Global trends and establishing long-term advantages
One distinct feature of the modern economic landscape is the ultrafast rate of change, which creates new challenges for all market players. This can most clearly be seen in the production and refining of oil and gas. The past few years have resulted in significant changes to the strategy of leading players in the industry. Price volatility requires companies to have an extremely high level of operational efficiency and the ability to compete successfully under any market conditions.
Key global trends and the Company’s response
|Global trend||Description of the trend||What does this mean for Gazprom Neft?||Our solution|
|The volatility of market conditions in various segments of the oil industry confirms the importance of an integrated business model and creates high demands for operational efficiency.|| |
|In recent years, rivalries among producers of various energy resources have significantly intensified. Competition is not only growing among companies and producer nations, but also among different classes of production and energy resources – oil, gas, and renewable energy sources (RES).|| |
|The volume of conventional reserves is decreasing in the structure of oil and gas companies’ portfolios. The potential for future production is concentrated in unconventional and technologically complex segments such as offshore, shale, and other hard-to-recover reserves. Some of the world’s largest companies have acquired assets in shale oil production, and some companies have designated this segment as the focus of growth for the next few years.|| |
|In the 21st century, technology is developing at a pace that has not been seen before in the history of mankind. This leads to rapid changes that are radically altering the landscape of the energy industry.|| |
|Environmental issues are having an increasing impact on the activities of the global energy industry.|| |
Simultaneously, radical technological transformations are taking place as well. The main technological breakthroughs of the 2010s were horizontal drilling, hydraulic fracturing as well as shale mining and offshore production methods. In 2016-2017, these capabilities were supplemented with digital modelling, big data analysis, and the use of artificial intelligence, remote production management, and blockchain in supply chains.
Gazprom Neft strives to introduce the most advanced methods of oil exploration, production, and refining in its operations. As a result, the Company has become a flagship of the Fourth Industrial Revolution (‘Industry 4.0’) by providing an impetus for the technological development of the entire Russian oil industry.
But new technologies require new management methods. Gazprom Neft’s responses to key global trends have not been haphazard, but have consisted of a systematic process of managing changes and a range of complex technical and organizational transformations. The use of high technologies, complete vertical integration that encompasses the entire value chain, and the efficiency of all business processes have enabled the Company to successfully implement its strategy and turn challenges into opportunities.