HOUSTON, May 3 -- The greatest challenges facing independent oil and gas companies are access to talent and commodity price volatility, participants concluded at an Offshore Technology Conference panel discussion of independents in the global energy business.
Jean Claude Gandur, president and chief executive of Addax Petroleum Corp., said independents offer interesting careers to potential graduates that would progress faster than at the majors. He stressed that independents are more flexible and cannot afford to file away study after study on particular engineering concepts, instead empowering employees to take control of their projects and face the challenges.
Of those attending the panel discussion, 15% said accessing resources such as licenses, assets, and new opportunities was the greatest challenge facing independents. William Schneider, vice-president of international at Newfield Exploration Co., said his company has been successful in winning acreage and production by developing creative alliances with other companies, in particular partnering with the majors. Schneider said it was important that independents find innovative ways of reducing costs to compete in the marketplace.
He added that governments, such as Malaysia, had offered attractive terms targeting independent operators to develop acreage that the majors considered uneconomic.
For Helix Energy Solutions Group Inc., the focus has been to pick up mature properties that the majors do not want and extend the life of those assets, said Chief Executive Martin Ferron. The company consists of two complimentary elements: E&P and a service provider.
Ferron said Helix aims to start gas production in second half 2008 from its Noonan discovery on Garden Banks Block 506, 145 miles off Galveston in the Gulf of Mexico. It announced a 100 bcf find earlier in February. "The find and development costs are less than $2/Mcfe and usually in the Gulf of Mexico you're looking at $4.50/Mcfe," Ferron said. Development plans being screened include a fast track subsea tie-back to selected infrastructure located in shallower water. Helix will use its own services to carry out all of the development work for Noonan. The services division is expected to get $100 million of revenue from the work.
Gandur added that good relationships with ministers of host countries and local communities were another advantage that independents hold over the majors. "Many independents have been founded by CEOs who have created portfolios and negotiate with ministers on a 1:1 basis. International oil companies, however, got acreage years ago and follow other processes."
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