Recently, I participated in Petrotech 2019 in a panel themed “Investments and Partnership opportunities in Upstream Sector” exploring a question that had been on top of most energy experts and policy makers: “How do we stimulate and sustain activity and investment in the E&P sector in India, so that we reduce dependence on imported oil?”
The global economy has grown at a rate of 2-3% per annum since 2010; while the emerging markets, led by China and India, are growing at 4%. The world will need to provide heat, light and mobility to over seven billion people. Of this, over two billion either don’t have access or cannot afford it. So, energy supply in the future must be accessible, affordable and more importantly, with fewer emissions!
India offers a conundrum: while on one hand, it has an abundance of poor-quality and inexpensive coal, on the other hand it is importing most of its oil and gas requirement.
Policy reforms such as shale revolution in the US, stranded gas development as LNG, subsidy reduction and low carbon energy are taking place across the globe to make oil & gas investments more lucrative.
To address this dual challenge, the need of the hour is to ensure every drop of oil and every molecule of gas, that we can find, must be produced. I for one, would like to propose half a dozen initiatives that may be a first step to ‘energize’ the sector:
The dual challenge affects everyone so we must all work together: corporations, governments, civil society and citizens to provide energy to the masses, but with fewer emissions. At BP, we are committed to advancing this lower carbon future. For instance, we, along with our partner in India, are investing additional sums of up to INR 40,000 crores to develop three new discoveries in the KG basin. This 30-35 mmscmd production could satisfy over 10% of India’s gas demand in 2022 and production over the life of the project would help reduce imports by around ~$20 billion.
Going forward, technology in the form of AI and big data will bring about accuracy and speed which will drive efficiency and as a result bring affordability. This will underpin everything that we do in the Upstream. Some futuristic technologies seem inconceivable today, but the same may have been said for a smartphone device and data management 30 years ago!
The last crude price drop has taught us to think deeper at ways to simplify and be more efficient. Big data and AI are changing the way we do business. An example is the fact that modern day data analytics and seismic imaging helped find an extra billion barrels of oil in the Gulf of Mexico. BP will take its latest technology to other parts of the world to unlock energy. Understanding well performance across the globe will help manage drilling and maintenance of wells to minimize failure and field decline to maximize output.
There may be many trends that dictated the future of E&P, but the energy providers that will “break the wave” or prosper in an increasingly competitive environment are those that stay in step with society; embrace the latest technologies and ways of working; and are able to keep evolving.
Views expressed here are personal.