At this week’s Mediterranean Gas & Energy Week, Iman Hill, IOGP’s Executive Director, reflected on the unprecedented situation the oil and gas industry is facing and outlined how the Association is supporting its members in areas such as safety, environmental performance, methane emissions mitigation, standardisation and more.
Read the full speech below. (Slide presentation)
Mediterranean Gas & Energy Week 2021
Keynote Speech, 19th January
Iman Hill, Executive Director, IOGP
Good morning everyone and greetings from London. Thank you very much Ricardo for the introduction. It is my pleasure to speak to you today at the Mediterranean Gas & Energy Week 2021.
I have a strong link to the region having worked in Greece and on a number of the Egyptian assets in the Mediterranean Sea while I was in Egypt and the UAE.
I am speaking to you on behalf of the International Association of Oil & Gas Producers, and so my remarks include both a global view as well as looking at the region in particular.
Before I talk about IOGP and how the Association is working to support its members both globally and in the Mediterranean, let me quickly reflect on the unprecedented situation our industry has been facing.
Oil and gas in the spotlight
Industry has been hit twice; by the drop in demand and the price drop.
Global oil demand fell by as much as 30 million barrels per day when COVID hit, and prices reached 18-year lows at the beginning of April last year. Many of our members have had to lay off colleagues and reassess the viability of projects.
Putting this into context it is hardly surprising when you consider that road transport in regions with lockdowns has dropped by up to 75%, with global average road transport activity almost falling to 50% of 2019 levels. Air travel has almost come to a halt. There were times when nine out of ten aircraft remained on the ground in Europe.
However: Even with these significant drops in demand, the world still needed 70% of the hydrocarbons that were needed prior to the crisis. Even in times of a global pandemic, oil and gas remain the backbone of energy and feedstock supply. Why? Because, hydrocarbons, as you all know, have many uses beyond transport and heating. We are surrounded by items made from oil and gas in our homes every day, from the cooking utensils we use to our windows, sofas and mobile phones and they are key components of the most important medical items to fight this pandemic. Energy is an enabler to get businesses and societies back on track.
Oil and gas have a promising future: According to the International Energy Agency’s Sustainable Development Scenario oil and gas will meet 46% of the global energy demand in 2040. This is only one percentage point less than their 2019 forecast.
Hardly surprising when we consider the growing populations in developing countries and that access to affordable energy is a pre-requisite for economic advancement. We mustn’t forget that currently almost 800 million people are living without access to electricity, and hundreds of millions more only have access to very limited or unreliable electricity. Billions of people do not have access to clean cooking.
Our industry is ready to meet this demand. Andwe do so while playing our very significant part in achieving the Paris Agreement goals.
I firmly believe that the fight against climate change would be slowed down without the power and capabilities of our industry (the know-how, expertise, project management skills and technology leadership).
Just as our member companies are fully committed to helping to make this world better and more sustainable, so are we at IOGP. Let me briefly introduce our Association.
About IOGP and How we work
IOGP is the voice of the upstream industry. One of our key objectives is to enhance understanding of the contribution oil and gas makes to everyday life and to fulfilling global energy demand, as well as the critical role the industry plays in the Energy transitions to a lower carbon future.
Recognising our rapidly changing world IOGP supports members by being a driving force in the energy transitions and low carbon future in support of the Paris Climate agreement goals.
We work on behalf of the world’s Upstream companies and organisations to promote safe, responsible and sustainable exploration and production.
The Association comprises many of the world’s leading publicly-traded, private and state-owned oil and gas companies, industry associations and major upstream service companies.
Our 70+ members produce about 40% of the world’s hydrocarbons.
From our headquarters in London, we interact with a variety of global and regional bodies including UN agencies, the World Bank, ISO, the International Regulators’ Forum, OSPAR and others.
Our Brussels office provides an essential conduit for advocacy and debate between our industry and the European Union and its policymakers.
We also have a presence in Houston to liaise with regulators, members and future members in the Americas, a region we are working to grow our presence in.
