Fifteen years ago, the energy industry was managing its costs very well, said Patrick Pouyanne, chief executive and president of the executive committee for Total SA. Now, operators should find ways to simplify its processes to return to reasonable costs. “Everything is possible for engineers, but complexity is not always better or safer,” he said. “We must be efficient, and not just be spending money.”
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| Total employees. Image from Total. |
Yet, not everything is as simple as it seems. For example, the current industry thinking is that the oil oversupply is due to US unconventional production, but that’s just not true, he said. Much of the oversupply can be contributed to global conventional offshore projects. “You have to look at the full market,” he said.
On an optimistic note, Pouyanne said he is confident that the energy sector will find a new equilibrium to deal with the current low oil price environment but it should continue to invest. “I’m a strong believer that in this industry we will be able to find new frontiers,” he said.
Conversely, some of Total’s regional development has been put on hold. He used Total’s recent withdrawal from Yemen as an example of a country where the risk to human life simply outweighed the potential for continued development. “We stayed as long as we could, but 10 days ago we had to decide to safely evacuate. No profit is worth putting lives at risk,” he said.
“We’ve had easy times,” said Pouyanne. “So, as an industry, we lost some control about how we spent the money. We have to simplify, and be careful, and lower our breakeven point again.”
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