Do you desire a more joy-filled, deeply-enduring sense of accomplishment and success? Live your business the way you want to live with the BUSINESS BEATITUDES...The Bridge connecting sacrifice to success. YOU NEED THE BUSINESS BEATITUDES!
TAP INTO YOUR INDUSTRIAL SOUL, RESERVE YOUR COPY NOW! BE BOLD. BE BRAVE. DARE GREATLY AND CHANGE THE WORLD. GET THE BUSINESS BEATITUDES!
Welcome to the industrial talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's go
Hello, and welcome to industrial talk, the industrial ecosystem focused on your success by featuring industry leaders, companies that are solving problems and who are passionate about collaborating. You know why they're bold, they're brave, they're Daring Greatly each and every day. And they're changing lives, and they are changing the world. That's why we here at industrial talk, celebrate them all the time. That's what we do. All right, in the hot seat, we have a gentleman by the name of Tom Barney, he is a partner and managing director with a Deloitte, we're going to be talking about oil and gas. And I'm telling you, this is a podcast for you to take notes down because he's just nailing the bullet points. He's just saying, Do this, do this, do this. This is what we say, blah, blah, blah. Let's get cracking. Yeah, so I sat down with Tom. And we had a great conversation. This is last barrel standing is a blog or article that he wrote, it's out on industrial talk, of course, it's out on Deloitte. And it really just nails down tremendous steps on on what's taking place within the oil and gas industry what to do, where it's going, I am just telling you a paper and pencil on this particular conversation, he brings the truth lumber in a big way. Couple of items. One, we've got a hashtag called we are industry. And that is just a celebration. And it's just a hashtag that is a culmination of all the stories out here that are featuring true human successes that exists within industry. And I just think inherited as a shirt if you want one of these shirts, if you're looking at on videos with hashtag, it's a it's a black shirt with white lettering called we are industry. But I'm telling you right now, industry is what it is. It's human, it's people. It's solving problems. And it is truly wrapped around education, collaboration, and innovation. So that we all succeed, we need it more than ever, we need to be able to collaborate that as my soapbox, make it happen, make it so hashtag, we are industry. The second item, industrial talk, we'll be broadcasting from IoT solutions World Congress, that is in Barcelona will be broadcasting their live. So be on the lookout for that, as well as broadcasting from a distributor tech live there too, as well featuring incredible, incredible companies and individuals that are again, solving problems, innovating, making our lives better. And then finally, we're going to be at the manufacturing, digital manufacturing summon that's in Chicago, same thing. They're incredible companies are all going to be there. A lot of fun, a lot of great opportunities to learn, educate a lot of great opportunities to collaborate. That's what we need to do. And definitely innovate specially today. All right. Now, again, I go out to Tom Barney stack card out on LinkedIn. Yeah, you'll be impressed. And the conversation you think, oh my gosh, we're gonna be talking about oil and gas is going to get down into the weeds. Now. My notes, the article itself. Very, very strategic, very focused on this is what this is it this is it point, point point, the way I love to rock and roll, and it's all out there, go to industrial talk.com Find out more. There are some backlinks there. So let's get on with the interview because I don't want to waste your time. This is Tom Barney, Deloitte as the company. Let's get cracking. Tom, welcome to industrial talk. Thank you very much for finding time in your busy schedule to talk to the best listeners in the world. How are you doing?
I'm doing well today. It's a nice sunny day in Houston. So can't complain.
I'm in New Orleans right now right outside of New Orleans. And I'm sure you're getting a great weather too. I'm doing the same thing. It's sort of weird because I got spring fever.
We should probably do this outside next time.
Yeah, but you know how it is. It's the same thing in Houston. Same thing in Texas. Same thing, Louisiana. Today's good. Tomorrow, we'll probably you know, sweater tushies off, you know, it'll be completely different and muggy and then you want to stay inside. All right. For the listeners. Let's get the sort of level set. I've looked at your stack card out there on LinkedIn, massive skills. But without me sort of yammering on give us a little background on who Tom is.
So I won't tell you the number of years I've been doing this type of work because I've run out of digits to say how long I've been in this type of business. It's a combination of both industry, I was at a service company before and consulting as well. For Deloitte, I head up our core operations practice. So by that, you know, it's like, how do you actually manage the oil and gas platforms and things like that? How do you maximize potential etc. And then a lot of that today means also applying digital different types of solutions for them. And so I lead up a group that focuses on those types of aspects and capabilities.
So you're focused on digital stuff that is impacting oil and gas, right?
Yeah, that winds up being a lot of what we do today, just because it's, it's not about doing things, traditional ways of working, and just lean six sigma and process flow. It's actually how do you reimagine and enable that with leveraging different tools such as digital?
