The impact of the COVID-19 pandemic has been felt across the energy world with a supply and demand imbalance and considerable supply chain restrictions However, there is renewed optimism as the global economy and oil markets are now showing signs of recovering due to the strategic and essential nature of the sector for the economy of most countries. According to the International Energy Agency (IEA), the inventory surplus built up last year is being worked off and global oil stocks are expected will return to pre-pandemic levels in 2021.

Despite the uncertainties for the long-term outlook for the oil and gas sector, there is a collective acceptance that governments and energy companies must take this opportunity to prepare for the prospects of the new world that lies ahead once the pandemic has passed and adopt strategies to pivot to the new energy future.

Within the oil and gas value chain, the petrochemicals segment is anticipated to bounce back faster than other oil and gas sectors, with the potential to continue to be a bright spot in the portfolio of leading energy companies. With the IEA predicting that by 2026, global oil consumption will reach 104.1 mb/d, it highlights that ethane, LPG and naphtha together account for 70% of the projected increase in oil product demand by 2026.

According to McKinsey & Co., petrochemical management teams should update their strategic agendas to reflect lessons learned from the first half of 2020, including using scenarios to manage the recovery, preparing for increasingly regionalised supply chains, scaling digital and analytics in commercial and operations, and continuing the transition to a circular economy.

As the diversification in supply chains will be key in the post-COVID-19 scenario across the globe, companies are also expected to increasingly restructure their supply-production strategies in order to survive the new normal. In the short term, companies will pursue supply chain adjustments, along with leveraging remote working wherever feasible. In contrast, in the medium to long term, energy firms are expected to progressively adapt to the evolving new normal while safeguarding their financial sustainability.

Most analysts predict the energy transition will be accelerated by several years as a result of the experience of the COVID-19 pandemic, with trillions of dollars expected to flow through economic relief packages into the deployment of low- and zero-carbon infrastructure, as well as research and development into technologies that enable it.

According to S&P Global Platts Future Energy Outlooks, the pandemic’s effects will cumulatively lower energy sector CO2 combustion emissions by 27.5 gigatons over 2020-2050 -equivalent to almost one full year of emissions. Hydrogen, carbon, capture utilisation and storage, and biofuels will all likely play roles in transforming and decarbonising the interconnected global energy system.

In the Middle East, while there remains uncertainty for the upcoming year, 2021 offers some reason for hope and optimism for the oil and gas industry. PWC highlights new projects, such as the expected restart of construction on Qatar’s LNG megatrain, the ramp-up of natural gas production in Oman’s Khazzan Field, and the commercial launch of Oman’s much anticipated Liwa Plastics Industrial Complex, as breathing new life into the construction and midstream/downstream oil and gas activities in the region.

And although Middle Eastern countries will continue to be the world’s primary producers of oil and natural gas for the foreseeable future, with Abu Dhabi announcing a plan for state producer ADNOC to spend Dirhams 448 billion ($122 billion) over the next five years, for example, 2021 should see an acceleration in sustainability and decarbonisation efforts in the region.

According to the World Energy Council, the Middle East region is working hard to ensure that oil and gas remain relevant during this period of energy transition and a drive to decarbonise the global economy. National oil companies and their international partners among the oil majors are developing new technologies to reduce the carbon footprint of oil and gas production. As we emerge from the crisis, the countries of the region are aware of the need to improve their credentials concerning environmental sustainability and also of the vast potential for developing a hydrogen economy, which, if combined with carbon capture and storage, will provide solutions that can be applied to a number of sectors.

 

Muscat-based MB Group, one of the Middle East’s largest multinational groups in the energy and natural resources industry sector, has entered into a digital transformation partnership with global technology company SAP.

As global energy demand continues to increase, energy firms are racing to digitise their operations to support new levels of productivity and efficiency. The Middle East and Africa’s digital oilfield market is set to reach a record-high of $2 billion by 2022, according to a recent report by TechSci Research.

One of the biggest players is MB Group, with more than 4,000 employees in more than 20 countries across the Middle East, Africa, South Asia, and Australia. MB Group covers the fields of oil and gas, marine and engineering, mining and exploration, manufacturing and trading, and investments.

Supporting innovation in oil and gas, MB Group is digitally transforming its operations on a wide range of SAP’s cloud-based solutions across financials, employee experiences, and procurement.

