Sylvain Riba: The energy landscape is rapidly evolving in response to internal and external changes. Externally, access to capital and funding is constrained for all energy companies. Fossil fuel assets must meet very stringent ESG requirements to receive funding; Financial institutions, in many cases, simply refuse to fund new projects due to their own decarbonization objectives. In places like Europe and the US, there is increasing pressure on policymakers and companies to decarbonize the economy and implement changes in the type of assets they own. Sustainability, like safety, is now an imperative – prerequisite to conducting business.
In parallel, newly built facilities (renewables or green field projects) have become more expensive since 2021. The double effect of inflation increasing costs of construction and equipment (circa +25%) and making financing more expensive (as the Federal Reserve increased interest rates to limit inflation) limits the economic viability of many projects and results in delay or cancellation of their approval.
Beyond those short-term challenges, the energy transition is creating incredible opportunities for the industry. I see three approaches impacting the energy industry and we need all of them to succeed to limit externalities related to energy use.
- Technology improvements bring new types of solutions that are affordable, reliable and with limited externalities: solar, battery storage, wind (onshore and offshore). This modifies how power is being generated worldwide at a rapid pace. In Texas, for example, around 25% of the nameplate power capacity comes from renewable sources (solar and wind).
- Reducing carbon emissions of existing assets (via Carbon Capture and Sequestration). New solutions to store or transport energy are available (such as hydrogen) and efficiencies are being made. More sustainable methods are being implemented to manage the supply chain, accelerate circularity, and address how waste is being treated in order to reduce environmental impact.
- Policies are being implemented in many countries to jump-start research and development in emerging technologies to limit the externalities created by fossil fuels. Decarbonization is driven by decision-makers and the population they represent that want to reduce carbon emissions close to home. Policies are the enablers of new technology implementation. The Inflation Reduction Act in the US is a prime example of funding change.
Sylvain Riba: Considering these changes, oil and gas companies are by in large adapting and, in general, use three strategies to do so:
- First, they modify how they operate their legacy assets to minimize their carbon footprint. Gas flaring is being reduced, if not eliminated, which is significantly reducing carbon emissions. To ensure accurate ESG reporting (scope 1, 2 and 3 for example), monitoring and measuring processes are being carried out. The ability to monitor in real-time how a refinery is behaving is the first step toward performance improvement. It enables better control and reduces emissions via mitigation measures – improving efficiencies, KPIs and the ability to measure progress.
- Second, diversification of their revenue stream in the short term is being addressed via different strategies with one common goal: reducing the carbon footprint while maintaining shareholder value. Some companies extend the life expectancy of their existing assets via CCUS or add hydrogen to their revenue stream. Others invest in new markets, such as renewable energy technologies (solar, wind, storage). All have a dynamic portfolio where asset revenue is not the only criteria for investment – low carbon intensity is equally important. This is creating both challenges and opportunities for ageing assets that can’t always be upgraded to maintain production due to high costs for improvements. But some could be converted into Carbon sequestration solutions where a CO2 market (Europe, US) is available, and they become carbon sinks.
- Third, some companies set ambitious long-term goals: Net Zero by 2050 is a prime example. In such cases, the overall energy mix (oil, gas, power) of companies in 2050 will be vastly different from today. Some oil companies are now publishing a revenue forecast for 2050 with liquid production being a minority contributor to their profit.
In summary, most multi-energy companies and utilities are at a strategic inflexion point. In my opinion, diversification of the energy mix is probably a more accurate definition than transition. In all the scenarios portrayed by the EIA, in 2050, oil and gas represents 50% of the primary energy consumption in the world and renewables 26%. Based on these predictions, all sustainability efforts must succeed to limit energy’s externalities, especially in reducing the carbon footprint of fossil fuels, as mankind won’t be able to suppress their use entirely. We need to consider all of the above to ensure our population has access to affordable and clean energy.
Sylvain Riba: When considering a career change, it’s imperative to look for existing transferable skills. Some disciplines are more easily transferable than others: finance, legal, procurement, asset management or stakeholder engagement all require a similar foundational knowledge and skillset.
For others, it requires curiosity and a willingness to embrace change and get out of a traditional career path in the same speciality. I started my career in geoscience and after ten years, I wanted to expand my horizon; I studied and moved into finance, business development and now asset leadership. This is not the norm, I had to start from scratch and join a team where I was 5 to 10 years more experienced than my peers. It was puzzling at first, but I never regretted it.
The upstream oil and gas industry has one competitive advantage: managing large, complex projects. Year after year, the production rate of an oil and gas field goes down due to depletion (commonly 5 to 10%) and companies must constantly invest in upgrades (new wells, production facilities, midstream infrastructure) to maintain their revenue stream. A project engineer would have commonly worked on a different project every two to three years, building a strong track record in project management, team leadership and international adaptability.
Technical skills or specific disciplines are not the only qualities required to succeed in a career transition. Extensive experience in diversity, equity and inclusion is also very common in international careers. I lived in six countries, I’ve managed and led diverse teams across >20 nationalities, and it is often the norm. Adaptability, diversity of thought and respect for each other are required to succeed in this career path.
In addition, leadership skills, management of sophisticated processes, budget, negotiations, and commercial acumen, are all transferable skills, provided there is a fit between the core values of the individual and the company. The ability to lead and to influence are as important (if not more) as a strong technical excellence in one specific field.
Sylvain Riba: Every background is different but finding the common ground between two roles is key. For example, a geoscientist is used to computing complex multi-variable correlations and identifying patterns in Terabytes of seismic data. The fundamentals of Artificial Intelligence are similar, in the sense that they are algorithms that look at patterns, and trends in data to find the most probable outcome. A few of my good friends successfully transitioned from being geophysicists to working in AI and they used their previous experience as a foundation to learn something entirely different.
Be bold! A transition takes three things: willingness to learn, to get out of an existing comfort zone and resilience. Many programs are available to get a degree or be exposed to something different. When I decided to pursue an Executive MBA from Rice University mid-career, it required me to dedicate all my weekends and many evenings to reach this goal over two years. It was not comfortable, but the journey was rewarding and fulfilling. At the same time, I transitioned to offshore wind with the same mindset.
For those looking at recruiting talent, the path selected by the individual is key in identifying the right fit. A Subject Matter Expert who has selected a path in one specific field without signalling an interest in transitioning to something different may not be it. But many others in the oil and gas industry have had several career changes, and different types of jobs and they have what it takes to build, lead and drive success within renewable energy. In multi-energy companies, teams are mixed and have to tackle different projects across multiple energy sources. And that is the type of personality that is relevant in a talent search.
