Total is finding ways of being resilient in the current turmoil, its CEO Patrick Pouyanné told delegates at the IP Week conference held In London on 11 February, aptly themed ‘Navigating through uncertainty’
In a keynote address, Pouyanné commented that the industry is facing “quite a crisis” due to the low oil price, but predicted that if cutbacks continue to major projects this will likely lead to a sharp rebound in the oil price in a few years' time, and a potential shortfall in supply of 5-10mn bpd by 2020.
Pouyanné pointed out that volatility is the name of the game in the commodities business. “Volatility will be there today, there tomorrow,” he said. What differentiates the current cycle from previous ones are the extreme fluctuations in price, he added.
“Be excellent in what you can control,” he said. “Focus on safety as a core value, pursue operational excellence, get the most out of your assets, deliver on your commitments, exercise discipline on your capex and opex, make the most of technology - these are in your hands. Train your people, select your people, motivate your people…this is of the essence, manage and motivate your people with the right objectives.”
Total has shifted its R&D focus away from “ultimate resources” to lowering costs, he said. “We have the opportunity to exit this crisis stronger if we focus on the right priorities and stay the course,” he concluded.
Pouyanné’s comments were foreshadowed by the remarks of Martin Tiffin, Total’s deputy senior VP, Development and Support to Operations, at an earlier session on establishing strategies for long-term growth. He highlighted smart engineering, industry standardisation and collaboration with service companies as areas of focus.
“The contractor and supplier market is changing,” he said. “If we can design better, purchase better, operate better, the incremental benefits will get us where we need to be.” Tiffin described how the company has changed its operating model by, for example, developing smart rooms onshore to cut down on offshore expenditure.
Also speaking at this session was Chip Miller, Halliburton’s VP Scandinavia Region, who stressed the need to improve the current foundation for future growth. “Cash is king,” he said. “We need to find ways to pursue it – to keep the immediate foundation safe so the future is possible.” He described how Halliburton has switched its focus to mature assets to deliver incremental production at reduced cost. “With new techniques and technologies it is possible to deliver increases from mature fields, with a lower capital requirement, lower risk and reduced cost per BOE.”
While TK Kurien, executive vie chairman, Wipro, discussed the employment of disruptive technologies, highlighting strategies such as the use of data-driven insights, the development of agile, asset-light business models and the employment of supplier efficiencies along the lines of those used in the manufacturing or automotive sectors.
