This Energy Company Is Decarbonizing Quickly Thanks To Business Process Transformation

While it’s been clearly articulated at COP27 that fossil fuels are a dead end, in reality, they still play a key role in filling the world’s energy needs as the industry transitions to renewable sources of energy.

“The oil industry is not dying, but it is changing dramatically,” said Tarek El-Molla, Egypt’s Minister of Petroleum & Mineral Resources, at COP27 on Decarbonization Day. “Any organization that aims to become more sustainable by reducing emissions or changing the way they design and sell their products along circular models must first transform its business processes.”

The ambition

Egypt, the host nation of COP27, is one of the countries that has already been significantly affected by climate change through water scarcity, rising sea levels, and heat waves. Since the discovery of petroleum in Egypt in the 1880’s, oil & gas has been the most dynamic sector in the economy. The sector will continue to play a key role, but it is already operating under an entirely new set of rules while facing unique challenges and opportunities.

“It is crucial for us to contribute to climate action by accelerating the pace of decarbonization and working on energy diversification,” said El-Molla, speaking alongside climate leaders including John Kerry, US Special Presidential Envoy for Climate. Since his appointment in 2015, it has been El-Molla’s goal to align the industry to Egypt’s 2030 Vision for sustainable development through the Ministry’s executive body, the Egyptian General Petroleum Corporation (EGPC).

Thanks to a clear strategy and massive efforts undertaken by the Ministry, the country is on track with its interim use of gas while it works on filling 40 percent of its energy needs through wind and solar by 2030. “A key part of our decarbonization strategy is to enhance the sector’s business processes. That’s the only way we can turn our ambitions into real actions and transform from the current scenario to the desired state,” said El-Molla.

Like the EGPC, energy companies around the world are setting ambitious targets to achieve net zero by 2050. This requires a combination of long-term energy transition strategies with short and mid-term operational efficiency improvements.

According to research by Accenture the industry can reduce emissions in a number of ways. Focus areas include methane reduction, increased refinery efficiency, flare reduction, decarbonizing the gas value chain, the adoption of circular solutions and the use or storage of captured carbon (CCUS). Combined, such actions can reduce an oil and gas company’s direct emissions by 80 percent.

For many companies, it starts by tackling scope 1, 2, and 3 emissions.

The solution

Turning ambitions into real actions is easier said than done. To modernize its business and become more sustainable, EGPC has embarked on a massive, one-of-a-kind, transformation journey with SAP covering every aspect of its operations, including owned refineries, distribution, and upstream companies. The project, running on SAP Signavio Process Transformation Suite, is centered on the idea of constantly mining operational data to discover processes hidden within IT systems and using data-driven insights to make smarter decisions faster.

EGPC has chosen this path because in a technology driven world, almost every action within an organization leaves a digital footprint. These tiny data traces are more than just numbers. They contain the real story behind how organizations and processes actually work. Using these traces, process owners and managers can create dashboards and visualizations based on solid facts rather than on thoughts and instinct, leading to better informed decision making and process improvement prioritization.

SAP Signavio’s key capabilities support sustainability ambitions for EGPC in the process of capturing and governing the company’s well to wheel efforts. First, the solution allows the company to design and embed sustainable business processes in collaborative formats. Second, it allows process mining around specific sustainability KPIs for reducing greenhouse gas emissions. And lastly, it ensures compliance with sustainability regulations through a system of checks and controls around risk and crisis management, for example, in the event of an oil spill.

In practical terms, EGPC can now reduce a major part of its emissions by prioritizing the most cost-effective interventions in their operations. They are already substantially decarbonizing operations with better maintenance routines to reduce intermittent venting and flaring and are applying new methods for electrification of offshore facilities and vapor-recovery units to reduce methane leaks.

“With SAP Signavio, the company is able to achieve specific targets such as reducing downtimes and asset maintenance costs, improving overall equipment effectiveness, reducing transportation spend and days in inventory, and reducing revenue loss due to fulfillment issues,” said Hoda Mansour, EMEA South Head of SAP Signavio and key advisor on the EGPC project.

El-Molla believes in leading by example. The Egyptian Ministry of Petroleum’s modernization program will not only set an example for the nation, but as it begins to show results, it will help unlock the potential of the entire region by improving the economy, empowering people and creating sustainable sources of energy for generations to come.

“The go-live of EGPC and its refineries in the first phase of the project has paved the way for greater visibility on the business and opened the door to numerous improvements to run more efficiently,” said El-Molla. “We now have the platform and the ability to understand, improve, and transform all business processes. This is how we will achieve sustainability targets fast and at scale and become a sustainable enterprise.”

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