What makes Maersk Oil unique as an operating company?

We come from a challenging neighborhood and have a proven track record of turning marginal fields that other companies have given up on into a profitable business. We have done it in the North Sea and in Qatar.

What is the company’s biggest investment to date?

"The campaigning should start now with today’s students if we are to attract future engineers, geologists, etc."

The most significant investments over time have been in the Danish North Sea and in Qatar.
We have just finalized the Al Shaheen field development plan in Qatar on time and budget together with Qatar Petroleum. The US $6-billion-plus project is the most complex offshore field development project in the Middle East and included the installation of 15 new platforms, 160 new wells, and 130,000-metric-ton EPC facilities.

What types of plays hold the most appeal for your company?

Maersk Oil has a strong competence relating to platform and pelagic carbonates. In recent years, deepwater turbidite systems have played an increasing role. However, other play types are also being pursued in Maersk Oil operations in the North Sea, Brazil, and the Gulf of Mexico.

What are some of the challenges associated with drilling more complex reservoirs?

Let me give you an example. In Qatar, we have set the world record in horizontal drilling after drilling a 40,320 ft (12,290 m) long well. It is not only the length that is impressive, but that the reservoir was only 4 ft (1 m) thick in places. To drill a well in such a challenging environment takes superior drilling capabilities, outstanding seismic, and most of all, strong team work. The formula of success is the right mix of technical competencies, data, and collaboration.

What role does collaboration play in your plans? What does Maersk Oil look for in a partner?

The Al Shaheen field development, a US $6-billion-plus project, is the most complex offshore field development project in the Middle East.

The operational environment is getting more challenging as exploration and production move into deeper waters, deeper reservoirs, and shale gas plays among others. These new areas are technically more difficult and more expensive, and the risks of failure are higher all together pressuring the industry’s current business model.
To be successful, new technological step-outs are needed together with massive investments. Neither national nor international oil companies can accomplish this alone; so partnering is key to future success. With our strong technical capabilities and project management skills, Maersk Oil brings value to the table.
We are therefore partnering with quite a number of different oil companies around the world, including nationals, majors, and midsize oil companies. In the end, collaboration with other oil companies is an important element in risk management as well as in mutual development of capabilities where we try to build on each other’s strengths and cover weaknesses.

How significant is the role of technology in your plans to expand E&P?

Technology has always been and will always be a cornerstone in the E&P industry. In Maersk Oil, we spend a lot of financial and human resources on continuously improving our technological performance and understanding to enhance recovery from our existing assets as well as to unlock resources in the new and ever more challenging new plays.

For instance, we are working on a CO2 EOR study where we are exploring the possibility of storage and injection of CO2 in some of the mature fields in the Danish North Sea. Indications are that we can significantly improve the recovery and at the same time help reduce greenhouse gas emissions.
Another example is Qatar Research Centre, which we are supporting with several million dollars a year for a 10-year period. The center will help us find out how we can get the most value out of our ultra-long horizontal wells and further enhance oil recovery with advanced fluids and chemicals.

How does the carbon debate figure into your plans?

As a society, as a company, and as individuals, we have to take the climate changes seriously. We therefore continuously look at our environmental performance and find ways to reduce our environmental footprint and become more energy efficient.

For instance, we have initiatives under way to reduce our flaring in the North Sea and Qatar. And we are in the process of assessing whether CO2 injection can be used in some of our maturing fields as means of storage, as well as enhancing recovery. I have to say, however, that this is still early days for this technology, and there is still some way before this is a commercial technology.

Is Maersk Oil investing in renewable energy sources?

We fully support renewable energy as part of the whole supply of energy, but we have chosen not to get involved in renewable or alternative energy, as it is not our core competency.

It is better for society that companies with better skills get involved in these new energy recourses. Our skill and job is to recover oil and gas in the most energy efficient and environmentally responsible manner.

What are some of the company’s biggest challenges?

The good news is that there is plenty of oil and gas to be explored and produced, but the vast majority of known resources are in the control of national oil companies. We and many other international oil companies therefore face the whole issue of accessibility.

Our job is to continuously find ways where we can add value to the resource holders, and this means our value propositions have to be clearer.

Is Maersk Oil struggling like other operators to attract new engineers?

Industry statistics show that half of the current workforce will retire within the next 10-15 years. So, lack of qualified people in the industry is one of the biggest challenges for the industry, and this will, of course, also be a growing concern for Maersk Oil.

We can only attract enough new talent if we change the general perception of the oil and gas industry. We are not a dying dinosaur. On the contrary, oil and gas continues to be the vehicle for economic growth and prosperity as demand for hydrocarbons increases significantly.

Our job is to make sure that there is enough oil and gas available, and this opens up for a variety of career opportunities.

However, in my perspective the license to communication with young people lies within our ability to show how we are trying to minimize our environmental footprint. Our work with CCS (carbon capture and sequestration) and CO2 enhanced oil recovery could be the image changer for Maersk Oil and the industry in general.

The campaigning should start now with today’s students if we are to attract future engineers, geologists, etc.

How are you addressing that challenge?

Maersk Oil is addressing the recruitment challenge in several ways. We have established our own two-year graduate program – Maersk International Technology and Science program – where newly qualified graduates, through an intensive international program, build and enhance their engineering and geoscience capabilities. We are, of course, sponsoring several projects and programs at universities, actively promoting our business by giving lectures and speeches, and participating in conferences and fairs.

Maersk Oil has also developed oil and gas teaching resources that public schools are using in their training.

What sorts of E&P investments are planned for 2010?

I cannot give you any specific figures but last year we drilled 17 exploration and appraisal wells, and we do not expect to do less in 2010.
We will also continue investing in our current operations in Qatar, Denmark, and the UK.

This year we have also bought an interest in the Jack development project in the US Gulf of Mexico. And of course, we continue to look for new investment opportunities.

What types of projects will Maersk Oil invest in over the next five years?

We have a strong focus on growing within deepwater. We have had a good start in Angola, our first deepwater exploration well as an operator, where we made the Chissonga discovery. The next step is to take this experience into the Gulf of Mexico and become an operator of deepwater production in these areas.
That said, there is still plenty of oil and gas in the North Sea and in the Middle East, so improving the recovery rate is a key focus in these areas. For instance, we are looking at EOR as a technological step-out that will positively impact the recovery rate.