Industry transformation: Obstacle or opportunity?
The industry-wide drive for sustainability, digitalisation and shifting strategies are opportunities for disruption
Writing about Saudi Aramco’s $18bn contracts to redevelop Marjan and Berri fields brought to mind a comment from one reader who, after reading the July editor’s letter on industry transformation, wondered if sustainability measures would primarily be undertaken by larger companies, while smaller ones across the sector might struggle to implement changes, and continue to operate under the status quo.
It is a fair point; while it is quite simple to suggest that companies become more efficient and reduce carbon emissions, it requires a significant investment into upgrading facilities, developing new technologies, and, crucially, changing the mindset and culture of the company.
The last point is imperative for any transformation, be it digital, environmental or otherwise. A company is, fundamentally, a group of people working together. Whether their efforts collectively result in the production of hydrocarbons, equipment, or the delivery of necessary services, they share a common goal. When the means to a company’s goals shift, employees have to adjust. A strong leader makes that shift as natural as possible, and facilitates the employees’ “buy in” to the new paradigm.
It is something that most oil and gas companies have had to contend with, given the fickle nature of the sector. One example is ADNOC Group, whose CEO Sultan Al Jaber has been vocal about industry transformation and the importance of digital technology since he took the helm in 2016.
In a March 2019 interview with Oil & Gas Middle East about ADNOC’s blockchain platform, the firm’s digital operations manager Ali Alshehhi said that technology is the easy part of digitally transforming the company, but “the pace of change is so fast and without a strong buy-in from the organisation, at all levels, that change will not be possible.”
But for a smaller company fighting for market share, taking a long-term view in this economic climate might seem difficult, and the point moot; if it does not focus on getting orders in, rather than spending time, money and effort on extensive research & development, and new technologies, it might not survive long enough to reap the benefits of these efforts.
However, on the other end of Saudi Aramco’s $18bn contracts are companies receiving that money to help it redevelop it assets and reduce the carbon intensity of its products. Every situation that presents a struggle to the industry also provides an opportunity to those in the right place, in the right time, with the right plan.
The oil price crash was nothing short of a crisis, but it birthed an era of innovation that has seen new techniques, strategies and technologies, digital and otherwise, come to the forefront of the industry. Similarly, any large industry change, like the shift to more sustainable practices, digital technology, natural gas, among others, present small businesses with opportunities to disrupt the way the industry runs, if only they reach out and grab it.