At last year’s AGM meeting, we spoke of two paths: one where we stick to traditional oil and gas businesses allowing us to focus on supply and energy security.
The other, which pivots faster to lower carbon, allows us to avoid being overly dependent on oil and gas imports.
Today, a third path is clearer. This critical third path consists of oil and gas producers coming together to deliver the energy the world needs while fulfilling the expectations of a lower carbon future.
It’s not an “either/or” — it’s an “AND.”
We have the knowledge. We have the expertise. And we have the capabilities to scale lower-carbon solutions and explore new solutions to meet the demands of an ever-increasing world population.
Before the Industrial Revolution, people burned wood and dried manure to heat their homes and cook their food.
They used horses and animals for transportation, riding them and using them to pull carts and wagons.
And they harnessed the power of wind and water to grind grains and more.
Then, came coal.
Coal was plentiful and cheap, and its use marks the start of the first energy transition.
Coal is what enabled the Industrial Revolution, the transition from creating goods by hand to using machines and making coal as an energy source widely available for more than manufacturing, for example, to power the steam engine.
And people burned coal to heat their homes and cook their food.
Then came oil and gas.
People used oil for lighting their homes and with the invention of the combustion engine, demand took off for transportation, leaving the carts and horses in the dust so to speak.
And today we use gas in our homes, to heat them, to cook our food, heat our water, and run our appliances.
But you already know this.
We are no strangers to energy transitions.
We are an industry that knows how to solve some of the toughest problems.
For more than a century, we have had the courage to do what many see as difficult, and we will continue to do so.
With advances in technology, we keep getting better and better at finding natural resources and delivering them to our homes and businesses. All of us in this call.
This same problem-solving, innovative spirit, and collaboration that helped us navigate previous energy transitions is what we bring to the table to respond to unprecedented challenges that we face to:
- Lower the carbon emissions of our operations,
- Deliver oil and gas to keep the world running,
- Efficiently and safely capture carbon to meet ambitious targets, while
- We develop alternative energies such as Hydrogen, renewable fuels and products, and carbon capture, utilization and storage.
Let me pick two examples in the carbon capture space. I like the term, technology transfer.
Who knows better how to find the hydrocarbons buried deep below the surface?
The earth scientist and petroleum engineers that’s who. And their knowledge of the rocks, their mineral and physical properties, and understanding of their movement.
These are the same skills that we need to understand where we can bury carbon safely and efficiently. The same skills to find the pores, but now to store the carbon not to extract hydrocarbons from them.
And how are we going to get that carbon down in those reservoirs?
With the help of drillers who know how to access these reservoirs and have done for dozens of years. Although wells are different—some are for water, some in deepwater, some in shale & tight—we can drill them. These drilling skills are the same that we will need to develop geothermal capabilities.
Artificial intelligence. Data science. Analytics. ChatGPT.
The realm of possibilities with the use of data we cannot even imagine. As we leverage this data, along with robotics, digitization, the Internet of Things, we are transforming our operations, making them safer, reducing emissions and saving millions.
And we are using the same capabilities, innovative spirit and problem-solving attitude to find solutions to the new problems that we face.
The only way we will be able to manage the transition before us, one that is already underway, is to stay in the game; bring our resources and knowledge to the table and be a part of the solution; transfer technology learnings to new applications; and collaborate.
No individual country, no individual industry, no individual company, acting alone can meet the world’s energy and climate goals.
Collaboration and new partnerships are perhaps the most fundamental requirements to reach the ambitions of a lower-carbon future.
Collaboration – it’s what we do. A few examples from this year alone point to how effective we can be as IOGP.
We’re proud that, amidst the turmoil of the Russia-Ukraine war, IOGP and its members played a positive role in this crisis by coordinating shipments of emergency energy equipment to Ukraine and to enable a secure supply of energy for Ukrainians and others in Europe.
Lower carbon future – carbon emissions have dropped at many member companies and IOGP has issued important guidance and good practice documents on improving and measuring carbon footprints.
In 2021, we established committees for Carbon Capture and Storage (CCS) and low carbon operations and released 3 recommended practices for efficiency and cost reduction on decarbonization projects, and we have nearly a dozen more energy transition-focused documents scheduled for release this year and next.
This work is a reflection of the enormous resources that our membership and the larger industry is devoting to the energy transition. The appointment of Dr. Sultan Al Jaber, Chief Executive of Abu Dhabi National Oil Company, as President of COP28, is another reflection of this.
We also recognize that we are successful in part because of the diverse talent and deep skills of our workforce. But to attract and retain talent, we need to do more, and we need to embrace the undoubted benefits of diversity and inclusivity.
That’s precisely why IOGP’s Workforce Energy Task Force was set up last year. Their diversity, equity, and inclusion baseline report will be out this quarter. The Task Force will work with our members to develop recommended practices to accelerate progress in retaining, re-skilling, and attracting new talent to the industry.
Safety and life-saving work – an excellent example of collaboration.
Some would say our core mission. In 2022, the Safety Directorate again helped set the global agenda in its field, accelerating debate on the Human Performance Principles, deepening relationships with key stakeholders, and publishing a host of new documents such as a common industry definition for actual, potential, and near-miss Fatality and Permanent Impairment (FPI) injuries.
Meanwhile, in engineering, the 54 specifications created by Joint Industry Programme 33, which harmonize project procurement requirements, have been rolled out, and have been downloaded 250,000 times between 2019-2023. In an industry of roughly 6,000 companies, that is a substantial step toward general acceptance. Lessons learned from this effort are being applied to Joint Industry Programme 35, which aims to create industry-level standardization within the design specifications for offshore structures.
The Environment Committee has just completed a thorough review of its catalogue and has produced a new five-year strategy and workplan to direct efforts. Part of their work will be identifying which environmental data IOGP should collect given that many external factors have changed since we first started the environmental database. And, the Sound and Marine Life Joint Industry Programme has published an Underwater Sound Research Database Webtool to help projects limit their impact on marine life.
And lastly, IOGP’s European office in Brussels continues to advocate for the industry and provide expert input to the European Commission. Our work proved highly valuable to EU policy makers last year, with a report, commissioned in the early days of Russia’s invasion of Ukraine, on how exactly Europe’s gas supply can move away from Russian sources by 2030.
These are all examples of strong collaboration that delivers results.
To go back to my path’s analogy, we are on the third path.
We must continue to come together in organizations like IOGP to deliver the energy the world needs while fulfilling the expectations of a lower-carbon future.
It’s not an “either/or” — it’s an “AND.”
And there has never been a better time to be in the energy business.
We will witness unprecedented change and we can part of it and, more importantly, lead it.
To all the new members among us, we warmly welcome you. You will become a part of a strong group of collaborators who are committed to their work and to progressing our goals.
Our annual report is coming soon. I encourage you to read it and understand the impact of the work IOGP and its members are doing to drive industry performance.
Thank you for your efforts. You have again proven that ours is an industry which can deliver despite the most disruptive, challenging, and difficult conditions.
And thank you to everyone in the IOGP – those who work with members, and those who work behind the scenes who deliver a tremendous amount daily. They go above and beyond.
Without their dedication, our list of accomplishments would not be as robust. On behalf of the Board and again, thank you for all you do.