When I arrived a few months ago at one of the largest oil and gas industry conferences in Madrid, for a moment I thought I had come to the wrong place. The display of heavy and expensive machines, which opens every conference, was replaced by a display of autonomous submarines and advanced, small autonomous robots. The heavy seismic data analysis software was replaced by systems streamlining and data analysis software, and the outdated control rooms were replaced with innovative displays based on simulations of facilities, remote command-and-control, and management of digital models of the facilities.
Suddenly there was no trace of the old, heavy industry with the environmental impact. The companies were careful to present an image of environmental, advanced, digital energy companies investing in technology that reduces the environmental footprint and focuses on renewable energy and technological innovation.
A senior executive at one of the largest oil and gas companies told me: “We’re investing more and more in renewable energies because that is the future, but the big money is invested in digital technologies that lead to efficiency, lowering costs, and reducing the environmental footprint.”
Beneath the surface, a revolution is taking place
Beneath the surface, a revolution is taking place in the oil and gas industry: from an industry focused on fossil fuels to one looking for environmentally-friendly energy alternatives; from a conservative industry to an open industry seeking extra-organizational technological solutions; from an industry focused on working with a small number of huge subcontractors to one open to working with a variety of innovative companies; from an industry focused on internal R&D to an industry looking to implement new, extra-organizational technologies and solutions.
Today, more and more people understand that the real expectation is that in the next 30 to 40 years, fossil energies, with an emphasis on natural gas – which constitutes a transition energy between old (oil and coal) and renewable energies – will remain key energy sources in the global energy mix. Therefore, we are witnessing a paradigm shift and huge investments with a view to the future.
We are at the threshold of an extraordinary opportunity. A huge, rich industry puts its trust in internal and external innovation, and is willing to invest tremendous resources. In order to search for new technologies in the field, companies in the industry have established dozens of investment entities with huge capital earmarked for non-organizational investments, including huge venture capital funds, accelerators, incubators, programs for developing collaborations between industry and academia, and more.
Right now, an opportunity is being created for the Israeli innovation community to begin establishing leadership in the field. This is a historic juncture: to turn Israel into the “hub” of innovation for the renewable oil and gas industry. The large energy companies know the potential of Israeli innovation and look up to Israel – with expectations. They seek advanced solutions in the entrepreneurial and technological ecosystem, in academia, industry and the Israeli innovation community.
A recent example of this is the visit of the innovation team from the leading E&P company Energean, which has joined forces with the giant Halliburton company, and is coming to meet with start-ups, entrepreneurs and academics in Israel, in a first-of-its-kind event. The meeting creates an opportunity to create awareness of the great opportunities inherent in the connection between the oil and gas industry and Israeli innovation. It’s likely that this will be the opening shot for a long line of connections of this kind – paving the way for the inevitable revolution in tomorrow’s energy world.
The author is CEO of ISROG and is a special consultant to the energy minister on oil and gas innovation.