22nd WORLD PETROLEUM CONGRESS REVIEW Crossing the energy bridge From Istanbul...

...to Houston

Stars align Energy in focus Houston calling Produced and Istanbul hosts Top-level talks WPC 2020 distributed by industry leaders tackle challenges heads to Texas

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Upstream has, in just over twenty years since its launch, firmly established itself as the leading news source in the international oil and gas industry. Our policy is to relentlessly pursue accurate, exclusive and independent news on the entire upstream oil and gas industry in every corner of the globe. The focus is on business, policy and the key players. The daring news content is supported by features, commentary and profiles offering an inside view of the issues and the people that make a difference in the industry.

Upstream newspaper is read each week by almost 40,000 influential executives in more than 100 countries. With an experienced team of 30 reporters strategically located in key oil & gas cities on six continents, Upstream provides the unbiased, independent journalism that business leaders have come to depend on to fill their news and in- formation needs. Upstream publishes a weekly newspaper complemented by round-the-clock digital news coverage. www.upstreamonline.com CONTENTS 8 14 Dewhurst 00 Award Rex Tillerson receives prestigious award for his services to the energy industry. Turkish delight Dr Pierce Riemer reviews 6 the success of WPC 22.

Star power Technology is key WPC 22 attracts industry Innovation by industry 12 and political leaders. 18 can have multiple benefits. Photo highlights from WPC 22

30 BP ready to adapt Sustainability Business to respond to US shale can yield lessons 28 lower carbon path ahead. towards curbing emissions. 38 Changing 34 landscape Stepping Shale is driving on the gas Brazilian balance surge in Israel sees Deep water ‘can be as capital. big potential. 36 profitable as shale’. ID statement: Upstream’s 22nd WPC Review (ISSN# 0807-6472) is publishedby NHST Media Group, PO Box 1182 Sentrum, 0107 Oslo, Norway and printed by Southwest Precision Printers, Houston, Texas, US. 22nd WPC Review Editor-in-chief: Erik Means. Chief sub-editor/lay-out: James Ross Mackenzie. Commercial Director: Sidsel Norvik. Email: [email protected] 22nd WPC Review was printed on 22 November 2017

4 22nd WPC REVIEW CONTENTS

Bridging the gap In transition Turkey looks to Call for collaboration diversify its 16 to meet challenges energy mix. of future energy supply and demand.

20-23 26 Saudi strategies New day dawns Aramco targets Opec general secretary overseas gas assets reveals group is reaching and highlights out to US shale players. future vision.

10, 24, 41&49 34 32 Cash needed Opening let- to fuel LNG ter Woodside Turkey looks to chief executive bridge the highlights scope energy gap for investment in sector.

Downstream players 40 confident of growth. Houston kick-off 50-58 Energy capital of the IEA reveals upstream 42 spending picture. world gears up to play host to WPC 23 in 2020. Sonatrach looks to 44 net foreign backing.

Spotlight on industry 46 gender imbalance.

Warning over young 48 talent shortfall.

22nd WPC REVIEW 5 22ND WPC REVIEW Delight at Turkish delivery

​The 22nd World Petroleum Congress was held in Istanbul in July 2017, and it proved a great success. Here, WPC director general Dr Pierce Riemer sums up the event and looks forward to the next gathering of key petroleum industry leaders in Houston in 2020.

ur team in Turkey shift over time towards more energy source. It is abundant co-operation, not only between did an amazing job. renewables. and affordable. Thirdly, we must companies, but also between Headed by the chief We will need all energy sources leverage the power of innovation organisations and nations. Oexecutive of TP in order to satisfy this rising and technology to make the use At the Congress we awarded and under the auspices of the demand and continue to support of oil and gas more efficient and the Dewhurst Award to Rex President of Turkey they pulled economic development, while minimise emissions. Tillerson, Secretary of State for out all the stops. We attracted at the same time mitigating The final factor is policy. In some the US. In his acceptance speech more than 12,000 attendees from the impact of climate change — places policy-makers are acting to he congratulated the industry on 102 countries. Included within another key issue discussed at the advance lower carbon energy. In its achievements and welcomed the attendees we had seven congress. others, technology and economies everybody to the next Congress heads of state, 38 ministers, 620 Driving technology and of scale are acting to bring down in Houston, which he said he will speakers and more than 500 innovation in combination the cost of lower carbon energy. attend “in some form”. A large chief executives, presidents with clear, predictable energy Either way, we need to respond by number of industry leaders and and heads of international policies making lower carbon making our businesses fit for a low experts will be gathered there in organisations. energy sources competitive carbon world. Houston in 2020 to hear the views Energy transition was a were issues seen by many as The World Petroleum Council of key decision-makers on future key topic discussed in several critical. has been dedicated to promoting developments in our industry. sessions. It is often portrayed in Over the next 25 years we are the sustainable management We expect that the geopolitical the media in terms that compare going to see a world economy and use of the world’s petroleum context, climate change, it to a revolution, a moment in that will double in size and resources for the benefit for all. cost resilience, energy mix time when everything changes. billions of people moving out of Since 1933, our mandate has been developments, producer/consumer Countries and different sectors poverty as living standards rise, to provide a neutral platform to issues, people, technology & will advance at different speeds resulting in at least another bring together the best minds in innovation and the industry’s and we are talking about 2 billion energy consumers. the industry with key decision reputation and role in society all changes that will take place over How will the oil and gas makers to discuss the best way will be relevant and challenging generations. industry be able to continue forward for all involved in oil and issues. We will also be able Despite the growth of to provide the safe, affordable, gas. to see how governments and renewables, fossil fuels will reliable, and sustainable energy WPC is contributing through industry leaders take leadership, continue to be a major part of the required by the world’s growing our “meeting places” including commitment and a long-term energy mix. Most organisations population, while mitigating its expert workshops, our leadership perspective in securing the future estimate that more than 70% of climate impacts? conference and youth forum to of clean and sustainable energy. the world’s energy needs by 2050 Firstly, it will require open and the congress. All are ideal arenas will be provided by coal, oil and competitive markets. Secondly, and platforms for establishing Dr Pierce Riemer natural gas. However, the energy we think that natural gas will and nurturing relations and Director General of the mix is expected to gradually provide a vital lower carbon contacts that are the basis for World Petroleum Council

6 22ND WPC REVIEW Photo: World Petroleum Council

7 THE DEWHURST LECTURE

US Secretary of State and former chief executive of ExxonMobil delivered a very personal speech at the opening of the 22nd World Petroleum Congress in Istanbul as part of his visit to receive the prestigious Dewhurst Award, write Kathrine Schmidt and Erik Means.

