Three Steps For Oil And Gas Companies To Survive The Energy Transformation

That we are on the path to a low-carbon future is beyond doubt. Despite disagreements among stakeholders and how we might get there, and the pace of change required there seems to be a broad unity in the long-term vision. We know we need an energy portfolio that both meets the needs of a growing population that is predicted to grow by 1.5 billion by the end of the century and satisfies the ever-increasing living standards of the existing populace. But we also need an energy portfolio that meets the needs of that environment.

What we all want is a future where there is reliable, ample, affordable, cleaner energy for the world, but this is where consensus ends. There are many different views on the best path to get there, and the pace of change required, as well as the role that oil and gas companies will play in the future.

At the recent BHGE Annual meeting in Florence, Mohammed Y Al Qahtani, SVP upstream, Saudi Aramco laid out the path the world’s largest oil and gas company is plotting to a sustainable future.

“If we can agree on what the energy future looks like, with oil and gas continuing to shoulder the major burden of the world’s growing energy needs, then what does a successful oil and gas company of the future look like?” he said. “In a word smarter.

“I don’t mean solely in terms of technology beyond shattering technological barriers and developing and promoting cleaner oil products, and we also have to improve our image, engagement and public acceptance in order to fulfill our role in society better.”

1: Positive contributor

Top of Al Qahtani’s list is being a positive contributor moving mankind forward. “It will be a company focused not only on shareholders but also on the broader groups of stakeholders, from consumers and employees to suppliers, governments, regulators, and communities,” he said. “Certainly, this applied to climate change where we must have a healthier more productive and broader dialogue with the public.

“It goes without saying that we must be actively committed to delivering technology that reduces the GHG footprint of hydrocarbons, but we must also let our communities know the actions we are taking and the progress we are making.”

2: Technology leader

Next, a successful energy company will be a successful technology company. He believes that in the 21st century the oil and gas industry can be at the epicenter of the whole industrial revolution, but only if it reclaims its passion for innovation. “There was a time when we were at the leading edge, we created 3D seismic and horizontal drilling and introduced supercomputers to manage the reservoirs,” he said. “Today, compared to industries like computing, space, healthcare and the internet, we are nowhere near the front of the pack.

“We have within our reach digital technologies that are turning science fiction into science fact. Tools like artificial intelligence, the internet of things, robotics, big data, and analytics.”

He points to the fact that Saudi Aramco was working in the fourth industrial revolution years before the World Economic Forum coined the term. There are massive amounts of data generated in the oil and gas value chain. A single drilling rig or a gas plant can produce terabytes of data every single day, but the challenge is that the industry utilizes only a tiny fraction of it.

“By applying new technologies to data that we are already generating, we can change the game,” Al Qahtani added. “In exploration, for instance, machine learning and artificial intelligence can sift through vast amounts of 3D and 4D seismic data to extract features invisible to the human eye.

“In drilling, we should settle for nothing short of fully automated drilling rigs to increase performance, safety, and efficiency. I know, all of this and much more is within our grasp.”

When it comes to what is holding the industry back, he points to two problems, lack of investment and isolationism. “Market events has had a chilling effect on investment,” he explained. “In field development, the investments are mostly for short-sighted, smaller projects, while in R&D there are mostly in incremental improvements with swift payouts.

“We must reverse this trend because I believe lacking investment is the greatest single threat to our future success.

“Secondly, in our industry, we tend to keep our problems to ourselves. This is not the way in the 4.0 space, where innovation comes from looking beyond our industry’s boundaries. In collaboration, not isolation. Breakthroughs come when we blur the lines. When fields like digitalization, bio and nano-technologies, space science, quantum computing, robotics, big data, and earth sciences collide. Whether it’s a full-scale test the point with a leading robotics company or a simple collaboration with a university on a difficult algorithm, we have an opportunity to transform our industry by working together.”

3: Competitive advantage

Finally, he believes that a successful energy company will build and exploit a competitive advantage. “We know technology is a differentiator, but it is not the only one,” he concluded. “Maximising areas of competitive advantage and differentiation, whatever they might be is critical.

“There are still bright prospects ahead of our industry, but the environment will be challenging, and only the best will thrive. Our own renaissance is called for if we are to strengthen the role of oil and gas and continue to play in mankind’s future.

“If we will rekindle our passion for innovation and advanced technology. If we commit to the investments needed to expand supply, if we continue to develop lower carbon, cleaner oil and gas products, and technology, then I believe an uncertain, and unambiguous future is the very stone from which we will carve a stronger and more capital in future.”

Source: www.forbes.com