Energy companies should not to return to ‘bad habits’ when oil prices begin to show signs of recovery
Latest in a series of online ADIPEC Energy Dialogues focuses on the need to embrace digital change in order to move forward in a new era for oil and gas
Structural cost changes made during COVID-19 pandemic must be sustained by Oil and Gas operators to ensure business continuity
ABU DHABI, UAE, Sept. 16, 2020 /PRNewswire/ — The oil and gas industry has been impacted severely due to the COVID-19 pandemic; however, with the industry now actively embracing the digital transition and moving to new grounds to sustain itself, business continuity amidst the current downturn has a pivotal role to play.
Participating in an online ADIPEC Energy Dialogue Webinar, Chikezie Nwosu, CEO of WalterSmith in Nigeria, a world class integrated energy solutions provider said that although the oil and gas industry has previously experienced similar shocks to supply and demand, the impact of the COVID-19 pandemic is being felt over a much shorter period and far more aggressively than before.
"The COVID-19 pandemic has clearly shown us that oil price is not in control of any oil and gas company or country, as even the largest oil-producing countries such as Saudi Arabia and Russia are ill-equipped to adjust to what we are experiencing today," Nwosu explained. "The focus for companies now is to control their costs to ensure business continuity for when the oil prices eventually recover. This can be done by continuing with the structural costs changes that were made during the pandemic."
However, Nwosu warns that bad habits often return when oil prices show signs of recovery, something he has seen happen on numerous occasions in the past.
Discussing the role of technology in navigating the unfamiliar economic conditions, Nwosu said that WalterSmith has been able to successfully continue operations using a combination of effective logistics planning for maintenance and operations, and the use of technology for remote monitoring of assets.
"Reliance on technology in field operations in Nigeria is slowly continuing to grow and, while drones were already being deployed for surveillance in the field operations before the COVID-19 outbreak, many previously manual tasks will now be automated or can be remotely accessed," he said.
Turning the dialogue towards the specific challenges faced by oil and gas companies in the time of a pandemic, Nwosu highlighted several issues including the lack of direct access to field operations, managing expectations for restricted community access to operations, not having expert personnel in the field to do necessary production optimisation, in addition to dealing with skeletal services from regulators and government partners which means that all approval processes are taking much longer.
Looking into the future, WalterSmith will no longer be an oil and gas company; but rather an Integrated Energy Company where the focus is on delivering energy from cleaner sources. As part of this process, Walter Smith has partnered with the United Nations Industrial Development Organisation (UNIDO) to build a 500-hectare Eco-Industrial Park in which the company will transition from 300 MW of gas power, first to 500 MW, then 1,000 MW of solar power by 2025/2026. By this time, all the power that the company requires for operations and consumer distribution will be through solar energy.
Nwosu believes that while international energy companies are taking the energy transition extremely seriously, the advantage for WalterSmith is that as an independent, small player in the market, the company can be more nimble than the oil giants by making the right changes now, and driving the energy transition forward with the right partners.
"The energy transition is simply good business which is being driven by our respect for humanity and the environment, rather than all the tensions around financing for oil and gas," Nwosu added.
The ADIPEC Energy Dialogue is a series of weekly online thought leadership events created by dmg events, organisers of the annual Abu Dhabi International Exhibition and Conference. Featuring key stakeholders and decision-makers in the oil and gas industry, the dialogues focus on how the industry is evolving and transforming in response to the rapidly changing energy market.
With this year’s in-person ADIPEC exhibition and conference postponed to November 2021, the ADIPEC Energy Dialogue, along with insightful webinars, podcasts, and online panels continue to connect the oil and gas industry, with the challenges and opportunities shaping energy markets in the run-up to and following, a planned four-day virtual ADIPEC conferences, exhibition and awards ceremony taking place from November 9-12.
The ADIPEC 2020 virtual conferences and awards ceremony will bring together energy leaders, ministers, global oil and gas CEOs as well as the engineering faculty to assess the collective measures the industry needs to put in place to fast-track recovery, post COVID-19.
To watch the full ADIPEC Energy Dialogue go to: https://www.youtube.com/watch?v=pUhSD3uDmeY&t=154s.
ADIPEC is the world’s foremost meeting place to identify innovative ideas, exchange knowledge, launch revolutionary new products, strike diverse partnerships and do business.