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How to implement more sustainable business models in oil and gas?

Many companies in the sector are recognising the need to reinvent operations, invest in more sustainable business models and focus on renewable sources of energy. (Image source: Rockwell Automation/Shutterstock)

Sebastien Grau, regional vice-president Middle East, Turkey and Africa, Rockwell Automation, has highlighted how oil and gas leaders can use digital transformation to support sustainability objectives, as well as the pivotal point in defining the oil and gas industry’s role in today’s – and tomorrow’s – economy

“Emerging from the current challenges, we expect demand for oil and gas products to remain strong. However, it won’t be a return to ‘business as usual’ – even the biggest companies in the sector are recognising the urgent need to reinvent operations, invest in more sustainable business models and focus on renewable sources of energy,” Grau commented.

Why this issue is a broad industry priority? Grau has outlined an evident example. In 2020, Oil and Gas Climate Initiative (OGCI), which includes BP, Chevron, ExxonMobil and Shell, set a target to reduce carbon emissions by 13% from member companies' aggregated upstream oil and gas operations by 2025. This milestone, according to Grau, will be central to the oil and gas leaders’ strategies for growth post global lockdown.

How to balance priorities?

Oil and gas leaders need to balance short-term dependencies with their longer-term aspirations. 

“In the short term they are compelled to meet fluctuating market demand for oil and gas products, especially with the potential surge post-lockdown. Alongside these immediate priorities, there’s a growing requirement to consider what the world will look like in 2030 and aligning strategies and future investments in that direction.”

Implementing sustainable models

Grau has outlined three core pillars oil and gas leaders can leverage in order to elevate the role of sustainability, both in their current operations and in shaping future business models. 

1. Invest in efficiency: The mutually beneficial relationship between efficiency and sustainability means that oil and gas leaders are incentivised to look across their current processes and operations to find areas and specific use cases where new efficiencies can be introduced. 

2. Improve measurement: Improving efficiency entails having greater visibility into operations. Having real-time insights into granular aspects of operations at every phase of the production process is critical to making the best decisions and maximising value quickly.

3. Building towards a net-zero business model: While ‘doing better’ with current assets clearly presents an opportunity for improved green performance, it must be matched with an ambition to reinvent operations to set in motion a more sustainable, less carbon-intensive future business model.

These eventually lead oil and gas leaders to progress towards digital maturity. And to realise the full value of digital tools, there must be an innovative and collaborative environment. 

How Rockwell Automation helps producers to assemble business models that are resilient to ongoing market turbulence and regulatory requirements? Read more

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