Tillerson honoured Photo: Tolga SezginPhoto: Tolga

US Secretary of State Rex in the industry, credited his public notice to deliver the I miss you as partners, I Tillerson delivered the Dewhurst professional success to energy crucial to economic miss you as competitors, I Lecture at the opening of the the people of the US growth and poverty miss the healthy debates, the 22nd World Petroleum Congress supermajor. alleviation. collaboration, the breakthroughs in Istanbul, saying that oil and “I’m here because of what Fundamental ingredients that were achieved.” gas players will continue to they did, not because of what I are required to keep investors Tillerson, who was notified “make the massive investments, did,” he told a packed auditorium. active, he said, citing “a strong of his selection for the award in they’ll take the risks and they’ll The audience included myriad rule of law, international order, 2016, joked that he expected to persevere” to keep the world energy ministers and a respect for contract sanctity, make the visit to Istanbul as a supplied with the energy it executives from across the and a level of integrity between leisurely and relaxing trip after needs. globe. The usually reserved partners and counterparts”. his expected retirement from the A moved Tillerson was in Tillerson further used his Tillerson added that the US oil giant. Turkey to accept the prestigious brief remarks to pay heartfelt industry “must continue to But, he said wryly, “it didn’t Dewhurst Award at WPC on the tribute to the “remarkable” invest in human talent” moving quite work out that way”, with opening night of the congress. people of the oil and gas forward. Donald Trump winning the US The former ExxonMobil chief, industry, who he said worked “What I miss most, I miss all presidential election and who spent more than 41 years with great risk and little of you. I miss you as colleagues, asking Tillerson to take the job as

8 22nd WPC REVIEW THE DEWHURST LECTURE

LEADERSHIP: US Secetary of State Rex Tillerson (far left) receives the Dewhurst The Dewhurst Award from WPC president Jozsef Toth. Award, past and present

Rex Tillerson, US Secretary his exceptional leadership of State and past chairman of the largest publicly traded and chief executive of oil and gas company in the ExxonMobil, was recognised world over the past 10 years. for his “outstanding Tillerson is only the tenth contribution to the oil and recipient of the Dewhurst gas industry” with the Award in the history of the highest honour of the World WPC. Petroleum Council, the The award is named after Dewhurst Award. Thomas Dewhurst, who This distinguished lifetime organised the first World achievement award celebrates Petroleum Congress in 1933. Past recipients of the Dewhurst Award:

• Dr Saleh Al-Athel, president, King Abdulaziz City for Science & Technology, Saudi Arabia (1991)

• Sir Peter Holmes , Former chief executive, Royal Dutch/Shell group (1994)

• Kenneth Derr , chairman and chief executive, Chevron (1997)

• Pierre Jacquard , chairman and chief executive, IFP, France (2000)

• Euan Baird , chairman and chief executive, Schlumberger (2002)

• Lord Browne of Madingley, chief executive, BP (2005)

• Ali Al-Naimi, Saudi Arabia’s Minister of Petroleum & Mineral Resources (2008).

• Guilherme De Oliveira Estrella , chief E&P officer, Petrobras Tillerson honoured (2011) • Abdulla Bin Hamad Al Attiyah, former deputy prime minister of energy, Qatar (2014) the nation’s top diplomat, a role injured in July 2016, when a he also filled on Sunday night. coup was attempted against the “Turkey is also an important Turkish government. PREVIOUS RECIPIENT: partner in our efforts to promote “Nearly a year ago the Turkish Abdulla Bin Hamad greater energy security,” he said. people, brave men and women, Al Attiyah, the former Kaia Means “The United States looks stood up against coup plotters energy minister of Qatar. forward to engaging with Turkey and defended their democracy,” on projects that will increase he said. Photo: global energy security, such With the next WPC taking as the southern gas corridor place in Houston in 2020, Tillerson and eastern Mediterranean assured listeners he would show gas. These projects will enable his gratitude by being present at Europe to diversify its energy that event. “We look forward to sources thereby improving its hosting you as well.” energy security.” He added wryly: “I will be Tillerson also took a moment there, in some capacity, one way to remember those killed or or the other.”

22nd WPC REVIEW 9 AT THE SHOW 22nd WPC Opening ceremony

10 22nd WPC REVIEW AT THE SHOW Photos: Sezgin Tolga

22nd WPC REVIEW 11 RETROSPECT Stars shine bright in Istanbul Photos: AFP/Scanpix/Tolga Sezgin/Vladimir Afanasiev AFP/Scanpix/Tolga Photos: All eyes on Istanbul as industry leaders from all around the globe gathered to discuss the major issues in oil and gas, writes Erik Means.

hose who have and little public notice to deliver from Russia (Alexander Novak) the world access to affordable, experienced previous the energy that is crucial to and Qatar (Mohammed Bin Saleh reliable and sustainable energy. editions of the World economic growth and poverty Al-Sada). Energy transition and TPetroleum Congress — alleviation. Immediately thereafter, the sustainability were at the be it as a speaker, a delegate or The star power continued the conference centre was turned forefront of keynotes given by an exhibitor — have learned to next morning when the congress on its head as Turkish President the likes of Amin Nasser from expect something extraordinary, got rolling, with Turkish Recep Tayyip Erdogan arrived for Aramco, Bob Dudley from BP and and the 22 nd WPC lived up to Petroleum chief executive Besim the Presidential Ceremony. Ben van Beurden from Shell. these high expectations with Sisman chairing the opening Turkey is working to become All of them spoke of the flying colours. plenary session, covering the a “key energy bridge” as it plans need to invest in and develop There was a buzz in the very theme of the 22nd WPC — to reduce its energy dependency renewable energy, but they air right from the outset, ‘Building Bridges to Our Energy by diversifying the energy mix, also agreed that oil — and in as industry leaders from all Future’. Erdogan said from the podium. particular gas — will continue corners of the globe gathered The keynote speakers in the “Oil and gas resources are now to be a dominant force in the for an opening ceremony where first two plenaries were a bona associated with war, bloodshed energy mix for decades to come. the main attraction was the fide Who’s Who of the oil and and conflicts. But Turkey wants Fatih Birol, executive director Dewhurst Lecture presented gas industry, with the chief these resources to contribute of the International Energy by US Secretary of State Rex executives of ExxonMobil to peace and prosperity in the Agency (IEA), noted that demand Tillerson. (Darren Woods), Saudi Aramco world, and we have the ability to for crude will continue to grow The former chief executive (Amin Nasser), Shell (Ben be at the epicenter,” he added. for many years to come, despite of US supermajor ExxonMobil van Beurden), Socar (Rovnag This was a recurring theme the steep rise in the number of spoke fondly of the industry he Abdullayev) and China National during the week, and numerous electric vehicles. served for more than 40 years, Petroleum Corporation (Wang speakers addressed the At the same time, the IEA honouring the “remarkable” Yilin) all sharing their thoughts, preeminent challenge facing the released a report showing that people who work with great risk along with the energy ministers oil and gas industry — to provide the oil and gas industry spent

12 22nd WPC REVIEW RETROSPECT

GATHERING: (From left) Turkey’s Energy & Natural Resources Minister Berat Albayrak, Bulgaria’s Prime Minister Boyko Borisov, Turkey’s Prime Minister Binali Yildirim, Azerbaijan’s President Ilham Aliyev, Turkey’s President Recep Tayyip Erdogan, Serbia’s President Aleksandar Vucic, Albania’s Prime Minister Edi Rama and President of the World Petroleum Congress Jozsef Toth.

