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Conference review The offshore oil and gas sector is beginning to recover 2 years after oil prices bottomed out, which has led to cautious optimism in the sector. At this yearโs Offshore Technology Conference, held 30 Aprilโ3 May in Houston, that feeling was evident, although there is still a strong emphasis on cost containment and efficiency. This year was the 50th OTC, which has become a bellwether for the health of the offshore industry. Panel sessions, individual talks, and technical sessions focused on a range of topics, including the current state of the industry, reducing costs, breakthrough technologies in a low-oil-price environment, and the growing use of data analytics and digital technologies. More than 61,300 attendees from more than 100 countries gathered at the annual conference. Below are selected highlights from the conference. Offshore Retrospective The 50th edition of OTC kicked off with a distinguished panel representing operators and service companies evaluating the contributions of the past half century. And while the panel took a look back at the significant progress and innovation that has occurred since 1969, they also painted an optimistic view of the offshore sectorโs future. The opening ceremony featured remarks from Wafik Beydoun, chairman of the OTC Board of Directors, and panelists Patrick Pouyannรฉ, chairman and CEO, Total; Ryan Lance, chairman and CEO, ConocoPhillips; Jeff Miller, president and CEO, Halliburton; Harry Brekelmans, project and technology director, Royal Dutch Shell; Clay Williams, chairman and CEO, National Oilwell Varco (NOV); and Solange da Silva Guedes, chief exploration and production officer,ย Petrobras. Speakers emphasized the progress made in the safety of offshore operations as well as the technological innovation that has occurred since the first OTC was held in a small convention hall in Houston that attracted 2,800 attendees. More than 60,000 industry professionals attended last yearโs conference. After listing some of his companyโs significant offshore developments over the years in Abu Dhabi, Africa, and the North Sea, Totalโs Pouyannรฉ expressed optimism about the offshore sectorโs continued health, noting that many legacy discoveries are still producing or have led to new ones. โThe past also affects the future,โ he said. Oil price cycles and technical challenges will continue to be managed. โIn our industry, anything is possible and nothing is impossible,โ he added. โWhat makes me very confident for the future of offshore and the deep water industry is its capacity to innovate.โ Lance, noting emergence of unconventional onshore output, said offshore projects in the future have to work at the lower end of the oil price boundary. Projects need improved design and efficiency as well as standardization. โDesign one, and build manyโ should be the watchword going forward, he said. The use of data analytics, machine learning, and blockchain all have potential to make the offshore sector more efficient and economic, he added.
- South America (1.00)
- North America > United States > California (0.29)
- Asia > Middle East > Saudi Arabia (0.28)
- (5 more...)
- South America > Suriname > North Atlantic Ocean > Guyana-Suriname Basin (0.99)
- South America > Guyana > North Atlantic Ocean > Guyana-Suriname Basin > Stabroek Block (0.99)
- North America > United States > Gulf of Mexico > Central GOM > East Gulf Coast Tertiary Basin > Green Canyon > Block 826 > Mad Dog Field (0.99)
- (2 more...)
- Information Technology > Artificial Intelligence (0.88)
- Information Technology > Data Science > Data Mining (0.47)
Editor's column After months of speculation, development of one of the worldโs most promising shale plays, Argentinaโs Vaca Muerta field, is entering a new phase and attracting strong interest from supermajors. The Vaca Muerta formation in the Neuquรฉn basin is a world-class source rock. The basin is located in west-central Argentina and is the leading producer of hydrocarbons in Argentina covering 137,000 km2. The recent compensation deal between Repsol and the Argentine government over the governmentโs 2012 expropriation of oil producer YPF eliminated a huge roadblock to international investment in the countryโs most potentially prolific shale play. The compensation agreement offered USD 5 billion worth of government bonds in exchange for the Spanish company agreeing to drop its lawsuits against Argentina and YPF for the expropriation. Repsol had threatened to sue companies that struck shale deals with YPF. The investment uncertainty and threat of litigation kept most operators out of Argentina, despite the countryโs promising shale prospects. The US Energy Information Administration lists Argentina as the fourth-largest holder of technically recoverable shale oil resources at 27 billion bbl. With this hurdle lifted, Argentina hopes that operators now will flock to the country, leading to a shale boom like the one that has occurred in North America. Last year, Chevron braved the waters, agreeing to invest USD 1.24 billion in a Vaca Muerta joint venture. In September, Dow Chemical signed a deal to invest up to USD 120 million to 16 shale gas wells with YPF. Last month, there were reports that Malaysian state oil company Petronas had signed a memorandum of understanding with YPF for a joint venture