What are the major challenges and trends that have impacted the oil and gas industry lately?
The oil and gas industry is synonymous with boom and bust, it is never stable and it is one or the other. While today we are focused on the crisis in Ukraine and the ensuing price peek, we need to remember that this is not the first crisis we go through and probably will not be the last. Here is a short overview of the previous threats to the stability of the oil and gas industry. They are generally:
• Geopolitical: Such as the 1973 oil embargo and to a large extent what we see as a result of the Ukraine war today.
• Supply driven: This is what we witnessed in the mid-80s with the production accelerating in the North Sea and Alaska and where demand had not yet caught up.
• Financial: A good example is the financial crisis in the early 2010’s which led to demand destruction.
• Technological: Such as the shale oil boom in the USA in the late decade
•And lastly, the energy transition which is an existential threat. I will elaborate more on that later.
So the challenges are many and varied. Energy is intertwined with society, growth, politics and geopolitics – that is what is fascinating about it.
Currently we’re in a situation where the oil and gas industry is working to decarbonize. On a superficial level, we’re seeing companies rebrand and change their names and corporate identities. But we’re also witnessing oil and gas companies diversify into other energy industries such as renewables. We’re also seeing oil and gas companies increasingly focus on improving their efficiency and reducing their emissions.
“No doubt the energy transition will reduce our dependency on hydrocarbons and through technology we can lower costs and improve our carbon capture”
The energy industry is most likely going to continue to be a relevant part of everyday life for decades to come. We cannot simply switch from powering our modern lives using oil and gas, to using renewables, overnight. But what we can do is accelerate this transition and work to ensure that the oil and gas that we are using has the highest level of efficiency and lowest carbon cost possible.
What keeps you up at night when it comes to the major predicaments?
We are currently witnessing price volatility in the oil and gas markets that have real and negative impact on people’s lives. Not only are the recent price spikes increasing people’s energy bills, but are also adding to inflation and raising the price of household goods. For families on low incomes around the world this can have severe and long-lasting affects.
As a result, energy security is increasingly becoming a real issue for many countries around the world.
Aside from this global impact, oil and gas challenges are many and varied. However, they can be addressed through innovation, resilience and human capital.
Despite these challenges that often arise, I sleep well because I know that we, at Siemens Energy, have the right technologies and expertise to address them. We work alongside our customers and partners to create the solutions of today and innovate the technologies of tomorrow to ensure that as we progress through the energy transition, we are ready to tackle any challenges that arise.
Siemens Energy’s technologies are used in around one sixth of all electricity generated. We have a global team of more than 91,000 dedicated employees across 90 countries. Together, we’re responsible for meeting the growing energy demand while ensuring our climate is protected. We strive for sustainability in our decarbonization journey, innovation centered on future technologies, and transformation among future focused offerings, portfolio and mindset. That is what reassures me when it comes to facing challenges. This is how we shape the energy of tomorrow.
