Energy Journal: Video
Take a video tour of the inaugural issue.
Strategy
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Read MoreOW Insights Reinventing National Oil Companies Many of the national oil companies that dominate today’s oil and gas production – Saudi Aramco, the Iraqi National Oil Company and the Kuwait Oil Company – trace their origins back to partnerships forged with foreign investor-owned oil and gas companies at the turn of the century to develop local resources. -
Read MoreOW Insights Whatever Happened to Big Oil Oil prices have quadrupled since 2001. But many of the world’s largest international oil companies have not kept pace. Instead, their operating cash flow has only doubled over the same period. And most of their stock market valuations have trailed even further behind, underperforming the broader stock market as a group by about 65 percent. -
Read MoreOW Insights Dawn of a New Order in Commodity Trading - Act III Since 2011, oil prices have traded in a narrow band of around $100 per barrel in spite of a series of disruptions that in another era would have triggered significant price spikes. In Libya, rebels took over the government of the fifth-largest holder of proved oil reserves in the world. An anti-government uprising in Syria shut off more than one-twentieth of global oil production. South Sudan lost one-third of its oil production to fighting that damaged its oil wells. -
Read MoreOW Insights Missing Links in Energy Investments Confronted with tighter profit margins and greater risks, energy executives are under more pressure than ever to deliver higher returns from their business portfolios. Consider: The return on invested capital at energy companies has been nearly halved on average, from 20 percent to 11 percent, over the past decade.
Transformation
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Read MoreOW Insights The New Utility Business Model The rise in community initiatives to produce and distribute energy at a local level over the past decade is about to overturn most utilities’ traditional business models. In geographies with competitive retail markets, customers are switching to more cost-effective and easily controlled distributed generation. -
Read MoreOW Insights Recharging Utility Operations Utilities that defend the status quo are almost assuredly going to miss emerging opportunities, delaying their evolution to operating models that serve changing markets. You can’t reverse macroeconomic trends or shifts in market demand. To compete with a new breed of energy service providers armed with rapidly advancing technology requires flexibility in operations, simplified workflows, investment in the IT foundation, accountability in the organization and a hard-nosed, competitive approach to the market. -
Read MoreOW Insights Small is Beautiful As more utilities overhaul their business models, utility executives and energy-investors should consider this new truism for the utility business: thinking small can produce big results. Small utilities can offer attractive growth opportunities for large utilities and infrastructure funds scouting for future earnings growth. -
Read MoreOW Insights Rocket Science Will the aviation industry soon feel the winds of change when it comes to fuel? Ground transportation is transitioning to lower-emission fuels such as natural gas and electricity. But nearly all airplanes still run on petroleum-based jet fuel, due to a lack of commercial options. Many hands are at work on this pressing issue: Airlines, original equipment manufacturers, fuel suppliers, airports, government agencies and researchers are coming together in working groups and coalitions with exotic monikers like SAFUG, CAAFI, MASBI and SAFN to develop options that may finally enable the industry to move beyond its current predicament. -
Read MoreOW Insights Understanding Biorefinery Investment Risks A corollary issue to which renewable fuels will likely be adopted by the airline industry – and indeed may be a driver of that adoption – is what fuels are likely to achieve competitiveness at commercial scale. Oliver Wyman, in conjunction with researchers at the Massachusetts Institute of Technology and Metron Aviation (a leader in air traffic management systems research), has been working to assess renewable fuel refineries from just such an investment perspective.
Operations
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Read MoreOW Insights Gaining the Operational Advantage Hundreds of offshore drilling platforms and refineries worldwide are reaching – or have surpassed – their design life. Oil and gas firms are drilling at unprecedented depths with new technologies and lack needed experienced operators and engineers. At the same time, penalties for environmental and regulatory violations are climbing. In the past five years, enforcement actions by the United States’ Occupational Safety and Health Administration involving penalties of more than $1 million have risen. Last year, Canada raised the liability for oil spills to $1 billion, up from $30 million in the Atlantic and $40 million in the Arctic. -
Read MoreOW Insights Big Data As the strategic, operational and financial challenges facing utilities become more complex, these companies are finding it increasingly difficult to make informed, data-driven decisions in a timely manner. The ability to quickly consolidate, analyze and distribute business-critical information to key decision makers is the foundation of an effective data-driven culture. Such a capability could enable utilities to drive improvements in operations, reliability and customer service – leading to more attractive returns on investment. -
Read MoreOW Insights The Downside of Rising Interest in Process Safety Process safety became part of the vernacular of the energy business with the release of the Baker Report in 2007, following an explosion at the Texas City refinery that killed 15 people and injured 170. The report noted that BP, which owned the refinery at the time, had lost the culture of process safety, thinking that a culture that protected an individual from accidents (such as being hit by a falling object) would also stop explosions and leaks. By extension, areas such as maintenance and good operations, which impact both safety and operational performance, had been neglected. -
Read MoreOW Insights Survival Lessons As utilities in more countries face threats to their business models, one industry offers survival lessons: automobiles. The core of the traditional utility business model is under siege and pressure on performance is increasing – especially as renewables gain ground and regulatory pressure rises. Unfortunately, the top-down performance improvement measures that utilities have followed in the past are not working.
Risk
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Read MoreOW Insights The Oil and Gas Talent Gap Oil and gas executives won’t be prepared to meet tomorrow’s production demand if they don’t quickly address the one asset about which they know the least: their people. -
Read MoreOW Insights What it Will Take to Sustain the Shale Boom Producers using new technologies to drill oil and gas wells in shale fields face special environmental and safety risks that, left unmitigated, result in more safety incidents than conventional operations. That presents the industry with two problems, each of which is capable of burying the shale business under lawsuits and regulations. First, there are real safety and environmental risks that oil and gas companies must address by adapting their existing operational risk management systems. Second, there is a perception of risk among local people and environmental activists that isn’t always justified. Thus far, however, energy producers lack an approach that satisfies this concern. -
Read MoreOW Insights Sustainable Energy Germany’s attempt to rely on renewable sources of energy for 80 percent of its electricity demand by 2050 is one of the most ambitious economic ventures in the nation’s history. It requires the utility industry, which has relied heavily on conventional energy in the past, to undergo a fundamental change. In addition, the investment costs involved in this project are enormous. Our projections show that it remains uncertain whether there will be sufficient financing to meet the investment needs of both Germany’s transmission network and its conventional power generation. As a result, it is important for the government and regulatory bodies to adopt countermeasures – otherwise the energy transition may fail. -
Read MoreOW Insights World Energy Trilemma 2014 The 2014 annual World Energy Trilemma report focuses on the challenges and opportunities of scaling up investments in energy infrastructure.