UK energy industry leaders must take action now in order to capitalise on long-term opportunities, new report says.
The paper published by FWB Park Brown identified a list of ‘mega trends’ that are most likely to influence the future of the oil, gas and wider energy industry over the next generation.
Findings were based on discussions held at the company’s annual ‘Leadership Dinner’ in Aberdeen, Scotland attended by around 140 senior personnel from the sector.
Joined by keynote speaker Ian Marchant, chairman of Wood Group, attendees listed the increasing influence from Asia, changes in energy demand, resource scarcity, unburnable carbon, digital technology and changing business models as crucial areas for consideration for decision makers.
With the G7 nations aiming to significantly reduce reliance on fossil fuels by 2050 and The International Monetary Fund recently announcing an end to fossil fuel subsidies, there was a consensus that businesses need to be prepared to adapt to a new operating environment.
Attendees agreed that the impact of this was likely to be first felt in exploration followed by high cost production centres, such as the North Sea.
The tone of the conversations was positive however, with many long-term opportunities in the UKCS discussed throughout the evening.
One attendee said: “There may be growth in areas such as carbon capture and storage as a result of changes elsewhere. We have clear notice that energy businesses as we know them today will likely have to adapt and change, whether it be in 40 or 80 years. However, staying ahead of the game will require positive action from those of us in the industry.”
Attendees backed the impact of new technology on the region. However, one attendee highlighted that a clear balance would have to be struck: “Leaders must ask themselves if data is the same thing as wisdom? Where are the boundaries between the two? We need to be conscious that we don’t become too reliant on one at the expense of the other.”
When the debate turned to resource scarcity, fossil fuels and clean water gave way to a discussion around nurturing the next generation of talent coming into the industry, something that has been discussed at length within the North Sea industry in recent years:
“This is a resource that has to be cultivated and managed as much as any other by us. An increased global connection of human intelligence thanks to better communications has real potential to be a force for greater good within the industry,” said one audience member.
Following the event Stuart Cochrane, director, FWB Park Brown, said: “We wanted to provide a timely opportunity for decision makers to seriously consider what the next generation of the industry should look like, and what they need to do now to make that a reality.
Despite the low oil price and high cost base, there are still clear opportunities within the UK energy sector.
“The feeling on the night was that the industry here now has to regroup and leaders have to be at the forefront in embracing new thinking and adapting to the operating environments of the future.”
