SCHLUMBERGER’S group CEO, Andrew Gould, has warned of a “paramount” need to maximise oil&gas recovery. Speaking at the Howard Weil Energy Conference in New Orleans, Gould talked of three main challenges.
The need for new technologies and processes to help recover unconventional oils and gases while reducing costs, maximising extraction and shrinking the associated carbon footprint.
The need to maximise recovery of conventional hydrocarbons from the remaining under-explored and undeveloped areas. These include deepwater, the Arctic, certain parts of the eastern hemisphere and include deeply buried reservoirs.
The need for increased recoveries from fields already in production. It is here that new technology is likely to make the biggest difference in the short to medium term.
Gould said both demand and supply posed significant challenges and that, while the recovery in oil demand – coupled with Opec discipline – has led to stronger prices, it has also led to a growing fear that increased demand and lower investment will lead to even higher prices in the near future.
Referring to 2010 as a “transition year for energy”, he pointed out that the situation with gas was very different to crude, especially the “remarkable phenomenon” of unconventional gas production.
Gould said: “The costs of extraction and the rapid initial decline rates – particularly for shale gas – mean that higher levels of activity are necessary to maintain production.
“In addition, demand for natural gas is forecast to increase rapidly, with the IEA (International Energy Agency) predicting growth of 1.5% per year over the period from 2007-30.
“It is astonishing that so recent a phenomenon as shale gas has changed the perceived supply-demand balance so rapidly. The US now talks of a considerable reduction in its natural gas imports.
“Europe suddenly seems to have multiple choices for sources of supply.
“While the gas industry may have some short-term issues related to current supply and demand, which are likely to be corrected by 2013, there is no doubt that the longer-term future is extremely bright.
“After all, natural gas is the cleanest-burning fossil fuel with the lowest carbon-dioxide intensity of the fossil fuels.”
Unlike sceptics such as the author of the Last Oil Shock, David Strahan, who made an appallingly negative speech at the 2010 Scottish Offshore Achievement Awards, Gould told his audience that the world was not short of either oil or gas.
“I remain sceptical of any theory predicting that we will be unable to increase the amount of oil&gas we recover within a decade or two,” said Gould.
“But while we have ample resources, we still face the task of transforming them into reserves, and it is here that the true role of technology lies.
“At $70-80 per barrel, most oil resources, except ultra-deepwater, oil shales, some Arctic areas and various liquid conversions, remain economic to develop, although huge unknowns lie in the effects that technology can have on both reserves and recovery.
“Costs will certainly be much higher as the diverse challenges of remoteness, deeper waters, heavier oils and many others will intensify.”
Regarding gas, Gould cited the IEA, which predicts that more than 60% of the production in 2030 will come from new fields placed on production since 2008 and that the vast majority of the world’s natural gas resources are considered unconventional – trapped in low-permeability reservoirs, shales and coal-bed methane formations.
He expressed confidence that lower production costs and more efficient finding and development methods will come through technology. Moreover, the waste that current methods engender will be reduced.
“Not only will we be producing more from unconventional reservoirs, we will also be producing more diverse types of gas, including wet gas, sour gas and carbon-dioxide – all of which further complicate the challenge.”