Yeah, that's a that's a hot topic. And now, listeners, we're going to talk about an article or a report that was generated by Tom. And it's an interesting report, and I liked the title of it is catchy. It is pithy at the same time, last barrel standing, give the listeners a little background on on on the premise behind that particular article.
Sure. So essentially, if you think about it, so I can, in every energy scenario people are talking about now in the future of oil and gas, and that analysts will still say that, you know, oil and gas is here for for the foreseeable future, it's still part of the energy mix. Now that said, you know, it's not about a debate of if the energy transition is happening, it's more discussed around pace as to when that will happen. So in a world where we still need oil and gas, and there's but there's also this energy transition happening, we kind of see four different types of upstream operators evolving over time. And those will have to evolve to say, if you really want to be, you know, last and fit for any oil, price, etc, like that. There are going to be operating model implications across these four different types of archetypes, as we've called them, and how are operators going to adjust their operating models to essentially for those who decide to stay in oil and gas be that last barrel standing? That's essentially the premise.
You mentioned briefly? Four points four. Can you sort of expand upon that, please?
Sure. So the archetypes is essentially it's, you know, start at the book end. On one side, we have one that we call the hydrocarbon Staller. That's essentially the operator who says, You know what, I'm fundamentally an oil and gas company, this is what I do, I'm not changing my portfolio, I'm sticking to this, on the opposite side of that is what we call the net zero pioneer. So it's exactly right is the opposite of it. It's someone who says, You know what, I'm actually getting out of oil and gas, and I'm pivoting to new energies. So that's the book ends in the middle, we have those who take a little bit of flavor of each. So the one after hydrocarbon stalwart is the one that we call a low carbon producer, similar to the stalwarts, and the fact that they're still saying, Hey, I'm raising my hand, I'm an upstream player, but they recognize that there's a need to decarbonize and are making intentional choices to do so. They're balancing the economics of whatever play they're in with the environmental impact. And then the next one, which rounds out the four is what we call the green followers. So just before the net zero, and those are those who are saying I'm gonna go a step further than low carbon producers, I will slowly start pivoting out of my oil and gas portfolio, especially those that start not necessarily top of my revenue generation, margin generation, etc, that I'll start pivoting and I'm going to start pivoting a bit more to new energies. But I'm not going to jump head deep the way that net zero did, but I will overtime start adjusting my portfolio that's essentially the spectrum
of what was number three. I didn't really catch it, I got it. But what was what's the title, the number three, green follower green? Uh huh. Now I would imagine and correct me if I'm wrong, if I'm a if I'm a stalwart, the hydrocarbon stalwart, right, I'm, I'm all in. Do you foresee the necessity eventually, because I'm stubborn, for lack of a better term? Me then dipping my toes into low carbon and then then going down that do you think that it happens? What's that sort of culture taking place?
So what I'd say is across all four archetypes, you know, there are some very obvious operating model aspects that need to be considered and some of those obvious are is hey, if I'm not drilling in completing wells or managing oil anymore, I'm one of these. What's it called netzero pioneers. And I'm, let's say, my portfolio is full of wind, well, I don't need a reservoir engineer anymore. So that's the obvious, we're going to change capabilities that we need based on it. But then there's three things that we see, regardless of which one you choose, you're gonna have to do a flavor of this. And when I say a flavor of this, how far you go in depends on how much you're sticking with oil and gas, or you're moving to, to new types. But the three things that we talked about is, regardless, everyone needs to lean out based business and drive capital efficiency. This is fundamental to being the last federal standard, the economics will change, you want to be the one that is fit. If I'm the hydrocarbon stalwart, and I want to be fit for any bike, I need to make sure I have a very nimble, agile organization that can run at multiple different cost layer. That's going to be the first one. The second one is decarbonizing the EMP value chain, that was kind of your question, everyone, to some degree, is going to need to show that we're at least doing our best to minimize our carbon footprint. So the hydrocarbon stalwarts, hey, I'm not gonna flare as much, I'm going to take certain things out. Now, as you go across that spectrum. Well, I'm changing my portfolio, I'm moving into clean energy. I'm doing things like that. So that's part of that decarbonisation. But the spectrum of what you go with depends on where do you fall on that? The third thing that is if I think about it, like so, I'm leaning out, I'm going to be more cost efficient, and everything I do, I'm going to make smart decisions. And then I'm going to be better at understanding my carbon footprint and how to prep. So that means the third thing is, I need to be intentional about how I leverage digital as a coordinator, to monitor execute, optimize all of these things. So those are kind of the three aspects around the operating model that we think we'll have, you're gonna have to deep dive on more.
