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Oil Industry CEOs Explore Different Paths to Energy’s Future

Oil Industry CEOs Explore Different Paths to Energy's Future

On a cool, sunny Monday morning, the global energy industry converged on Dahran, Saudi Arabia — for deep discussions about applying technology to create a sustainable oil and gas future, and for conversations about the global energy picture. They were gathered for the annual International Petroleum Technology Conference (IPTC), hosted on alternate years in the Middle East and in Asia. (Next year the event moves on to Kuala Lumpur, before returning to Saudi Arabia the following year.)

 

The event organizers set the tone for the large audience (7,000-plus attendees) by inviting a young rising star, Saudi Aramco reservoir engineer Rowa Tawfiq, to act as master of ceremonies for the event. She painted an upbeat, enthusiastic and energetic backdrop to the event’s plenary session, and also provided a stirring vignette of why she chose to be a technologist in the oil industry and why she felt her role contributes to a better future for the world.

 

Her words came after several key Saudi Aramco executives and Saudi Arabian patrons opened the event with some strong messages about the narrative they wished to convey to the audience, the industry and the world at large. Aramco, newly energized and emboldened by their recent IPO, signaled clearly their intention to change the story around the place of oil and gas in the world energy picture for the years to come.

 

One speaker even referred to the energizing MC, Rowa, as “our Greta,” a reference to climate activist Thunberg.

 

 

Exploring What the Future Holds

 

Overall, the messages were sound and better organized, thought-through and orchestrated than those of some similar recent industry gatherings in North America. Here are a few soundbites from the various speakers at the IPTC opening executive panel on Monday morning:

 

Yasir Al-Rumayyan, chairman of Saudi Aramco and governor of the Saudi Public Investment Fund, talked about the opportunities that the global energy transition gives Saudi Arabia in particular and the industry in general. He talked about the “flawed vision and narrative” that is in the world of public opinion today and said, “Disagree we must.”  

 

He said, “We will make our voices heard.” He talked about the decades ahead of the world in navigating energy transition, that the energy value chain is far too complex for simple answers and that there will be multiple energy transitions globally and regionally. He also remarked on incoherent energy policies of governments thinking about this too simply.  

 

Al-Rumayyan talked about the opportunity for the energy industry to make transformational change, pushing the technological possibilities to “lighten the carbon load” of energy. He summarized that Saudi Arabia intends to deliver on two visions, one of making transformational change and one to power economies around the world.

 

Saudi Arabia is embracing a low-carbon future. They believe that it will be science, technology and innovation that will allow them to lead and continue to lead in reduced carbon intensification and greater energy efficiency. They report having reduced carbon intensity 8% from 2012-2018.

 

Additionally, Aramco is focused on transforming technical skills of workforce to drive operational efficiency, a culture of science, and focus on energy. Efficiency. By focusing on areas such as AI and machine learning, and also enabling people to use this technology, they believe they can deliver a sustainable energy future.

 

Mohammed Al Qahtani, Aramco’s senior VP of upstream, emphasized the importance of creativity and new forms of collaboration in the increasingly complex energy world. He talked about the growing global demand for energy, as well as the need for affordable and accessible energy, especially in Asia.

 

A few sober stats were put forward: that 3 billion of the world’s 7.5 billion people still get their food and heat from indoor fires, and that 1 billion have no access to electricity today. Those are the global inequality realities that must be measured against the also-urgent need to combat climate change.

 

Al Qahtani talked about the Saudi Vision 2030, and elaborated a little on his notion of “unconventional collaboration,” giving examples of the energy industry looking for partnerships with technology companies.

 

 

The CEO Perspective

 

Two journalists, CNBC’s Hadley Gamble and Bloomberg’s Annmarie Hordern, moderated a pair of very interesting executive dialogs, involving the respective CEOs of ExxonMobil, Total, Petronas, Woodside Petroleum, Halliburton and Baker Hughes.

 

ExxonMobil’s Darren Woods echoed remarks he made at a Barclay’s Energy Conference last September. He noted that global energy demand will continue to grow, by their projections, and that he and his company need to think out more than one year at a time. He said that he views their key medium-term strategies as including a responsibility to produce more and more efficiently, and with lower emissions and carbon footprint. This is where technology will play an increasingly crucial role.

 

Woods stated they must always plan for instability and volatility and have the reserve power to handle ups and downs. He also nicely parried a question from Gamble, on the upcoming US elections, stating his confidence that any presidential administration would realize the reality of the importance of energy in raising the overall economy, and the interdependence and complexity of it all.

 

Total’s Patrick Pouyanne talked, as he consistently has, about Total’s strategy to evolve from an oil and gas company to an energy company. He talked about society and activists’ pressure on the energy industry. Total’s role, he pointed out, has what they believe is the answer the demand for energy. He feels that through 2030 and 2040, the increasing demand for electricity will be the most significant trend globally that needs to be met. He also talked about the possible evolution of marine shipping to natural gas as a cleaner fuel.

 

Both Gamble and Hordern were able to elicit some interesting discussion about the “over-simplistic fiction,” of energy independence by any one country. This point was emphasized many times over by the CEO panelists. That the global oil, gas and energy picture is complex, with much interdependence, such that satisfying global demand will become more challenging.

 

Two themes woven throughout these conversations revolved around the importance of human capital, lifetime training of the workforce and attracting the right new workers to the industry. There was also the parallel and closely related theme of the crucial roles of technology — by which the participants meant digital technologies, AI, machine learning and related areas.

 

This set the stage for a number of quality discussions around technology innovations over the next two days, including my Wednesday presentation on the role of digitalization in gas production, and particularly the vision of the autonomous plant.

 

 

To learn how energy companies can innovate to achieve new levels of operational excellence, check out our recent executive brief, Next-Generation Operational Technologies Enable the Smart Enterprise in a Changing World.

 

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