{"id":12404,"date":"2019-05-27T10:00:07","date_gmt":"2019-05-27T09:00:07","guid":{"rendered":"https:\/\/www.engineernewsnetwork.com\/blog\/?p=12404"},"modified":"2019-05-24T10:12:15","modified_gmt":"2019-05-24T09:12:15","slug":"oil-potential-remains-abundant-beyond-shale","status":"publish","type":"post","link":"https:\/\/www.engineernewsnetwork.com\/blog\/oil-potential-remains-abundant-beyond-shale\/","title":{"rendered":"Oil potential remains abundant beyond shale"},"content":{"rendered":"\n

How does the oil and gas industry plan its future in the ever-changing operating environment? <\/p>\n\n\n\n

The Association of International Petroleum Negotiators (AIPN)<\/a><\/strong> International Petroleum Summit, held in Houston this week, focused on a number of themes which will help companies determine a strategy for the years ahead.<\/p>\n\n\n\n

The event is timely as the implications of the US shale boom continue to reverberate globally. <\/p>\n\n\n\n

In his keynote address, Gulfport Energy\u2019s CEO, president and director, David Wood, noted the rise of US LNG exports, which have emerged thanks to the abundance of shale gas. <\/p>\n\n\n\n

Meaningful growth in US LNG exports is expected over the next decade, he said, providing an outlet for the country\u2019s gas output. This growth is anticipated to help prop-up prices in the longer term. Indeed, Wood said he believed that looking ahead, oil and natural gas have two different trajectories. <\/p>\n\n\n\n

\u201cGas is a much longer-term, bigger part of business for the US to pursue.\u201d<\/p>\n\n\n\n

Wood warned, however, that with the exception of the Permian-Delaware Basin, there is not as much resource as we think when it comes to shale. This will drive exploration and production companies to seek other opportunities outside of shale especially in the longer term.<\/p>\n\n\n\n

Latin America<\/strong><\/p>\n\n\n\n

Latin America was very much in the spotlight, with sessions focussed on Mexico, Brazil and Venezuela. <\/p>\n\n\n\n

During the panel discussion on Mexico, participants agreed that there had not been a dramatic a change for the country\u2019s energy industry since President Andr\u00e9s Manuel L\u00f3pez Obrador took office in 2018. <\/p>\n\n\n\n

The representatives \u2013 from international oil companies (IOCs), as well as one domestic company \u2013 noted that that their concerns over whether they had a future in Mexico had recently been assuaged. They said the new government is impatient at the slow pace of progress in the country\u2019s oil industry as it works to reverse the country\u2019s oil production decline. They attributed this to the new regulatory processes that have been slow having only recently been put into place when the country\u2019s energy sector was liberalised. <\/p>\n\n\n\n

However, Jaguar E&P\u2019s former CEO, Javier Zambrano, said regulators have listened to operators and have made changes. Despite a relatively favourable assessment of the opportunities available in Mexico, the panellists agreed the fact that there are no further bid rounds for acreage currently scheduled presented a major challenge. <\/p>\n\n\n\n

Opportunities are also expected in Venezuela after the current regime changes. <\/p>\n\n\n\n

However, the Venezuela panel discussion focused on the major hurdles facing the country as it moves forward from economic collapse. <\/p>\n\n\n\n

Francisco Monaldi, a Fellow at Rice University\u2019s Baker Institute for Public Policy suggested that any money provided to Venezuela by multilateral agencies and other international players would not go towards oil. <\/p>\n\n\n\n

As a result, reviving the country\u2019s oil industry would rest on others, such as private companies. <\/p>\n\n\n\n

The resource potential is there \u2013 Luis Giusti, a senior adviser for energy and national security at the Center for Strategic and International Studies and former Chairman and CEO of PDVSA, said that every well drilled in the Orinoco Belt would strike oil. <\/p>\n\n\n\n

