This excellent article is subtitled "Energy and materials companies face a demanding future." They must start preparing for it now.
McKinsey Consulting have written a new entry in their "Energy, Resources, Materials: Strategy Analysis" entitled "Global Trends in Energy". Noting that we face a rather disruptive decade in which
"change and uncertainty as a combination of six macroeconomic, social, and business trends reshapes the competitive landscape."And
"executives in these sectors will have to confront difficult strategic, organizational, operational, and technological choices".I would certainly subscribe to these points and would boldly suggest the place to do that is here on this blog and the time is now.
The six macroeconomic trends include:
- Booming demand for energy.
- Basic materials resources.
- Shifting of supplies to remote and geopolitical unstable locations.
- Heightened security of the environmental effects of production.
- Consumption of energy and materials.
- Increasingly large capital investments needs at a time of regulatory uncertainty.
Such is the challenge we face today. This list accurately reflects MIT President' Professor Susan Hockfield comment that energy is now in what she considers a "perfect storm". Outside of World War II, I can't think of a more difficult time for the energy industry. McKinsey goes on to suggest
"Recently, McKinsey sought to identify the trends that will make the world of 2015 a very different place to do business from the world of today. In all, we identified ten of them: macroeconomic trends that will transform the global economy, social and environmental trends that will change the way people live and work, and business and industry trends that will generate new management approaches and business models. All ten will affect the energy and materials sectors to a certain extent, but we believe that six will shape their future and therefore deserve special attention."In the area of human resources McKinsey defines a particular point about the demand for petroleum engineers;
"In the oil industry, the demand for petroleum engineers and development engineers could almost double over the next decade, and the hunt for scarce reserves will place commercial deal makers in high demand. It is a matter of concern that a shortage of experienced project managers who can handle complex capital projects (such as oil platforms or pipelines) may create bottle-necks that will determine whether multibillion dollar projects are finished on time and on budget."A comment that I have made repeatedly in this blog regarding the increased volume of work necessary for each barrel of oil will increase, not decrease. The earth scientists and engineers are critical to the discovery and production of oil and gas. McKinsey closes the discussion with the excellent point;
"Executives who wish to exploit these trends must keep a watchful eye on them and be ready to respond swiftly to their implications."And as McKinsey note in the above subtitle, the time is now. The scope of this problem is large and quite well quantified by their projection that $4.3 trillion dollars in capital expenditures from 2005 to 2030 will be needed for oil alone. In a related article, "Making the most of the world's energy resource" Mckinsey states
"New research... reveals that global energy demand is on a path to grow by 2.2 percent a year over the next 15 years."The demand for energy has never been higher. The energy industry has never disappointed the market, and I don't expect them to do so now. Industry must organize themselves for these challenges and renew their focus on speed and innovativeness within their organizations. I agree the time is now and the place to start organizing is here, with this blogs software developments.
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