GE O&G '17: BP chief says digitization is future of O&G industry
By Adrienne Blume, Editor, Gas Processing and Executive Editor, Hydrocarbon Processing
FLORENCE, ITALY—Following the plenary keynotes of GE Oil & Gas' Annual Meeting 2017 on Monday, January 30, a "fireside chat" was hosted by GE Chairman and CEO Jeffrey R. Immelt and BP Group CEO Robert "Bob" Dudley (Fig. 1; Mr. Dudley pictured on top screen).
Mr. Immelt and Mr. Dudley discussed the concepts of the "crystal ball" and the "rearview mirror." The crystal ball is what industry economists forecast for the future, while the rearview mirror represents hindsight of past trends and challenges.
"The difference [right now] is, there is no crystal ball," Mr. Dudley said. The outlooks for the industry and pricing markets are still murky. For that reason, balancing costs while maintaining a profitable business is paramount. "What we are trying to do at BP is make 75% of our cost reductions be sustainable," Mr. Dudley said.
Digitization is key to industry innovation. Mr. Immelt asked Mr. Dudley if he foresaw any major disruptions to the industry, after the fashion of the US shale revolution, over the medium term. "Digitization of the industry," Mr. Dudley asserted. "We [as an industry] are still so behind in this area." Much progress remains to be made, the CEO said.
Digitization and sensors are playing large roles in BP operations, especially on upstream platforms, Mr. Dudley said. "This will change the way people work. They won't have to run back to the control rooms—they'll be able to work right from the platform."
Keeping an eye on global warming. On the subject of climate change, Mr. Dudley acknowledged, "It's a force. It's a transition that's going to have to happen." Along these lines, BP has established a billion-dollar fund to monitor methane emissions.
Mr. Dudley believes that natural gas will play a large role in the development of cleaner energy and in addressing climate change concerns; however, he also emphasized the need to monitor methane leaks and emissions.
"Carbon markets can work when they're designed well," Mr. Dudley added. "Policymakers and politicians can design carbon markets to work. If you stopped all power plants using coal today, and replaced them with natural gas, you could probably make the 2°C [ceiling on global warming] target—but that's clearly not going to happen."
Mr. Dudley believes the industry will likely overshoot the 2°C target, a prediction with which Mr. Immelt agreed.
Stay tuned for more coverage. More coverage of key speaker presentations and technology sessions from the GE Oil & Gas Annual Meeting is forthcoming. Watch this space for updates!
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