Eni bets big on Zohr explorer finding new Egyptian treasure
Eni bets big on Zohr explorer finding new Egyptian treasure
The geologist, who heads Eni’s exploration team, began collecting rocks as a boy growing up in Tuscany, developing a curious eye that eventually led him to discover two of the world’s biggest gas fields this century.
His latest success, the Zohr field off Egypt, sits in an area that Royal Dutch Shell pored over for years before Bertelli persuaded his boss to embark on a drilling program that turned up the Mediterranean’s largest gas discovery.
Now the 59-year-old and his team are under pressure to show they can keep finding treasures others have missed — this time in waters off Mexico where former state oil monopoly Pemex has been exploring for decades.
“We feel there’s room for surprise, even in areas previously explored,” Bertelli said up in his 12th-floor office in Milan, fingering a specimen of crumbly oil-rich rock from the Amoca field it won, with two other fields, in 2015.
Bertelli is a lynchpin in Eni’s corporate strategy which in recent years has seen it break ranks with major rivals and ignore the rush to shale, focusing instead on eking out the world’s conventional energy resources.
In recent years weakness in its “downstream” businesses like refining and chemicals have dragged on profits and placed more of a premium on securing success in “upstream” exploration.
The story of how Eni discovered the giant Zohr field in 2015 offers a window into how Bertelli and his team operate.
He said geologic intuition and experience told him there could be something there that other companies hadn’t spotted.
Previous discoveries in the East Mediterranean had all been in sandstone. But it soon became clear this was not the case in Zohr, prompting a host of rivals to dismiss the site.
What Bertelli and his team saw instead were the outlines of a different kind of structure beneath a thick layer of salt and he had a hunch it could be a form of limestone — carbonate — that he had seen yielding oil and gas in fields as far flung as Kazakhstan and Venezuela.
“Intuition comes from experience,” he said. “In the case of Zohr we’d already seen similar geological features elsewhere.”
Then Eni’s supercomputer came in. It is the third most powerful in the industry after those operated by France’s Total and Norway’s Petroleum Geo-Services, processing 8 million billion operations a second.
It recrunched imaging data hailing from the 1990s to look for signs of carbonate formation, performing the task in a matter of days rather than the months that was once needed.
“The result gave us the confidence to back up our intuition,” said Bertelli. “We decided to go for drilling.”
But if Eni, the seventh-biggest major by output, might have an edge in exploration, its downstream business has struggled. The consequent shift of focus away from those areas has raised concerns it might be overly exposed to oil price volatility.
Its heavy presence in Africa, with the risk associated with working in places like Libya and Nigeria, is for some another reason why the company’s shares have underperformed peers like BP and Total.
A decade ago, Eni was all but washed-up as an explorer.
It was struggling to discover as much new oil and gas as it extracted each year. And its ability to run complex projects was in doubt after losing its role as sole operator of the huge Kashagan oilfield in 2008 due to delays and cost overruns.
Since then it has discovered two world-class gas fields, in Mozambique and Egypt, adding 115 trillion cubic feet of resources.
Bertelli attributes the turnaround to a strategy he helped CEO Claudio Descalzi implement — a focus on simple projects majority-owned by Eni to better control costs and time.
The decision not to chase the shale bonanza that reshaped the industry was also key. “We found a window of opportunity in a field no longer dominated by the super-majors but by smaller independent players.”
Bertelli points to a map on his wall of the company’s giant Mamba field off Mozambique, calling it one of a kind. Then he pauses for thought. “But it’s probably not unique,” he adds. “There’s another one out there waiting to be found.”
Shopping ‘Star Trek’ style becomes next frontier for most major brands
- The use of smart speakers has expanded the possibilities available through smartphone chatbots or text-based systems, including those from Facebook and Apple.
- Voice shopping is expected to jump to $40 billion annually in 2022 in the US, from $2 billion today, according to a survey this year by OC&C Strategy Consultants.
