Research PREVIEW for

ICT Spend in the South African Oil & Gas Sector

Rising ICT Spend as the South African Oil &

Gas Sector Looks to Optimise Operations

Key Highlights

• Information and communication technologies (ICT) aids in and facilitates the ongoing

transformation of the South African oil and gas sector.

• With developments in technology, trends such as big data allow organisations to use

predictive analytics to gain a comprehensive understanding of structured and

unstructured data collected.

• Growing technologies such as cloud services, mobility, and customised applications

have helped organisations facilitate remote access to systems and distant capabilities

in upstream and downstream operations.

• Oil and gas companies must take advantage of the new ICT innovations available to

meet their business challenges and to gain competitive advantage.

• In order to compete effectively, ICT service providers will need to improve their

understanding of the industry-specific trends and ICT requirements over time.

South Africa’s Oil and Gas Sector at a Glance

• Total GDP: $327.1 billion

• Oil and gas sector: 1.9%,

or $23.6 billion, of overall

GDP

• ICT spend by the oil and

gas sector: $44.3 million

ICT in Oil and Gas:

Macroeconomic Trends,

South Africa, 2014

Oil and Gas Sector in South Africa

• A major economy in the Sub-Saharan Africa

region, South Africa’s oil and gas sector is built on

a legacy of developments in the Western Cape

region.

• South Africa does not have substantial upstream

fields, but is well positioned to facilitate upstream

logistics and oil and gas distribution services to

other regions of Africa. The Western Cape

Province has been contributing to a majority of

onshore facilities and offshore platforms for

material and equipment services.

• The developed infrastructure in South Africa is one of the key factors

underpinning the well-established midstream and downstream

activities. In fact, South Africa’s midstream and downstream value

chain has a combination of domestic and global participants in

distribution and logistics services.

• South Africa’s well-developed infrastructure and stable geopolitical

conditions create a unique advantage in forming a central hub for oil

and gas companies in Sub-Saharan Africa.

4

Overview of the Oil and Gas Value Chain

The sector is increasingly integrating emerging technologies and innovations to improve

operation and financial efficiency.

Key Takeaway: Oil and gas as well as value chain participants are looking to improve the

efficiency of exploration, production, and refining to optimise their operations.

Upstream Midstream Downstream

• Processing and

treating oil and gas to

be sent to markets

• Transporting oil and

gas to refineries

• Distributing and

marketing oil and gas

products

• Selling oil and gas to

consumers

• Exploring new oil and

gas resources

• Bringing oil and gas

to the surface using

natural and artificial

methods

5

Overview of ICT in the Oil and Gas Sector

Oil and Gas

Exploration

Production

Transport or Processing

Refining or Transport

Marketing

Machine to machine (M2M) communications, Big Data, ubiquitous collaboration, as well as network and

infrastructure security are among the main sector trends shaping the growing ICT investments made by oil

and gas companies, both globally and in South Africa.

Big Data

M2M Communications

Anytime, Anywhere Collaboration

Network and Infrastructure

Security

6

ICT in the Oil and Gas Value Chain—Key Takeaways

Big Data

Big Data is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.

M2M Communications

M2M communication involves digital communication between an endpoint and an enterprise's backend system over cellular and/or satellite networks.

Anytime, Anywhere Collaboration

In this business environment, communications—both real-time and non-real time—are integrated to optimise business processes and increase productivity.

Network and Infrastructure

Security

New approaches are vital to the protection of both network and physical infrastructure, including identity and access management policies.

7

Overview of Enterprise ICT Spend by Sector

5-y

ea

r G

row

th F

ore

ca

st

Magnitude of ICT Spending

• Agriculture

• Construction

• Energy and

utilities

• Manufacturing

• Mining

• Transport and logistics

+ Financial

services

+ Public

sector

Oil and Gas

+ Retail

+ Healthcare

Key Takeaway: Overall ICT spend by large enterprises across all industries in South Africa was

$5.0 billion in 2014 and is expected to grow at a CAGR of 2.6% reaching $5.7 billion by 2019.

ICT in Oil and Gas: Enterprise ICT Spend by Sector, South Africa, 2014

Low

High

High

The Full Analysis Features the Following Content

Section Slide Numbers

Executive Summary 3

Research Overview 5

Market Definitions 10

Overview of the Oil and Gas Sector 13

ICT in the Oil and Gas Sector 17

ICT Spend in the Oil and Gas Sector 21

Drivers and Restraints 26

The Last Word 31

Appendix 33

The Frost & Sullivan Story 37

Key Questions the Analysis Answers

What is the current spend on ICT in the South African oil and gas industry?

What main ICT categories are oil and gas companies spending on?

How is this spend expected to evolve over the next five years?

What technologies are shaping the current and future investment in ICT?

Which oil and gas sector needs are driving the majority of the investment?

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Research Authors

Lehlohonolo Mokenela

Research Analyst

Information & Communication

Technologies

http://za.linkedin.com/pub/lehloh

onolo-mokenela/41/269/30

Samantha James Corporate Communications – Africa

(+27) 21 680 3574

Samantha.james@frost.com

Global Perspective 40+ Offices Monitoring for Opportunities and Challenges

Industry Convergence Comprehensive Industry Coverage Sparks Innovation Opportunities

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Transportation

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Instrumentation

Information &

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Technologies

Energy & Power

Systems

Chemicals, Materials

& Food

Electronics &

Security

Industrial Automation

& Process Control

Automotive

Transportation & Logistics

Consumer

Technologies

Minerals & Mining