The global upstream oil and gas industry needs to move away from a “business as usual” approach and capitalize on opportunities to transform itself to be at the forefront of the world’s energy industry.
Speaking at the annual SPE and ATCE conference in Dubai, President and Chief Executive Officer, Amin H. Nasser delivered the keynote address titled, “E&P 2.0: A New Business Model for a New Era,” and said, “The oil and gas industry has a long history of navigating challenges – but today’s pressures are unprecedented. In the current low-price, volatile environment, the “business as usual” practices can’t stand up to increasingly complex financial, technology and talent issues. Cutting edge technologies and innovation have helped to make energy more abundant and sustainable as well as provide the resilience that’s required during challenging times.”
Nasser said the energy landscape is currently witnessing world demand on a steady course which augured well for the industry.
“While its pace has been tempered by energy-efficiency gains, demand will be impacted by global population growth expected to pass 9½ billion by 2050, and rising living standards in developing economies,” said Nasser.
“Presently, oil and gas fields are becoming increasingly mature and complex to operate. Environmental pressures are intensifying, amid misperceptions about our support of a cleaner environment. In light of this backdrop, if we look at the industry’s present business and operating model and ask if it’s up to the tasks ahead, I’d say the answer is no,” he said.
The call on energy will be met by oil and gas – and oil’s central position, especially in heavy transport and petrochemicals feedstock, will remain solid and central for years to come.
However, Nasser cautioned that the oil and gas resources currently available, as well as new discoveries, are more challenging and more expensive to develop.
He said an integrated strategy can help lift the upstream industry, enabling it to adapt to the energy transitions; environmental, policy and regulatory trends. Nasser said the biggest challenge was the need for resilience to industry downturns. Industry players must possess strong financial capacity to ride through challenging times and to maintain long-term investments to develop new capacity while continuing to innovate for better efficiencies.
“As it stands, $1 trillion in costly, challenging and marginal resources may be delayed or canceled by the end of this decade. Yet, long-term investments must be maintained to develop new capacity and keep technology on track,” Nasser added.
The second point which interlocks with resilience is technology where the research and development, as well as innovative capabilities of industry players have always been the upstream’s driving force.
“Clearly innovation can’t stand still – but it also can’t just plod along. We have to push the envelope. Saudi Aramco is doing just that as part of our strategic intent to become a global, integrated energy and chemicals company – which places a huge growth emphasis on an area where we were already strong,” he said.
Nasser wrapped up the final two points of the strategy – talent and collaboration as being the human touch and momentum enabler which completes the package. He said that investing in technology and research to solve E&P’s big challenges also calls for investing in the people who will develop and use these tools. One prime example he cited was the collaboration between Saudi Aramco and King Fahd University of Petroleum and Minerals to establish their new College of Petroleum Engineering & Geosciences.
Nasser was among the top global oil and gas industry executives and technical experts who spoke at the event, held at the Dubai World Trade Centre from 26–28 September. More than 500 Saudi Aramco delegates from the upstream business line and other organizations attended the event.