First day of Rio 2018 Oil & Gas focuses on Natural gas, technology and gender
Event schedule discussed relevant issues topics both in the congress and in parallel events
Rio de Janeiro, September 24, 2018 – The first day of Rio Oil & Gas’s 19th edition addressed several issues that affect the industry, from natural gas, fuels, digital transformation to compliance and gender diversity.
Natural gas
Gas plays a key role at a time when the world is moving towards energy transition. Brazil will have an increasing supply of natural gas, as the extraction from the subsalt advances. This will require a new legal framework to expand the market. In light of this scenario, outlined in the “Reform and Restructuring of the Brazilian Natural Gas Market” panel, IBP’s Natural Gas Executive Secretary, Luiz Costamilan, stressed that the country should have a sense of opportunity and create, as soon as possible, the grounds to pave the way for the expansion of this new market. The executive advocated the adoption of “additional actions”, such as free access to existing infrastructures that do not require legal changes.
In order to leverage such fuel, Edvaldo Santana, president of the Brazilian Association of Large Energy Consumers (Abrace), upheld the need for “infra-legal” measures. “We need to unlock this segment and, as it was not possible to approve the Gas to Grow Act, we can move forward like this”, he said. Marcelo Cruz Lopes, Petrobras’ Gaz Executive Manager, added that measures such as the adoption of commercial prices (rather than output and input prices) and the creation of a national hub do not required a new Gas Act.
Fuels
The irregular trade of fuels and their impacts was also addressed during the congress, in a special session on the subject. According to data from the Getulio Vargas Foundation, losses caused by tax evasion and default in the distribution industry amount to R$ 4.8 billion per year in Brazil.
According to Edson Vismona, executive president of the Brazilian Institute of Competition Ethics (ETCO), the high tax burden in Brazil is the main cause of illegality. Helvio Rebeschini, director of strategic planning and market at Plural, pointed out that an aggravating factor is that persistent debtors find legal grounding in the 70th Summary Statement of the Supreme Court. “In São Paulo alone, the top 20 distribution companies accumulate R$ 20 billion in active debt”, he said.
The federal Judge and Ajufe’s vice-president, Flávio Oliveira Lucas, argued that the Federal Supreme Court began to look at the debtors’ situation differently to distinguish different situations and acknowledged that Draft Bill 284/17 was an important kick-off to change this scenario.
Still on the downstream, the panel “Storm at Sea – challenges and opportunities with the new fuel specification” discussed the shift in the ship fuel market, which will have a lower sulfur content by 2020 to reduce pollutant emissions.
According to Esa Ramasamy, Global Director of Product Strategy at S&P Global Platts, consumers from all around the world will pay for it, given the importance of sea transport. “Bunker fuel with a lower sulfur content will cost 50% more than the current one and this will have a high inflationary impact”, he said, predicting an R$ 1 trillion increase in the price of goods.
However, there is a great economic opportunity for Brazil. This is because the national oil, particularly from the subsalt play, already has a low sulfur content. Besides, Petrobras’ refining plant is sophisticated enough to produce fuels suited for the new rule. “This is a disruption of the refining market”, said Guilherme França, Petrobras’ Executive Marketing Manager. For him, the impact resembles the substitution of mineral coal for oil derivatives in the twentieth century. In this scenario, Brazilian refineries can also operate transforming less noble derivatives, which should cost less in the future, into more noble and expensive fuels.
Gender Diversity
Discussions on gender diversity and inclusion were also included in Rio Oil & Gas’s first day schedule. During the panel “Gender diversity adding value to the business”, executives from the Oil & Gas industry pointed out the importance of accessing the best talents, regardless of gender. “We work in a highly competitive industry with difficult decisions to be made every day. That’s why decision-makers need to be supported by different types of professionals, by the best talent – that’s where diversity comes in”, said Sophie Zurquiyah, CEO of CGG.
Ingvil Smines Tybring-Gjedde, Norway’s deputy minister of the Ministry of Petroleum and Energy, also bets on women’s capabilities. “We have to challenge criteria set by men, because when they set the criteria, they choose men. Women have as much skill and technical capabilities as men. We are actually different, but that is precisely what makes the subject so relevant in the business environment”, she said.
A practical issue in this regard was introduced by Doug Pferdehirt, Global CEO of TechnipFMC, and refers to the number of filed patents. “We are a technology company, and intellectual property is a key issue for us. In that sense, a personal observation I have made is that the percentage of patents filed by women has been growing faster than by men”, he explained.
Technology
Electric and self-driving cars, as well as other increasingly cheaper technologies, promise to make a deep transformation in the oil & gas industry. In light of this scenario, discussed during the special session “Digital Transformation in the O&G Sector”, Severiano Macedo, Cisco’s Digital Transformation Advisor, states that “no industry is exempt from digital and soon O&G will fall into the eye of the hurricane as well” . According to Simon Cushing, Gartner’s Director of Research, Oil & Gas, the possibilities are endless in this industry, ranging from optimization to complete transformation: “90% of oil & gas companies already have some digital initiatives”, he said.
With these tools in hand, decisions can be more efficient and faster. This is what the leader of energy practice at Accenture Brazil, Philippe Bize, believes. “In this journey, there must be a cultural change among employees, and for that end, it is crucial to train employees and promote an ecosystem conducive to innovation”, he said.
This “human factor” is one of the most important parts for Equinor’s Vice-President of Supply Chain, Mauro Andrade. He predicts that transformations will not be shocking, but rather incorporated into everyday life. “The O&G industry has many sensors, which produce a large amount of data”, he said, noting that the industry needs to learn how to process all that information and draw value from it.
Within the agenda of side events, Oil & Gas TechWeek has started by bringing a discussion on connectivity trends and its role in the oil & gas industry. Experts have presented digital solutions to industry bottlenecks, such as the use of remote sensors on oil rigs, the collection of climate data and the control of intelligent thermostats through the Internet of Things (IoT).
Equinix’s Solution Marketing and Business Development Manager, Wellington Lordelo, spoke about the importance of interconnection in the security of data and information exchange, one of the points of attention of the oil & gas industry. The interconnection creates a kind of single platform, privately connecting several data centers around the world and allowing this data exchange to be made directly between companies.
Digital solutions were also discussed in the environmental surveillance and security area. The global head of Product Portfolio for Indra’s Oil & Gas area, Estrella Jara, presented an integrated system for early detection of leaks. By monitoring hydrocarbons automatically, the solution is able to improve leak detection by 30% and reduce false alarms by 75%, in comparison to traditional systems.
Compliance
Compliance was addressed at the Knowledge Value Arena, within the side events schedule. The session showed a scenario where the oil & gas sector has a high risk of corruption, which is common in developing countries. As this is a sensitive industry, it requires compliance programs in line with the risks it faces.
“There has been a breakthrough in the maturity of Brazilian compliance programs in recent years, which has started mainly with large companies. However, we see an escalation of the program in the entire chain, passing to medium and small-sized companies”, said Thiago Jabor, lawyer at the Mattos Filho Law Firm.
Marlom Jabbur, Latin America’s leader of integrity services at Ernest Young, said that we need fewer barriers and less opportunity for corruption points, with a more streamlined model.
Rio Oil & Gas will be held until Thursday (27), with five thematic blocks that will address Exploration and Production, Downstream, Gas & Energy, Supply, Industry Management, and Digital Technologies. Eleven parallel events will take place, bringing together specialists in technology, sustainability, SMS (Health, Environment and Security), certification, exploration, downstream and professional development.
The complete schedule can be accessed through the portal www.riooilgas.com.br or through the App, available for download at Google Play or the App Store.