BOB DUDLEY MOHAMMED BARKINDO BEN VAN BEURDEN

FATIH BIROL DARREN WOODS ALEXANDER NOVAK

25% less on upstream operations Barkindo and Decio Oddone, in 2016 compared to 2015, and director general of Brazilian spending is expected to be flat market regulator ANP. this year. Another central message Aramco boss Nasser spoke delivered by several prominent of the vast under-investment leaders during the week was in the sector in recent years, that technological development saying “almost $1 trillion of will continue to be vital in order investment was supposed to for the industry to tackle the come to the upstream sector that challenges that lie ahead. was deferred or cancelled, and This involves not only this will have an impact over the reducing costs and increasing mid-to-long term on supply”. efficiency, but also shrinking our The Ministerial Sessions are carbon footprint. always a main attraction at “Technology holds the WPC, and this year’s congress promise of reducing global PATRICK POUYANNE and DECIO ODDONE was no exception. Energy energy poverty and emissions,” ministers from myriad countries said ExxonMobil’s Darren on lowering breakeven costs World Petroleum Congress, their — including Russia, India, Qatar, Woods. through efficiency drives. focus can now shift to Houston Algeria, Israel and, of course, Total boss Patrick Pouyanne “We will be able to deliver and ensuring that WPC 2020 will host nation Turkey — were on added that even challenging a project with a breakeven of again attract the top names from site at the Istanbul Congress deep-water fields, such as those under $20 per barrel of oil,” he the oil and gas industry for an Valley for meetings and sessions. in Brazil’s Santos basin, “can said. “It is just a matter of focus innovative week of high-level As were the likes of Opec be as profitable as shale” if the (and) of innovation.” discussions on the future of the secretary general Mohammed industry is able to keep its focus For the organisers behind the sector.

22nd WPC REVIEW 13 ENERGY POLICY Tu r ke y looks to bridge the gap

Country aiming to cut dependency on imports by diversifying its energy mix and building up its own resources, writes Anamaria Deduleasa. s is the norm at the and conflicts. But Turkey wants limited carbon resources. But A strong World Petroleum these resources to contribute we need to reduce our import Congress, the head of to peace and prosperity in the dependency by maximising our country has Astate of the host nation world, and we have the ability to local resource,” Erdogan said. its own energy held a much-anticipated address be at the epicentre,” he said. “We also aim to incorporate on the first full day of the event He called Turkey a local resources, diversify resources or in Istanbul. “considerable actor on the energy our energy mix by adding has a say in it. Turkey is working to become arena”, as it is involved in the renewables and nuclear. a “key energy bridge” as it plans construction of new plants and Promoting energy efficiency is to reduce its energy dependency the development of pipelines also a priority for us.” Turkish President by diversifying the energy mix, that will transport resources Erdogan wants to see Turkey Recep Tayyip President Recep Tayyip Erdogan from Russia, Azerbaijan and the become “a bridge nation” Erdogan said in his speech. Caspian Sea into Europe. that can further promote co- “A strong country has its own The country is at the centre of operation and, as a result, energy energy resources or has a say the huge Tanap and TurkStream security. in it,” Erdogan said, warning pipeline projects that will open Turkish Prime Minister Binali that the exploitation of such up additional gas corridors to Yildirim added: “We want to resources can lead to conflicts. Europe. ensure we become a key global “Oil and gas resources are now “Today Turkey is dependent economy around the world. What associated with war, bloodshed on imports of oil and gas due to we need to do is ensure energy

14 22nd WPC REVIEW ENERGY POLICY

Setting the tone: Turkish President Turkey Recep Tayyip Erdogan at WPC in Istanbul. ploughs in cash

Turkey is investing in the upstream sector in an attempt to reduce its energy import dependency, while at the same time ploughing resources into large midstream projects to ensure security of supply in the wider region, writes Eoin O’Cinneide. Speaking at the opening of the 22nd World Petroleum Congress, Turkey’s Minister of Energy & Natural Resources Berat Albayrak said: “Oil and gas alone will constitute maybe more than 50% of global energy supplies in the near future... And yet we are far behind the level of investment in this sector to ensure global security of supply.” To meet strong domestic demand and in an effort to secure “predictable market conditions”, the Ankara administration is looking to take a more direct stake in upstream investments. “We have begun focusing on oil and gas exploration studies in the Mediterranean and Black Sea regions,” Albayrak said. “We have intense studies Photo: AFP/Scanpix Photo: already under way to conduct seismic research in the Mediterranean basin, and we intend to do the same for the Black Sea as well. These studies will (be followed by) security for Turkey, and energy further exploration and drilling Diversification: diversity to guarantee peace and Turkish Prime activities and will push forward co-operation.” Minister Binali the potential in both seas as well Turkey is investing in the Yildirim as the security contribution of upstream sector in an attempt supply in Turkey and our region.” to reduce its energy import Albayrak name-checked Photo: AFP/Scanpix Photo: dependency, while at the same the Tanap and TurkStream time pushing for renewable and midstream projects as nuclear energy development. significant investments from “Turkey has significant Turkey in wider regional energy potential for the development security. of renewable energy, which is “Our energy diplomacy, expected to account for 30% of however, is driven neither by Turkey’s energy mix by 2023,” pure commercial interests nor Yildirim said. by security of supply alone. We “We also want to add nuclear emphasise the role of energy as to the energy mix, and are a peacemaker and the supporter working with Russia, Japan and of prosperity, rather than as France to build nuclear plants by causing conflicts, as we have 2023.” seen in the past.

22nd WPC REVIEW 15 ENERGY TRANSITION World is heading towards major energy transition

Shell chief executive Ben van Beurden calls for industry to shape up and to look at collaboration in effort to meet the challenges of future supply and demand, writes Fabio Palmigiani.

nglo-Dutch supermajor bridge of perception. The energy growth to take place in Asia and onto a less energy-intensive Shell has warned that transition is regularly portrayed sub-Saharan Africa. pathway to development”. the world is undergoing in terms that compare it to a “Consider where these people Nevertheless, he added that Aa major transition of revolution, a moment in time will be, where the energy these countries will still require its energy system, and that the when everything changes,” he demand is going to emerge. It is hydrocarbons to develop their oil industry must shape up and said. in areas where we can expect to industries, and that the energy collaborate to secure the planet’s “In truth, different countries see living standards rising. There revolution and shift to cleaner energy future. and different sectors will is a huge opportunity here,” he sources of power, like natural In a keynote speech at the advance at different speeds. We said. gas and renewables, will happen World Petroleum Congress in are not talking about a moment He said whereas countries over time. Istanbul, Shell chief executive in time, but of change that will in Europe will have to “renew “There is not one single energy Ben van Beurden said the world take place over generations.” and evolve” infrastructure, transition under way, but many, needs to cross three important Quoting a United Nations those in other parts of the world all running alongside each bridges to address the existing study, he said the world’s with minimal infrastructure, other,” Van Beurden said. “These energy challenges, making a population is expected to limited finances and growing are happening right now, but parallel to the three bridges that increase from 7.5 billion to 11.2 populations will have an entirely they will take many decades to now cross the Bosphorous Strait billion by the end of the century, different task — they have the play out.” in Istanbul. “First there is the with the vast majority of the potential to “shift more directly The second bridge to be

16 22nd WPC REVIEW ENERGY TRANSITION Photo:AFP/Scanpix

crossed, he explained, relates transition will require different There is not other initiatives such as the to solutions. In transport, solutions. There is no one, Carbon Pricing Leadership battery electric cars are gaining single answer to all these one single Coalition, launched in Paris in consumer acceptance in challenges, and that means energy November 2015. some parts of the world, there will be many winners,” he “Creating the investment while wind and solar are predicted. transition landscape in which all these contributing more and more to The third and final bridge, under way, different solutions, and many the global energy supply, he in which the world must make more too, can be developed and said. a commitment to change and but many, deployed at scale, is one of the Van Beurden highlighted that, move in the same direction all running great challenges in the world,” as the world “decarbonises”, towards a successful energy he said. hydrogen fuel cell vehicles will transition, is perhaps the most alongside “We have one planet and, for be needed, as well as liquefied difficult to achieve, Van Beurden each other. good or ill, a shared destination. natural gas as a transport fuel said. Even as the world moves Shell chief and the next generation of Shell will be investing up to forward with different solutions executive Ben sustainable biofuels. $1 billion per year on its new and at different speeds, it must “Different challenges energies division by the end of van Beurden commit to moving in one throughout this energy the decade, and is supporting direction.”

