In this exclusive roundtable, executives from Enverus, KPMG and Rystad Energy discuss key trends, opportunities and challenges that are expected to shape ESG in the oil and gas sector in 2022.
From increasing disclosures to stronger investor sentiment, the past year saw an expected upward growth of ESG initiatives taken by the oil and gas sector. While many are calling 2021 the year of ESG investing, there’s little debate left about ESG now being core to the energy business.
Jason Reimbold, managing director of energy investment banking at BOK Financial, gives his take on the state of energy finance and dealmaking plus a preview of oil and gas activity from the Midcontinent region.
Despite entering another pandemic year, the state of energy finance is definitely brighter than it has been—even pre-COVID, according to Jason Reimbold, managing director of energy investment banking at BOK Financial.
“In fact, the volatility is really what speaks to the opportunity,” Reimbold told Hart Energy Editorial Director Len Vermillion.
In this exclusive interview, Rystad Energy Head of Shale Research Artem Abramov sheds light on flaring trends and what’s driving declines in the Permian Basin and Bakken.
Gas flaring hit a record low in the U.S. last fall—a trend that Artem Abramov, head of shale research for Rystad Energy, expects will continue.
“Based on what we hear from some E&P companies when we talk to them, I have a high degree of confidence that gas flaring will continue to decline in the next two to three years,” Abramov told Hart Energy in an exclusive interview.
Cleantech is expected to remain a dominant investment theme among oil majors as sustainability and ESG become more prominent features of company strategies.
Roughly a decade ago, oil and gas majors began launching corporate venture funds dedicated to nudging innovation in clean energy.
While the original goal was to outsource R&D efforts, achieve operational efficiencies and improve profitability, these venture funds have helped oil majors navigate the challenges of a broader energy transition and achieve ESG goals, Samuel Dibble, partner at Baker Botts, told Hart Energy.
Digital experts offer deep insights on how remote operations, IoT and digital twins are evolving in today’s fast-changing environment.
As the oil and gas industry adapts to its new reality, new technologies are playing a key role in helping companies make better data-driven decisions. In an exclusive roundtable discussion, senior executives of digital agreed that advancements in AI, augmented reality and data management are all driving the transformation of the industry as it transitions to a low-carbon future.
Shan Jegatheeswaran, Vice President of Digital, Oilfield Services, Baker Hughes
Sujit Kumar, President, Agora, a Schlumberger venture
Stuart Thomson, CTO, Ikon Science
Gino Hernandez, Head of Global Digital Business, ABB
Future of remote operations (0:56)
Digital twins and asset optimization (6:28)
Digitalization and decarbonization (9:59)
Why is data management so important right now? (14:40)
Future trends (21:37)
In an exclusive roundtable discussion, executives offer expert insights on the road map to net-zero emissions and the immediate actions required from governments and businesses.
How realistic is the net-zero goal? (0:44)
Progress toward the goal (4:54)
IEA’s report findings (10:30)
Challenges on the path to a net-zero future (13:00)
New technologies for decarbonization (17:21)
In this roundtable, offshore experts provide insights on how new technologies are opening the door to a new era of productivity and efficiency in offshore exploration.
Considering the reality of continued oil and gas demand for decades to come, the offshore exploration sector will play a key role in providing the abundant, affordable and reliable energy that the global economy needs.
In an exclusive roundtable discussion, senior executives of offshore discussed how the offshore exploration sector is well-positioned for the energy transition as it continues to be a source of innovation and new technologies that will help drive the industry’s decarbonization efforts.
In this exclusive video interview, Diamondback Energy CFO Kaes Van’t Hof talks about the growing sustainable operations of oil and gas companies in the Permian Basin.
As ESG-focused activism continues to gain momentum, there is increasing pressure on oil and gas companies from investors to focus on ESG goals. But even though social and governance are an important part of the ESG movement, investors are more concerned about the environmental performance of oil and gas companies, according to Kaes Van’t Hof, CFO and executive vice president of business development of Diamondback Energy.
“When we talk about ESG, I think the ‘S’ and ‘G’ are important, but for oil and gas, it’s really about your environmental performance that drives a lot of the investor demand,” Van’t Hof said in an exclusive interview with Hart Energy’s Faiza Rizvi.
There are a few trends emerging among operators when it comes to managing methane. Darcy Partner’s Jack Blears discussed everything from the low-hanging fruit to the sophisticated technology enabling the industry to lower its emissions.
Jump to a topic:
Finding and eliminating super-emitters (0:35)
Limits and cost boundaries (1:00)
Continuous monitoring technology (1:35)
How investors evaluate ratings and reports (2:10)
Holistic ESG ratings (2:35)
James Curry, managing shareholder in Babst Calland's Washington, D.C. office, says the topics of hydrogen and carbon capture in the energy sector are qualitatively different this time around.
Every 10 years or so, people get excited about the potential for hydrogen and carbon capture utilization and sequestration. Most of the time, the conversations sizzle out and the industry gets back to what it is comfortable doing. This time, however, James Curry, energy attorney and managing shareholder of Babst Calland's Washington, D.C. office, says the conversations seem much different.
He recently sat down with Hart Energy's Len Vermillion in the firm's Pittsburgh headquarters for a frank discussion on the energy transition, including the role of pipelines, hydrogen and CCS in the future energy mix.
The energy industry is at an inflection point and a moment of resiliency as it experiences a rebound in pricing and recovers from the impact of the global pandemic.
