The energy transition is not about abandoning oil and gas, but about becoming a more diversified business

CEOs of some of the world's largest oil and gas companies kicked off SPE's annual technical conferences and exhibitions with a clear indication of what the energy transition means for them and what is at stake
.

Arnaud Breuillac, President of Exploration and Production at TotalEnergies, at SPE's annual technical conference and exhibition in Dubai on September 21

For the upstream oil and gas industry, the energy transition is as much about diversifying energy products and reinventing business models, as well as the need
to eliminate carbon emissions from the value chain.
This was one of the key presentations from five industry executives at the plenary session at the
SPE's annual Technology Conference and Exhibition (ATCE) in Dubai this week.

Arnaud Breuillac, president of exploration and production at Total Energies, said: "It is not enough to simply decarbonise energy, it is also necessary
to meet growing energy demand.
This is a double challenge, which we call balancing action
.
”

Breuillac then uses the term "reinvention" to describe what the oil and gas business will have to do in the coming decades to sustain itself
.
This means actively participating in the expansion
of solar, wind, biofuels and hydrogen.
In June, TotalEnergies changed its name to reflect its new vision plan, which will invest $3 billion a year over the next decade in an effort to become one
of the top five producers of renewable energy.

"But at the same time, we will continue to invest in low-cost oil and gas development," Breuillac said.

For TotalEnergies, this would be defined
by assets that cost less than $20 per Bank of England to recover.
But these lower-cost projects would still need to reduce greenhouse gas emissions from the French superpower to be approved, which would mean fewer oil projects on the agenda, but they wouldn't be completely shelved
.

TotalEnergies aims to change its oil and gas production mix from the current 50:50 to around 50 percent natural gas, 35 percent oil and biofuels, and 15 percent renewable electricity
by 2030.

Breuillac dismissed any suggestion
that this means the company is shrinking in the face of the energy transition.
Total Energies currently produces about 3 million barrels of oil equivalent per day
.
If all goes according to plan, that figure will rise to 4 million barrels of oil equivalent per day by 2030, half of which will come from new liquefied natural gas (LNG) production
, he said.

Commenting on the energy strategy of this year's host city and emirate, Ahmad Al Muhairbi, Secretary General of the Dubai Energy Supreme Council, told delegates that "while the oil industry was once the 'ultimate driver of the world's energy,' a turning point has come with widespread support from society and governments for more renewable energy"
.
Al Muhairbi is a petroleum engineer
.
"What does this mean for the hydrocarbon industry? This means that competition has begun, and the industry needs to improve its thinking and skills throughout the supply chain to meet the clean energy goals
that are being established around the world.
”

All speakers expressed overwhelming recognition
of the ability of the oil and gas business to restructure its business for this new model.

Omar Obaid Al-Nasri, CEO of ADNOC Onshore, reminded that when his company was founded in 1971, it had a sustainable mandate to deal with associated gas
from its oil exploitation.
"This creates ADNOC LNG, so when it comes to sustainability, it's part of
our DNA," he said.
”

Building on this tradition, Al-Nasri noted that ADNOC announced in May that it was moving forward with plans
to build a large "blue" ammonia and hydrogen production facility.
The project will involve the generation of low-carbon ammonia from nitrogen and blue hydrogen, which is generated
by combining natural gas steam transformation with carbon capture and storage (CCS).

As upstream companies strive to be part of the grand energy transition, one question for the executive committee is who will be there to work
for them in the future.
Schlumberger CEO Olivier Le Peuch said this represents "some of
the biggest risks we face in the future.
" If we don't get funding, talent, innovation, the future will be at risk, and people are the source of
innovation in our industry.
”

Le Peuch said the solution lies in the industry's ability to show that it is a true technology leader in an ever-expanding range of energy sources
.
"If you're committed to decarbonization as you did this morning, and if we're committed to digital transformation, I believe we can retain and engage talent in our industry and help our employees transform in this industry to become the energy leaders
of the future," he said.
”

ATCE comes at a time when many oil and gas producers are enjoying high prices for their products
.
However, this has not diminished the willingness to
change.

Vadim Yakovlev, deputy chief executive of Gazprom Neft's upstream business, noted in his speech that Russian operators cut production by 20 percent last spring to meet the requirements
of the OPEC+ deal.
Now the company is "fully launched" with 2 million barrels of oil equivalent per day, which it says is a long-term goal
.
"I feel like we've passed the ultimate test that huge market volatility has given us,"
he said.

But as Gazprom Neft emerges from the downturn with a better balance sheet, it is also looking for ways to
align with climate goals for the next decade.
Yakovlev said this would translate to about 80 percent of all new production growth coming from natural gas and gas condensate, which could eventually reach 4 BCF/D with recovery costs of $
5 per barrel of oil equivalent.

In terms of decarbonization efforts, Gazprom Neft's main contribution is likely to be concentrated on
CCS.
The company operates an extensive network of pipelines that can be used to transport emissions from the Russian industrial base into the
reservoir.
Yakovlev said they are in talks with Russian industrial and chemical companies to create a CCS business model
.
"We're actually talking about building a massive new industry," he said, adding, "Without CCS and oil and gas talent, the world's net-zero goal would not be met
.
" The only people who can bring carbon back into the ground are oil workers
.
So it's our role, our responsibility, and we know how to do it
.
”