22nd WPC REVIEW 17 ENERGY TRANSITION Technology is the key, says Woods

Innovation by industry can help reduce environmental impacts and raise living standards, writes Kathrine Schmidt.

ey challenges for of global abundance to increase install about 700 kilometres of on strong relationships across the oil and gas global affluence.” pipelines crossing rough volcanic the world, including with industry include That is an important goal when terrain. Production from the national oil companies and Knot just reducing some 1 billion people worldwide project began in 2014. governments. capital spending and reducing still lack electricity, and 3 billion “Technology was critical to Industry’s challenge, he said, emissions, but also bringing are still working only with scale up and make the investment is “reducing energy poverty by energy to new markets to help primitive fuels, he said. profitable,” Woods said. increasing energy access”. increase living standards, ExxonMobil is cultivating new Another technology-driven However, certain conditions ExxonMobil chief executive technology to drive innovative project involved the company’s need to be present to facilitate Darren Woods said. projects, such as efforts to develop giant refining and petrochemical such investment, Woods said. Woods told a plenary session carbon-capture fuel cells and plant in Singapore, which “We can do our jobs when at the World Petroleum Congress advanced biofuels from algae. according to Woods included the markets are open, rules are clear in Istanbul that technology, However, technology has also 2013 start-up of the world’s only and investments are protected,” including that which drove the played a key role in the company’s steam cracker that uses crude as a he said. Without those conditions, global shale boom, has been and staple capital projects, such as its feedstock. “the investment case is much continues to be a key driver for $19 billion PNG liquefied natural Other key efforts include more difficult”. those goals. gas project in Papua New Guinea. liquefied natural gas in Qatar and “If governments restrict “Technology holds the promise There, the company leveraged the West Qurna field in Iraq, as markets, these restrictions of reducing global energy innovation to fly in large drilling well as the Abu Dhabi and Saudi should be applied evenly,” Woods poverty and emissions,” he said. rigs to drill productive gas wells Arabia markets. said, to generate a level playing “It’s about taking advantage and used special techniques to ExxonMobil also works to build field.

18 22nd WPC REVIEW ENERGY TRANSITION Photo: Sezgin Tolga Photo: Sezgin Tolga

DEBATE: ExxonMobil Exploration & Production Company president Steven Greenlee (third from left) joins a panel at the 22nd WPC. Hedging seen as safer bet to offset low prices ExxonMobil sees even costs have become diversification among “much lower”, meaning projects as a key hedge those who aim to focus only against the uncertainty on unconventionals “might created by today’s low oil want to reconsider”. price environment, a top ExxonMobil’s vision exploration executive said, also includes a role for top writes Kathrine Schmidt. exploration projects and That is why the company acreage. The company has invested in increasing spudded its Payara-2 its position in the short- exploration well off the cycle Permian basin in the south American nation of US state of Texas, the PNG Guyana two weeks prior to LNG liquefied natural gas the WPC gathering, Greenlee project in Papua New Guinea, confirmed. and deep-water Area 4 off This is the latest Mozambique, according to exploration test of the major Steven Greenlee, president of discovery called Liza and the ExxonMobil Exploration surrounding accumulations & Production company. that the supermajor believes Speaking in a panel at the could contain between World Petroleum Congress 2 billion and 2.5 billion in Istanbul, Greenlee said recoverable barrels of oil ExxonMobil does not pretend equivalent. to be smart enough to predict ExxonMobil had just which types of projects — reached a final investment Technology holds the short-cycle, long-cycle or decision on the $4.4 billion promise of reducing liquefied natural gas — will first phase on Liza, to be eventually emerge as top produced with a 120,000 global energy poverty performers. Instead it aims barrel per day floating and emissions. It’s about to focus on a variety of production, storage and projects that will perform offloading unit. taking advantage of global well with low oil prices, but Partnerships with key abundance to increase global also offer an upside if prices stakeholders are also crucial go up. for the supermajor across its affluence. “We’re trying to insulate projects. ourselves,” Greenlee “The cycles come and go, ExxonMobil chief executive explained. That said, each but the partners are there for Darren Woods different company will the duration,” Greenlee said. reach different conclusions The sector’s uncertain about how best to handle the future also exerts a cost challenge. in human capital, with While some deep-water recruiting routinely projects are not as profitable suffering during downturns, as they once were, break- Greenlee said.

22nd WPC REVIEW 19 CORPORATE STRATEGY Aramco targets overseas gas Saudi Aramco chief executive Amin Nasser speaks to Upstream editor-in-chief Erik Means in exclusive interview.

audi Aramco, the national oil company, but he programme is all currently in the conventional or unconventional, world’s pre-eminent emphasised that international kingdom. All of our production onshore or offshore, upstream or producer of crude oil, growth is a priority for Aramco. is coming from associated and downstream. Sis actively pursuing an “We are ambitious,” he said. non-associated gas, including Asked when such overseas ambitious new strategy to invest “There is a big team looking at unconventional gas, and this is investments might be heavily in international gas it, assessing the opportunities our target over the next decade forthcoming, Nasser remained production. globally, and then hopefully it — to bring 23 billion cubic feet noncommittal. “You will see it Aramco chief executive will come to our board and (we per day. But this is from existing whenever we announce certain Amin Nasser, in an exclusive will) seek approval based on resources within Saudi Arabia,” joint ventures or partnerships or interview with Upstream in where the opportunities are and Nasser said. heads of agreement.” Istanbul on the sidelines of the where we want to get in… All of “We are at the same time Nasser also spoke freely World Petroleum Congress, this is ongoing right now.” looking at international on topics such as the vast said the company “is exploring Aramco has previously investment in gas. This is a new underinvestment in the all opportunities” within the revealed ambitious gas strategy to look at international upstream oil and gas sector international gas sector. production goals, aiming to gas development and production. worldwide over the past few He declined to reveal double its output to 23 billion We are exploring opportunities years and the recent rise of US specifics on production cubic feet per day within the in different countries.” shale output. targets, investment levels or next decade — but that target, He added that there are “There is an under-investment geographical regions that have Nasser explained, involves many questions that need to be that we have seen — almost caught the eye of the Saudi only domestic production. “Our addressed on such investments — $1 trillion of investment was

