As cities and economies grow and as the climate changes, water resources come under greater pressure, placing the people and industries that depend on them at risk.
A comprehensive approach to water management begins with a clear understanding of the risks associated with water scarcity and potential impacts on the core business, including interruptions in operations or increases in operating expenses.
Water risks pose a threat to many businesses, but the oil and gas sector is particularly exposed because of its requirements for vast amounts of water across the value chain and the geographical overlap between many of its operations and the places where water is most scarce. Water risks carry the potential to interrupt production, increase operating expenses, and damage reputations and relationships with regulators and local populations.
At the same time, the oil and gas sector is particularly well suited to take the lead in managing water scarcity issues, given its engineering expertise, access to investment funds and its many operations in water-stressed regions.
A successful track record of water projects not only ensures that this essential resource remains available for operations; it also strengthens relationships between oil and gas companies and local stakeholders, including regulators and members of local communities.
Nimr Oilfield – Oman
Shell, for example, worked with the government of Oman to develop an industrial wetland to treat enormous volumes of water used in production in that country’s Nimr oilfield. Since 2011, Shell has used large fields of sloping wetlands and evaporation ponds to process more than 100,000 cubic meters of (used) water every day, water which otherwise would have needed to be injected into deep well aquifers.
Bhit & Badhra – Pakistan
For example, in 2015 Eni began to investigate water consumption in the water stressed Bhit and Badhra regions of Pakistan. Eni identified areas for improvement in managing water, including better management practice and new infrastructure, along with the need to increase awareness of the importance of water resources among employees and local communities. The company invested in the water distribution network for civil and industrial usage, started the reuse of water from treatment plants for irrigation and invested in plant improvements to make better use of water.
Increasingly, oil and gas companies are tapping their expertise to develop innovative approaches to solving water issues, from programs that increase efficiency of water usage in their operations to partnerships that deliver clean water to local populations.
To help mitigate those risks, leading oil and gas companies take three kinds of actions.
1. Optimise water efficiency. To make the best use of available water resources, oil and gas companies will need to work with local partners to develop innovative solutions.
2. Manage wastewater efficiently. Wastewater is also an asset, which companies can use to reduce their demand for fresh water—which in turn cuts costs and increases sustainability. Leading companies protect local water supplies and the environment from pollutants and contamination by developing effective programs to treat water used in their production processes.
3. Fund remediation and sustainability projects. Industry leaders invest in a long-term vision that aims to continuously improve water quality and the access to water supply. They implement programs to reduce or remove any effects that oil and gas operations have on water resources. These projects are also important in building lasting relationships with local governments and populations.
In many cases, oil and gas companies are the only available players with the capabilities, resources, and motivation to address water scarcity issues. Developing the capabilities to manage water issues could represent a source of differentiation, one that highlights a unique value proposition for investors, local stakeholders, and partners.
