Dublin-based consulting firm Accenture helps energy companies streamline operations, but it also takes its cues from energy leaders.
The firm holds annual meetings with top executives from many of the largest oil and gas producers and energy providers in the world. Former BP CEO John Browne led the Accenture meeting recently in Houston, as 12 leading executives discussed the most important issues, challenges and opportunities they see worldwide.
Jean-Marc Ollagnier, CEO of Accenture’s resources group, hosted the gathering and spoke with FuelFix about the takeaways from decision-makers at some of the world’s largest companies. These are edited excerpts from the interview:
FuelFix: What was on the minds of the executives that you met?
A: What was maybe more fascinating this time than ever was something that I’m not sure the press and even the U.S. talk a lot about: The U.S. is today, when you combine gas and oil, the first producer in the world. Already the first producer of gas, but when you combine it – oil and gas – it’s No. 1, above Russia, above the Middle East. It may be even the first producer of oil one day. This is incredible news.
FuelFix: What’s the significance of that?
Ollagnier: There is a lot you can say but look at, for example, the natural gas price. This is what is happening right now: It’s $4 here, $18 in Japan, $12 to $15 in Europe. This is the first time ever we have so much of a difference in the gas market. I can tell you this is changing a lot of things. Today in Europe gas prices are too expensive for utilities and guess what? They go to coal – coal from the U.S. This is changing potentially even the geopolitics. More and more ships from the Middle East are going to China. Fewer and fewer will go to the U.S. Australia invested a lot to go to China with their gas. If one day the U.S. exports gas, what happens to the expensive gas from Australia?
FuelFix: How has natural gas from shale changed the approach of oil and gas companies?
Ollagnier: It is a very important change. In the Gulf of Mexico, you have one big hole, one big drilling operation, you put $20 billion somewhere and you are expecting the return for the next 20 years, which was the business model. With shale gas you have a very different model. You have multiple little drilling operations, they last one, two, three years. You have very complex land management, because you have to deal with the different farmers. You have complex onshore logistics. Instead of building one big thing, you need to have an industrialized process to be effective in the way that you deal with your onshore logistics and drilling operation. So it’s how you industrialize the things that will make the difference.
FuelFix: How were the executives thinking of improving their oil and gas production in the future?
Ollagnier: One word that came a lot was digital. There are going to be more and more opportunities to leverage digital in the industry because there is a lot of data. If you use data more effectively, you’re going to earn $1 or $2 more per barrel. And there is a lot of interest around that because even though the energy industry is in reasonably good shape, they are under pressure to get more and more returns. Because they have to invest more and more to get oil, production is more and more expensive, and they need to get some savings. Everybody was considering a digital enterprise as a way for them to increase their return on the higher and higher investment that they have to deal with.
FuelFix: Was there anything else that you heard from the executives that was surprising?
Ollagnier: Climate change was another thing I found interesting. The tone was slightly different. There has always been a different perception in the U.S. than in Europe about the importance of climate change. They have been in denial mode a little bit in the U.S. For the first time I have seen people from Houston saying, look, the scientific guys have done their job. It is a reality. So now what do we do about it? So it was a different tone from what I’ve heard before.