According to Sanjiv Singh, chairman of Indian Oil Corp. Ltd. (IOCL), foreign demand for U.S. energy exports will increase dramatically within the short span of a decade.
"We see the energy requirement ⦠going up at least one-and-a-half times within the next 10 years," he said in a panel discussion titled "Downstream: Competing Through the Cycles" at CERAWeek by IHS Markit, held recently in Houston. "And in spite of all the initiatives that are being taken -- solar and wind included -- oil and gas will remain the energy provider."
Singh noted that although many countries are adopting "very attractive" initiatives that promote the development of biofuels and renewables, he anticipates fossil fuels will remain the primary source of energy, adding that adopting a diverse energy resource portfolio encourages "the push toward energy independence" in both the transportation sector and the industrial sector.
Chemical recycling, digitalization
Tufan Erginbilgic, chief executive of Downstream for BP plc, said his company is paying increasing attention to chemical recycling technology.
"This is very important and is a big trend impacting this industry in this cyclical economy," he said, adding that chemical recycling technology "will be a game-changer because the process will increase how much you can recycle the feedstocks -- from 10 percent today to 50 percent in the future with our technology."
Digitalization continues to transform energy's marketing and manufacturing with a focus on "productivity and predictive analytics and optimization," Erginbilgic said.
"We are actually expecting $500 million earnings growth by 2025 on digital transformation in our operations," he added.
Focus on consumer needs
"New trends are impacting the industry and providing more significant opportunities," Erginbilgic concluded. "But for anybody to be successful in this highly unpredictable and rapidly changing environment, you have to be highly competitive, agile and adaptable, and that is exactly what we are trying to do."
As more diverse fuels enter the marketplace, Arif Mahmood, executive vice president and CEO of Downstream for PETRONAS, said his company is closely examining its retail business.
"We need to change the way we think about retail. One of the things we say is, 'Forget the fuel. This is retail,'" he said. Mahmood observed that fuel is just one product its customers need, and that need is more likely to be met by a diverse mix of fossil fuels as well as renewables, adding that PETRONAS is intent upon making its customers' experience a positive and pleasant one.
"If we can see the dynamics of what people need, we can reflect that in the design of our locations," he said. "We must think of the ways to make the whole experience very good for them and how we can increase the global market."
"The company that wins is the one that has the ability to be very agile and very responsive," Mahmood concluded. "Culture has become a very critical thing; it comes from the leadership of the organization driving it. It is about changing the way we see things and putting customers right at the center of things."
Kurt Barrow, vice president of oil markets, midstream and downstream insights for IHS Markit, moderated the discussion.
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