ExxonMobil: Close collaboration is key for success of energy sector
Close collaboration between international oil companies and national oil companies will be a key feature of future success in the regions oil and gas sector, according to Rex Tillerson, CEO, ExxonMobil.
“We must be resilient and willing to adapt to the ever changing nature of the industry,” said Tillerson, speaking at the opening ceremony of ADIPEC 2016.
“Responding to current market challenges while continuing to invest in new projects will require a disciplined approach by the industry and a strong operational focus.”
Tillerson said that the most successful companies will be the ones that plan and prepare for the long term.
“When ExxonMobil considers an investment decision, we look beyond the current market conditions,” said Tillerson. “We look at what energy demands the world will have in as much as 30 years time, across a wide range of business scenarios, to ensure that we are creating value. This allows us to continue to invest wisely.”
Tillerson stressed that if the global energy sector is to succeed in providing a sustainable energy source for future generations, close collaboration between International Oil Companies and National Oil Companies will be absolutely critical.
“Today’s environment requires strong partnerships to ensure that there is an incentive to make significant, sustained investment in the research, development and deployment of new technologies to meet the energy demand challenge.”
The IEA estimates that the world will need to invest $68 trillion in the energy sector by 2040. Of that investment, $45 trillion will be required for oil and gas.
“Such massive capital outlay will require the energy industry and the governments of the world to work together like we have never worked before. We need to have partnerships that foster the sharing of technical expertise, that will sustain complex projects that will have life spans that will last decades.”
“Our industry has proven that close partnerships can boost efficiency at every point and help to maximise the value of resources, providing the safe and reliable delivery of energy.”
Tillerson paid tribute to his company’s relationship with the UAE’s NOC, ADNOC.
“ExxonMobil and ADNOC have shared a close and successful partnership over a number of decades, and we have had the privilege of participating in the UAE’s oil sector, since the first oil concession was granted in 1939.”
“Together with our joint venture partners, we are developing the tremendous potential of the Upper Zakum field. Now and in the future, partnerships such as these will be even more important.”
Tillerson also stated that collaboration between NOCs and IOCs would also help countries meet their environmental responsibilities in a more sustainable manner.
“We continue to face the dual challenges of increasing global energy supply while simultaneously reducing emissions. To many this may seem difficult and daunting. As industry experts are working to meet the supply challenge, it is important to note that we are also working to mitigate the risk posed by climate change,” he said.
“At ExxonMobil we share the view that the threat posed by climate change is serious and warrant careful reflection. Addressing these concerns require broad based practical solutions around the world.”
ADNOC CEO pushes for efficiency and value to tackle oil glut
ADNOC ceo pushes for efficiency and value to tackle oil glut and Gas companies that drive efficiencies, value and commercial excellence, will be the ones to come out on top as producers wrestle with low oil prices, UAE Minister of State and ADNOC Group chief executive said at the opening of a major industry event.
“While we cannot predict the future price of oil, one factor remains well within our control and that is the cost of every barrel we produce,” H.E. Dr. Sultan Ahmed Al Jaber reiterated pressure on cost cutting at the oil and gas exhibition ADIPEC 2016. “In this new energy era we must reflect on how to make the most of our resources, enhance our performance and find new ways to be more competitive,” he said.
Benchmark Brent crude plunged from more than $115 a barrel in June 2014 to less than $28 in January this year, and traded below $46 on Monday. The decline has forced oil and gas explorers to delay projects, cancel billions of dollars of investments and eliminate thousands of jobs.
The industry has slashed capital spending from about 700 billion dollars in 2014 to 400 billion in 2016, according to Total chief executive Patrick Pouyanné.
Wood Mackenzie forecast the international oil companies to slash investments by $370 billion until 2017-end, while $100 to be cut in Sub-Saharan Africa alone over the next five years.
By driving efficiency and leveraging synergies, oil and gas companies can succeed in the new energy era, Al Jaber stressed, but sound, strategic, targeted investments are equally important to enable sustainable growth.
“Time and again, our industry has shown it can engineer around obstacles, create ground breaking solutions and catalyze human progress,” Al Jaber said. “Today’s new energy landscape calls on us to once more to break from old conventions and welcome new paradigms. By embracing the new energy era, we will thrive and we will shape our future.” He highlighted the example ADNOC Group has adopted to take charge of its own future to ensure resilience and long-term prosperity.
ADNOC Strategy 2030
Under its new 2030 strategy and five-year business plan, ADNOC will diversify and increase production of its petrochemical portfolio, while opening new markets to ensure sustained profitability. It also intends to expand its refining capacity to meet growing demand for refined products.
“We will stretch the margin from every barrel we produce,” said Al Jaber. “And by taking full advantage of our geography, at the pivot point between East and West, we will capitalise on the world’s fastest growing markets, including Asia, where oil demand is expected to increase 15 per cent and the market for petrochemicals is set to double by 2030.”
Al Jaber stressed innovative forms of collaboration are needed in order to maximize success in the new energy era. “To fully unlock those opportunities, we require a new model of partnership across the industry, one that creates real and tangible value by bringing technology, experience, resources and market access to the table,” Al Jaber said. “At ADNOC we are focused on growth and we are open for business,” he added.