However, he warned that there are significant challenges involved \u2013 the Orinoco oil is extra heavy, making it difficult to move by pipeline. Meanwhile, the Maracaibo Basin is also very prolific, but most of its oil is located offshore in Lake Maracaibo, where the water causes corrosion of infrastructure.<\/p>\n\n\n\n

The panel discussion on Brazil included the country\u2019s Deputy Secretary of Oil, Natural Gas and Biofuels, Renata Isfer, who said there were opportunities for small and medium sized companies to enter the country, not just majors. <\/p>\n\n\n\n

Tudor, Pickering, Holt & Co\u2019s Managing Director, Joe Amador, who moderated the panel, described Brazil as, \u201cA country with a tremendous resource base and a willingness of the government to offer IOCs \u2026 access to those resources through a variety of contract terms and the ability to grow not only the upstream but downstream\u201d. He added that Brazil would likely achieve 3 million barrels per day of production in the next couple of years.<\/p>\n\n\n\n

Offshore opportunities<\/strong><\/p>\n\n\n\n

US producers will find new, longer-term opportunities that will outlive the shale boom closer to home. BP\u2019s Regional President for the Gulf of Mexico and Canada, Starlee Sykes, talked up the super-major\u2019s resource additions in the Gulf. She attributed these to BP\u2019s breakthroughs in advanced seismic imaging technology which had allowed it to identify resources beneath salt layers.<\/p>\n\n\n\n

The deepwater Gulf remains very competitive as an investment destination, Sykes said adding that drilling and completion costs had reduced by two thirds since 2014, independently of rig rates. These efficiency gains, and others, are in turn bringing down the breakeven price per barrel and \u201cfuelling\u201d new exploration.<\/p>\n\n\n\n

Sykes pointed out that the first well at Thunder Horse, where BP is now proceeding with a new expansion phase, was drilled when oil prices were US$8-10 per barrel. \u201cIf we could make it work then, imagine what we could do now,\u201d she said.<\/p>\n\n\n\n

Climate concerns<\/strong><\/p>\n\n\n\n

Unsurprisingly given the rising prominence of climate change concerns, there was much discussion at the AIPN 2019 International Petroleum Summit as to how the industry should be tackling this issue particularly in the light of international governmental pressure. <\/p>\n\n\n\n

Climate change has political traction whether you believe in it or not, Gulfport\u2019s Wood said during his address earlier. The climate change panellists agreed. Gaffney, Cline & Associates\u2019 global Head of Carbon Management, Nigel Jenvey, moderating the session, said there was \u2018a climate of change\u2019. <\/p>\n\n\n\n

He said that moves by companies to address climate concerns were more than just a marketing exercise. He added, however, that fossil fuels would still be part of the energy mix in the future, but minimising, sequestering and managing greenhouse gas (GHG) emissions would be the key to success. <\/p>\n\n\n\n

Renewables still have a long way to go, it was repeatedly echoed, but operators are increasingly investing in this sector. Still, opportunities for new oil developments \u2013 both in the deepwater and onshore \u2013 remain abundant.<\/p>\n","protected":false},"excerpt":{"rendered":"

How does the oil and gas industry plan its future in the ever-changing operating environment?  The Association of International Petroleum Negotiators (AIPN) International Petroleum Summit, held in Houston this week, focused on a number of themes which will help companies determine a strategy for the years ahead. The event is timely as the implications of …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[106],"tags":[6331,161,359],"class_list":["post-12404","post","type-post","status-publish","format-standard","","category-oil-gas","tag-association-of-international-petroleum-negotiators","tag-oil","tag-shale-gas"],"yoast_head":"\nOil potential remains abundant beyond shale - Engineer News Network<\/title>\n<meta name=\"description\" content=\"How does the oil and gas industry plan its future in the ever-changing operating environment?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.engineernewsnetwork.com\/blog\/oil-potential-remains-abundant-beyond-shale\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil potential remains abundant beyond shale - 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