Business Models in the time of Coronavirus

A general consensus is that the Oil & Gas industry is very much a traditional industry. One, where contracts are won and executed over extensive periods of time. One where even winning said contracts may take even more time than executing them. It seems quite paradoxically when we are in the business of ‘making energy’. Energy that puts the world in motion and drives innovation at every other level of our society. So why wouldn’t the Oil & Gas Industry embody exactly that. Innovation that drives innovation.

First of all, what do we mean by a traditional business model. It’s quite simple and a basic economic law – supply and demand. On the supply side we have countries with massive resources, such as Saudi Arabia, the US and the UAE. Each country has private or government-owned companies that either cover the drilling and processing aspect of the industry or the whole supply chain spectrum. The overall objective is to balance the production of oil & gas to avoid market saturation and maintain a profitable price per barrel of oil. It’s on this price that all other industries are basing their own financial structure, knowingly or not.

On the demand side we have customers. We know who they are: governments, businesses, us, everyone in the world. But the ‘us’ of now are different from the ‘us’ from 20 years ago. McKinsey Consulting nailed this in their ‘The Oil & Gas Organization of the Future Report’. Demographically, the bulk of the active labor force is shifting to the millennials. On the operational side with nearly 100% but some also moving up on the executive ladder. And the core drive of a millennial is data. If they require data in their work, they require it in their consumption as well. Internet of Things, Industry 4.0, 5G, all are example of technology driven by data, aggregated in a platform that enables digital control over physical products. And that platform will need extensive amounts of energy. So how rentable it is to just think of Oil & Gas as two boxes that exert opposite forces on a resource. A resource that is not as scarce as we believe. A resource that has several ‘greener’ alternatives, creating a market that is ever increasingly aggressive.

But let’s not get ahead of ourselves and look at the elephant in the room. COVID-19 managed to reveal both our digital dependency and our social individuality in the same time. The internet allows us to work from home, stay informed, connect with our friends, buy our products and so on. And with each action that we do we reveal a little bit more of our profile. But it does not substitute the human interaction. The best way to express our individuality is face-to-face. And why is that relevant? Because companies in the Oil & Gas industry will be facing clients more digitally adept, persuaded by the power of Big Data but won by Customized Service. After coronavirus, clients and companies alike will know what works on the computer and what just does not. And if it is the latter, the reason is as simple as not being service-centric.

The future business models in the Oil & Gas industry will not start at the resource, it will start at the end-user. It is a manner of reverse engineering and instead of focusing on the technical aspect, we are focusing on the human one. Data can create order from chaos on the technical aspect. But only people can truly create a customized experience. And that is the crux of our believes here at SAS Environmental Services.

ADIPEC 2019 - Impressions of a 'newbie'

ADIPEC 2019 is here… larger, more inspiring and more dynamic than ever. With key speakers such as Condoleezza Rice, Udacity co-founder Sebastian Thran and Assistant Secretary of State for Energy Resources, Frank Fannon, among others, the show’s theme aimed at integrating innovation and diversity in a more conservative industry.

If you’ve participated, you would have noticed a little book in your welcome pack titled ‘Connecting the Global Energy Community’. That’s exactly how it felt. The Oil & Gas industry is a very tight knitted society where relationship management is your strongest skill. This may come as a surprise to an outsider as the perception is that oil & gas is a more product-centric trade. In fact, the key ingredient for a successful career in this area is the degree of trust and commitment you can insert in your work ethic. ‘Actions speak better than words’ is a fully embraced mantra. But these do not come easily and it’s no wonder that in the time these skills are nurtured people became more than partners, they became a community.

The same applies for SAS Environmental Services. With an experience of 20 years in the industry SAS has always had one goal in mind. Find a solution to a very challenging problem – drilling waste and everything associated with it. Different actors within the industry struggled with this obstacle, needing to keep certain KPIs in mind. While those are important for us and our partners, what we really want to achieve is a way to help the industry minimize its impact on the environment and prosper in the same time. A testament to our success is the miles we walked at ADIPEC meeting with our partners. Exciting times are waiting us and we’re looking forward to sharing them with you.

Can Technology Improve Health and Safety in the Oil and Gas Industry?

Health and safety is an aspect of the oil and gas industry that includes all players, such as the government, companies, associations, workers, and so on. In the UK this aspect of the industry is of paramount importance, and it is believed that the new digital transformation which is sweeping through the industry can help the sector improve health and safety even further. 

Offshore workers are constantly exposed to many health and safety risks; therefore, it must be a priority to prevent major accidents that could result in serious injuries or indeed fatalities. It seems this has been successful over recent years, with the sector's three-year rolling average, non-fatal injury rate reducing and remaining lower than other sectors such as transport, construction, and manufacturing.

““The industry’s work to improve safety performance is delivering.””

— (Mick Borwell, Health, Safety and Environment Policy Director with Oil & Gas UK)

Technology now plays an important role in improving health and safety in the oil and gas industry. Industry players and employees around the world believe through smart sensors, wearables, and the Industrial Internet of Things (IIOT), the oil and gas sector could improve the safety of its workers even further. Technology has already shown how useful it can be to the sector by boosting workers safety in remote locations, alerting them to potential exposure to toxic gases, monitoring their vitals in harsh environments offshore, and feeding them real-time data during critical decisions.

In many other industries the digital transformation causes some concern however it seems that is not the case in the oil and gas sector. Overall the reception to digitalisation is very warm, with 77% of workers seeing digitalisation as a positive development for the oil and gas industry. 

““Oil and gas companies are leaning on technology to make existing roles - and the people in them - more effective.”

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— (Global Energy Talent Index, 2018 Survey)