Paula Dittrick
OGJ Senior Staff Writer
HOUSTON, Sept. 18 -- Industry must continue to find and produce oil and natural gas from increasingly complex geological settings in remote regions and deeper waters, said Schlumberger Ltd. Chairman and Chief Executive Officer Andrew Gould.
Speaking on Sept. 15 at Barclays Capital Energy-Power Conference in New York, Gould said an estimated $350 billion/year is needed in upstream investments for 20 years to meet projected world energy demand.
“With the ‘age of easy oil’ over, and the consequent higher costs of new supply, the challenges of matching supply and demand are not likely to decrease,” Gould said. The International Energy Agency forecasts world energy demand will grow by 40% by 2030, and that hydrocarbon fuels will continue to dominate the global energy mix with coal, oil, and gas supplying almost 80% of primary energy needs.
“New regions are already characterizing the challenges of new supply with whole new provinces emerging. These include offshore Greenland, and central sub-Saharan Africa,” Gould said. “Extraordinary concentrations of activity exist in Brazil, North Africa, the North Sea, southeast Asia, western Siberia and the Caspian area. There is also growing interest in eastern Siberia.”
Oil companies and their service contractors face “an increasingly harder task of turning resources into reserves, and reserves into production,” he said. “I would add that the additional control and oversight that deepwater operations in general can now expect following the Gulf of Mexico accident will undoubtedly add cost.”
Gould referred to the Macondo well blowout on Apr. 20 off Louisiana that resulted in a massive oil spill following an explosion and fire on Transocean Ltd.’s Deepwater Horizon semisubmersible that killed 11 workers. Macondo was drilled in 5,000 ft of water.
In the gulf, Gould said he does not expect “any material improvement until next year” in deepwater drilling activity.
Offshore reserves needed
IEA estimates half of the conventional oil production needed by the end of the next decade has yet to be developed or found.
“Offshore activities—and deepwater operations in particular—merit significant attention,” Gould said, adding that more than half of the oil and gas reserves added in the last 10 years came from offshore discoveries.
“Partly as a result, offshore oil production is expected to be supplying approximately one third of the world’s needs late in the next decade,” he said. “And within that same period, deepwater production will increase steadily to about one third of offshore supply, corresponding to approximately 10% of global oil supply.”
Technological improvements mitigate technical and economic risks, he said. “The complexities of deepwater operations require sophisticated measurement and modeling to ensure that the right well is drilled, and the right information collected.”
Much of the gas needed by 2030 is expected to come from fields on production since only 2008, he said. “As for oil, considerable conventional resources exist, but the vast majority of the world’s natural gas resources are in fact unconventional—trapped in shales, low-permeability reservoirs, and coalbed methane formations.”
Differing hydrocarbon types require greater degrees of technology, both to improve the reliability of operations and to reduce overall finding and development costs, he said. Advances in research and development efforts fall into three primary areas:
• Technologies required helping recover unconventional gases and unconventional oils, such as horizontal drilling.
• Technologies to lower risk and increase operational performance in the recovery of conventional hydrocarbons from underexplored or undeveloped areas, including offshore drilling.
• Technologies to prolong the production of producing reserves and to increase the recovery rates of those reserves.
Contact Paula Dittrick at [email protected].
File photo from PDVSA..