Abu Dhabi’s Supreme Petroleum Council approved ADNOC’s new 2030 strategy and five-year business plan last week, which seeks to deliver a more profitable upstream, more valuable downstream and a more sustainable and economical gas supply.
UAE Energy Minister: Diversified energy mix to provide energy security
The UAE’s Energy Minister, His Excellency Suhail Mohammed Faraj Al Mazroui, said that the energy sector should look to combine oil and gas with alternative energy in a complimentary manner. Speaking at the opening of ADIPEC 2016 in Abu Dhabi, His Excellency stressed the importance of the oil sector working hand in hand with solar and wind producers. “The opportunity is there. This industry is always resilient and will always survive, stronger from any downturn in the oil prices that we see. “We have a diversified mix of energy sources that we always have to think about. We are not alone and we will grow together. We will compliment each other in a very balanced way,” he explained.
The Minister said that the UAE was leading the way in this collaborative approach and hoped that this would lead to greater energy security in the future. “This is the strategy of the energy sector in the UAE. What we are trying to do is to give an example, where the green and the renewable forms of energy are fully complimenting oil and gas and will not in the near term replace or compete [with them].”
His Excellency said that he had talked to the majority of CEOs who attended the panel discussion and asked them how they see the market one year on from the last ADIPEC. “I saw optimism. I’m always telling people I’m optimistic, but this time I see it. Meeting every CEO who came to Abu Dhabi, the glut is almost gone, from where it was one year ago. “This is a positive thing for us to think about. I think we are at the bottom of this cycle. “We need to continue investing in this industry. We have a responsibility to fulfill. And that responsibility is to ensure that we don’t see a huge spike three or four years from now. And that cannot be avoided without continuing investing in our oil and gas development.”
ADNOC CEO Says Oil and Gas Industry Can Achieve Resilience by focusing on Being More Efficient, Value Driven and Agile
Delivering the keynote address at ADIPEC 2016, the world’s most influential event for the oil and gas industry, H.E, Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said that in an era of unpredictable oil prices, producers who focus on efficiency, value creation, commerciality and excellence will be successful.
H.E. Dr Al Jaber said: “While we cannot predict the future price of oil, one factor remains well within our control and that is the cost of every barrel we produce. In this new energy era we must reflect on how to make the most of our resources, enhance our performance and find new ways to be more competitive.”
By driving efficiency and leveraging synergies, oil and gas companies can succeed in the new energy era, he stressed, but sound, strategic, targeted investments are equally important to enable sustainable growth.
“Time and again, our industry has shown it can engineer around obstacles, create ground breaking solutions and catalyze human progress,” said H.E. Dr Al Jaber.
“Today’s new energy landscape calls on us to once more to break from old conventions and welcome new paradigms. By embracing the new energy era, we will thrive and we will shape our future.”
Using ADNOC as an example, H.E. Dr Al Jaber said ADNOC is not waiting for times to change, but taking charge of its own future to ensure its resilience and long-term prosperity.
Under its new 2030 strategy and five-year business plan, ADNOC will diversify and increase production of its petrochemical portfolio, while opening new markets to ensure sustained profitability. It also intends to expand its refining capacity to meet growing demand for refined products.
“We will stretch the margin from every barrel we produce,” said Dr Al Jaber. “And by taking full advantage of our geography, at the pivot point between East and West, we will capitalize on the world’s fastest growing markets, including Asia, where oil demand is expected to increase 15 per cent and the market for petrochemicals is set to double by 2030.”
H.E. Dr Al Jaber stressed innovative forms of collaboration are needed in order to maximize success in the new energy era.
“To fully unlock those opportunities, we require a new model of partnership across the industry, one that creates real and tangible value by bringing technology, experience, resources and market access to the table,” H.E. Dr Al Jaber said.
“At ADNOC we are focused on growth and we are open for business,” he added.
H.E. Dr Al Jaber’s comments were delivered days after Abu Dhabi’s Supreme Petroleum Council approved ADNOC’s new 2030 strategy and five-year business plan, which seek to deliver a more profitable upstream, more valuable downstream and a more sustainable and economical gas supply, in line with the directives of Abu Dhabi’s leadership.
In addition to creating a more commercially minded organisation, ADNOC is also building on its legacy of success by creating a performance led culture and developing its talent.
“Our most precious resource lies not in the ground, or under the sea, but in the people of our organizations. Investing in our human capital and nurturing a performance led culture is the best investment we will ever make. And to truly excel, we must take advantage of the entire talent pool, both women and men alike,” H.E. Dr Al Jaber said.
Oil companies also have a paramount duty to protect their employees, he added, and there can be no compromises on keeping them safe, while at the same time ensuring the integrity of operations, safeguarding communities and protecting the environment.
Speaking on the same day as the COP 22 Marrakech Climate Change Conference opened, in Morocco, H.E. Dr Al Jaber said: “The industry is doing its part to protect the environment, while supplying the energy needed to drive the global economy.”
ADNOC, he said, is producing cleaner fuels for its customers, and advancing innovative clean technologies, including the Middle East’s first carbon capture utilization and storage project which was inaugurated on Saturday. The facility will capture, use and sequester 800,000 tonnes of CO2 every year.
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