Addressing Mature Production and Other Global Challenges

Schlumberger Chief Executive Andrew Gould spoke with JPT Editor John Donnelly on the challenges facing the oil and gas industry in mature basins.

Gould: I think that general interest will be focused on how the industry can build and maintain production. There will obviously be a focus on the North Sea and the changes that will occur in the region as it becomes a mature basin. Therefore, I believe that there will be a lot of discussion about the technology needed to increase recovery factors. And there will undoubtedly be some spillover of the debate into where new production will come from and who is going to develop it. So I’m also expecting to hear discussion about the Middle East and Russia as well as on the roles of the national oil companies, the major integrated companies, and the independents.

The biggest issue the industry will face in the next four or five years is people. There is a definite shortage in the availability of sufficient skilled specialists in all of the engineering practices that the industry uses to face a rapid ramp-up in activity. The industry does not really understand the scale of that problem yet, and I do not think any of us have a magic solution for it. It is a problem that will likely be with us for a number of years.

…..I have been on record for some time now saying that, provided there is no drop in demand, the state of supply is such that this cycle will be fairly long. The only thing that would cut it off prematurely would be an actual drop in demand and therefore an economic recession. The business has not stopped being cyclical. But is this a much longer up cycle than 1997 or 2001? In my opinion, yes, because until you start building reasonable surplus production capacity, you are unlikely to see a huge drop in the oil price.

Schlumberger