“Rumours of the IOCs demise are premature”, said Shell’s upstream director Andy Brown to a crowded lunch discussion on the roles of IOCs, Independents and NOCs yesterday.
Brown said as NOCs are now operating outside their home countries and service companies’ offerings are becoming more sophisticated, IOCs will have to innovate.
“The opportunity today is richer now than ever”, he said, mentioning that IOCs are going into deeper basins, tracking unconventionals and developing new technologies.
Brown discussed three ways in which IOCs can differ from NOCs and Independents: the size and scale of their work, discovering new ways to unlock resources, and by building relationships with partners.
Shell’s next wave of innovation includes the Prelude FLNG technology, a 500m-long vessel weighing 600,000 tons. Brown said the company plans to build an additional three units, including one for partner Woodside Petroleum for its Browse development offshore Australia.
With NOCs, such as Statoil, Gazprom, Petronas, and CNOOC, moving into international territories, Peter Jones, Abu Dhabi-based TAQA Bratani’s UK managing director, said that collaboration between NOCs and IOCs remained important.
When asked if NOCs moving into these new markets was a threat to IOCs, Brown disagreed, saying that in relation to potential partnerships, “we have skills that are complementary”.
Paul Warwick, Talisman’s EVP Europe-Atlantic, said Independents can offer new ideas and value-based strategies. And while they may not have the same access to capital like IOCs, independents can take calculated risks. Warwick referred to Talisman’s entrance into Kurdistan while most majors were wary.
“See your place in the market”, Warwick advised the audience. “Know when to get in and know when to get out.”
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