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In this case, the meeting was the opening plenary session of Offshore Europe 2007, and the minds were Malcom Brinded, executive director E&P, Royal Dutch Shell; David Lesar, chairman of the board, president and chief executive officer, Halliburton; Robert Olsen, chairman and production director, ExxonMobil International Limited; and Frank Chapman, chief executive, BG Group.
As you might expect of some of the industry’s brightest lights, they all had some interesting and insightful things to say. Each of their talks had a theme, and within them, some comments and observations were made that are worth repeating.
Brinded pointed out that it is essential for carbon capture and storage (CCS) technology to move forward because in a world where CO2 is constrained, this will allow hydrocarbon projects to move forward. And he believes there is work to be done, saying that CO2 for enhanced oil recovery projects only works in limited circumstances. The implication is that technology for wholesale storage is not yet here.
Where will the next trillion barrels come from? was a question posed by Lesar, who also asked: Does it exist? He answered, yes, and he thinks training and technology will make it happen. It’s no idle comment — according to Lesar, currently one-third of his company’s revenues come from products that didn’t exist three years ago. This is an amazing number for a prominent member of an industry alleged to be risk averse and too slow on technology uptake.
Lesar also commented on the significance of the digital asset, which he characterized as a complex web of technologies that should be considered as an environment or ecosystem. He sees the operations-center component of the digital asset as essential for leveraging talent.
How will energy demand be met in the year 2030? According to Olsen, 80% of it will be still met by oil and gas, and he observed that technology makes the unconventional resources of the past the conventional resources of the future. Echoing Brinded, he said stabilizing CO2 levels will require technological breakthroughs. It may surprise some, but Olsen’s company is pursuing this goal in part as lead sponsor of G-CEP, the Global Climate and Energy Project centered at Stanford University.
Natural gas is Chapman’s province, and he calculates that demand for it will grow 64% from 2004 to 2030. He added that liquefied natural gas (LNG) will compose 15% of US demand by 2015. Chapman made the interesting observation that growing use of LNG will have the effect of converting gas from a regional commodity to a globally fungible asset. This could set the stage for global, rather than regional, gas prices.
A fifth member of the panel, while not specifically part of the industry, should not be overlooked. David Cairns, UK Minister of State at the Scotland Office, said the economic case for devolving North Sea revenues is flawed and Scotland’s interests are best served by powers remaining reserved to Westminster. He said the UK government has no plans to disrupt the sector’s stability by devolving oil and gas powers to the Scottish Parliament.
Needless to say, that issue was not resolved on the spot. In all, the session was interesting, insightful and a reminder that industry leadership is in good hands guided by fine minds.