Mikaila Adams
OGFJ Associate Editor 


While global demand for energy will continue to rise, the upstream oil and gas business needs to face the reality of today’s challenges while still focusing on the long-term, and prepare for the challenges ahead, speakers told CERAWeek attendees on March 9.

“Upstream is a business that needs to focus on the long-term,” said Jay Pryor, vice president, business development for Chevron. "If we under invest", he said, "the industry will not be able to keep up."

During the recent credit crisis, deemed by many as the “Great Recession,” energy investment was down nearly $100 billion. “We must invest steadily during market fluctuations,” Pryor continued.

Pryor predicts global oil demand to increase by 40%, and that while all sources of energy will be required to meet the growing demand, the majority of energy in 2030 will still come from hydrocarbons.

The industry will continue to face challenges. For Pryor, the key to meeting long-term supply challenges is centered on four core drivers: access, a stable investment climate, technology, and collaboration.

Jakob Thomasen, CEO of Maersk Oil, agrees that the industry should focus on the long-term, but stated the importance of facing today’s reality. “We must face the reality–what is going on right now, before we can start looking at opportunities,” he told attendees.

Today’s challenges include an increasingly challenging operating environment that will threaten profit margins, an increasing environmental drive, and an ongoing battle for talent.

Thomasen offered a few thoughts on combating some of the challenges.

When operating in challenging environments, leverage strengths, cover weaknesses, and share risks. “Find partnerships with NOCs and governments to create future value,” he said.

Focus on being a good corporate citizen said Thomasen. Companies should focus on their operations. Run operations more responsibly, efficiently, and safely and invest in innovation and technology.

And finally, while workforce challenges are rooted in various ways, Thomasen suggests companies work hard to change the perception of the industry. Take on projects driving better economic performance, attract youth to the industry, and participate actively in the environmental agenda, he concluded.