National oil companies remain committed to ambitious agendas
By Kurt Abraham, Executive Editor
HOUSTON -- An impressive cross-section of national oil company (NOC) executives and governmental officials from hydrocarbon-prone countries re-stated their commitments to ambitious agendas during an OTC (Offshore Technology Conference) panel discussion earlier this week. While they continue to dabble in biofuels and other renewable energy, these officials continue to keep the emphasis on hydrocarbons.
“Our priorities are oil, oil and natural gas,” said Maria das Graças Silva Foster, CEO of Brazilian NOC Petrobras. “And our priority will remain offshore,” she added, pointing out that 92% of Brazil’s oil reserves are offshore. Foster noted that output from 17 pre-salt wells has hit 300,000 bopd since the drilling of these wells began in 2006. Overall, the company will invest $236.7 billion over the next four years, of which 58%, or $137.5 billion, will be spent on E&P projects. All of this spending comes as Petrobras tries to more than double its production from about 2.2 MMbpd of crude and condensate to as high as 5.7 million bpd in 2020. Of the latter figure, 74%, or 4.2 MMbopd would be exported. As part of this plan, Petrobras, itself, would produce 85% of Brazil’s output.
Across the Atlantic, Angola has become the second-largest oil producer in sub-Saharan Africa, said Minister of Petroleum José de Vasconcelos, with 97% of production coming from offshore fields. “Now, in addition to increasing our offshore production further, we will try to boost our onshore production,” said de Vasconcelos. He said that he hopes to see his country secure substantial amounts of investment over the next few years. “Next year, we will offer about 15 blocks onshore, as we work to increase our reserves and production. Offshore, our biggest challenge now is to exploit the ‘pre-salt,’ as opposed to the subsalt in the past. Our other major priority is do develop Angolan LNG. Downstream, we have some problems; we are not able to fully satisfy our internal market.”
Mustafa Sanala, a deputy to the chairman of Libya’s National Oil Company, said that production in that country is almost up to levels from before the revolution that ousted former dictator Moammar Gadhafi. Sanala said that output is averaging about 1.5 MMboed. Speaking on behalf of all NOCs as one group, Sanala said, “I think we should invest more in exploration. Also, we should focus more, and risk more, on unconventional plays, including shales.” Sanala also said that National Oil Company recently formed a team to examine the country’s oil and gas fiscal regime, and take an inventory of available parcels. Of course, any changes have to be ratified by the General National Congress.
The general director of exploration and production at Mexico’s Pemex, Carlos Morales-Gil, said that cooperation with independent oil companies is important for increasing production. “The NOCs control 81% of oil reserves know in the world,” said Morales-Gil. However, he noted that “production is a lot more balanced” mix of NOCs, IOCs and independents. He went on to say that the future has been changed by technological breakthroughs that have made shale oil and tight oil output more economical. “The oil industry must continue investing to satisfy the energy demands of the world,” said Morales-Gil. “We will start developing our portion of the Eagle Ford shale, which we share with the U.S., shortly. One must remember that Mexico energy is driven 95% by hydrocarbons. We want to create jobs and a better standard of living.”
Perhaps the strongest commentary of the day came from David Ramsay, Canada’s Minister of Industry, Tourism and Investment. Reflecting his government’s growing impatience with U.S. President Barack Obama’s seeming inability to approve the Keystone XL pipeline to the Gulf Coast, Ramsay said that Canada is prepared to work on alternative possibilities for moving crude out of the country. “If Keystone flounders and doesn’t get the necessary federal and state approvals, we will have other options to put on the table,” said Ramsay in a firm tone. “We are interested in developing our own resources and getting those resources to market.”
One possible alternative is a 61-year-old, U.S-built pipeline that runs from the Northwest Territories through mountains and on to the Pacific Coast. A second alternative is an existing pipeline that runs into neighboring Alberta. Ramsay noted that the Northwest Territories are home to a sizeable resource base that includes oil sands and shale oil in the central Mackenzie River Valley and stranded natural gas in the Mackenzie Delta. More than 16 Tcf of gas and 1.2 Bbbl of oil have been found in the province, and operators have more than $1.8 billion in capital expenditures tied up in the area over the next two years. “The industry has been dealing with stranded natural gas for more than 40 years,” said Ramsay, who added that it was time for that gas to find a market.
When it comes to renewable energy, including biofuels and solar, most of the countries express an interest in expanding their development of those sources. However, no one in this group is as far along with renewables as Brazil. Foster said that renewables accounted for about 44% of Brazil’s energy mix in 2011. That figure will climb slightly to 46% by 2030, including biofuels.
This OTC panel featured audience participation via hand-held data transmitters. When the crowd was asked, “What should be the priority for technical innovation,” a plurality, 36%, answered that increasing the efficiency of existing energy use was the leading priority. However, 29% answered, “finding and developing new oil and gas resources” as the priority. Another 19% felt that developing alternatives to oil and gas should be emphasized. The remaining 17% favored increasing the efficiency of existing energy supply.