Hess is relying on innovative technologies and Lean operating processes to manage through a period of "unprecedented disinvestment" in the energy industry.
Greg Hill, Hess President and COO., discussed the company's strategy and approach recently at the 2016 Deloitte Oil & Gas Conference in Houston. "The amount of disinvestment in this industry has been incredible — unprecedented. And of course, that’s going to have a lot of implications for the future," he said.
Energy companies like Hess need to balance current economic realities against future expectations and position themselves to ride out the low-price environment while remaining agile enough to respond quickly and efficiently when the market rebounds, Hill explained.
"We’ve reduced activity and have been adjusting the number of staff. But we have not done across-the-board cuts — it’s vital that we maintain our capabilities for when prices recover," Hill said.
Hess is delivering on its commitments to its stakeholders by using both capital and resources more efficiently, improving returns, and driving safety and operational integrity, he added.
The company is also using Lean methodologies to foster a culture of efficiency, innovation and continuous improvement.
Hill's comments were well aligned to the objectives of the Deloitte conference, which was held to discuss critical issues and trends shaping the future of the oil and gas industry. The conference attracted nearly 750 senior executives and board members from all sectors of the energy industry, as well as investors, academia, commercial and investment bankers, industry analysts and journalists.
"This business is resilient and resourceful and will rise to challenges. This business — which one reason I love it so much — is a business of innovation," Hill said.
Hess’ strategy is to preserve its balance sheet, capabilities and growth options in proven and emerging oil-prone plays.
Offshore, Hess has reduced turnaround times, drilling cycle times and non-productive time — down to zero in some cases. In addition to two major offshore developments that will come online in the next two years, Hess is continuing exploration offshore of the South American nation of Guyana, where the company confirmed a world-class oil discovery several months ago.
Onshore, Hess is drilling the lowest cost, highest return wells in North Dakota's Bakken. "In the space of four years in the Bakken, we have cut our well costs by two-thirds. We’ve tripled the productivity, and the complexity factor of the wells has gone up by four," he said.
Global energy consumption is projected to increase by 48 percent over the next three decades, according to projections from the U.S. Energy Information Administration (EIA).
"The world is going to need more energy resources," he continued.
Hess is looking at opportunities in both shale oil and gas and in conventional offshore. "We're bringing these opportunities into the company to provide a long-term sustainable growth for our shareholders," Hill said.