Creating shared value through better management of water and waste in oil and gas

Abstract

In the oil and gas sector, access to water and disposal of liquid and solid waste can be an opportunity to create significant additional value rather than just an operational and environmental risk. With the growing number of oil and gas projects in water-scarce regions, the ascent of unconventional extraction methods, and the growing need for enhanced oil recovery in mature fields, treating and managing water is becoming increasingly complex. In addition, strict regulations for the disposal of (hazardous) wastes require advanced treatment and create pressure to close resource loops. Many of these pressures are felt by the Australian oil and gas sector as it is transiting into the operations phase in LNG developments. Turning water and waste management from a cost item into tangible financial benefits has never been so important for producers.

This extended abstract examines key strategic collaborative case studies built on shared value creation between global oil and gas operators and a global environmental services contractor. In contrast to a more traditional buyer-seller relationship, these strategic collaborations are built around joint project teams that identify and implement value creation opportunities in water and waste management, fully leveraging the unique knowledge and experience of both partners.

The extended abstract outlines this collaboration model, which consists of five distinct value creation levers including top-line improvements through increased production, bottom-line improvements through operational efficiencies, securing license to operate, de-risking of investments through financial engineering, and strengthening of brand value through sustainability and social engagement.