IOGP is a member led, not for profit organisation. We act as a unique forum in which our members identify and share knowledge and good practices to achieve significant improvements in health, safety, the environment, standardisation and social responsibility.
I will come to this in more detail in a moment.
Our members operate in all producing regions: the Americas, Africa, Europe, the Middle East, the Caspian, Asia and Australia. Several of our members are located in the Mediterranean and many have E&P activities in the Mediterranean region.
You will hear me talk about our members many times throughout this presentation, Why? Because incredible work wouldn’t be possible without the dedication and commitment of our members and their subject matter experts. About 1,700 member experts are active in the IOGP groups.
The Management Committee, the Board of IOGP, is responsible for the Association’s overall strategy and direction. It provides guidance on policy, work plans, finance and communications and it ensures that we keep to our Articles of Association.
The Management Committee is chaired by Dr. Fawaz (Fuzzy) Bitar who many of us know as Fuzzy, Senior Vice President HSE & Carbon at bp.
We have 11 standing committees and over 70 subgroups (subcommittees, task forces, networks). We’ve just been through an Operational Review to make our work processes even more efficient
We Publish 30-40 guidance documents per year, that help the industry to operate more safely, more sustainably, more cost-efficiently and more effectively.
Let me give you a couple of examples from some of the areas we are focused on.
Our impact and value – Safety and Health
Safety has always been part of our industry’s DNA with special momentum after some tragic incidents like Macondo and Montara.
We have a special focus on Well Control an example of which is the Source Control Emergency Response Planning Guide for Subsea Wells.
IOGP’s work is not meant to provide theoretical guidance only, we want to achieve real change. Under the umbrella of “Project Safira”, which aims to eradicate fatalities from our industry, we are working in four areas which, I would say, present the highest root cause for the industry’s fatalities and incidents: Process Safety, Aviation, Land Transportation and The Life Saving Rules – all based on the deep and broad dataset that the Association has been gathering for decades. All of this is available for companies to implement and use.
We would like all of our industry to adopt the same Life Saving Rules and Process Safety Fundamentals because:
1) Their purpose, the eradication of fatalities, is core and meaningful to everyone who works in this industry.
2) They are based on the biggest upstream safety dataset, every fatality has been meticulously analysed as part of the groundwork, hence they are the ultimate learning vehicle for safety in our industry. They help ensure that every fatality counts in preventing the next one.
3) Imagine if they were fully embedded as part of the DNA across our industry. It would enable us to focus attention to the specific in-the-moment risks on your location rather than generics.
4) This is an area where efficiency and safety truly go hand in hand. Yes, I am not ashamed to say that these safety imperatives will reduce duplication and thus save cash for our industry. This is also a priority and what a fantastic way to do it.
5) All materials to support implementation are freely downloadable at iogp.org and we can also support you directly for those wishing to adopt.
6) The next steps for Life Saving Rules includes start-work checks. Watch this space. The Process Safety Fundamentals having just been published, our focus is to support implementation and the next step is to consider process safety in design.
7) Important to note that whilst Life Saving Rules were initially introduced with a hard compliance “tone”, the Process Safety Fundamentals are intended to be softer, encouraging teams to raise dilemmas they face in doing their work.
If you don’t know a lot about us, I encourage you to visit our website at iogp.org to take a look and search our publications library for what you might need. Reach out to us and we will support your implementation.
One report I would like to highlight is our Offshore Helicopter Recommended Practices document which aims to assist in the safe, effective, and efficient management of offshore commercial helicopter transport operations. It has been developed in collaboration between oil and gas companies, aviation industry associations and helicopter operators. Adopting the guidance will provide the framework for effective management of a key material risk to the safety of offshore personnel.
The industry has also heavily been working to mitigate the impact of the pandemic: As soon as the pandemic emerged, the joint IOGP/IPIECA Health Committee convened to focus on the implications of COVID-19 in terms of travel, screening, office routines, cleaning, how to and when to evacuate infected parties, and work in remote or offshore locations. Later the agenda has expanded to include social distancing, work rotations, Covid-19 testing, vaccination and the mental health concerns associated with continuing isolation. Several position statements were published to support our members.
