New Energies – Olivier Appert, Chairman & CEO – France
The chairman and CEO of IFP New Energies talks about France’s current role in the global oil and gas landscape, and the steps the organization takes in providing education for the next generation of the sector.
The IFPEN, originally known as IFP, will be celebrating its 70th birthday in 2015. What have been the institute’s most important contributions to the oil and gas industry over those years?
The IFP (Institut Français du Pétrole – French Petroleum Institute) has been involved since the beginning in the oil and gas sector, and our name is well known around the world. The IFP is a recognized brand name in many countries and this is a key asset for our organisation.
We have been contributing to oil & gas exploration, production and technology transformation and consumption for the last 70 years, with many innovations. Our strength, our raison d’être, is innovation. What we bring to the table consistently is scientific excellence, our ability to work well with the industry, and our IP culture; this year, for the fourth time, we were recognized by Thomson Reuters as one of the top 100 global innovators.
There are huge energy and environment challenges in the years to come and we need to take into account the future need of the energy sector as well as new energy technologies. This is why we are investing in new energy technologies, and adapting by adjacence our knowledge for new markets. We have structured our strategy according to five main priorities. The first is related to renewable energy – we are adapting our expertise in offshore platforms to the new market of offshore wind, for example. The second priority is eco-friendly production: we need to work on ways to increase the environmental footprint of production technology. CCS (Carbon Capture and Storage) is an example of this, but we are also working on ways to reduce water consumption in production and transformation phases. In fact the most important water producers are the oil and gas companies since producing one barrel of oil implies producing on average 3 to 4 barrels of water. As water is becoming a global concern, this is a major problematic we are dealing with. The third priority is innovative transport. The transport sector is becoming an increasingly large consumer of oil. We are therefore working on innovative transport, both on improving the efficiency of engines and on reducing the environmental footprint of the transport sector, through the introduction of new technologies and also new types of fuel and engines. The fourth priority is eco-efficient processes in refining and petrochemicals. We need to develop new processes and catalysts in order to produce petroleum from a wider variety of fossil resources and produce existing products in cleaner and more efficient ways. The fifth and last priority is related to sustainable resources. Energy transition will take time due to the inertia of the energy sector so we will need to ensure that in the longer term we will develop sustainable resources of oil and gas. For example, we need to increase recovery factors in order to boost the sustainability of reserves.
How does IFP work to increase its impact on an international level?
Technology, energy and the environment are international concerns. This means that our playing field is therefore international. Our role is applied research and innovation, but at the same time our role is also in offering training. We provide this training through PhD’s and master’s degrees: we offer specialised degrees to train studentswhich are directly used by the industry. Our courses are taught in French and English, and currently 50 percent of our students are non French, coming from 50 countries. We also employ PhDs from abroad, which is great: when we want to work with Petrobras or Pemex, it is of huge advantage to work with people who got their PhDs at IFP. We have also worked to spread the IFP worldwide, with entities in Algeria and India for example. We have also contributed in the past in creating the university KFPM in Saudi Arabia. For the time being, I am a member of the international advisory committee of KFPM.
We have always worked and cooperated with the industry. We are an innovation center, developing products and processes to match the demands of both the industry and society at large.We always have one foot in pure science, but with a mind to commercialization, to fixing bottlenecks. We are active internationally through our commercial arms and subsidiaries. Approximately 85 percent of our turnover, including IFP and our subsidiaries, is internationally driven, with our primary market in the US. From our base in France, we have worked to develop relationships with European academia, and simultaneously develop our relationships with international companies: Petrobras, Saudi Aramco and the IOCs. Many of these companies work with us on joint industry projects: we offer companies shares in research projects, and in turn they influence the work and we keep the IP : for these companies, this is an extremely efficient way to grow competencies in new areas. Today, around 50 percent of our partnerships are with foreign companies.
How would you qualify the role France plays in the global oil and gas industry today?
For a country that has no significant oil and gas resources, it’s unique that France has the fourth most important IOC, Total, as well as leading service companies like Technip and CGG, and GDF SUEZ, a leader in the mid-stream gas sector. France’s influence in the sector is a result of long-term policy decisions that were taken in the years after the Second World War. Thanks to this, we have clear leaders in the field that have a global reach.
More than 90 percent of the turnover of the French petroleum service and supply sector is made abroad. What makes the ‘Made in France’ label so special, and in which areas are the French leading the way?
Innovation and technology is what makes the ‘Made in France’ brand so important on the world stage. When companies are considering the technological aspect of a project, they usually come to France to see French companies or meet with French companies in the centres of excellence of Houston, Aberdeen or Stavanger.
It’s a unique way to compete with the rest of the world in the oil and gas sector. In offshore services and engineering generally speaking, France is a strong player.
As it is often the case in France, only a few national champions are well known abroad, despite there being over 400 SMEs. How can SMEs continue to develop with no local production and very little state support for the sector?
Under the umbrella of the French government, there has been a focus on cooperation between French companies related to technological development. Twenty years ago, when I was Director of Hydrocarbons at the Ministry of Industry, a special financial procedure was in place in order to help French companies develop technology, with ELF, Total, and the IFP helping SMEs develop new technologies. Since that time, we have developed a habit of cooperation between companies. As a result, it has been possible for French companies to create this enviable global footprint.