Helge Lund (Archice photo: Veronika Smolenskaya)
Following the opening of the annual energy conference, Mr Lund focused on three major issues speaking to the 1200 attendees:
Trends in the current industry environment, how the merger between Statoil and Hydro oil and energy responds to these, and StatoilHydro’s technology and collaboration priorities.
"The business models looking forward will be different from what we see looking back. They will be more collaborative. The companies that are best at striking the balance, may also strike the best deals," said Mr Lund.
"To me, increasing complexity is the key feature of our industry today. Technically, we are attacking deeper waters, harsher environments, heavier oils and tougher projects. Commercially, the race for reserves is getting increasingly fierce, with national oil companies going global, and classic utilities and service companies crawling up the value chain. Politically, resource nationalism is an emerging reality," Mr Lund said.
He pointed to the merger of Statoil and Hydro’s oil and gas activities as a direct response to the changing industry dynamics.
"It had become increasingly clear to me that we were too small to deal effectively with increasing competition, complexity and risk. Independently, similar recognitions were emerging in Hydro. As such we faced the fundamental choice of being a consolidator or being consolidated," Mr Lund said.
He suggested that the industry now finds itself at a crossroads where abundant capital is chasing limited traditional exploration and production opportunities.
"I think we are all now faced with a new game: How to accommodate interests and expectations in a world that has prospered even between 50 and 100 US dollars per barrel," said Mr Lund.
He argued that we are now in a phase of realignment and rebalancing of business models. To work, they must align interests in ways that create genuine win-win partnerships.