2nd WPC Leadership Conference


2nd WPC Leadership Conference

Federation of Indian Petroleum Industry (FIPI) joined hands with the World Petroleum Council (WPC) to organize the second edition of WPC leadership conference from 18 – 20 February, 2019 in Mumbai, India. The WPC Leadership Conference is a global conference on industry leadership in responsible operations, international cooperation and sustainable solutions for the petroleum sector. Recent edition of the conference was even more important in the Indian context because India, one of the major demand centers for energy, has a large growing population with increasing appetite for energy and is faced with serious concerns regarding air quality and climate change. The key themes of the conference were Engaging Energy Poverty, Energy Transitions and Industry Responses to Climate Change. The conference was attended by major stakeholders from the Indian and International Oil and Gas industry, including industry leaders, experts and academia.

The two-day conference commenced with the welcome remark and setting of context by Mr. Tor Fjæran, President, World Petroleum Council and Dr. R. K. Malhotra, Director General, Federation of Indian Petroleum Industry (FIPI). Mr Fjæran underlined the rising concerns due to air quality and climate change and emphasized that the efforts of the industry will be fruitful only through collaboration, dialogue and sharing of best practices. Dr Malhotra pointed out that as the world approaches energy transition, access to energy sources at an affordable price will be of paramount importance. The first session of the conference ‘Energy Transitions – The Changing Role of the Oil & Gas Industry’ was chaired by Dr Sun Xiansheng, Secretary General, International Energy Forum (IEF). During the discussion, it was well established that the energy transition has already been put in motion by ground breaking developments in the industry like Electric Vehicles (EVs), emergence of renewables and digitalization. In the future, the energy transition will be driven by three major factors – efficiency, innovation and digitalization. Going forward, bringing clean energy access to even the most under privileged will be the main focus for the entire energy industry. In this direction, the success of Government of India’s Pradhan Mantri Ujjwala Yojana (PMUY) scheme, that made clean cooking fuel in the form of LPG cylinders available to more than 60 million under privileged households, drew wide spread appreciation. The panelists agreed that faced with the energy transition, the Oil & Gas industry will have to shoulder a responsibility more important than ever before to ensure a smooth transition to a sustainable future.

The next session, ‘Leadership Perspectives: Making Energy Access for All a Reality’ was moderated by Dr R K Malhotra. During the session, it was discussed that over 3 billion people around the world still do not have access to clean cooking fuels. While shifting towards a sustainable future, it will be the responsibility of energy companies to make clean fuel available to all. It was realized that a coordinated effort from the Government, companies, investors, international organizations and the civil society is crucial for an inclusive growth. Going forward, Governments around the world will play a crucial role in the transition by creating a supportive policy ecosystem and by being more adoptive towards the new disruptive technologies. In India, the cost of renewables has been on a constant decline and has now started posing a challenge to the dominating position enjoyed by coal in the country’s energy mix. Towards making clean fuel accessible to all in the country, Natural gas could play a significant role. While natural gas in power generation can be integrated with renewable to balance the grid, a shift to piped natural gas in the urban parts of the country can make more LPG cylinders available for the hinterlands. It was realized that to make energy accessible to all a reality, scope and scale that will drive affordability, digitalization and digital platforms will drive efficiency and the focus of the industry will change to customer experience.

The next session at the conference was ‘Managing Stakeholder Expectation’ and was moderated by Mr Rajiv Bahl, Director (Finance, Taxation and Legal), Federation of Indian Petroleum Industry (FIPI). Most Oil & Gas companies have now started moving well beyond compliance and are now embracing corporate governance goals. It was mentioned that the industry is today expected to not only generate returns but also to care for the environment and the society. In India, the Oil & Gas companies are not just trying to be responsible in their daily operations by neutralizing any environmental or societal impact but also supporting Government’s welfare initiatives.

The session ‘Cleaner Fuels - Innovative Technologies for safe and clean downstream operations’ was moderated by Mr. Pedro Miras Salamanca, Chairman, CORES, Spain and Vice President, WPC. The session discussed the latest developments and the innovative technologies in refining, petrochemicals and biofuels industry. During the discussion, it was underlined that responsible and wise use of carbon is important. It was mentioned that to adhere to the new fuel BS – VI fuel standards, which are to come in effect from April 2020 nationwide, Indian refiners have already invested over USD 4 billion in up-gradation of refineries. Further, it was pointed out that India needs to reduce its dependence on imported fossil fuels and should explore domestic sources of energy. It was also mentioned that India wastes a large part of agricultural and food wastes that could potentially be used as a fuel. In this regard, CSIR IIP has started various initiatives to produce usable fuels from food and agricultural wastes, which will not require Government subsidy and could easily be scaled up and deployed at a national level.