20 22nd WPC REVIEW CORPORATE STRATEGY Nasser sees open road for electric vehicles Aramco targets Photo: Saudi Aramco Saudi Aramco chief executive improvement in the Amin Nasser agrees that infrastructure and the the world fleet of electric battery charging time… you vehicles will skyrocket in need to have the incentives number in the years to come, being made available. All of but he does not expect this these things need to happen overseas gas to cause a reduction in global for that growth to continue,” demand for oil, writes Erik Nasser said. Means. In this scenario, he added, Nasser, speaking with the share of electric vehicles Upstream on the sidelines in the global fleet “will be of the World Petroleum significant compared to what Congress in Istanbul, it is today, but that means pointed to a report published also that conventional by the International Energy vehicles will grow in terms Agency, showing that the of numbers”. number of electric vehicles The number of in operation worldwide conventional passenger has surpassed 2 million cars would grow from following 60% growth from 1.2 billion at present to 2015 to 2016. between 1.6 billion and 1.8 However, this number billion in 2040, thus posing pales in comparison with new environmental and the total size of the world technological challenges. passenger vehicle fleet, “We are a strong believer which is currently thought that technology is going to to stand at about 1.2 billion help us to reduce emissions,” and is projected reach 2 Nasser said. He noted billion by 2040. that, as improvements are The percentage of electric made in charging time vehicles in the global fleet “is and the infrastructure for very small but it is growing”, electric vehicles, there Nasser said. That percentage will in parallel be positive stands currently at a mere developments to reduce 0.2% but is expected by most emissions from conventional analysts to reach somewhere cars. between 10% and 20% by The oil industry and the PRIORITIES: Saudi Aramco chief 2040. Such a development car manufacturers will executive Amin Nasser. would mean that the number continue to make gains of electeric vehicles would in reducing emissions, balloon to between 200 Nasser said, because supposed to come to the upstream be hard-pressed to meet this million and 400 million by they are channelling “a sector that was deferred or demand. 2040. lot of investment in that cancelled — and that will have an “US shale definitely is “There has to be direction”. impact over the mid-to-long-term helping by adding a certain on supply,” Nasser said. amount of supply to the The Aramco chief executive is market,” he observed. “However, on record as saying his company shale alone is not going to be plans $300 billion of investment sufficient.” over the next decade, mainly “You have 97 to 98 million on the upstream side. “That is barrels of supply today, and on an indication of our continued that supply we are looking at a Photo: Reuters/Scanpix Photo: investment, regardless of the 3% to 5% (annual) rate of decline, cycle, because our view is that so we’re talking about 3 million the market, in terms of demand, to 5 million bpd in decline that will increase.” needs to be caught up. He went on to predict that “Add to this a lack of CHARGING UP: The number of global demand is likely to rise by investment of $1 trillion, so electric vehicles in use across the between 6 million and 7 million there is a need to have additional world is set for a dramatic increase. barrels per day over the next production coming from five years, and the industry will conventional oil,” he said.

22nd WPC REVIEW 21 CORPORATE STRATEGY Investment vital for energy security

Saudi Aramco sees oil and gas as key long-term component ‘at the heart of the mix’ for decades to come, writes Amanda Battersby.

il will continue to estimates suggest about 20 play a key role in million barrels per day needs to the global energy be offset over the next five years Omix but continued to counter these two effects... investment in the sector is that is a lot of production vital to ensuring global energy capacity to be made up.” security, according to Saudi He said that industry leaders Aramco chief executive Amin and policymakers must develop Nasser. “an aligned and compelling “Rising demand for all sources narrative” that will attract the of energy — with oil and gas at level of investments needed. the heart of the mix — will be Meanwhile, there has been the reality for decades to come,” a dearth of new oil and gas he said. discoveries in recent times, with In his plenary session address the volume of conventional oil at the 22nd World Petroleum found in the last four years down Congress, Nasser questioned more than 50% on the prior 48 whether the world is paying months. sufficient attention to ensuring “And none of this is being adequate energy supplies during helped by misleading narratives the long transition towards about ‘peak oil demand’ and alternative energy sources. ‘stranded resources’,” Nasser “There seems to be a growing said. belief that the world can He added that this translates to prematurely disengage from financial investors shying away proven and reliable energy from making much-needed large sources like oil and gas, on the investments in oil exploration, mistaken assumption that long-term development and alternatives will be rapidly related infrastructure. deployed. Aramco is transforming its Rising demand for all “If we look at the long-term own business model to build sources of energy — with situation of oil supplies, for the resilience and discipline to example, the picture is becoming see the company through the oil and gas at the heart increasingly worrying,” he said. transition. of the mix — will be the Nasser told delegates that “We plan to invest more around $1 trillion-worth of than $300 billion over the reality for decades to come. investments has already been coming decade to reinforce lost during the latest crude price our preeminent position in Saudi Aramco chief executive slump against the backdrop oil, maintain our spare oil Amin Nasser of burgeoning oil demand and production capacity, and natural decline at producing pursue a large exploration assets. “Even conservative and production programme

22 22nd WPC REVIEW CORPORATE STRATEGY Saudis

Photo: AFP/Scanpix Photo: lay out vision Saudi Aramco will spend more than $300 billion over the next decade as the state- owned giant looks to play its part in the ambitious Vision 2030 plan, designed to reduce the kingdom’s dependency on oil and gas revenues, writes Eoin O’Cinneide. The company is also looking to ramp up gas production to feed into the domestic power sector. “Over the next 10 years Saudi Aramco will be spending more than $300 billion,” Ahmad al Saadi, senior vice president of technical services at Saudi Aramco, said at the World Petroleum Congress in Istanbul. The $30 billion or so per year will go on both energy projects development and the services sector as part of Aramco’s large-scale IKTVA (In-kingdom Total Value Add) programme. The oil company’s two major flagship projects are the $5.2 billion King Salman International Complex for Maritime Industries & Services, to be situated at Ras Al-Khair in the Persian Gulf, and the new Energy Investor City. The maritime centre — involving partners Aramco, Lamprell, Hyundai Heavy Industries and Saudi state shipping company Bahri — will build and maintain jack- up rigs as well as offshore and centring on conventional and minimise emissions, as part energy sources. With economic commercial vessels. Another unconventional gas resources,” of the kingdom’s commitment diversification and future nearby yard venture with Nasser said. to the Paris Agreement,” he energy transformation in mind, McDermott International will Aramco is also focusing on added. the kingdom’s Vision 2030 sees work on offshore platforms. its underlying cost structure Aramco plans to double its Saudi Arabia becoming The new industrial city, to “because greater efficiency and domestic natural gas production nothing less than a solar cover 50 square kilometres cost competitiveness — to 23 billion cubic feet per day powerhouse. close to Abqaiq on the east without compromising on over the next decade, which The kingdom has already coast, will be “a world- safety or the environment — is will boost the share of gas in the launched a phased programme class city with high-quality mission critical for everyone. kingdom’s utilities to around 70% to build an initial renewables infrastructure,” Saadi said. Third, we must leverage the — said to be the highest of any capacity of 9.5 gigawatts by 2023, “It will serve as a hub for power of innovation and G20 nation. and Aramco is set to play an support industries directly technology to make the use But the company is not just increasing role in achieving that related to the energy sector.” of oil and gas ultra clean and focusing on conventional goal.

22nd WPC REVIEW 23 AT THE SHOW From the floor...

24 22nd WPC REVIEW AT THE SHOW Photos: Sezgin Tolga

22nd WPC REVIEW 25 SUPPLY & DEMAND Opec breaks the ice and reaches out to US shale Oil producers group takes steps to ‘meet with our colleagues’, writes Amanda Battersby.

