Q&A: DNV GL Oil & Gas CEO on the energy transition outlook

Q&A: DNV GL Oil & Gas CEO on the energy transition outlook
Published: 22 January 2020 - 11 a.m.
By: Carla Sertin
Briefly tell me about DNV GL’s energy transition outlook.

For the last three years DNV GL has produced an Energy Transition Outlook. Our Outlook comprises a main report, where we detail our forecast for the global energy system through to 2050. We also produce supplementary reports looking at the implications of our energy forecast on three of the core industries we serve: Oil & Gas, Maritime and Power & Renewables.

Building a model of the world’s energy system encompassing demand and supply of energy globally, and the use and exchange of energy between and within 10 world regions … is a complex task. To do this work, we have created an Energy Transition research unit. Our researchers collaborate with over 100 experts in our operating units. Those are colleagues tasked with verifying, assessing and advising our customers who are building and installing the oil, gas, power, renewables assets. In other words, the infrastructure that will deliver world’s energy system in the coming decades.

Our research team also interacts with dozens of leading experts in businesses and academia worldwide. The Energy Transition Outlook is a single forecast – not a new scenario. It is our best estimate of what lies ahead.

What are the biggest opportunities for oil and gas companies looking to leverage digital technology?

The industry faces an unprecedented combination of market forces, regulation, societal pressure over climate change, and challenges to integrate with other sectors like power and renewables. Oil and Gas companies need digital technology to provide the long-term efficiency and productivity gains needed to stay competitive. DNV GL’s Technology Outlook 2030 highlights the impact on the industry as the acceleration of digitalization takes place with the emergence of a digital oil and gas value chain run by machines and software algorithms. We also see operators in Middle East taking increasing advantage of operational cost savings by implementing predictive analytics to improve their operations and maintenance regimes.

How do digitalization and automation fit into the energy transition?

I see the oil and gas industry exploiting new technologies and data-driven opportunities across the value chain to develop new, more efficient and more sustainable products and services,
and novel business models.

Enabling technologies in the digital transformation include

• Cloud computing and platforms including DNV GL’s platform VERACITY
• Data acquisition and security
• Artificial intelligence and automation
• Digital twins

Below are some of the ways in which digital solutions can help the oil and gas industry maintain sharp focus on business optimization for safer, more reliable and more efficient operations, to remain competitive in the energy transition:

- By enabling de-manning, therefore reducing the need to transport people and supplies and
reducing the associated carbon footprint.
- By enabling new manufacturing solutions, such as additive manufacturing, that can reduce the GHGs associated with delivering parts and structures.

What sustainability gains, if any, have we seen in the region due to uptake of digital technology? What gains can we expect?

Middle East energy companies are investing heavily in renewables and energy efficiency. Digital technologies support development of smart power grids for improved electricity transmission, reduced peak demand, and renewables integration. EXPO 2020 in Dubai will likely increase focus on implementing renewable energy pilot projects and showcasing sustainable technologies in the UAE and the broader region.

Innovations in hydrogen such as production through direct electrolysis of seawater, are attracting interest.
By mid-century, power generation in the region is expected to come primarily from variable renewables like wind and solar complemented by gas. While oil and gas production will continue to play a significant role for decades to come, the shift to renewables will change the location of where energy is going to be produced, which in turn impacts on MENA’s economies and politics.

To transform operations now and in the future, the global oil and gas industry will need to invest in digitally-enabled solutions, such as digital ecosystems, platforms and data strategies alongside 3D printing technologies, sensors, drones, and robotics, to support faster, leaner and more sustainable E&P.

An interesting example of our work in the region was providing Petroleum Development Oman and Occidental Oman with online monitoring of gas turbine emissions. Using a cost-effective solution that meets international standards, the customers can continuously monitor and report air emissions from 44 gas turbine emissions sources to comply with Omani government regulations.

Our digital solution is a predictive emissions-monitoring system, built for the specific gas turbine type and combustion system, and offers a completely new generation of advanced predictive analytics and reporting. Being able to monitor and report on emissions accurately is the first step in reducing emissions in the future.

What are the next steps for regional oil and gas companies looking to lower their carbon footprint?

The long-term, sustainable future of the oil and gas industry is dependent on its license to operate today. A sharp focus on safety and environmental performance is more crucial than ever. Public scrutiny over the oil and gas industry is increasing, as climate change continues to rise up society’s agenda.

It is imperative that the oil and gas industry maintains the highest standards of safety today to win the public support that it needs to decarbonize for tomorrow. The oil and gas industry must also continue to reduce its carbon footprint by curtailing methane emissions from its value chain. IPIECA, the global oil and gas industry association for advancing environmental and social performance, notes that the sector accounts 54% of total methane emissions. Tools for curtailing methane emissions include reducing flaring for exploration and production for example, which still holds considerable improvement potential for some operators in the Middle East region.

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