in the shale play, and there were further reports that ExxonMobil and Wintershall had expressed interest. Shell entered the Vaca Muerta play in 2011 and has been cautious about investment, but now says it will triple upstream spending to USD 500 million this year, compared with USD 170 million in 2013, given the changes taking place. Also attracting investors are Argentinaโs attempts to liberalize oil and gas prices closer to international levels and expectations that the country might modify its existing hydrocarbons law. The existing law governed a local petroleum industry that was self-sufficient and a regional exporter, but the country now faces rising import costs and occasional shortages. The government has promised companies that invest more than USD 1 billion over 5 years that they will be exempt from some foreign-exchange rules and will be allowed to sell 20% of their production outside the country at international prices. YPF controls about one third of Vaca Muertaโs acreage and wants to drill hundreds of wells to produce at least 100,000 BOPD by the end of the decade. As with other countries outside North America, development of shale is anything but certain. In addition to the need to attract operator investment, the country lacks drilling equipment and technical labor and does not have a robust service sector. But outside North America, Argentina appears to be the most interesting global shale play this year and one that Argentina desperately needs to help turn around its energy sector. JPT
- Geology > Rock Type > Sedimentary Rock > Clastic Rock > Mudrock > Shale (1.00)
- Geology > Petroleum Play Type > Unconventional Play > Shale Play (1.00)
- Energy > Oil & Gas > Upstream (1.00)
- Government > Regional Government > North America Government > United States Government (0.56)
- South America > Argentina > Patagonia > Neuquรฉn > Neuquen Basin > Vaca Muerta Shale Formation (0.99)
- South America > Argentina > Patagonia > Neuquรฉn > Neuquen Basin > Vaca Muerta Field > Vaca Muerta Shale Formation (0.98)
Editor's column Government, industry, and labor representatives met recently to discuss solutions to the technical skills shortage in the global oil and gas industry. Although the discussion was wide-ranging, the group came to a consensus on several key points.ย ย The Global Dialogue Forum on Future Needs for Skills and Training in the Oil and Gas Industry, held in Geneva, drew 84 participants representing a variety of countries and viewpoints. The 2-day meeting was sponsored by the International Labour Organization, an agency of the United Nations. The group concluded that the industry has had limited success so far in alleviating what many see as a chronic shortage of skilled technical professionals, and that industry, governments, and labor organizations need to collaborate more on this issue. What was clear is that different countries face different challenges in overcoming the skills shortage. Some developing countries struggle to offer the industry an adequately trained and educated workforce, and complain that operators do not offer enough information on the skills they need and do not provide enough specialized training to indigenous workers. A government representative from Ghana pointed out that there is not enough detailed information on skills shortages needed to identify gaps. In addition, technology is advancing rapidly and new curricula must be developed to meet these changing needs, especially in countries where oil and gas production has recently begun. Whether the industry should favor university degrees over industry experience was also debated.ย ย ย ย In developing countries, industry image and the boom-and-bust cycle that follows oil prices were seen as major deterrents in attracting younger professionals. The group did reach consensus on several points, including: More data on the types of skills needed by the oil and gas industry would help stakeholders identify shortages in developed and developing countries and in different sectors such as deepwater or onshore operations. Operators in particular would need to cooperate in supplying this information. Governments in countries where oil and gas operations are taking place have the responsibility to set adequate safety, health, and environmental standards and should ensure that regulations and contract terms are met. But industry has the responsibility to provide job opportunities for local populations and skill and technology transfer. Similarly, government has the responsibility to provide the industry with a basic educated and trained workforce. But industry should provide specialized training needed in using complex technologies or methods. That could come through apprenticeship programs and knowledge sharing. In addition, industry should provide workers with opportunities to take advantage of continuous training, skills upgrading, and lifelong learning. Several programs have been successful in helping improve technical skills among the workforce, including promotion of science and engineering in the classroom, distance learning, apprenticeships, and training programs funded by governments, industry, and labor organizations. Measures should be taken to improve worker gender equality globally as well as health, safety, and environmental standards. This would improve the industryโs overall image and attract new workers.
