MADRID—“Collaboration” is a word that seems to be on many people’s lips these days. A challenging price environment coupled with increasingly complex targets means that cutthroat competition might not be the best strategy.
This type of collaboration was on display Monday afternoon as Philip Ringrose, outgoing European Association of Geoscientists and Engineers (EAGE) president, and Helge Hove Haldorsen, president of the Society of Petroleum Engineers (SPE), each spoke about the importance of the two societies working together at the EAGE Forum.
Ringrose said that the focus of his presidency had been on making the EAGE more focused on sustainability. This will be expressed this week through the 633 presentations, 372 posters and 12 pre- and post-session workshops scheduled for the conference, he added.
The sustainability theme also is being expressed through 40 meetings EAGE has held and will hold throughout the year, including near-surface geophysics. The association also has established the Green Fund, a charitable arm that currently is working on preserving the rain forest in Costa Rica and obtaining drinking water from humid air in Madagascar. (Members are encouraged to submit further initiatives.)
EAGE also is testing the use of e-lectures around the world, and again there is a growing core of activities centered on environmental themes, he said.
In addition to SPE, the association continues its collaboration with sister societies such as the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. This year it signed three memoranda of understanding with local societies in other countries.
Haldorsen took the stage next, outlining the “great challenges” awaiting the industry, like where to drill to find plays like the large Lower Tertiary fields in the Gulf of Mexico or the sweet spots in the Bakken and Eagle Ford. But it also has internal challenges such as cost overruns, over-optimistic production forecasts and siloed operations.
He likened the industry’s challenge to Charles Darwin’s basic message: Adapt or else. However, he said, Darwin had a blind spot by overlooking collaboration. “The fittest will be the best collaborators,” he said.
He outlined the success of the industry as “4-E”: enough energy, economics of supply, environmental and social performance, and education of both STEM students and the general public. And the capability of humans to learn shouldn’t be underestimated. “Fifteen thousand years ago, flint arrowheads were the highest technology we had,” he said. “And then we put a man on the moon in’69. Today we’re drilling in 10,000 ft [3,048 m] of water. It’s like going to the moon every day.”
Today the industry produces 93 MMbbl/d of oil and 10 Bcm/d (350 Bcf/d) of natural gas. This energy is fueling human progress and raising living standards, he said. “Changing the world for the better should be in your job description,” he said.
But while most forecasts indicate that oil and gas will still be major contributors to the energy mix as far out as 2040, there is sobering news as well. Haldorsen said that the price crash has so far resulted in 150,000 people losing their jobs. In response to this, SPE has added a link to its website listing 10,000 jobs globally. Combined with cost overruns and the complexity of the targets, the E&P sector needs an “extreme makeover,” Haldorsen said. “We have to do something in every part of the business, whether it’s geoscience, appraisal, field development, value creation, operations or production. We have to do it smarter, faster, cheaper and more sustainably.”
This will require, he added, an “assembly line” of both incremental and disruptive technological improvements.
Finally, Haldorsen pointed again to the “systematic sugar-coating” of forecasts that are increasingly wrong and megaprojects that are consistently over budget. This would be a red card in European football, he said. Better collaboration would help companies come up with a more realistic base case. “We need to operate jointly on the patient,” he said.
Hart Energy is the official show daily for the EAGE Conference & Exhibition. Read more articles from the show daily here.
Recommended Reading
Marketed: KJ Energy Operated Portfolio in East Texas
2024-04-16 - KJ Energy has retained TenOaks Energy Advisors for the sale of its operated portfolio located in East Texas.
NOG Closes Utica Shale, Delaware Basin Acquisitions
2024-02-05 - Northern Oil and Gas’ Utica deal marks the entry of the non-op E&P in the shale play while it’s Delaware Basin acquisition extends its footprint in the Permian.
Vital Energy Again Ups Interest in Acquired Permian Assets
2024-02-06 - Vital Energy added even more working interests in Permian Basin assets acquired from Henry Energy LP last year at a purchase price discounted versus recent deals, an analyst said.
California Resources Corp., Aera Energy to Combine in $2.1B Merger
2024-02-07 - The announced combination between California Resources and Aera Energy comes one year after Exxon and Shell closed the sale of Aera to a German asset manager for $4 billion.
DXP Enterprises Buys Water Service Company Kappe Associates
2024-02-06 - DXP Enterprise’s purchase of Kappe, a water and wastewater company, adds scale to DXP’s national water management profile.