum worked closely with SAP Services to implement Upstream Hydrocarbon Accounting Management – including mass balancing – Integration with Plant Systems, Logistics, Management of Change, Resource Scheduling and Production Planning for its operations. Crescent Petroleum is the first company in the Middle East to roll out the module within the IS OIL solution stack of S4/HANA.
These steps represents a significant advancement in Crescent Petroleum’s digital transformation journey, enhancing operational efficiency and enabling strategic growth across its regional footprint. Ramaswamy is especially excited about next steps enabled by the SAP S/4HANA implementation.
With enhanced data-driven accuracy, the company will be measuring the right metrics. As with most energy companies, Crescent Petroleum faces many challenges on the journey, but it now has the right technology to support its strategic goals.
“With SAP S/4HANA at the core, we can add intelligent technology such AI and machine learning,” said Ramaswamy. “This creates a completely integrated view of our operations, allowing us to better leverage predictive analytics.”
Fifty years ago, natural gas was primarily a byproduct of oil production and was simply burned at the well head in a wasteful and polluting process called flaring.
Today, natural gas is playing a key role in the energy transition away from high carbon emitting fuels to cleaner sources of energy. Crescent Petroleum is at the forefront of this massive shift, thanks to its long-term focus on developing the region’s natural gas resources aided by cutting-edge technology.