- Africa > Ghana (0.25)
- North America > United States (0.16)
Editor's Note:In recognition of SPE's 50th anniversary this year, JPT is conducting interviews with several Society luminaries about their careers, their relationship with SPE, and the changes they have seen in the oil and gas industry and the Society over the past several decades. What do you think are the most significant changes that have occurred in the industry since you joined it 5 decades ago? There have been many changes, both dramatic and multidimensional. Foremost, I think, has been in technology, documented and disseminated wonderfully well by SPE. The industry has gone from simple vertical onshore wells to extended-reach, horizontal, and multilateral wells in water 2 miles deep and under permafrost or arctic pack ice, using digital 3D and 4D seismic, all of which was unimaginable 50 years ago. Next, perhaps, is the dramatic increase in oil production outside the U.S. In 1956, the U.S. was producing nearly half of the world's oil; now it is less than 10%. Past SPE leaders should be given great credit for making the painful, at the time, decisions that enabled SPE to become genuinely international. Additionally, natural gas has gone from being essentially a waste product and priced as such to becoming the cleanest fuel available and in great demand worldwide. Also, the implied employment contract, between a professional and the company for which he works, has changed. Fifty years ago, the employer was much more paternalistic, and mutual loyalty between the professional employee and his employer was expected and respected. Now it is a much more competitive, and often even adversarial, environment. That has both good and bad features, but mostly it is just different and must be recognized and accepted as such. Another huge factor worldwide is a greatly heightened concern for the environment, specifically the perception that global warming, caused in part by fossil fuel use, is a serious problem. Global warming is now center stage in the political arena, and the impact on the industry likely will be large and uncomfortable. But it will not now, nor in the foreseeable future, eliminate the world's need for oil and gas. What are the most significant changes that have occurred in SPE? There have been quite a few changes. A significant one was the evolution of SPE from a branch of the American Inst. of Mining, Metallurgical and Petroleum Engineers to a truly independent Society 50 years ago, and then becoming a technical society that addressed specifically and broadly the burgeoning need for technology documentation and distribution within the oil and gas industry. Next in terms of importance, perhaps, was the decision by SPE leaders to become genuinely international. As the focus of oil and gas exploration and production moved away from U.S. shores, so did the development of and need for technology. SPE's mission to capture that technology, wherever it was developed, and to disseminate it to wherever it was needed, became global in scope. Finally, I would cite the more recent decision by the SPE Board of Directors to enhance an expensive but vital worldwide electronic network, , which is accessible anyplace in the world at any time by any and all professionals in petroleum technology.
- North America > United States > Alaska (0.31)
- North America > United States > California (0.29)
- North America > United States > Alaska > North Slope Basin > Prudhoe Bay Field (0.99)
- South America > Brazil > Parnaiba Basin > Block PN-T-68 > California Field (0.89)
The value of transactions in the oil and gas industry last year more than doubled from 2004, the most activity since the corporate megamergers of 1998โ99. And some of the most active players were the formerly stodgy national oil companies (NOCs). Gazprom's U.S. $13 billion takeover of Sibneft and China Natl. Petroleum Corp.'s $3.9 billion buyout of PetroKazakhstan were two of the largest deals that took place last year, according to consultancy John S. Herold, and China Natl. Offshore Oil Corp.'s unsuccessful $18.5 billion bid for Unocal also made headlines. There was a threefold increase in NOC international merger and acquisition activity last year, according to Herold. Times have changed for state-owned enterprises. Most were founded to ensure national energy independence for their countries and have been major employers as well as major funders of government coffers. Now, it is just as likely to see NOCs competing head to head against the majors for prized acreage or for other companies. Some analysts have begun calling these more aggressive state-owned firms international national oil companies (INOCs). The industry is more internationalized, and state companies have become more adept at using technology. States are also concerned about security of supply. The shift of technology ownership from operators to service companies over the past decade and firmer oil pricesโwhich has lessened the need for external financing of some big projectsโalso have played a role, according to the Accenture consulting firm. Accenture interviewed the senior leaders of 10 NOCs about their objectives. All were interested in growth opportunities, but each had their own distinct priorities, often reflective of their government's policies. All indicated a desire to investigate deals beyond the typical production-sharing or joint-venture contract that, up to now, has been a mainstay of NOC business partnerships. The consequences for the private international oil companies (IOCs)โand the future global energy marketโare huge. This new competition is driving up bid prices and pinching returns for private companies' international projects. And the majors are increasingly looking for oil outside mature provinces in places where state enterprises dominate the landscape. Relationships between NOCs are becoming more strategic and longer term as dealings between IOCs and NOCs are becoming more transactional, the Accenture report concluded. NOCs working together make a formidable bidder for projects. China Natl. Petroleum Corp., Lukoil, Uzbekneftegaz, Petronas, and Korea Natl. Oil Corp., for instance, recently joined forces to develop gas fields in Uzbekistan. Often, an NOC and its host government would prefer to work with another NOC, particularly if the countries have similar geopolitical interests. In a recent speech in Singapore, BP Chief Executive Officer (CEO) John Browne pointed out that eight of the 10 largest oil companies in the world are state-owned. "Those state companies control huge resources, far more in total than all the private-sector companies put together," he said. Since 2003, more than half of all reserves sales have been to state companies, he said. To participate in this new competitive climate, private companies will have to bring value to the table, Browne saidโnamely, "the ability to access and apply knowledge very rapidly on a global scale." That means technology and the skill to apply it. His contemporary, Jeroen van der Veer, Chief Executive of Royal Dutch Shell, agrees. "National and international companies have complementary strengths, and our relationship will be vital for the future," he said at a recent Houston energy gathering. Several NOC leaders in the Accenture study mentioned that they are envious of IOCs' downstream assets and technology. While NOCs may appear to have an advantage over their private counterparts, they also have the burden of satisfying their government's financial needs. In the future, IOCs and NOCs may pursue mergers with each other, particularly if the size and scope of energy projects become burdensome. IOCs and NOCs certainly should consider pursuing joint ventures outside the host country and looking at ways of developing partnerships across the value chain, Marathon CEO Clarence Cazalot said recently. The bottom line is that IOCs need the resources the NOCs control, and NOCs need the technological expertise of private companies, he said.
