Oil services executive forecasts fast exploration growth
Exploration services are likely to grow much faster than the overall oil field services market worldwide for years, Schlumberger Chairman and CEO Andrew Gould said.
By OGJ editors
HOUSTON, Oct. 7 -- Exploration services are likely to grow much faster than the overall oil field services market worldwide for years, Schlumberger Ltd. Chairman and Chief Executive Officer Andrew Gould said. Absent a global recession, he is optimistic about the long-term outlook for oil and gas.
"We are now in the fifth year of an up cycle in E&P investment," Gould said in a recent speech, noting that supply remains flat because of a declining mature production base, cost inflation, the time for exploration to translate to production, and increasing numbers of complex, capital-intensive projects in deep water or targeting unconventional resources.
"It is unrealistic to think that 5 years of increased spending in an inflationary environment can compensate for 20 years of underinvestment," he said. He foresees continuing increased spending on exploration worldwide.
"The number of exploration blocks awarded has also been increasing substantially. This part of the business is most influenced by geopolitics and access to reserves," he said. More than 12,000 exploration licenses were awarded during 2003-07 worldwide.
Meanwhile, the offshore drilling fleet is growing. Current construction plans will increase the existing fleet by 29% by 2012, he said, noting that a significant share of the newbuilds are designed for high-specification deepwater operations.
"Among these newbuild rigs are 44 new drillships, which will almost exclusively be involved in exploration and delineation work," Gould said. "In addition, there are 81 new semisubmersibles capable of drilling in ultradeepwater—defined as being deeper than 5,000 ft. These will probably double the number of deepwater rigs involved in exploration activity."