In this IndustryVoice video, Babst Calland attorneys Joe Reinhart, Co-Chair of the firm’s Energy and Natural Resources team; and Jim Curry, Managing Shareholder of its office in Washington, D.C., discuss a range of topics examined in the report with Hart Energy Senior Editor Joe Markman.
Ajay Bakshani, co-author of East Daley’s annual Dirty Little Secrets midstream outlook, discusses the expectations for $90 billion in free cash flow and why ‘midstream can really do it all in the next few years.’
Ajay Bakshani, capital markets analyst for East Daley and a co-author of the report, said the sector was primed to generate about $90 billion in cash over the next four years, based on research on the 25 companies the firm actively follows. The question for the East Daley team became: with fewer projects, how will that money be used?
With 2021 soon coming to a close and commodity prices having stabilized, the theme of the oil and gas industry can be described as cautious optimism.
Shareholder focus, new investment options as well as the experience with the last downturn has given U.S. shale producers a different perspective this time around, according to Amy Chronis, vice chair, U.S. oil, gas and chemicals leader, Deloitte.
“They are now pivoting toward a new math, maximizing free cash flows from hydrocarbons, investing in the decarbonization of hydrocarbons, new energies and certainly very aware of all the stakeholder pressure,” Chronis said.
Joined by Kate Hardin, executive director for the Deloitte Research Center for Energy & Industrials, Chronis recently spoke with Hart Energy’s Brian Walzel about Deloitte’s 2022 outlook for the oil and gas industry including the five key trends that the firm believes will likely influence the industry over the next 12 months.
The new world order of the oil and gas industry surrounds a low-carbon and/or new energy focused business model. And, as capital allocation for these projects grew significantly in 2021, this implies favorable economics for low-carbon producers in 2022.
Nicholas Fulford, the senior director of energy transition for petroleum consulting firm GaffneyCline, said net-zero commitments from all supermajors and most NOCs paired the introduction of new tax credit incentives indicates a new horizon for oil and gas portfolios going into 2022.
“We’ve seen carbon capture and CCUS projects come to age and there is a real following now within the investment community and a real belief in that technology going forward,” Fulford said.
Even though oil and gas companies are increasingly focusing on reducing the environmental impact of their operations with aggressive efforts centered on the narrative of energy transition, they aren’t going to move away from fossil fuels, at least over the next few decades, according to Dr. Jerry Bailey, director of Petroteq Energy and former president of Exxon Arabian Gulf.
“Oil companies are not going to move from oil, that’s what got them where they are,” Bailey said in a recent interview with Hart Energy’s Faiza Rizvi.
“Oil companies have an important and lucrative niche in this regard. There is no reason to transition away from that. There are enough companies working in the other arenas that can cover those types of things,” he said, referring to renewable energy.
After spending decades focused on production growth, oil and gas companies transitioned to a free cash flow model in recent years to boost their financial performance and now it appears investor demands are changing again.
“Firms representing over $100 trillion of assets under management have signed up for responsible investments, stating they will consider ESG when allocating capital,” said Manuj Nikhanj, president of global energy data analytics and SaaS technology company Enverus.
With increasing pressure to fight climate change, scientists and leaders agree that carbon capture, use and storage (CCUS) is a cost-effective solution to meet emissions goals made under the Paris Agreement.
Although aggressive efforts are needed to meet the net-zero goal, oil and gas companies are making significant progress in deploying CCUS projects at scale, according to JP Brisson, partner at Latham & Watkins’ law firm.
“More than 30 [CCUS] projects are in operation globally with more than 40 under development,” Brisson said in a video interview with Hart Energy’s Faiza Rizvi, adding that U.S. oil and gas companies are well-positioned to make progress in the area.
“There are several reasons for this,” he said. “First of all, U.S. is a leader in CO2 injection and sequestration. Companies in the U.S. have been injecting CO2 since the 1970s, which builds credible extensive capability.”
As the Biden administration in the U.S. and governments throughout the world decarbonization push has spurred a renewable boom, which has created both obstacles and opportunities for the oil and gas space.
With a large amount of capital flowing into the renewables space, the energy industry has responded in a number of different ways, according to Cliff Vrielink, partner in Sidley Austin’s energy practice group.
“Of course, some of the larger supermajors have developed other strategies and are also investing in the renewables space but for the most part I think the industry has been focused on trying to reduce their carbon footprint,” Vrielink told Hart Energy’s Emily Patsy.
Chris Romer describes himself as not only head of an ESG data company that he helped launch but also the leader of a broader movement across the oil and gas industry as well.
“The movement of Project Canary because we are a project and we welcome you to join us in giving the emissions ‘the bird,’” Romer, co-founder and CEO of Project Canary, recently told Hart Energy.
The company, Project Canary, is a Denver-based start-up at the heart of the responsibly sourced natural gas (RSG) push with a growing number of partnerships with companies across the upstream, midstream and utilities space to provide continuous emissions monitoring and independent RSG certification.
If there is one person who has played a significant role in expanding Baker Hughes’ sustainability performance and ESG reporting, it’s the company’s vice president of energy transition Allyson Anderson Book, who also chairs the ESG steering team at Baker Hughes.
Book was recently named ESG Champion at Hart Energy’s ESG Top Performers Awards program for her outstanding contribution toward broadening Baker Hughes’ sustainability reporting frameworks and her active involvement in the creation of the company’s net-zero roadmap.