Yeah. And I think that I think the creating efficiency being a lot more nimble requires a digital conversation, right? I guess you do, I don't think you can achieve whatever that objective is without a concerted effort into your digital conversation, right? Yeah,
12:21worked with, in the height of:
It's you know, but maybe I need to rethink what the true structure of my organization needs to mean. I need to challenge what work needs to get done, where that work needs to get done, and who needs to do that work. And I mean, front office, back office roles. I think the industry already understands we can do things differently. But there's a key learnings in COVID, and remote work that I think a lot of these operators have started to get a sense for companies, service companies start to get a sense for, actually, you know, what if I take advantage of very smart folks who work in different countries in different regions, and use them to collaborate with me to deliver work, I don't necessarily need everybody to sit here in Houston, or whichever country you're based at, we can we can find different ways of working together. Also, what oil and gas companies need to do is if I look about what it takes for you to drill, complete, manage production, all that? Do all those core engineers near worlds always need to be on my book. Or can I say, Hey, there's this concept of a gig economy, there's this concept of service companies are other ways of outsourcing. So to speak, some of that traditional work that we say has to be ups, you still need somebody in house, but as a way of creating a base load that I always do. And then I manage the rest differently. But that's not what I saw on the downturn was the minute you need to start cutting. It's like, okay, you get rid of all external services. And then I make everybody my own folks to work. But it's like, maybe if you use service companies and others in a different way previously, can you not continue to do that by really challenging what those core competencies really are for you internally that you must always have on your books? A pause, so that kind of describes the lien. Now,
this is this is rich information. Definitely a couple of things that I want to point out, did you find that the pandemic as a whole sort of facilitated this type of a conversation because what you're touching on is a human element, right? It's all great to balance value versus cost. But you have this whole traditional legacy thinking over here that we don't do it that way. We've done it this way for years and years, right. But now I've got this pandemic, I've got to, I got to be more nimble. I've got to be more agile, I've got to be, I've got to be flexible, your your your point on collaborate. That is like that's, if it was four letters, it'd be a four letter word. But it's not four letters. It's a longer word. But do you find that there? This is all good, but do you find there's a resistance or reluctance from a human perspective to do any of this? Yeah.
So the Collaborate versus compete was two different CEOs. And one of them more recently said the service companies know me the best. The only way I'm ever gonna Really get better than that is I have to work with them. So that's one side some see it. Then there was another one. We were doing a workshop and all that, and I was chatting away. And I'm saying, Okay, what about this theme here. And his perspective was, that sounds good on paper, at the end of the day, I just don't trust them. Not gonna happen. And it's that, that trust, that lack of trust is the hard thing. And it's really going to, it's on both sides. By the way, it's it's not like it's just one direction. But it is a matter of like, who's going to be that first person to say, I'm going to dip my toe, I'm going to take a shot at doing that, I want to think a little differently. I think that that person who does is going to be the company will be the trendsetter and be the one that then delivers that to be that last bear standing actually squeeze out every single cost that I can, I can deliver more value more revenue as I can. And that doesn't do it by just using my own brain. So
you're, you're you're hitting on all cylinders. And I really like and yeah, we can we can say, hey, this is an oil and gas. But I find this this approach applicable to manufacturing, not just oil and gas, but manufacturing and absolutely streets where, hey, you don't have all the answers. And if there's a way of being able to work with you, in some way, shape or form where I'm more efficient, you're more efficient we have, we're sharing information that's meaningful. That's a that's a that's a hell of a homerun.
21:29recent one and all that. And:
And honestly, you bring up another good point I being in oil and gas and, and seeing the changes. And I mean, these are swings, these are massive market swings that just go up and down. me if I was king of oil and gas, I would want to create something a little bit more one predictable, a little bit more collaborative, and more mutually beneficial type of thing. Because this this up and down pump handle, that's a tough way to do business, and it's tough way to live.
Yeah, you know, it's, it hasn't been a fun time. So
you wake up and you're saying, Well, I didn't see that one coming. But now what do I do?
23:18o are markedly different than:
I think there's some regulatory pressures as well on on reducing the carbon footprint to so you can meet that stalwart. But, you know, eventually, you're gonna have to play that game and you're gonna have to reduce that footprint in some way, shape, or form, or it's gonna cost you
and that's why it's I was saying, like one of our elements is decarbonizing, because regardless, even if you're like, you know what, I'm here to stay, and I'm just going to keep playing, you will have people looking over your shoulder, you will have people calling you out. So as long as you're saying, Hey, I'm doing my part doesn't mean I'm going to stop drilling and bleak completing wells. But you know, I'm not just needlessly flaring. I'm trying to find ways to reduce my emissions, the large sum the larger independents and all that I think are the ones you're going to focus more on like, alright, carbon capture and different techniques and things like that. So moving a little bit more, but you will, you're gonna have a spectrum.
