Role of the Engineer in the Petroleum E&P Industry in the Year 2000
Authors: Jordan James R. 
Published: December 2007

This paper examines the role of engineers in major oil companies during the period from 1986 to 2000. It looks at both the majors involvement in petroleum E&P and the significant technical challenges facing the industry for the remainder of the 20th century. The paper forecasts the functions of the engineer during this period, the computer support available to the engineer in the year 2000, and the qualifications required of the entry-level engineer in 2000.

Introduction

At the request of the SPE Education and Professionalism Committee, this paper addresses the five following questions.What aspects of the petroleum industry will major oil companies primarily be concerned with in the year 2000?What will be the significant technical problems addressed by the petroleum industry during the remainder of this century?What support will computers provide the engineer in the year 2000, and how should the engineer be prepared to use this technology effectively?How will the functions of engineers change during the remainder of this century?What will be the qualifications required for an entry-level engineering position in the petroleum industry in the year 2000?

This paper does not and cannot predict the future price of oil, the estimated number of active drilling rigs, the job opportunities available for engineers in the petroleurn E&P industry, or any of the other standard measures of economic vitality. To do so would require an infallible econometric model, inerrant data about parameters going into the model, and above all, incredible prescience about future political developments worldwide. This paper is based on certain premises, however, which are summarized in Table 1.

Major Oil Companies' Involvement in Petroleum E&P

In the petroleum E&P or "upstream" business, major companies can be characterized as being more or less self-sustaining in their technical work. In exploration, their own employees do the geology and geophysics; in development and production, they do their own engineering and operations; in both, they are supported by their own research effort.

Major oil companies are defined here as the top 16 oil companies, based on worldwide liquid reserves, of the 1984 OGJ 400.1 This grouping was used because of data accessibility. Thus major components of the worldwide petroleum E&P industry---e.g., British Petroleum, Royal Dutch/Shell Group, various national oil companies, and eastern European organizations---are not included in this analysis.

Today major oil companies account for 4.7% of the world's liquid petroleum reserves, 4.3% of the gas reserves, and 16% of the liquids production (see Table 2). In the U.S., they drill about 15% of both the exploration wildcat wells and development wells, and probably do a somewhat larger percentage of the geologic and geophysical effort that supports this drilling. Whether these relative percentages will increase or decrease by the year 2000 is basically an economic/political question and beyond the scope of this paper.

When considered on a global basis, the major oil companies will operate at a high-intensity level in the year 2000 in all four of the classic E&P functions: exploration, development, production, and EOR. In the U.S. only, the exploration and development functions probably will be at a moderate activity level because the U.S. will be well advanced in the so-called E&P cycle, with a smaller number of exploration and development opportunities available. These relative activity levels are summarized in Table 3.

Significant Technical Challenges for the Remaining 20th Century

To consider the technical challenges facing the petroleum industry during the remainder of this century, we return to the major E&P functions of development, production, etc.

Development.

Table 4 summarizes the future problems and challenges of the development function. The two major challenges in developing oil and gas reserves will be an early, accurate characterization of the reservoir and optimal engineering design in drilling and completing the wells.

Development.

Table 4 summarizes the future problems and challenges of the development function. The two major challenges in developing oil and gas reserves will be an early, accurate characterization of the reservoir and optimal engineering design in drilling and completing the wells.