PEC Secretary General other’s business prior to that US shale producers were continue this energy dialogue Mohammed Barkindo meeting. forthcoming on the financial with them. revealed at the World “They are operating in a very issues with which they were “As an organisation, we do OPetroleum Congress short-cycle project sector of the prevailing to contend in the not necessarily see the shale in Istanbul that the oil producers industry, whereas we have long current market. industry as an extraneous group had, for the first time, cycle, but we all belong to the The US shale producers component of the oil industry,” reached out to US shale players same market,” Barkindo said. and Opec agreed that, going Barkindo said. with a view to deepening the “We thought it was very forward, there is a need for both “The shale revolution, if you dialogue between the on-paper important for us to reach some to be conscious of their shared would like to call it that, in the rivals. understanding... we all have a responsibility to ensure stability US played a very critical role in “We went out of our way to shared responsibility to ensuring in this market. meeting demand at a time when meet with our colleagues in stability in this market. “This is a shared responsibility the energy landscape was facing this important industry in the “Because, at the end of the day, that requires shared and joint severe difficulties, particularly US and have kick-started this when we first met in Houston action,” Barkindo argued. in some of the major producing dialogue with them,” Barkindo with all the leading producers Although he described the countries,” he told delegates. told the audience in a plenary from all the shale basins, business relationship between “We should not forget the session at WPC. we realised that we were all Opec and US shale producers as a role this shale industry played He admitted that the two impacted by this cycle in very “work in progress”, Barkindo in ensuring security of supply producing “groups” probably negative numbers.” said the cartel intended to and ensuring stability in the had limited knowledge of each Barkindo said that these deepen its discussions and would market,” he added.

26 22nd WPC REVIEW SUPPLY & DEMAND A new approach to business is needed Photo: Devon Energy The world could be facing a supply shortage of oil and gas in the latter half of the 2020s if investment towards sustaining production is not stepped up, according to Chiyoda chairman Katsuo Photo: Sezgin Tolga Nagasaka, writes Amanda Battersby. Boosting investment will require new business models across the whole value chain to improve profitability by reducing costs. There also needs to be risk sharing between stakeholders, Nagasaka told the World Petroleum Congress in CAUTION: Chiyoda chairman Istanbul. Katsuo Nagasaka. “A harder challenge is [the] impact from global warming, range of balanced energy which requires reduction in options, while Chiyoda carbon dioxide emissions,” itself is working on three he said. new technologies to support Japan has already reduced energy supplies in the its share of oil in the primary medium to long term. energy mix, from a high SPERA hydrogen is the of 76% to around 41% today, contractor’s proprietary while gas is expected to technology that is claimed become more important to lead the way towards the in the next few decades, “extensive introduction” of Nagasaka told delegates. hydrogen as a new energy “This is due to its source. availability... and reduced Chiyoda is exploring ways CO2 emissions,” he said. to safely and economically However, Nagasaka store and transport hydrogen cautioned that new in large volumes. investments in liquefied The company is also natural gas projects had working on Japan’s first pilot become “stagnant” under the project for the production DIALOGUE: Opec current economic conditions. of renewable jet and diesel Secretary General “To confront challenges fuels. Mohammed Barkindo. and materialise investment, Furthermore, Chiyoda it is necessary to implement is participating in the appropriate business models consortium studying the to reduce costs and share potential commercial Photo: Sezgin Tolga risks among stakeholders,” exploitation of methane he said. hydrates, which are said to Nagasaka added that be “widely abundant around engineering companies Japan”. worldwide were focusing In 1972 the company on reducing plant costs published its ‘Legacy for and construction costs “by the 21st Century’, which working jointly with owners, advocated the need contractors, vendors and for harmony between government agencies”. industrial development and Japan has committed to environmental preservation. tackling global warming and Nagasaka said this charter is the nation is studying a wide still valid today.

22nd WPC REVIEW 27 SUSTAINABILITY BP ‘ready’ to meet dual challenges

Supermajor aims to play its part in providing key resources while also adapting to the realities of climate change and a move to a low carbon world, writes Kathrine Schmidt.

oday’s energy industry businesses fit with a low carbon back bureaucracy, aiming to use company is bringing online this faces tough challenges world,” he said. “common sense at a large year. in meeting global “First, by providing more scale” across the organisation. As for the host nation, Tenergy needs and energy than ever before, and Technology, where “what used projects such as the TurkStream adopting to the realities of second, reducing carbon to take weeks can now literally and Tanap pipelines will climate change, but BP is ready emissions more than ever take minutes”, will also be deliver resources from Russia, to dive into the task, its chief before. There are no quick crucial, Dudley said. Azerbaijan and the Caspian Sea executive Bob Dudley said at the fixes, no overnight Renewables will play a role into Europe. World Petroleum Congress in solutions.” and are seeing a “competitive” “Turkey is helping write Istanbul. Operational excellence, as business case in some that story as one of the great Demand is continuing to well as key partnerships, will circumstances, according to transport hubs of the world,” grow, “driven by fast-growing be crucial in achieving the Dudley. Dudley added. economies like Turkey”, Dudley task at hand, Dudley continued. So will natural gas, which He concluded: “There’s a told a plenary session. “We The company aims to simplify is being produced by six of transition under way, and we’re need to respond by making our by “doing less, not more” and roll the seven major projects the going to be part of it.”

28 22nd WPC REVIEW SUSTAINABILITY Photo: Sezgin Tolga Photo: Sezgin Tolga

Call for oil companies to be more socially aware

Oil companies should in the process of nation resolution. De Klerk said avoid trying to be “the building. the Paris Accord on climate power behind the throne” De Klerk, speaking change “certainly involved when striking deals alongside another legendary a great deal of intense with governments but peacemaker in former diplomacy on behalf of 195 must also not shirk their Algerian foreign minister signatory countries”. responsibilities when it Lakhdar Brahimi, said the However, referring to the comes to being a socially three biggest challenges recent decision by the US to responsible partner in facing the world this century unilaterally pull out of the emerging economies, are: the fight against poverty, accord, he added: “President according to former climate change, and how to Trump’s decision has South African president manage diversity in societies. enormous implications for FW de Klerk, writes Eoin “Capital rich companies diplomacy. So, there will be O’Cinniede. operating in countries need plenty of work for diplomats “I think it would be wise to take an interest in the and negotiators in the energy of companies to limit their social situation in those field in the foreseeable future. political intervention to countries. They need to get “Some have to secure just making sure they have involved in channelling part new exploration rights, a good regulatory regime of their profits towards the some will be working for in the countries where development of opportunities or against energy cartels, they operate, to help those for the people of that country, others attempting to resolve governments to offer them a to help create jobs, to help if territorial disputes over fair legal system with good there is a medical crisis in energy-rich regions, and security with regards to their that country,” De Klerk said. others exploring ways and We need to investment,” the Noble Peace “Social responsibility is a means of preserving our Prize Laureate said at the big issue when it comes to fragile environment through respond by World Petroleum Congress in multinational companies, the reduction of carbon making our Istanbul. and I am glad to say that, emissions.” “But they should stay in all my interaction with De Klerk said he hoped businesses out of politics because they these companies, I get the crises — such as climate fit with a should not try to be the impression they are taking change — can be resolved power behind the throne this seriously.” peacefully through diplomacy low carbon and get involved in internal Oil players also have a heavy and negotiation. world. politics — (albeit) with one burden to bear when it comes “The alternative of trying to BP chief qualification,” De Klerk said, to helping combat climate resolve such disputes by war, executive referring to what he sees as change, meaning there or by doing nothing to address Bob Dudley companies’ obligation to be will be an increased need climate change, would be too socially responsible partners for diplomacy and conflict ghastly to contemplate.”

