Decarbon Daily - Issue for August 19, 2021

This week has been all about the supply chain. It's no surprise that supply chain emissions, investments, and disruptions are on the mind of every executive across Energy (and practically every industry). Operating effectively in this new normal is a challenge for the large corporates and small private companies.

NOV, an energy services and equipment provider, is a perfect example of adapting to the supply chain disruptions. The company provides equipment and services to offshore and onshore energy producers of oil, wind, biogas, and more. NOV faces challenges across their business lines and continues to make investments while remaining flexible.

Clay Williams, the President & CEO of NOV, stated:

Other than to say, we go through intensive detailed reviews with 18 business units, every quarter, and I would tell you, it came up in every single business unit. And we spent a lot of time talking about it, because it's kind of everywhere.

The "it" is supply chain disruptions. Yet, the company is not standing still. NOV is busy rejuvenating, repurposing, and repositing the company to adapt to the market.

Repurpose Equipment and Technology

The company is building the offshore vessels that are capable of handling the larger turbines that offshore wind. NOV is able to repurpose offshore jack-ups developed for oil & gas projects for offshore wind projects. They have proven capability in complex offshore environments due to the company's history in offshore oil and gas.

Rejuvenate Existing Assets

NOV's electric frac system is demonstrating reduced emissions while increasing pump volume by nearly four times compared to conventional equipment. The electric frac system can utilize power from the grid or other power sources. With the Delta variant, demand may slow for completion equipment; however, the company is poised for growth with product validation from an IOC and independent operator.

Additionally, carbon capture and flare gas recovery equipment and services are poised for growth as new projects focus on reducing emissions and altering the carbon footprint.

Reposition Business Lines

NOV's large fiberglass business depends on epoxy resin from Malaysia but when the government mandated a shut down of manufacturing due to a Covid spike, the company had to shift to manufacturing plants. This resulted in higher costs yet NOV was able to meet customer's needs. Raw material prices have increased by nearly 40% and shipping costs are four times the 2019 costs.

The fiberglass business line is able to reposition to biogas, solar, and waste treatment services across the globe. The combination of waste treatment and fiberglass expertise allows the company to build industrialized systems to create better biogas solutions.

Clay Williams finished his statement with:

As the world continues to heal from the COVID-19 pandemic and the global economy tries to recapture some sense of normalcy, NOV is poised to benefit in both our traditional oil and gas businesses and our newer ventures in the renewables space.

Companies large and small must repurpose, rejuvinate, and reposition to thrive in the global economy.

Inside this Issue

📈 National Oilwell Varco, inc (NOV) Q2 2021 Earnings Call Transcript
🏛 Congress Pushes New Offshore Wind Supply Chain Tax Breaks
🚢 Petronas Delivers First Carbon Neutral LNG Cargo to Japan's Shikoku Electric
☁️ Danish Carbon Capture Project Presses Ahead