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The biggest driver for innovation in the oil and gas industry is the energy transition, said Michael Hatfield, chief technical officer and senior vice president of global technical functions with ConocoPhillips, at CERAWeek.
Lowering global atmospheric temperatures to 1.5 C is one of the largest problems the sector is facing, but professionals both within and outside of the oil and gas industry have solutions in the form of technology and policies to help guide operators to reduced emissions.
During CERAWeek’s “The Oil and Gas Field Reimagined” session on March 8, panelists discussed what is motivating operators and service providers to change direction in the ways they do business, from technological advancements to public and investor outlook.
Hatfield said his company is working toward its net-zero emissions by 2050 goal by reducing emissions at current work sites as well as investing in new, cleaner energies and technologies.
“At ConocoPhillips, we're following what we call a triple mandate and that's to deliver oil and gas production responsibly and reliably, that it meets whatever the energy transition pathway is, whether it's fast, whether it's slow,” he said. “We believe there's going to be a need for hydrocarbons for many decades to come, and producing those hydrocarbons is as low cost and as low-emission intensity as possible is critically important, and that's one of the things we're focused on.”
According to fellow panelist Robert Zeller, vice president of low carbon ventures with Occidental Petroleum, the company got its start in the transition by looking at how different forms of energy fit together within the company and how to integrate carbon solutions into that mix with the help of a new business unit launched in 2018.
“Everything that we do is highly aligned to match what they need in order to drive carbon intensity and improve their operations,” he said.
The company remained open-minded in terms of trying differing business models to align with its carbon capture plans as well as expanded tax credit through the new business unit.
“We've been very thoughtful in our investments. We're not investing for a return in three to five years from a venture point of view—that's not what we do,” Zeller continued. “Just like I'm sure you guys look at investments, you look at molding on to your existing operations to solve a particular problem, to drive that new technology given out a value that we get from commerciality.”
Transparency and collaboration
Bacho Pilong, senior vice president of project delivery and technology with Petronas, said transparency with investors and customers, while already an important part of the energy transition, will have an enhanced role in the coming years.
“One of the tenants of the industry is perception,” Pilong said, adding that the oil and gas industry is seen as the primary source of exacerbating climate change even though it is looking to better manage CO2 and methane emissions.
However, it is not just the responsibility of the energy sector to make these changes but all sectors.
While service providers are working toward developing new technologies that will advance the energy transition, big tech companies shouldn’t be excluded from the conversation. Abdellah Merad, executive vice president of performance management with Schlumberger, believes it will take the combined efforts of industry and non-industry professionals to limit global warming to 1.5 C.
“The reality is that it's going to be collaboration, and partnerships are actually going to be, I would say, central to how we're going to focus going forward,” Merad said. “I don't think that now we should turn away the importance of domain knowledge. But I see collaboration, I see partnership and I see that, yes, they have a role to play today.”
“This is an opportunity for us to come together, [to share] expertise and [the] opportunity [to] address this challenge for humanity,” Pilong concluded.
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