The last session of the first day was ‘Energy Transition Challenges in the wake of growing energy demand in India’. The session was moderated by Dr. Sun Xiansheng, Secretary General, International Energy Forum (IEF). The session discussed that India is one of the largest consumers of energy in the world and the country’s dependence on fossil fuels is only going to increase in the foreseeable future. At this stage of energy transition, developing countries like India are faced with the challenge of striking a delicate balance between economic development and environmental sensitivity. It was underlined that to ensure a smooth transition, India should reduce its dependency on import of fossil fuels and make better use of renewables and technologies such as carbon capture and storage (CCS). To promote domestic production of Oil & Gas, the Government has introduced a flurry of new policies in the upstream sector. To further support exploration in the country, the Government should encourage E&P activities in the unexplored basins.

The second day of WPC leadership conference started with the session ‘Increasing safety, environmental protection and energy efficiency: Impact of Digitalization’. The session was moderated by Mr. Kjell – Einar Eriksson, Vice President Digital Partnering, DNV GL - Oil & Gas, Norway. At the session, it was mentioned that digitalization has not only metamorphosed the operations in the Oil & Gas industry but has also made them safe. Mr Sengupta underlined energy transition, price volatility and increased complexities as the three major drivers in bringing the digital transformation in the energy sector. It was opined that the major challenge to digitalization in India are high initial investment and an aging work force.

The following session, ‘Best Practices in engaging energy poverty and local communities’ was moderated by Dr. Pierce Riemer, Director General, World Petroleum Council and Chair, Energy Access Platform. The session discussed that the three pillars to alleviate energy poverty are Advocacy, Operations and Partnership. It is important that any strategy in this direction is firmly supported by Government policy. On the Government’s part, it is necessary to ensure that all structural barriers hindering new investments in the sector are removed. Further, it was realized that there is an urgent need for the Oil & Gas industry to build a favorable narrative and apprise the common people about the benefits of the industry. It was pointed out that, in India, oil marketing companies, due to their high penetration in the rural sector, are also considering to extend support to various social welfare projects.

The last session of the conference was an interactive session on "Taking the next step - what way forward for sustainability in Oil & Gas?’. The interactive session moderated by Mr. Sven Mollekleiv, Senior Vice President and Head of Corporate Social Responsibility, DNV GL and Honorary President, Norwegian Red Cross, Norway emphasized that to ensure affordable energy access to all and a smooth transition towards a sustainable future, it is imperative that all stakeholders i.e. Government, industry and society must remove the trust deficit and work together. To reduce the impact of Oil & Gas operations on the environment, the industry needs to invest in fine tuning technologies like carbon capture and storage and in neutralizing the impact of their operations on the local ecosystem. Further, it is important that the Oil & Gas industry breaks away from its long-standing impression as a polluting industry and needs to create a favourable narrative, highlighting its benefits, to attract more youth to the industry.

The Second edition of the WPC leadership Conference brought industry leaders from the international Oil & Gas industry, experts and the youth under one roof to deliberate about the upcoming energy transition and the industry’s preparedness towards it. This transition, unlike all previous energy transitions, is driven more by the very fundamental concerns over air quality and climate change and not by the emergence of a new fuel. During the course of the discussions, it was realized that for a sustainable future, affordable energy access for all will remain the central focus while the key levers in this transition will be energy efficiency, digitalization and acceptance towards disruptive technologies. It was realized that for a smooth transition towards a cleaner future, natural gas and renewables will have play a key role in the India’s energy mix. In this direction, various initiatives and policy measures taken by the Indian Government like adoption of BS-VI standards, Ujjwala scheme and interventions in the upstream space attracted wide spread appreciation. During the discourse it was underlined that in a sustainable future, the Oil & Gas company will have to shoulder a responsibility much beyond generating returns and will have to engage with the local communities for an over-all socio-economic development. The petroleum companies, to ensure their place on the right side of the history, will not just have to be a stakeholder in the upcoming energy transition but will also have to be a vanguard in this major paradigm shift. The details of the sessions in the conference are mentioned in the below section.

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