WASHINGTON: Voice shopping using smart speakers and smartphone apps is starting to gain traction among consumers, opening up a new “conversational commerce” channel and potentially disrupting the retail sector.
Devices such as Amazon’s Alexa-powered speakers and Google Home, which use artificial intelligence to respond to voice commands, are offering new choices to consumers who are looking for more convenient ways to order goods and services.
Voice shopping is expected to jump to $40 billion annually in 2022 in the US, from $2 billion today, according to a survey this year by OC&C Strategy Consultants.
“People are liking the convenience and natural interaction of using voice,” said Victoria Petrock of the research firm eMarketer.
“Computing in general is moving more toward voice interface because the technology is more affordable, and people are responding well because they don’t have to type.”
A recent eMarketer survey found 36 percent of US consumers liked the idea of using a home-based assistant such as Amazon Echo for making a purchase.
Amazon’s devices, which hit the market in 2015, were designed in large part to help boost sales, and Google Home was launched a year later.
“This is growing exponentially,” said Mark Taylor, an executive vice president at consultancy Capgemini and co-author of a study on conversational commerce.
“We’re getting very used to asking Alexa or Google to do something on our behalf, which makes it simple to switch and say, ‘Hey Alexa, buy me dog food.’”
Capgemini research shows many consumers are satisfied with voice interactions and that this is growing for search and information as well as for purchases and that this is likely to become a “dominant” mode of consumer action within a few years.
“It’s becoming part of the fabric of our lives,” Taylor said.
The most commonly shopped categories through voice are groceries, entertainment, electronics and clothing, according to OC&C.
For now, Taylor said, most voice-based purchases have been “low consideration goods” such as items consumers have purchased before.
But as people grow comfortable with voice assistants, Taylor sees a potential for growth in “higher consideration” items including insurance or financial services.
An important element will be the tonality and personality established by intelligent assistants that will help companies establish an image or brand.
“People like to talk to human beings because humans give insight and guidance, and AI can do the same thing,” he said.
The “conversational interface” is a tremendous advantage in some situations, said Manlio Carrelli, executive vice president at Live Person, which provides technology for firms in online platforms.
“This is like ‘Star Trek,’” Carrelli told AFP. “I can just say what I want and get it. Consumers don’t care what’s on the back end, they just want to be able to get what they want.”
Carrelli said these systems are important not only for sales, but for customer service — reducing the need for dreaded call centers and saving millions for businesses.
“We’re now entering the mainstream for this market,” Carrelli said. “I don’t think you’ll find a single major brand that isn’t looking at this.”
Walmart last month launched a text-based concierge shopping service called Jetblack, which uses both artificial intelligence and professional assistants offering buying suggestions as part of its effort to compete with Amazon.
But Walmart is one of dozens of retailers offering voice-based shopping through Google Express as well, along with sellers of flowers, hardware, groceries and other goods.
Domino’s Pizza has embraced this technology, allowing orders through Amazon Alexa, Google Home, Facebook Messenger and other platforms.
In France, Google Home devices can be used to shop at the giant retailing group Carrefour. And retailers in China have been partnering tech firms for similar services.
According to OC&C, Amazon Echo speakers are used in around 10 percent of US homes, with 4 percent for Google Home.
According to the report, Apple is lagging behind in this sector as its Siri assistant lacks the AI capabilities of Google, and the new HomePod has only just hit the market.
Apple just this year rolled out “business chat,” enabling consumers to ask questions and place orders through iPhone text or voice commands, and see images of products on the iMessage service. Retailers Lowe’s and Home Depot are among the partners.
Some analysts, however, expect more players to enter the market, with speculation rampant about a speaker from Facebook, which now is allowing business and consumers to connect through Messenger chatbots.
“Voice commerce represents the next major disruption in the retail industry, and just as e-commerce and mobile commerce changed the retail landscape, shopping through smart speaker promises to do the same,” said John Franklin of OC&C.