The reduction in the world’s known oil and gas reserves, security of supply issues and increased climate change concerns have spurred investments in cleaner energy concepts. Consequently, the energy future is challenging and the solutions are not obvious, since conflicting goals must be balanced diligently.
Energy, and in particular oil and gas, has never been as high on the public agenda as it is today. The reduction in the world’s known oil and gas reserves, security of supply issues and increased climate change concerns have spurred investments in cleaner energy concepts. Consequently, the energy future is challenging and the solutions are not obvious, since conflicting goals must be balanced diligently.
Energy is the ‘fuel’ for growth – an essential requirement for economic and social development. During the next forty years, the world’s energy demand could double or even triple as developing countries expand their economies and try to overcome poverty. The International Energy Agency estimates that in 2030 the primary energies’ relative shares will remain almost unchanged. Oil, gas and coal will continue to be the dominant energy sources, with gas replacing part of the oil share.
Surging energy demand
The surging energy demand and tight global supply have pushed oil prices to record heights, with no downturn in sight. The competition for untapped energy deposits is fiercer than ever and national oil companies, which are instruments used by nations to provide secure, reliable and affordable energy for their populations, are increasing their control over the world’s remaining oil and gas resources. China and India, anxious to secure sufficient fuel for their growing economies, are investing large sums domestically and internationally in oil and natural gas sources.
Many of the world’s remaining potential new sources of oil and natural gas are located in countries with relatively high levels of political risk or in technically challenging regions, such as the Arctic, or in ultra-deep waters. Securing new supplies of oil and natural gas is therefore a difficult and often risky venture.
Meanwhile, the refining capacity is currently at its limit, and we will see significant investment in existing refineries in Europe and the USA, as well as in new refineries in China, India and the Middle East. It is nonetheless predicted that new refinery additions will struggle to keep pace with the growth in demand. As a result, utilisation rates will remain high and may even increase. Furthermore, recent events have focused public and industry attention on process safety, which is an area where DNV offers its customers considerable expertise.
Holistic approach
No single solution will deliver the necessary changes. We need a mix of options which focus on developing more energy sources, using energy more efficiently and reducing carbon intensity. Evidently, the global energy market’s opportunities belong to those who employ expertise in a concerted manner across geographical boundaries and throughout the operation’s life cycle.
Business strength in the energy industry has many dimensions. It is now about how a company identifies and seizes opportunities, pushes technology boundaries safely and cost-efficiently, and meets or exceeds increasing environmental requirements and expectations, all this while balancing risk and returns in a highly competitive global arena.
That is why DNV, with its global presence, technical know-how and holistic approach, is highly valued in the energy sector. Our vision is to contribute to a safe and sustainable future by offering assistance in developing new hydrocarbon-based energy supplies more efficiently, cleaner fossil energy and renewable energy.
Growing complexity
A key challenge facing the oil and gas industry is therefore how to manage risk in the face of this growing complexity. There is a wide range of political, commercial, technical, human and environmental risks involved, requiring skills in many disciplines. In addition to qualification, classification and verification services, DNV offers distinctive risk consulting services related to the total enterprise as well as to specific areas, such as Health, Safety and the Environment (HSE), Asset Integrity, and Information Technology. By integrating these services across the value chain and throughout an asset’s life, we create a comprehensive approach designed to manage complex challenges safely and responsibly.
For example, during the past two years, DNV has helped bring StatoilHydro closer to its vision of achieving world-class operating and maintenance practices. DNV is also heading up the work of harmonising industry HSE standards for the Barents Sea, supported by the Norwegian and Russian governments and industries.
Our Offshore Classification services experienced substantial growth in 2007, with a long list of new drilling semi-submersibles, drillships, jack-ups and FPSOs orders to DNV class, many aimed at deep-water exploration and production in key developing hydrocarbon provinces. Our production capacity has been greatly increased by establishing Service Centres at key locations, enabling local approval and extending survey capacity. The market has responded positively to this initiative, and the Resource Centre in Singapore, among others, has been very successful. Here, DNV was contracted to classify the largest drilling jack-ups ever to be built
at Singaporean yards.
DNV’s involvement in the evolving LNG industry has continued. More than 40% of the current receiving terminals have obtained guidance from DNV in order to identify and manage both HSE and business risks. Services range from the verification of floating offshore LNG facilities in Brazil and the USA to the incorporation of business risks induced by multiple users of import terminals in Europe.
China National Petroleum Corporation is now a world-leading integrated energy corporation, and is China’s largest producer and provider of crude oil and natural gas. DNV is involved in several projects with this company, including the provision of ISRS7 baseline assessments and asset integrity management solutions.
Frontier challenges
New hydrocarbon discoveries have not compensated for the reduction in the world’s known oil and gas reserves resulting from current production. As we have seen, future exploration and production activities will take place in deeper, colder and harsher areas – and the reservoirs will be more complex. The industry therefore needs to make sure its solutions represent best practices and the highest standards at all times.
DNV assists in tackling frontier challenges, from concept feasibility to the qualification of new technology and certification of detailed designs, helping to break barriers with confidence. We manage a vast number of joint industry projects aimed at solving frontier challenges. Also, we are involved in several deep and ultra-deep water projects in Brazil, the Gulf of Mexico, West Africa, the North Sea and Asia, involving the use of novel technologies for subsea processing, pumping, compression and pipeline transportation.
Date: 2008-06-26