Rewriting the rules of oil and gas: what it takes to really embrace the ‘New Normal’
These are unique times to be in oil and gas.
The prolonged downturn caused by sluggish oil prices, labelled as the ‘New Normal’, is causing a structural disruption of the traditional parameters that defined the industry over the past few decades.
Still when you look at it closely, we can see how this trend is not something completely new.
Recently, I was fortunate to be part of the compelling program of International Petroleum Week. With the oil price steadily in the neighborhood of $50bbl for a few consecutive months, many of the conversations were infused with cautious optimism. The past few years demanded – at times brutal – changes, but there are signs that as an industry we have learned some good lessons:
- Efficiency as the driving force to make operations viable at a lower oil price. Some of the operators at IP Week discussed how they can keep operations viable at $40 or $50 per barrel by eliminating unnecessary work and by driving optimization;
- Efficiency goes hand-in-hand with Collaboration. Everyone from operators to OEMs and Engineering Consultancies to Government Agencies has called for players to come together and cooperate, in search of a unified vision for industry’s future. From an OEM’s perspective, GE has relentlessly advocated partnering with customers at the earliest stage of a project to define optimal solutions together, reduce and share risk, and help make the right decisions from the start;
- Smart Technology. We need to harness the sophistication of our industry to make our technology smarter and more efficient. We also need to be ready to build on the potential offered by the Digital Industrial Revolution. How are we fostering the right blend of skills and capabilities to form future leaders to take it to the next phase? This will require a new set of skills ranging from physics to data science, from maths to artificial intelligence.
These lessons are helping to reinvent the way we do business across oil and gas and creating robust foundations to build on for the future. To make significant steps forward, we must invest just as much time and effort focusing on Culture.
Our industry recruits and develops top-notch talents. Oil and gas experts have been instrumental in developing sophisticated, ultra-reliable technology in line with some of the most rigorous safety standards in the industrial world, making operations possible and productive in some the most challenging environments on earth. An unyielding commitment to safety and dedication to technology innovation are at the core of our shared culture.
To meet new challenges we need to strengthen and evolve our culture. There are new drivers to consider: learning to embrace failure and driving bold and disruptive innovation. It’s only by failing first – and fast – that we learn. A viable, meaningful solution is rarely – if ever – created at the first attempt, or by the tenth … it follows multiple trials. Getting comfortable with failure is a challenge, no question. But recognizing failure is a vital part of the journey towards new, innovative solutions.
At GE, we encourage this ‘failing fast’ mindset. In an industry generally labelled as conservative, that can be a tough sell. Still, the outcome is making all the difference. We are working more closely with our customers than ever before, testing and learning together, failing fast and reacting accordingly to co-create solutions.
By being disruptive innovators, we can truly design our ‘New Normal’. Henry Ford once said: “If I had asked people what they wanted, they would have said faster horses”. We need to aspire to a level of innovation that brings us to new heights, not just improvements of the existing one. What today seems unthinkable and unprecedented will be commonplace tomorrow.
Rewriting our rules does not happen overnight. Like everything else in business and in life, it requires planning, dedication and co-ordination. Change demands new leadership styles to make this industry the place to be for tomorrow’s engineers and innovators, for digital architects, and for software developers.