BP boss warns: “While we’re in a race to reduce emissions – we also still need (lots of) oil”

Bob Dudley
Bob Dudley

The boss of one of the world’s Big Oil giants has told his industry peers and politicians alike that the developed world will still need oil aplenty in future – even if ‘we are in a race to reduce missions’.

Speaking at an oil and gas trade show, recently Bob Dudley, BP chief executive warned:

“We are in a phase of rapid change – like the automobile industry after the Model T or computing after Windows.

“And as daunting as this may seem for our industry, you can summarise it in six words: more energy, lower costs, fewer emissions. 

“So, given these challenges, what are the new priorities for our industry? I think they match up fairly simply.

“Providing more energy means growing our production. Achieving lower costs means maintaining capital discipline and maximising operational efficiency. And generating fewer emissions means operating and investing in ways that support the transition to a lower carbon economy.

“Let me now look at how those priorities show up in the choices we make, right down the supply chain, from the production contract through to the customer product.

How things have changed

“Now, after the shale revolution, we have moved from scarcity to abundance. We now estimate that resources recoverable today could meet the world’s demand to 2050 – at least twice over.

“It’s not that there’s more oil and gas – we’re just getting better at producing it. We actually increased production from our existing base operations in BP last year – up by 0.6%. That’s remarkable in an industry that assumes the base declines.

“Then the spotlight shines on operational efficiency. This is where digital technology has come of age at just the right time. Digital sensors to monitor; digital tools to control; digital simulations to optimise; and digital databases to organise.

“Our data-lake now receives a billion new records each day. That’s around twice the traffic on Twitter – and much more interesting in my view.

“Recently we applied a mathematical model developed with a Californian start-up to optimise production at 180 onshore wells in the US. It led to a 75% cut in venting emissions, a 20% increase in production and a 20% fall in costs. Silicon Valley meets shale

“It’s also about efficiency. We have developed technology using acoustic sensing which has helped us detect sand in our wells. When the tool was tested, the amount of sand entering the well dropped by 90% and we added around 2,500 barrels of production per day from one well.

“I didn’t expect that kind of thing when I joined this industry in 1979. And neither did I then grasp what the transition to a lower-carbon world would mean. Today, we need to reflect this transition by moving to a lower-carbon mix ourselves. And remember it is a transition, not an overnight switchover.

“Oil will be used with increasing efficiency, and gas has a bright future. In fact, we think gas could grow three times as fast as oil, as it is used in heating, as fuel for ships and trucks, and in the power sector as the perfect partner for wind and solar power.

“So this is not simply a race to renewables. It’s a race to reduce emissions

“This is why I am encouraged to see the industry making a diverse range of low-carbon investments. It prepares us for a diverse future.

“That said, one common theme is natural gas: because gas clearly has a big role in the transition and can be produced with great efficiency. That is why six of our seven big start-ups last year were in gas. It’s why half of this year’s will be.

“And it is why other businesses also have major gas investments – Shell, ADNOC, Total, Statoil, ENI, to name a few.

“So times have changed. It is a very different industry to the one many of us joined. But it is an industry that adapts.

“The Irish playwright George Bernard Shaw once said: ‘Those who cannot change their minds, cannot change anything.’ “I think that’s true – but let me turn it into a positive:

“’Those who can change their minds, can change everything.’”

28 Feb 2018

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