The oil and gas industry is generally of little interest to an outsider, other than for its impact on the environment and prices at the pump.
But the industry itself often wants the outsider — from an ordinary consumer to a potential investor or a government official — to understand the language it speaks, because it’s their behaviour that, in various ways, will determine the trajectory of the industry in its transition towards a lower-carbon future.
Norway’s state-controlled oil and gas company Statoil has been very creative in how it describes one of the most important issues in the industry. Its chief executive Eldar Saetre used an erotic romance novel reference last year, talking about 50 shades of sub-sea yellow. This time, Statoil top executives opted for computer terminology to make their point.
“As it is my last opportunity, the team were slightly concerned that I would do this off script. But sorry – I am going to stick to the script, because we are, of course, on record,” Shell’s outgoing chief financial officer (CFO) Simon Henry told journalists at the beginning of his presentation of the company’s financial results today.
Any outlook covering a period of several decades is surrounded by plenty of uncertainties that could significantly alter its projected trends. That is the key reason why those who compile these outlooks often avoid the word “forecast”, and talk instead about “scenarios” (the International Energy Agency’s World Energy Outlook) and “cases”.
After being a pair of Scrooges for the past two years, oil and gas majors BP and Total have rediscovered the joys of treating themselves to shiny expensive presents this holiday season. The gloss comes from access to new low-cost production now and in the future — gifts that keep on giving.
When oil prices started sliding in mid-2014, most oil and gas firms had little choice but to tighten their belts, postponing and cancelling projects, reducing headcount and focusing on efficiency. Two years on, this disciplined approach to spending has made them leaner and, as a result, more confident in their ability to weather the storm of oil prices staying lower for longer. Continue reading