Our impact and value – Environment/low carbon
For our member companies, climate change and achieving the Paris Agreement Goals are among the most pressing and priority challenges they face.
Collectively we believe that the oil and gas industry can, does and will continue to contribute significantly to tackling the challenges of climate change.
Member companies have been working for years on reducing emissions in their operations, to provide cleaner energy, and to develop low carbon technologies such as Carbon Capture Utilisation and Storage and clean hydrogen.
We have been supporting our members in all of these areas. I’d like to mention a couple of specific topics and projects we are working on:
We became a supporting organisation of the Methane Guiding Principles in 2018 to help ensure they are applied as widely as possible along the whole gas supply chain.
Just recently, we published a report on comparison of Methane Reporting Requirements. It compares different methane emissions measurement methodologies and emission factors for upstream operators, and highlights areas where members need to focus their efforts on improving accuracy of methane emissions data.
We have also been working to improve the accuracy and transparency of the upstream industry’s annual methane emissions data published by IOGP each year.
Together with OGCI and IPIECA we just recently launched a joint project to develop a common set of recommended practices for methane emissions detection and quantification technologies, applicable to the upstream industry.
If you’re concerned with Environmental management, I draw your attention to one of the most successful IOGP reports, which we recently updated together with IPIECA: The report on Environmental management in the oil and gas industry serves as a good practice guide for environmental management throughout the lifecycle of upstream oil and gas projects.
The revised version emphasises topics that have developed or emerged in the industry since the original was released, including the relationship between environmental and social management, and the emergence of biodiversity and ecosystem services as a discipline.
I could talk for hours about our work in the area of biodiversity, habitats retention or energy efficiency,
But let’s have a closer look at our efforts in the Mediterranean
IOGP has designated ‘observer’ / ‘partner’ status to represent industry at several regional and international organisations including:
- The Barcelona Convention for the Protection of the Marine Environment and Coastal Region of the Mediterranean and its Protocols (incl. Offshore Protocol)
- We participate in the Offshore Oil and Gas Group (OFOG) and actively contribute to the development of the Mediterranean Offshore Guidelines and Standards, Amendments to the Offshore Protocol, and effective implementation of the Mediterranean Offshore Action Plan
- We are also an accredited ‘partner’ of ACCOBAMS: The Intergovernmental Agreement on the Conservation of Cetaceans of the Black Sea, Mediterranean Sea and contiguous Atlantic area. Cetaceans are whales, dolphins and porpoises to most of us!
- And we participate in the ACCOBAMS Scientific Committee, the Joint Noise Working Group’s Industry Advisory Group and the Marine Mammal Observers Working Group
We also participate on behalf of the industry as a Partner in the Regional Seas Convention.
- Co-ordinating industry data collection on e.g. chemicals and microplastics, and,
- Sharing industry technological advances in areas such as;
- Produced water treatment, drilling waste management technology
- Environmental monitoring
- Decommissioning technology
- We develop good practice guidance through a harmonised approach, based on global experience, recent examples include:
- Environmental Sampling and Monitoring from Airborne and Satellite Remote Sensing
- Risk-Based Assessment of Offshore Produced Water Discharges
- Environmental Management in the Oil and Gas Industry – 2nd edition
Our impact and value – Standardisation
One of our significant success stories is the Joint Industry Program, that works on standardisation of Equipment Specifications for Procurement, which will drive cost and time efficiencies in the industry supply chain.
IOGP initiated JIP33 in 2016 – with support from the World Economic Forum capital project complexity initiative – this was in response to industry-wide overruns on Capital Projects in cost and schedule of more than 40%.
Historically, oil and gas operators ask suppliers to deliver against a different set of requirements for each order – often hundreds of pages long. Specifications can be different even for projects from the same company. It’s incredibly inefficient. By standardising the specifications used for procuring equipment, the supply chain can become more effective, faster and cheaper.