- Asia > China (0.67)
- North America > United States > Wyoming > Albany County > Laramie (0.15)
The fields are located in the Ucayali River basin east of Lima. This is only the first planned phase of the development. The consortium proposes a second, U.S. $2 billion scheme involving liquefied natural The government says that Block 88, the main Camisea gas field, contains 12.8 Tcf in Camisea has 8.7 Tcf of proven natural gas Getting Camisea's gas to market has not been easy. Input from environmentalists and local groups also delayed development. Camisea's emergence is an important step in a revitalized Latin American energy market, Nevertheless, there are some hopeful signs.
- North America > United States (0.72)
- Asia > Middle East > UAE (0.31)
- North America > Canada > Alberta (0.30)
- (2 more...)
Anticipation that natural gas may one day replace oil as the world's primary Development at Stanford U. The study, titled The Geopolitics of Natural Gas, examines the geopolitical implications of this transition in the world's fuel supply. About 75% of the world's gas resources lie in the former Soviet Union and the Middle JPT is always eager to hear from its readers. If you have any comments or suggestions, please contact me at jdonnelly@spe.org or by phone at 713.779.9595
- Europe (1.00)
- North America > United States (0.71)
- Asia > Middle East > UAE (0.31)
- (2 more...)
Don Paul, SPE, is Vice President and Chief Technology Officer of ChevronTexaco Corp. and is responsible for the company's three technology companies: Energy Technology, Information Technology, and Technology Ventures. Previously, Paul served as Vice President of Technology and Environmental Affairs for Chevron Corp., a position he assumed in 1996, and was responsible for Chevron's worldwide health, safety, and environmental policy and compliance. Paul began his career with Chevron in 1975 as a research geophysicist with Chevron Oil Field Research Co. in La Habra, California. He has held a variety of management positions of increasing responsibility in both upstream operations and technology, including President of Chevron Petroleum Technology Co. and President of Chevron Canada Resources Ltd. Paul is a member of the external advisory boards for the Energy Laboratory and Department of Earth, Atmosphere, and Planetary Sciences of the Massachusetts Inst. of Technology and the School of Earth Sciences Advisory Board of Stanford U.
The historically high oil prices of the past few years have helped. Production from Alberta's 21 currently operating oil-sands projects totaled 1 million Surface mining is no longer used. Natural gas plays prominently in the equation. JPT is always eager to hear from its readers. If you have any comments or suggestions, please contact me at jdonnelly@spe.org or by phone at 713.779.9595
- Europe (1.00)
- North America > United States > Texas (0.49)
- North America > Canada > Alberta (0.37)
- (2 more...)
The changing nature of the North Sea's investment and development climate, and the challenge of extracting additional oil out of mature basins, dominated discussion at this year's Offshore Europe conference in Aberdeen. The conference generated renewed interest because it came at a critical juncture for the North Sea, one of the world's premier upstream provinces. Independents and upstarts are showing new enthusiasm for the area as larger integrated firms look elsewhere for potentially larger oil finds. North Sea production is now declining, and the only way to stem that decline appears to be in extracting new oil from brownfields or smaller new fields. Government and tax policy in the United Kingdom and Norway are encouraging this transformation. The conference offered a variety of perspectives on the current status and future of the region, in particular the U.K. Continental Shelf (UKCS).
- Geophysics > Borehole Geophysics (1.00)
- Geophysics > Seismic Surveying (0.97)
- Europe > United Kingdom > North Sea > North Sea Basin (0.99)
- Europe > United Kingdom > North Sea > Central North Sea > Central Graben > Block 21/10 > Forties Field > Forties Formation (0.99)
- Europe > Norway > North Sea > North Sea Basin (0.99)
- (2 more...)