By JIM REDDEN
HOUSTON -- While ample evidence exists to
effectively debunk the peak oil theories, locating and
extracting reserves that are more than capable of meeting
future demand remains a primary challenge going forward, a
diverse panel of national and international companies said
Tuesday morning at the Offshore Technology Conference.
Between 2010 and 2035, we
see energy demand increasing by 51%, and 82% of that demand
will be met by oil and gas, said Farouk Hussain Al Zanki,
CEO of Kuwait Petroleum Corp. (KPC). The primary
challenges we face in the future are availability, reliability and affordability of
energy supplies. These are critical for the good of
Al Zanki was one of six
panelists, representing operators, service companies and
consultants, in a standing-room only panel discussion that
examined the changed patterns that mark the global energy
outlook. Joining him were Ali Mosheri, Chevrons president
of Africa and Latin America; Carlos A. Morales-Gil, Pemex
director general; Shell Director of Projects and Technology Matthias Bichsel; Matt
Rogers, director of McKinsey and Derek Mathieson, Baker Hughes
president, Western Hemisphere.
Morales-Gil said one of the
biggest challenges for international oil companies (IOC) is
gaining access to the mammoth reserves held by the national oil
companies (NOC). He said, however, that partnerships are
critical in providing the energy required for the new
The state oil companies
today hold some 81% of the worlds reserves of
hydrocarbons, he said. It is imperative that any
partnership clearly define the roles all parties are to play in
joint developments. The partnership must be clearly defined to
instill confidence during execution and management.
Shells Bichsel said IOC
joint ventures and production sharing arrangements with
national oil companies are not necessarily confined to the
latters home country. He pointed specifically to
Shells joint work with Chinas CNOOC, which has
extended to major projects in Qatar and Australia.
Our partnership with CNOOC goes beyond its national
boundary. Today, we have several projects in Qatar and also are
working together to develop coalbed methane in Australia for LNG
export, he said.
Citing Shells Innovation
Through Collaboration initiative, Bichsel said joint
development and safe application of emerging technologies hold
the key to meeting ever-increasing demand.
We are involved in a
number joint industry projects, including deepwater subsea
containment, and those will increase in the future.
Morales-Gil echoed that
sentiment, citing the critical importance of continually
developing new technologies, as the industry moves into
ever-deepening waters and accelerates its push for
unconventional onshore reserves. In deep water, for instance,
he pointed specifically to new developments in flow assurance
and new-generation robotics, which he said have
contributed significantly in optimizing production in
To meet the increased future
demand, Al Zanki said Kuwait Petroleum has embarked on a major
initiative to increase production to 4 million bopd from its
current output of 3 million bopd. The national company also is
expanding its refining capabilities with the aim
of producing up to 930,000 bpd of refined product.
In February, KPC unveiled a
major enhanced oil recovery and reservoir management program in
the Divided Neutral Zone that includes, among other
advancements, pressure maintenance, chemical flooding and
water-injection projects. At the same time, the state operator
announced its intention to pursue growth in petrochemicals, both inside and
outside of Kuwait, with a partner focusing on high-growth petrochemical products.
Over the next five years,
Kuwait Petroleum Corp. will invest about $270 billion in both
upstream and downstream projects, Al Zanki said.
Al Zanki pointed out that unlike
years past, OPEC member countries no long hold total sway over
global oil prices, a trend he said will only continue. We
now see $100/bbl oil prices, even though OPEC has increased
production significantly. Non-OPEC production may account for
more than three-fourths of global supply by 2035, he
Much of that supply, the
panelists agreed, will come from the unconventional plays.
A principal target today is the unconventional oil and
gas in North America and elsewhere, he said.
Morales-Gil said beleaguered
U.S. gas producers can take heart, as he envisions gas taking
an increasingly higher role in the years ahead. It is
ironic that a few years ago, North America had the highest gas
prices in the world, and now it has the lowest.
Non-conventional gas will increase in importance, and that is
all because of technology, he said.
This article appeared in the
May 2 official newspaper of the Offshore Technology Conference. To read those
newspapers in full, visit the HPInformer blog by clicking here.