Title : New exploration technologies to keep the O&G industry competitive
Abstract:
Despite exceptional profitability in recent years, the Oil & Gas (O&G) industry is facing several challenges that threaten its viability in the face of an increasing share of available investment capital flowing to renewables and other sectors, and a much more uncertain future for oil prices. Furthermore, at the same time that societal pressures and multinational and government rules are forcing O&G companies to offer ever-cleaner energy, they know that if they fail to keep the world supplied with oil and gas, they will suffer dire political consequences for failing to adequately meet continuing demand. That is a significant enough risk to warrant a renewed industry focus on core O&G business, to ensure that markets will be adequately supplied, since the costs of overreaching towards net zero objectives could well be greater than those associated with falling short on mandates for climate change, renewables and decarbonization. The O&G industry can no longer rely on its historical profitability to overcome inefficiencies and other fundamental industry problems. In order to remain competitive in a world where societal, political, environmental and shareholder pressures impose a difficult multi-dimensional objective, the industry must significantly improve the cost effectiveness of its operations and major projects. Many strategies are appropriate for the O&G industry to improve its competitiveness. Analysts have pointed to the need for a renewed focus on core oil and gas business, prioritizing low cost, safe, prolific, durable and price-resilient plays, leveraging existing efficiency-improvement technologies (standardization, AI, digital modelling, etc.), balancing the portfolio of conventional and unconventional assets, pursuing even more industry consolidation, and being more conservative in diversification initiatives and in allocating investments to renewables and other sectors. However, the upstream sector, and especially exploration activities, have absorbed the lion’s share of industry investments while delivering results that have not kept up with efficiency improvements in other areas. Since exploration involves extremely large and long-maturation projects, the risks of future changes in oil prices and in operating demands are also high. Given that scenario, it is proposed that exploration activities are the key area in which the O&G industry must seek efficiency gains to keep the O&G industry competitive. To this end, new exploration technologies and concepts for exploration campaigns must be adopted, which reduce costs and exploration risks, and significantly shorten the exploration cycle, from initial geophysical investigations to confirming successful discoveries.
Audience Take away:
- Various challenges threaten the future competitiveness of the O&G industry
- Justification for focusing on the exploration phase to ensure that the O&G industry remains competitive
- Currently proposed strategies for improving the business performance of the O&G industry are insufficient to ensure its continued competitiveness
- Availability of innovative hydrocarbon exploration technologies
- Existing proposals for a new exploration model for the O&G industry
- How these proposals can reduce exploration costs and risks, and shorten exploration cycles
- Examples of performance improvements from adoption of the proposed changes in how exploration activities are conducted in the O&G industry
