Interview: Gordon Ballard, New Head of IOGP

The International Association of Oil & Gas Producers (IOGP) has appointed a new CEO, Gordon Ballard, who took over from Michael Engell-Jensen mid-January.

A week later the former Schlumberger executive spoke to NGE in his new company’s new offices – now north of the Thames, in the City – about the immediate challenges that his organisation would be addressing on behalf of all its members, which include national and international oil companies and oilfield service companies.

The industry is at low ebb, owing to low oil prices, and against that unpromising background he has to promote a sector struggling to retain a licence to operate. But “Despite the price environment we still have to produce oil and gas safely, sustainably and securely. That is our core function,” he said.

IOGP is working with the industry to produce standards for equipment, seen as a key way to reduce costs. “We need to standardise kit as so much of it -- for instance valves, switch-gear, subsea equipment – has company-specific standards. Our new joint industry project (JIP) is tackling those three items to improve efficiency. It is very simple to say that we need standard equipment but it needs a single, neutral party to develop these standards within the global upstream,” he said.

The JIP comprises a number of companies with shared interests to commit funding: BP, Total, Sonangol, Eni, Shell, Woodside, Engie, Saudi Aramco, Chevron and Statoil.

At its launch in December, chair Ian Cummins of BP said there were "millions of dollars of potential savings to be gained per major project by not re-writing specifications, and this is viewed as only the tip of the iceberg. Standardized specifications on each project help us to significantly reduce unnecessary costs associated with preferential engineering." 

An earlier project by a similar industry platform was on subsea well response in the immediate aftermath of Macondo in April 2010. “People look to us when the industry has to act together, to share best practice, and now there are four subsea emergency well-capping units ready around the world,” he said.

COP21: what’s in it for gas and oil?

At the end of last year, the United Nations-led COP21 meeting in Paris led to an agreement – of sorts. Now deeds are what matter. However IOGP welcomed the degree of certainty of a global agreement. At the time, it said: "the COP21 accord, with its reference to proceeding ‘in the context of sustainable development and efforts to eradicate poverty’, is a welcome step." 

Ballard said: “We have to applaud the fact that the countries reached a global agreement at the highest level but now it must be implemented. We will promote gas, make clear the advantages of gas, such as in power generation and in heating. Replacing gas with power in the heating sector in the UK would mean increasing dramatically the transmission capacity,” he said.

IOGP will be working with the International Gas Union on this, he said. The IGU has made the point that whatever effect carbon emissions have on the environment, over whatever time span, it is the particulates emissions from coal-fired power plants that do demonstrable and serious damage to health, now.

“We share the views of the IGU, we met them this week. What we are keen to do is to make the case for gas. Clean, secure and cheap energy is a fundamental in the world. We need to make the case strongly and personally and we are discussing with our members how to do that.,” he said.

For oil, IOGP has to put out a different message: namely its utility, “As a fuel for transport and feedstock for petrochemicals it is hard to replace. We are pretty dependent on petroleum," he said. "We have to maintain the case for oil and gas, that it is important for global prosperity, and get the facts out there. The IOGP must speak clearly for industry, authoritatively and credibly. We will ramp up the effort in these issues over the year,” he said.

“Technical work will continue too, despite headwinds, we will carry on with our core function. At the top of the agenda is the licence to operate. We need to continue to have that and to gain access to resources,” he said.

Bridging the Skills gap

There has been concern in the industry that there is a looming shortage of skilled professionals coming into the industry -- this was a major theme of the Offshore Europe conference in Aberdeen last year. The huge waves of redundancies that accompany sharp downturns in the sector’s fortunes must be a deterrent to school leavers who may have been considering a career in it. And many of them – at least in the UK – go on to better-paid and more secure jobs in the City, even if they did study engineering at university. But Ballard disputed the view that studying oil and gas engineering is no longer popular.

“We do see some issues in attracting talent, but not globally. It is a problem confined mostly to western Europe and the US. Globally, thousands of people, men and women, want to get into the sector. In the UK, there appears to be a gap in engineering talent, but that is across the whole range of engineering jobs, not oil and gas. There may be a skills gap at around 15 years’ experience due to previous gaps in recruitment but that just means that companies will have to look for their good young candidates and give them responsibility. Good people, not 15 years’ experience, should be the goal. And there are transnational bodies, such as Opito, that are focused on skills and training, who provide good leadership in this area," he said.