22nd WPC REVIEW 29 SUSTAINABILITY

US shale patch yields lessons

Argentina’s Vaca Muerta and other burgeoning unconventional plays can learn from emission reduction techniques in North America, writes Eoin O’Cinneide.

merging to introduce technologies and Iraq ahead by 1.5 Bcm. The shale space that have expressed unconventionals regulations to reduce flaring US, however, was down by 3 an interest in gas flaring markets such as before the sector really kicked off. Bcm, with the rest of the world reduction has doubled in the past EArgentina can learn “One good thing coming out of collectively down 3.6 Bcm. few years, he said. from North America’s mature the shale oil industry in North The reduction in the US The US sat at number six in industry to help cut out America is that there has been came despite satellite imaging, the list of the top 10 flaring methane emissions even before a lot of technology... to monitise gathered in 2015, showing a high nations between 2013 and 2016, production is brought online, the associated gas,” Hamso degree of flaring in core US shale information from GGFR showed, according to Bjorn Hamso, said. basins — such as the Permian, with Russia at the top, followed programme manager at the “Unfortunately, in 2016 there Eagle Ford and Bakken — as well by Iraq and then Iran. Venezuela, World Bank’s Global Gas Flaring has been an increase in flaring as Canada’s oil sands province. Algeria, Nigeria, Mexico, Angola Reduction Partnership (GGFR). globally,” he said, with GGFR Despite continued upstream and Malaysia, in descending Hamso said at the World research showing more than activity in the US, Hamso said order, rounded up the top 10. Petroleum Congress in Istanbul 149 billion cubic feet of methane flaring in the US appeared to have In terms of cubic metres of gas that his group had been speaking emissions that year, up from peaked and he hoped further flared per barrel of oil equivalent with stakeholders in the likes of 147.3 Bcm in 2015. reductions would follow. produced, the US performed even Argentina’s Vaca Muerta shale Iran posted a rise of 4.3 Bcm, The number of companies better, with Russia also far better patch to try to convince them with Russia up 2.8 Bcm and operating in the North American off than Iran and Iraq, while

30 22nd WPC REVIEW SUSTAINABILITY Drive to substantially cut back on gas flaring Photo: Sezgin Tolga Industry is routinely ignoring Foster said. He used a recent existing technology that, if example of how Kazakhstan’s applied, can make substantial state player KazMunaiGas and immediate inroads into was persuaded to do a fresh cutting methane emissions assessment of flaring at its from oil and gas operations, oilfields. the World Petroleum Congress “They went and undertook in Istanbul was told, writes to do a measurement with a Eoin O’Cinneide. company — they did a very “The current information is detailed research — and largely based on estimates... to their shock, when they The technology is available, passed by their operations but it is not being used,” said with infra-red trucks, they Scott Foster, director of the found enormous amounts of sustainable energy division at methane” being leaked from the United Nations Economic the seals or compression Commission for Europe components. (UNECE). “There were problems all Foster said there is a huge along the way, and they fixed opportunity with methane them on the spot. So, it was management in the extractive simply by becoming aware industries to have a positive that they were able to fix them effect — both economical and right away — and it was in environmental — if companies their own commercial interest and regulatory regimes would to do so. only put more effort into “So, leak detection and properly assessing how much repair can be highly effective and where they are actually and has positive returns on emitting methane. investment. The estimate is “We are finding we don’t that 60% of methane leaks have a common approach to that are happening today are methane management across economic to fix and stop,” countries. Foster said. “We need to address the “We should not stop and just scope and the standards for wait for technology to advance how you measure, how you — we just have to get on with monitor, and what is the right it,” he added. One good technology and units, and thing how you report (these things),” coming out of the shale Uzbekistan was way out on its oil industry own as the worst performer, in North GGFR data showed. The World Bank’s Zero Routine Flaring by America is OPPORTUNITY: Scott 2030 initiative challenges oil Foster, director of the companies to make development that there sustainable energy division at the United plans for new fields with zero has been Nations Economic routine flaring, while seeking a lot of Commission for Europe. economically viable solutions to Photo: Tolga Sezgin end routine flaring no later than technology. 2030. The initiative has 24 signatory Bjorn Hamso, governments — including the Global Gas US, Russia, Canada and Iraq — as Flaring Reduction well as 32 companies, including Partnership Shell, BP, Total, Statoil, Eni, Oil & Natural Gas Corporation, Sonangol and Lukoil.

22nd WPC REVIEW 31 GAS MARKETS Call for more LNG investment Woodside Petroleum chief executive says up to $50 billion needed annually to meet forecast demand, writes Amanda Battersby.

iquefied natural gas and they have a different make- producers need to up from and requirements approve projects Gone are the to traditional long-term LNG Ltotalling around 20 days of big, purchasers, Coleman said. million tonnes per annum each “These new customers year in order to meet projected long-term have different credit abilities, future demand, according to pipeline they have different needs for Woodside chief executive Peter contracts, different expectations Coleman. contracts and different pricing points,” he “This year we expect there will that were added. be maybe zero to 5 (million tpa “Many of our customers are of committed new investment). simply cash seeking shorter, more flexible So we are already behind the registers. contracts and with smaller curve,” he told the World parcel sizes. These are all Petroleum Congress in Istanbul. contrary to the investment Peter Coleman, The touted 20 million tpa thesis for long-cycle LNG Woodside investment translates to projects.” between $30 billion and $50 chief executive Coleman told delegates this billion, depending on the means that LNG producers will location of the liquefaction have to put on their thinking projects. caps to come up with ways of strategies to meet the needs of New customers, many of them being more flexible in their prospective new buyers. “We smaller buyers, are emerging marketing and contracting need to help solve this problem Qatar gas expansion ‘positive’ for industry Qatar’s stated intention to boost its “I don’t think that the cancellation and supply going out into the future,” Coleman liquefaction capacity to 100 million tonnes postponement of projects which is now said. “So you have a reliable supplier, a low- of LNG per annum is not expected to come happening in many places would be because cost supplier, coming into the marketplace. at the cost of other such projects, according of the initiation of this project in Qatar.” The timing of the Qatari decision aligns to Seyed Mohammad Hossein Adeli, Meanwhile, Woodside chief executive with where most forecasters are saying that secretary general of the Gas Exporting Peter Coleman said that Qatar’s move, new supply is required into the market. Countries Forum, writes Amanda Battersby. despite competing with Australian LNG “As I sit here and look at it, I say that’s “I’m not sure that a project of one country projects, was not a negative one. a very sensible signal to the market that would lead to the cancellation of a project “I think it’s a very positive signal for the they’re going to produce supply out there, in another country,” he told reporters at market. If I was a buyer I’d say it was a very and if I was a buyer I’d be very pleased with the World Petroleum Congress in Istanbul. positive signal because it gives me surety of it.”

