Even as assurances come from industry and analysts that world oil and gas output has not yet peaked, one caveat is almost always attached: Future output growth depends on continued technological advances.
The US Energy Information Administration reported that proved Gulf of Mexico gas reserves dropped 15% in 2004, while proved crude reserves in the gulf fell 9%.
The UK Offshore Operators Association’s Economic Report for 2005 estimates the UK’s production decline for oil and gas through 2020 at 7%/year. Even this rate of decline, however, is contingent upon investments of £4 billion/year. Lower investment levels could see the country importing 90% of its oil and gas needs by 2020. The UK was self-sufficient in natural gas supplies until last year and continues to supply its own crude, according to UKOOA.
New technology will go someway to addressing both of these situations. But new technology requires more than cash outlays alone. It requires actual human capital, qualified minds at work applying themselves to the problems at hand. And as the median age of skilled workers in oil and gas continues to climb, this resource is becoming increasingly scarce.
Industry initiatives
Several new initiatives, however, are emerging to address this situation.
One such initiative is the New Entrant Training Program, a Houston-centered, industry-driven effort to encourage owners and contractors to allow new engineering entrants to the industry to work on challenging projects from the very outset of their joining a participant company. New entrants are graduates with less than 1 year of work experience or new hires from other industries.
The program, says John B. Reed, INTEC Engineering chief executive officer, is intended to narrow the generational gap of well-trained, experienced engineers ready to work offshore, particularly in deep water.
“An engineer’s average age in the industry’s facilities engineering business, for instance, is 47, leaving us limited time to develop new talent trained in the high-technology disciplines required for deepwater initiatives,” said Reed.
Other contractors supporting the program include Alliance Wood Group Engineering LP, AMEC Paragon, Global Project Consultants Inc., JP Kenny, J. Ray McDermott Inc., Mustang Engineering LP, and Technip Offshore Inc. Participating operators include BHP Billiton, ConocoPhillips, Kerr-McGee Corp., and Royal Dutch Shell PLC.
A similar, if not deeper demographic gap is emerging in the UK’s North Sea workforce, with similar initiatives gaining momentum.
Part of the UK’s approach to the problem also includes the establishment of research centers to advance technology in its own right and act as magnets for those interested in offshore oil and gas-related disciplines.
A study commissioned by trade group Subsea UK proposed the development of a center featuring a high-pressure hyperbaric chamber able to test in water at least 4,000 m deep.
A second initiative, undertaken by Aberdeen Renewable Energy Group (AREG), proposed the establishment of a center in Aberdeen, not only to develop new sources of energy from scratch, but also apply oil and gas industry know-how to renewables. AREG has a target of meeting 40% of Scotland’s and 20% of the UK’s electric power demand with renewables by 2020.
Talisman Energy (UK) Ltd., as part of research into the feasibility of creating a wind farm at the Beatrice field on North Sea UKCS Block 11/30, will build and run a demonstrator project consisting of two 5-Mw wind turbines linked by a subsea cable to the nearby Beatrice platform. AMEC will supply the turbines, with installation expected in summer 2006.
At the same time, Talisman continues its oil exploration efforts, earlier this month announcing an oil discovery on UKCS Block 13/23b, adjacent to the Ross and Blake fields.
Similarly, Rotech Engineering Ltd., Aberdeen, is developing 1-Mw tidal turbines for subsea deployment off the west coast of Scotland at the same time that it is deploying remotely operated vehicle-based subsea excavation tools as far away as the Gulf of Mexico and offshore Malaysia.
Young minds
The UK also is trying to capture the imagination of its younger citizens to draw them into the industry with a permanent oil and gas exhibit currently under construction at the national aquarium. The exhibit will include features such as live ROV demonstrations and subsea trees provided by Shell and Cooper Cameron Corp.
As one UK industry source noted: “This is exciting work. We do the equivalent of going into space every day. We need to make the younger generations feel that excitement.”✦
