INSEAD’s first oil and gas industry event calls for reform to account for new realities
As experts work out details for the next OPEC ministerial gathering on Nov. 30, INSEAD, the world’s leading business school, and Siemens, the global powerhouse in electronics and electrical engineering, brought together several industry figures to discuss the realities that oil faces in the region.
Titled ‘Managing Uncertainties in the Oil and Gas Markets’, the forum is the inaugural event by INSEAD and Siemens dedicated to the oil and gas industry. It was held on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), one of the world's most influential oil and gas events.
The meeting was opened with a keynote address by Dietmar Siersdorfer, Chief Executive Officer, Siemens Middle East and UAE, and chaired by Dr. Sami Mahroum, Director, Innovation & Policy Initiative, INSEAD.
Commenting on the event, Siersdorfer said: “The beginning of a new energy era calls for new forms of business and cooperation models across the entire industry. We also see digitalization as the next lever to create value, driving productivity and flexibility and enhancing interconnectivity. In this context, training and educating tomorrow’s workforce will be key in preparing for the digital age.”
Dr. Mahroum said, “The industry can no longer shape their long term strategy on a singular oil price forecast. Renewables and adoption of disruptive technologies are gaining a strong foothold, edging us closer to a decarbonized future. It is time energy companies look at adapting to this reality. The industry needs to nurture their talent resources accordingly to adapt and make a smooth transition. Through INSEAD’s dedicated programs, we trust that by equipping managers today, we can make this process more streamlined.”
The forum follows the recent announcement of the 2030 Strategy of the Abu Dhabi National Oil Company that has set a production target of 3.5m bpd in 2018 which is an increase of 400,000 bpd, and a stronger focus on technology for enhanced oil recovery and tapping into additional sour gas resources.
In his keynote ‘Global Oil Markets: Where Next?’ Christof Ruehl, Global Head of Research, Abu Dhabi Investment Authority (ADIA), anticipated that oversupply (including inventories) will last in the short term, with price ceiling restricting scope for intervention. He added that the capex cuts will support prices eventually.
Meanwhile, Stewart Williams, Vice President, Upstream Research, Middle East and North Africa, Wood Mackenzie in his keynote titled ‘Crude Oil Market Outlook: Volatility Ahead’, predicted a moderate oil price recovery in 2016-2017 as stocks shift from build to draws. He added that even though global demand is forecast to grow by a further 1.3 million bpd in 2016, the rate of oil demand growth will slow down after the year closes. At the same time, non-OPEC supply, especially from the United States, is expected to grow.
Sultan Al Hajji, Vice President & Chief Strategy Officer, Total E&P United Arab Emirates; Arafat Al Yafei, General Manager, Abu Dhabi Carbon Capture Company (Al Reyadah); Sameer Anees, Principal, Global Energy Practice, Arthur D. Little; Fred Chemin, General Manager, Dubai Petroleum and Christof Ruehl, ADIA also came together as part of a plenary session that was moderated by Stewart Williams.
