Services Firms Eye Partners to Tackle Transition

Global decarbonization efforts will require a “multiplicity of skills” and unprecedented collaboration between service providers and technology firms in order to succeed, executives of two major contractors argued Wednesday.

The CEOs of Schlumberger and Technip Energies said the energy transition presents a “golden opportunity” for companies across the value chain to work together.

Indeed, collaboration will be vital to addressing the transition and deploying key technologies such as carbon capture and storage (CCS) at scale and on time to meet global mandates for reducing carbon emissions.

“There is no doubt in my mind that, for the energy transition, partnering has to happen, and actually is happening at the moment,” Technip Energies CEO Arnaud Pieton said during the Energy Intelligence Forum 2021 virtual conference. “We need to open the aperture, we need to go team up with people we haven’t had to play with, because we need to accelerate the time to market if we want to stand a chance around achieving low carbon at scale.”

Sector Coupling

As energy companies begin to implement updated environmental, social and governance (ESG) strategies and focus on what it will actually take to zero out net emissions by 2050 as many have pledged, they are turning to their longtime service providers for solutions to address the monumental task of decarbonization.

Schlumberger CEO Olivier Le Peuch told the Forum that these conversations with clients are illuminating because they have revealed that many of their customers still are not sure how they will achieve their lofty decarbonization targets.

The talks also underscore the increasing need for collaboration between all key players whose expertise and skills may differ but are all needed in order to reach a common goal, Le Peuch said.

He said “sector coupling” will be critical to tackling the challenges posed by the energy transition.

“Partnerships and collaboration are part of the future,” he said. “Scaling innovation is the biggest challenge.”

Carbon Collaboration

In no area of the energy transition is this need to collaborate across disciplines more important than in CCS, the executives agreed.

Pieton said that “no single technology will allow us to succeed” in CCS since it requires expertise across a complex value chain, from operations to engineering and construction to reservoirs and subsurface storage.

“More than trying to win the one technological bet, more important is ‘How many technologies do I have access to so I can contribute to deploying them at scale?’" Pieton said. "There’s no single answer, no 'one-size-fits-all' when it comes to CCS,” regardless of the sector being decarbonized.

Shop Local

The energy transition will also require increasingly localized solutions, particularly around CCS.

This is something of a strategic departure from how services firms have traditionally approached their business models.

In the past, Le Peuch said, Schlumberger brought a single operating model to all of the regions in which it operates — “develop once, deploy everywhere.”

But as the nature of the business has changed, Schlumberger has shifted its strategy to a regional “fit for basin” approach that values localized knowledge and requirements as a way to build resilience over time to an evolving market.

In the energy transition, he said, “every country will have a different path.”