But again, it's And I can't say this enough, it is a, it is a digital conversation, how do you then capture that data? How do you mind that data? How do you make tactical decisions from the data to be able to achieve all these incredible points that you point out? I mean, it just is. And one of the questions I have for you is that with this with all of this focus, this was great. And the need for that ability to be able to start reaching in doing that digital side. There's, there's, there's a trust factor, there are two, because there are stories out there of people trying to deploy some digital strategy, and it failed, or its cost or it didn't work the way it needs to. We've got to get past that too, don't you
think? So for me, that means it's success. Because if every single digital project you do works, then you're not trying hard enough, you're not really trying to do anything that's a setup there. So but it's, that's what they'll tell you is like, the whole point is experiment. You need to do the the easy, obvious ones to know, I need to do production authorization, can I use analytics to control my artificial lift? Absolutely, then you're gonna have to experiment and try out some, some new types of techniques. And I was on a call with a client earlier who said, you know, they have an idea, I can't share all the details. But let's say hey, we want to try this. But I'm getting some pushback within the organization, because they're saying, well, we don't see anyone else doing this. Okay. So, you know, is it a good idea, you your asset base, and what you have, it's essentially they they're looking at maximizing the value of the hydrocarbon from upstream, midstream and downstream. Yeah. And it's like, by the way, there are people trying this out, but it it's a hard one to solve, because traditionally, I fit fix upstream and I and downstream worries about downstream and we don't necessarily work together. Well, they have a unique situation where they own a lot of that, and they can feed themselves in that, like, Can I think about differently, that sometimes Guess what? downstream, maybe you're gonna take a hit on your numbers, because it's an a benefit upstream, but as a company overall, that's the right thing to do. But it's that mentality of saying, just because it's hard, doesn't mean you shouldn't try it. And you should try some of these. But if every if everything you illustrate complete success, you're not trying harder.
See, that is the first time I've heard that spin. I like that your abs spin? Well, no. It's not a negative, it's a positive. Because you, you point out something that I'm a big fan of, if you're not, if you're not pushing the envelope, you're not failing, you're not trying, you know, even from an incremental perspective, this start small scale, whatever, whatever thing you do, if you're not failing, when I say fail on a negative, you're not learning and you're not being you're not creating value as you continue to get your awesome that is I'll have that link to that record. Right. Your your last barrel standing, right?
Yes, I'll shoot it over here. It's obviously on our deloitte.com website and easy one to just type in their search last barrel, and it will come up and we can give listeners a direct feed on your website as well.
Okay, so you're gonna have that backlink listeners. That's going to be a must a must read. We've just sort of scratched the surface quite a bit. But man, talk about a rich conversation. I've got a lot. My notes were overflowing with numbers. And I liked them and I like the fact that I can do that. Oh, number one. Oh, yeah. Okay. A stalwart. Okay, I'll get that low carbon. I'm okay. I got that. Makes it easier for me. How do people get a hold of you?
You can go ahead and just give me an email at T as in Tom, obviously, Barney, B O N N email@example.com. Got any questions? You want to have a Richard chat? Always happy to connect with folks.
All right, listeners. That's Tom. Tom, you are wonderful. Thank you for the time. Thank you for being on industrial talk. Alright listeners, we're gonna wrap it up on the other side. I'm gonna have all the contact information for Tom and as well as the link and go out to industrial talk.com and get it and just get that backlink get you got to start learning. And I think that Tom is hitting on all cylinders here. Thank you very much. We will be right back.
You're listening to the industrial talk Podcast Network.
All right. Thank you, Tom for being on industrial talk, absolute joy. I love the bullet by bullet solutions that are taking place from your last barrel standing article. absolutely exceptional. Thank you. And I'm telling you Right now you need listeners. You need trusted individuals trusted companies to help your journey into this digital transformation. Top body, Deloitte absolutely spot on trusted. That's what industrial talk is all about featuring trusted professionals that are solving problems. All right, again, we're going out to IoT solutions World Congress will count for those live conversations with Google best around the world as well as distribute tech. my wheelhouse utilities, love it. It's going to be exceptional. And we're all talking about the innovation. We're all educating. We're all collaborating. All right, people be brave Garrett, greatly hanging out with people like Tom and you're gonna change the world. We're gonna have another great conversation shortly. So stay tuned. Do not go away.