Exploration: Transforming for the Future
Interview with Mike Bowman, Professor of Development & Production Geology, University of Manchester, will be chairing a session at the 8th Petroleum Geology of Northwest Europe Conference (PGC) this September
How should the North Sea sector adapt its practices to ensure the most efficient exploration and extraction of remaining resources?
I see a number of areas where industry could make a bigger impact and build on the momentum being set up by the creation of the Oil & Gas Authority and the appointment of the new regulator together with the recent government tax changes. We need greater collaboration across operators, service sectors, academia and other SMEs through sharing of knowledge and information and learning from each other more effectively. Focus is needed on those few key themes which will make a sustainable impact on realising the remaining resource base, enhancing well rates and optimising production profiles across the basin in a safe and environmentally sensitive way. This has to be in areas that will also have real short term momentum and be noticed. Achieving this will require a major transformation in the cost base from both an operating and capital cost perspective.
Finally, there has to be change in willingness to take risks by applying new and transforming technologies to tough challenges such as stranded resource access and production and changing the way we operate our assets. We are an industry that is distinguished by a rush to be second. There are many novel solutions that will help make the short-term impact needed. These cover the value chain, from exploring for new fairways and plays through to novel development and production schemes that will offer simple low capex and opex solutions that might make the 10-20 million barrel pool an attractive opportunity and reduce dependence on the existing hub infrastructure.
What is your view of onshore unconventional gas and oil exploration in Europe? Is the prize worth the pain?
Given the pace of growth in the global demand for energy and the need for hydrocarbons, together with security of supply concerns and the pretty dismal track record of global exploration for conventional oil and gas in recent years, I feel we should do all that we can to safely and securely explore for both conventional and unconventional resources in our own region. The value of shale and also conventional gas as a clean fuel that will help bridge to a less hydrocarbon dependant future is clear and we should be doing all we can to support this and make it happen.
A great deal of effort is still need to help educate and inform the general public; to assuage their very understandable fears that this will be risky and unsafe and that it will cause major damage to the environment. This should not be the case, a shale gas industry in the UK and north-west Europe will build on the knowledge and learning from North America but it will be a very different type of industry that is adapted to the region’s social and environmental circumstances – more regulated, technologically smarter, smaller footprint, reduced water demand, transport infrastructure etc.
What technologies will shape the industry in the next 10–15 years?
I see four areas here – one will be transforming the unconventional shale based exploration and production through new and more advanced drilling, completion and stimulation technologies. Secondly, in the North Sea and related mature basin we must create novel solutions that will help transform those many small, currently uneconomic, resources and create value from them. This will require low cost, simple and increasingly automated engineering solutions that will improve operating efficiency, reduce operating costs and also the capital costs of a new development.
From the subsurface side, enhancing the seismic image will be key to enable higher quality images, better surveillance in our subsea fields and help in the creation of new plays together with an increased focus on how we can improve recovery efficiency from our existing fields through EOR, improved surveillance and broader subsurface understanding.
Last, but by no means least, a major shift is required in the level of investment and focus on CCS and other ways to reduce our footprint and be more environmentally sensitive.
Do you foresee North Sea infrastructure being significantly re-purposed for alternative energy use such as CCS or hubs for electricity transmission?
I remain astonished that there is such little activity in this broad and important area. There seems to be very little incentive or push from government. We must do all that we can to reduce emissions, better manage our footprint and make better use of our infrastructure from a broader energy perspective.
Based on your experience of previous dips, do you have any words of advice for oil and gas personnel in the current price environment?
Such times are opportunities for those companies with vision and imagination to invest in the future – people, resources and technology. Prices will rise again, along with the feeding frenzy and escalation of costs that come with this. It is when the price is low that we see the wise investments and novel imaginative leadership come to the fore. I have been very disappointed at the widespread reduction in recruitment and training that has accompanied the fall in oil prices – we don’t seem to have learned much from the past. It is here that such events as PGC8 offer great opportunities for relatively low cost and very powerful learning and knowledge transfer.
PGC takes place on 28–30 September 2015 at the Queen Elizabeth II Conference Centre, London
Early Bird Registration has been extended until the end of June.
Register your place by clicking here.