To ride out the current downturn in the oil and gas market, Queensland’s LNG industry needs to model itself on Swedish furniture giant, Ikea, according to a leading industry analyst.
“You’ve got to rethink this industry, you have to become the Ikea of the oil and gas industry – super cheap, snap together, dead simple, we make the bulk of the stuff at some place really cheap, and we bring it into the home and we snap it together with simple tools,” Mr Cann said.
Mr Cann said that with the LNG industry previously being predicated on $100 dollars a barrel for oil, businesses need to prepare for the current environment where a barrel of oil is worth half of that.
“You’ve got to get fit for $US50 dollars,” Mr Cann said.
“We’ve got to make our businesses, in Australia, liveable, fit for 50 bucks.”
“If we can run at 50, we run at 50.”
Over 220 guests were in attendance to hear Mr Cann give insights into the workings of the global oil and gas industry, and give practical lessons on the ramifications and opportunities that the recent sudden falling of oil prices represent for the Surat Basin region.
Mr Cann said businesses in the LNG sector needed to protect their current revenue, reduce costs through innovation and invest in new techniques and capabilities, freeing up underused assets, managing their expectations and upgrading selectively.
Mr Cann also said that while there has been significant concern surrounding the current state of the oil and gas industry, and while there are some difficult times ahead, Queensland was in an enviable position.
“What we are going through right now is a historic shift in how oil is produced on the planet – a shift from this big monstrous 100,000 barrel per day single well projects, to thousands and thousands of wells,” Mr Cann said.
“Now look around, Queensland – this is the land of small producing wells, Coal Seam Gas.
“The people on the planet who know how to do this better than anybody else, are going to be people living in Queensland – because that’s where coal seam gas wells are.
“So this State, might not believe it right now – it doesn’t feel like it, but this State is going to be at ground zero of what’s going to be the next generation industry on the planet, which is the production of lost and lots of small producing wells, in this instance Coal Seam Gas.”