Offshore Europe Conference Assesses Hydrocarbon Demand Challenges
Authors: Donnelly John 
Published: February 2015

How to manage mature production provinces, both globally and in the North Sea, while meeting rising hydrocarbon demand framed discussion at the 2005 Offshore Europe Oil and Gas Exhibition and Conference in Aberdeen. Attendance at the biennial event, held 6–9 September, surpassed 30,000, breaking the previous attendance record of 26,337 in 2003.

The conference offered a strong plenary and technical program, evident in the opening general session—titled “Reserves Recovery and Decline: A Global Perspective”—that featured a global who’s who in the oil and gas industry. Leading off the session was Andrew Gould, Chairman and Chief Executive Officer of Schlumberger, who also chaired this year’s Offshore Europe conference. Gould con-tends that the world has enjoyed a false sense of energy security because of the excess oil production in the late 1980s and the 1990s. “Today, rapid demand growth due to the emergence of China and India and a lack of investment in an aging production base and refining system have led to very little security of supply of crude oil, natural gas, and refined products,” he said.

A New Era

Gould agreed with other panelists in the opening plenary that hydrocarbons will be the fuel of choice for perhaps decades to come, but that development and production have entered a new phase. “Reserves are large but finite, operations in new areas are becoming even more technically complex, and nonconventional hydrocarbons will form a larger part of the production base” in the future, he said. Principally, production decline rates in mature basins are growing in significance. “We are moving into a period where the bulk of new developments will either be in deep water or harsh Arctic conditions, or in the hands of national oil companies,” he said. “Technology will continue to emerge for finding and development; however, we will also see a huge increase in technology developed to increase production from mature fields and, therefore, prolong the production plateau or slow the rate of decline.”

Mahmoud Abdul-Baqi, Vice President of Exploration for Saudi Aramco, outlined the challenges facing the industry as it strives to develop additional reserves to meet global consumption. “The main challenge is to commit the capital to develop reserves,” he said, and that investment needs to be made now. Regarding technology, greater emphasis should be placed on tools that expand the reserves base and drive down the cost of development. Producers need technology that promotes more accurate imaging of reservoirs, enhances automated field surveillance, and allows for faster drilling, Abdul-Baqi said.

“There is no real physical shortage of oil,” Abdul-Baqi said, contradicting proponents of the “peak oil” argument. In particular, he said, large areas of Saudi Arabia are unexplored, and the country’s exploration program is expanding. In addition, the kingdom will continue to maintain spare production capacity of 1–2 million BOPD. The robust outlook for oil and gas will create numerous opportunities for young professionals, who should be recruited by the industry aggressively, he said.