32 specifications, building on existing industry standards, have been published to date. These are now being adopted and implemented by the operators on major projects where benefits are already being demonstrated.
We always try to quantify the cost benefit of our deliverables and this is one of our case studies:
The supplier (Siemens) has benchmarked the JIP33 Spec against five prior OpCo specs (so we are comparing apples with apples). On average (for this specific product) adopting the JIP33 spec led to 50% cost reduction and 75% shorter delivery times. Volume effects are not included yet. In other words, when the market builds volume, costs may reduce even more.
However, the level of benefits cannot be generalised. This example shows very high benefits. For other products it may be a bit less.
In summary the benefit and value created by adoption of the JIP33 Standards can be seen in several areas:
Standardised formats mean less re-working and faster responses when tendering. IOGP’s use of digital feedback channels ensures that specifications fit with Industry needs and maintain pace with innovation.
Less variation results in lower project development risks and standardised products allows suppliers to hold smaller inventories which drives down unit costs.
Standardisation also means reduced project cycle times so that the focus can be on delivery, integration and optimisation.
Our impact and value – Advocacy
Last but not least: Together with our Brussels office we do a lot of work to support our members in their advocacy efforts. The Medditerranean represents the most promising E&P growth region in Europe, important for the development of the industry, for European indigenous production and EU energy security.
IOGP would like to improve industry coordination within the region and with more mature regions such as the North Sea where learnings can be leveraged
With its members, IOGP can help share this industry know-how in particular in the area of HSE.
IOGP can also foster the establishment of national oil & gas associations (NOIAs) in the region, which are currently missing in several countries.
Our work in Europe can positively impact the Mediterranean and beyond
We support the EU’s objective of climate neutrality by 2050 and we call for implementation of enabling policy measures. On this basis, our team in Brussels has a very clear focus on the axis for communication, on behalf of our membership, with policy makers and regulators which reflects the tremendous efforts our members are making in their European operations to advance towards a lower carbon future and supporting the Paris Climate Agreement goals.
These are: i) Reducing our Carbon Footprint; Methane mitigation, electrification of platforms, reduction of flaring, energy efficiency and CO2 capture and sequestration. ii) Supplying cleaner Energy; Gas as an alternative to Coal, Renewable Energies, Energy services and low Carbon liquids. iii) Large scale CCUS, Hydrogen, Nature based solutions and repurposing of assets, existing pipeline networks to carry CO2 and Hydrogen.
We are Active in the Mediterranean but Can and Want to do More
On 29 October 2019, we organised an event in Nicosia, Cyprus, in collaboration with the MEP Costas Mavrides and supported by the President of Cyprus Nicos Anastasiades. The objective of the event was to bring the knowledge and expertise of IOGP members in the North Sea to the East Med to help maximise the potential of the region’s oil and gas resources. The Energy Minister of Cyprus Georgios Lakkotrypis opened the event. The European Commission and the European Parliament were also represented in the different panels. A NOIAs meeting was organised by IOGP the following day in Nicosia. A similar event was planned for December 2020 in Israel in collaboration with the Association of Oil and Gas Exploration Industries in Israel. The event was cancelled because of Covid but could take place in 2021, which still needs to be confirmed.
The bilateral discussion IOGP had with Energy Minister and the European Commission led to the IOGP application to join the Gas Industry Advisory Committee (GIAC) of East Med Gas Forum (EMGF). The GIAC has been established to enable the participation of the private sector in the EMGF mission and enhance dialogue between key players in the industry on EMGF’s objectives. IOGP was formally invited to become a member of the GIAC in June 2020 by the Chairman Mr. Osama Mobarez.
Ladies and Gentlemen,
We’ve come far. But certainly not far enough. More needs to be done – on all levels. From safety, to environment, digitalisation, standardisation and most importantly in demonstrating that the oil and gas industry is an important enabler of a lower carbon future. We all share the same agenda. I firmly believe that IOGP can and will play an even bigger role in supporting its Members.
Thank you very much for listening.