“To meet the challenges of the complex and competitive oil and gas, manufacturing, and mining industries, MB Group companies needed full visibility on our operations worldwide,” said Badran Al Hinai, Group Human Resources General Manager, MB Holding. “Thanks to our digital transformation with SAP, we are on a journey to have real-time decision-making, better performance, and greater view of analytical dashboards.”

In particular, MB Group will run on the SAP S/4HANA real-time business suite, the SAP SuccessFactors human experience management suite, the SAP Ariba digital procurement platform, the SAP Digital Boardroom, SAP Analytics Cloud, and enhancing employees’ digital skills on the SAP Learning Hub.

“MB Group is showing how Oman’s multinational firms can drive digital transformation to optimise operations, logistics, and employee experiences,” said Waheed Al Hamaid, Managing Director, SAP Oman. “As an Intelligent Enterprise in the oil and gas sector, MB Group can deliver innovation that can meet the energy demands of tomorrow and deliver new value.”

Source: http://www.tradearabia.com/news/OGN_381670.html

 

Nasser indicated that Aramco has benefited from the acceleration of technology in discovery, recovery and maximizing the benefit from cost, efficiency and reliability as well as in carbon emissions

Saudi Aramco is using new and developing technologies to accelerate its energy transition plans and to decrease carbon emissions.

“Our reliability for 2020 is 99.8 percent, one of the highest in the world in terms of delivery,” Aramco CEO Amin Nasser said at the Future Investment Initiative (FII) forum. He noted that using data analytics and simulation models in managing reservoirs helped Aramco hit 70% recovery rate.

During the conversation, minister of communications and information technology, Eng. Abdullah Al-Swaha, pointed out that there are many fluctuations, ambiguity and complexity in the future, and that the future will be for those who have resilience, flexibility and resistance. He affirmed the importance of investment and innovation in the field of digitization, indicating that the digitization in 2020 showed that it is not the largest multiplying economy for the continuous social and economic balance, especially on environment preservation.

Nasser indicated that Aramco has benefited from the acceleration of technology in discovery, recovery and maximizing the benefit from cost, efficiency and reliability as well as in carbon emissions.

“We have an advanced level of digitization and we move our various tools using satellites from our center in Dhahran,” Nasser said. “We care about our equipment and our reliability, and our reliability is at the highest levels for 2020 which represent 99%.”

Source: https://www.oilandgasmiddleeast.com/drilling-production/37657-saudi-aramco-leverages-technology-to-boost-sustainability-ceo

China’s Sinopec Corp, Asia’s largest oil refiner aims to be carbon neutral by 2050, with its near-term strategy focused on natural gas development and a long-term pivot to hydrogen, top executives said on Monday.

As China’s largest hydrogen producer, Sinopec will focus on fossil fuel-based hydrogen production over the next five years and also start introducing “green” hydrogen using solar and wind power, Chairman Zhang Yuzhuo said in an earnings call.

Sinopec plans to build 100 hydrogen filling stations this year, part of the firm’s goal to set up 1,000 stations by 2025, including standalone hydrogen kiosks and those combined with traditional fuels.

“Hydrogen will be a core in Sinopec’s energy transition … We want to become China’s number-one hydrogen firm,” said Zhang.

Sinopec will first focus on its existing fossil fuel-based production of hydrogen, which carries the lowest cost since it is a by-product of its refining and petrochemical processing, said Zhang.

It is also planning to cap its carbon emissions at peak levels prior to a national timeline set by the government for 2030, both through its work to increase hydrogen output and the treatment and capture of carbon dioxide.

Another key area for spending will be natural gas, of which Sinopec is China’s second-largest producer. Demand for the fuel is set for strong growth over the next decade under Beijing’s campaign to burn less coal.

Following a “significant” increase in replacement of gas reserves last year, Sinopec expects to grow its natural gas production by an average of more than 10% a year over the next three years, said company president Ma Yongsheng.

Sinopec expects its gas output to reach 34 billion cubic meters (bcm) this year, and 38 bcm and 42 bcm for 2022 and 2023 respectively, said Ma, against 30.2 bcm last year.

Source: https://www.reuters.com/article/us-sinopec-carbon/sinopec-aims-for-carbon-neutrality-by-2050-with-pivot-to-hydrogen-idUSKBN2BL079