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Oil & Gas Companies are Facing Major Technological Disruption

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Oil & Gas Company:Major Technological Disruption

Over 80% of the world’s energy needs are provided by coal, oil and gas. Although technologies to extract fossil fuels may have changed over the decades, the core products themselves have never been challenged until now. A lot of people question whether large dinosaur of an oil and gas company can really compete in such a new high-tech environment. Pressure to reduce the carbon emissions is putting the future of fossil fuels in jeopardy, encouraging the growth of alternative methods to generate and distribute power. In just eight years the value of the biggest power companies has halved leaving Industry Giants scrambling to redefine their role in this new energy world. Across the world, old industries are facing disruption on an unprecedented scale. The pressure to adapt has never been greater. It is always the survival of the fittest- That’s capitalism. Because where there’s threat, there is also an opportunity.

The New power Generation – December 2015, The Paris Climate Conference – For the first time ever, 195 countries agreed to a legally binding climate deal to reduce carbon emissions and everyone in the oil and gas industries convinced that it’s going to be a different future. The New Energy Solutions, Statoil a five million dollar industry may be facing a seismic shift. But that doesn’t mean it’s ready to ditch the dirty fossil fuels that made it rich. Instead, many companies are banking on new methods to clean up an old process. Norwegian oil and gas giant, Statoil, struck it rich in the North Sea in the late 1960s. Over four decades later, at its Sleipner gas rig, the company is attempting to make fossil fuel production cleaner. They have an ambition to become the most carbon efficient oil and gas company in the world. The world will look for companies that take a corrective stand on this and deliver oil and gas to the world in a sustainable manner.

Statoil’s business still relies on the harmful burning of fossil fuels by its customers. But at least the company is trying to reduce its own carbon footprint. It’s transformed some of its off-shore rigs with technology that enables engineers to separate the carbon dioxide and pump it underground. Statoil’s Sleipner gas rig is the world’s first off-shore carbon capture storage plant. Each year Statoil stored 1 million tonnes of CO2, making extraction less carbon intensive. They believe that prioritising gas over more harmful fuels will further reduce global warming and keep them relevant for decades to come. One of the advantages with gas is that it’s very abundant, very reliable and it’s flexible. You can turn the gas stream on and off to regulate your gas flow very, very easily.

It’s a major challenge for the country’s Big4utilities. In eight years, the biggest – E.O.N – has seen its share price fall by over 75% because of the tremendous change in the technology and customer behaviour, and cheaper renewables. So, the industry was shaken up at its fundament and it’s a total different industry from the 27 years ago. E.O.N’s income from fossil fuels has fallen by more than a third since 2008. The company recently made a drastic decision to fully commit to the renewable revolution. The plan was to spin off the majority share of its fossil fuel assets and scale up its investment in wind and solar. But rather than focusing on just generating renewable power, E.O.N is sensed its real opportunity that lies in managing this diverse new supply on an industrial scale. This green society needs to manage the millions of feed and consumption sites, sharing economies in between, and under and over consumption at times. This management equation, big data mining, technical competence is obviously something this world needs and E.O.N will strive for being a capable partner in that. To secure its place in a new decentralised energy world, this former monopoly is taking steps that would have been unthinkable, just a decade ago. E.O.N’s partnerships have produced a raft of renewable energy projects. At the Arkona Wind Farm in the Baltic Sea, their investing partner is a surprising newcomer to the alternative energy industry.

Norwegian oil and gas company- Statoil, altogether it’s 1.2 billion Euros, taking fifty percent of that and It’s not just branding and green washing. The expectation of tremendous growth with wind in particular is definitely a great advantage of those growth opportunities. Statoil – like E.O.N – is positioning itself to take advantage of the energy industry’s new horizons. The company’s next project draws on four decades of off-shore experience to steal a march on far new arrivals. It’s always exciting – with the first floating full scale windmill in the world. The world’s biggest off-shore operator has developed a floating turbine that can mass produce cheaper and quicker than existing static windmills. Being an oil and gas company, they use another Platform technology, it’s ballasted – it doesn’t have any legs. The special software that allows the blades to move in certain directions which optimizes the wind production but it also makes the tower stand still. Statoil’s first floating wind farm is scheduled to be delivered to a site off the east coast of Scotland. It’s the future of wind at least. You can have them anywhere in the world, anywhere in any kind of sea. So this allows moving further from the shore, getting the better wind and produce cheaper electricity. Other fossil fuel giants, including Shell, Exxon and Total are also starting to hedge their bets with a range of investments in Bio-fuel, batteries, solar and wind. It might seem like a surprising move but by embracing these alternative technologies now, forward-thinking oil and gas company might just be able to withstand the disruption caused by the renewable revolution.

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