Petrobras CEO JosÃ© Sergio Gabrielli Optimistic about the Future of Oil
Despite a potentially tight market for oil, Petrobras CEO José Sergio Gabrielli is optimistic about the future of the industry. As a world leader in deepwater drilling, Petrobras has become the world's fourth largest company in terms of market capitalization, exemplifying Brazil's emergence as an economic superpower.
Due to sustainable growth of the company, with a record $70 billion share offering in 2010, Gabrielli was recently named Oil Executive of the Year by the Energy Intelligence Group, based on the votes of leaders of the 100 largest companies in the oil industry.
“I must stress that this award represents the culmination of a long and applied work that has been done successfully by a large number of relevant, applied, and courageous workers,” Gabrielli said at the 32nd annual Oil & Money conference in London.
In the 1990s, Petrobras had undertaken some great risks by investing heavily in deepwater oil deposits to find and extract oil from the bottom of the ocean. When a significant amount of oil was found in the Santos Basin in 2004, the course of oil exploration in Brazil changed forever. Digging deeper, Petrobras found an accumulation of giant gas and oil reservoirs in other pre-salt areas, which are expected to more than double reserves and production in upcoming years.
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The company also currently has three biodiesel production plants and is partnered with a major ethanol producing company to boost the capacity of electricity from sugar cane bagasse. "We are far and ahead of almost all countries in the world in the use of renewable sources of energy right now," Gabrielli said in an interview with AS/COA in 2009.
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Though efforts are being made, renewables are a long way from gaining the power that oil can supply for energy, Gabrielli explains. “Over the next 40 years, despite recent advances, the volume of alternative energy as a primary source will still be low,” Gabrielli says in an interview with Forbes. “Wind, solar, geothermal and tidal energy generated in the world today represent less than 1 percent of global energy. If they grow 10 times by 2020, they will reach only 9 percent of what the world needs. Therefore, oil will continue to be the world’s primary source of energy for a long time.”
Oil production will be able to better keep up with demand as cars, transportation systems and homes become more efficient and use less oil over time. And since the demand for energy is higher in developing countries, Gabrielli believes Brazil could very well be one to lead the way.
Technology revolution for water retailers
In April 2017, the UK’s water retail market in the world opened for business – the single biggest change to the water sector since privatisation. This development allowed businesses, charities and public sector organisations to shop around for the best deal.
However, like any industry, this change hasn’t been without its sticking points; here, Paul Williams, CTO at Everflow Tech (pictured far right), discusses how retailers can harness technology to their advantage
Quotations could take up to a week to produce, billing software had to be manually updated and brokers were unable to manage the complete customer journey in one place – all of which took time, cost money and allowed for human error.
The more complexity that was involved in billing or quoting, the more contact end customers needed to have with their retailers, pushing up the cost to serve for every SPID. This meant retailers – ourselves included – found themselves in a situation where profits were simply eaten up by service costs.
We also note that it can traditionally be hard for retailers to stay on top of balancing what they are charging their customers with what they are being charged by the market. To further exacerbate this, the longer a change goes unnoticed, the more trouble it can be to balance the issue.
It was these issues that Josh and his (at the time) small team wanted to ameliorate, creating their own technology in the absence of anything else.
This technology evolved into our award-winning retail sales, billing and customer management platform for the water retail market, and Everflow Tech was launched as a standalone venture in 2018, selling the software externally for other water retailers and their customers to benefit from.
What retailers want
As a relatively new entrant to the world of utilities competition, the water market could be seen to be lagging behind, particularly when it comes to innovation.
In fact, as recently as 2019, Ofwat said it expected the industry to be making technological advances and to be working with a culture of innovation, collaborating with companies both within and outside of the sector.
And with cost-savings for consumers traditionally lower than for other utilities, retailers need to be offering something more – whether that’s better support, energy-efficiency advice or more accurate data.
What’s more, consumers have had a taste of the power of technology, and they’ve come to expect nothing less from retailers across the board.
Another key issue – thrown into sharp relief during the past 12 months (and counting) of a pandemic – is rising levels of arrears, which are likely to increase bad debt beyond margins that retailers originally allowed for when the market was created.
In such a low-margin industry, there is a limit to the amount of debt retailers can take on, especially as recovering costs can be a very slow process. Ofwat has signalled that this issue could be addressed as early as this year, with a mechanism for recovering bad debt to be established during 2021/22.
The market needs simple solutions to better serve the end user, and we were perfectly placed to develop those solutions. At Everflow, our software is designed for the water retail market, by the water retail market.
As well as simple billing, clear-to-understand workflows, and a revenue assurance system to allow retailers to quickly compare market charges, Everflow has also introduced a complete debt solution, allowing missed payment dates to drive late payment charges and escalations automatically.
Retailers are able to design and put out their own bill and quotes, tailoring customer journey and overall experience – whatever the circumstances.
What does the future hold?
Automation is key to any industry; we’re heading into an age of driverless cars and smart homes, and this drive for tech will filter through to our industry, and we need to catch up.
The Internet of Things – a network of physical objects connected to each other – means human error (and effort) can effectively be removed from many everyday tasks, which goes for meter readings too. However, in the 21st century, the water market is still not leveraging previously emerged technology in the form of smart meters to provide accurate billing.
Consumers are also becoming more empowered, both to ask for information and change their preferences if they don’t like what they learn. Retailers need to be armed with this information, not next week, not tomorrow, but now – and, at Everflow Tech, we’re putting that information at their fingertips.
But the retailers themselves need to speak up too, and we will always work with them to get the best ideas on what needs to be developed and when.
Our strong bond with Everflow Water, along with other key customers, means we have a direct interest in making sure our systems serve the water market in the best way they can.
For us, the goal is to make sure retailers on our platform can grow as much as possible, leaving behind laborious daily processes to focus on their own strategic growth and, most importantly, helping their customers.