32 22nd WPC REVIEW GAS MARKETS

NEW CUSTOMERS: Woodside chief executive Peter Coleman. LNG is rising as a

Photo: Sezgin Tolga cleaner fuel option The role of natural gas in domestic supply sources are providing cleaner fuel is seen running short. as a key driver for liquefied Laurent Vivier, president natural gas growth even of gas for French giant Total, though the sector faces spoke of how LNG import significant challenges from projects can be developed a rush of new supply coming much more quickly and on stream and high project cheaply now, citing the five development costs, among years it took his company to other factors, writes Mark develop the large Dunkirk Hillier. onshore facility in France Steve Hill, executive vice and comparing that to the 18 president of Shell Energy months that are planned to in Singapore, told delegates get a project online in Ivory attending a session on the Coast using a floating import “role of LNG in security facility. of global energy supply” UK-based Chris Pateman- at WPC in Istanbul that Jones of consultant EY renewables provide clean acknowledged LNG’s and increasingly competitive advantages but warned of power. what he sees as the lack of However, he added that adequate investment going they alone do not supply into LNG right now. He argued reliable power, whereas the that the scale of projects combination of renewables and their high investment and natural gas does do that. requirements remain a Responding to concerns challenge. about natural gas oversupply, He also warned that Hill said that was not an renewables can grow faster issue that he was overly than the oil and gas sector concerned about, arguing is expecting and can come the sector will be helped by online initially at a smaller its role in meeting demand scale, thus needing more growth outside the power modest investments. sector. That means, he suggested, He explained that natural that LNG players need to gas has the potential to focus on developing their capture new markets in areas projects as economically such as transportation fuels and innovatively as possible, and city heating, helped by its making use of strategies such clean burning properties. as modular construction. On top of that, LNG or else this opportunity will rather than an oil or gas price- demand is forecast to grow pass. If our energy (LNG) is not linked formula. Coleman noted more rapidly than that available, these customers will that imports to new countries for natural gas, aided, for simply go somewhere have been facilitated by novel instance, by its flexibility in else.” business models and the supplying seasonal markets. He added that LNG sellers need advent of floating storage and LNG is also able to make use to change the way they sell into regasification units — “a new of existing infrastructure the market and the way they game-changer for the industry”. in countries like Pakistan manage risk in their portfolios. FSRUs were said to account for and Jordan, where original “Gone are the days of big, long- about 30 million tpa of imports, DEVELOPMENTS: Total term pipeline contracts that up from about 10 million tpa in president of gas Laurent were simply cash registers.” 2012. Vivier Meanwhile, LNG contract “That’s just going to continue pricing is expected to change, to grow. It’s a business model with a likely bias towards a that’s flexible. We’re seeing that constant for part of the cost big pipelines are now being — perhaps even a fixed price replaced by virtual pipelines,” for an entire short-term deal — Coleman said. Photo: Sezgin Tolga

22nd WPC REVIEW 33 MINISTERIAL SESSIONS Israel underlines gas ambitions

Energy Minister confident that new reserves off his country can replace declining output from North Sea, writes Anamaria Deduleasa.

srael is pushing ahead as we explore the area further,” with its plans to become Steinitz said. a “significant natural gas Two of Israel’s large discoveries Iexporter” in the near future, are the already producing Tamar as work advances on two possible field, with more than 320 billion The situation in the pipelines from the country into cubic metres in place, and the Europe, and more offshore fields Leviathan field, with between (Mediterranean) region are being brought online. 500 Bcm and 600 Bcm. The wider regarding energy is Speaking at the World region is also home to the Zohr Petroleum Conference in field off Egypt and Aphrodite off changing rapidly. Istanbul, Israeli Minister of Cyprus. National Infrastructure, Energy Additionally, Steinitz said Israeli Minister of National & Water Resources Yuval Steinitz Israel’s waters are home to Infrastructure, Energy & Water said he believes the new reserves between 6 billion and 7 billion Resources Yuval Steinitz found in the region’s deep barrels of oil, and around 200 waters will replace the declining Bcm of gas still to be discovered, reserves from the North Sea. according to government As a result, “the situation in research. the region regarding energy is “In Europe, depletion has changing rapidly”, he said. already started, and it’s we discovered in the eastern “We want to build a pipeline “The real change is that in estimated that in the near future Mediterranean, the levels from Israel to Turkey… A longer the eastern Mediterranean there will be a sharp decline balance out,” Steinitz said. 2200-kilometre pipeline from several significant discoveries in reserves in the North Sea. He added that Israel was Israel to Italy is also in the have been found and more are However, if you look at depletion engaged in “intensive talks” works, with links to Cyprus expected in the next few years, levels and the huge resources about building export pipelines. and Greece that will allow us to Russia warns of ‘destructive’ political tendencies Russian Energy Minister Alexander Novak, in barriers” that are erected by some countries to and natural gas, under the influence of a speech at the World Petroleum Congress in create “uncompetitive marketing of (domestic) political considerations,” he said. Istanbul, called for the removal of “politically production”. Additionally, he claimed Novak called for producing countries motivated restrictions” on oil and gas restrictions are being put in place to to concentrate on uniting their efforts infrastructure projects to bring the prevent the free development of and ensuring that the global economy is industry in line with a global trend of infrastructure. adequately supplied with energy to openness and transparency, writes Vladimir Novak said Russia has seen “plain sabotage” underpin its growth and transformation. He Afanasiev. of economically attractive infrastructure added that the “source of that energy is not Novak said the global energy industry is projects such as the Gazprom-led Nord Stream important”. transforming very fast and may become 2 subsea gas export pipeline from Russia to Instead, the energy should be easily unrecognisable in 20 years. He added, Germany. available on demand, competitive on however, that Russia has noticed “destructive “Some countries even go as far as refusing price and compliant with end-customer tendencies”, such as “artificial and one-sided clean energy sources, such as nuclear power requirements, he said.

34 22nd WPC REVIEW MINISTERIAL SESSIONS Brazil ready to Photo: Sezgin Tolga benefit Investments in the Brazilian oil and gas industry have the potential to increase in coming years and reach a tenth of the world’s total capital expenditure, as the country opens up to private-sector spending with a series of initiatives to attract new players and diversify the market, writes Fabio Palmigiani. Brazil completely revamped its regulatory framework in 2016 and 2017, in a bid to improve competitiveness, and it passed new legislation allowing companies other than Petrobras to operate upcoming pre-salt assets to be offered. Brazil also set up a bidding calendar through to 2019, including reduced local content requirements. “The current government is making these changes because it believes it is in the country’s best interest,” said Milton Costa Filho, secretary general of the Brazilian Petroleum Institute. He said Brazil represented less than 5% in global exploration and production investments but, despite challenges related to low oil prices, there are still many opportunities in the country. “We can easily attract more export natural gas to countries project. But the European Union is technologically feasible and than 10% in light of our huge in Europe. We already have and the European Commission would cost between $6 billion potential,” Costa Filho told a enough gas to justify these two have already started the initial and $7 billion, which is less ministerial session at the World pipelines,” Steinitz said. feasibility study,” Steinitz expensive than building another Petroleum Congress in Istanbul. “The Israel-Italy pipeline is a said. liquefied natural gas facility in He highlighted that average very ambitious and challenging “The study found this project Israel or Cyprus.” production from a single well in the Santos basin pre-salt province — about 25,000 barrels per day of oil — equals 40 onshore Iran sights on international markets wells in non-conventional plays Iran is hoping to use its massive production close proximity to the major growing markets in the US. potential to become a significant player in the of China and India — will combine to boost the “There is potential for growth,” international natural gas market in the next country’s position in the sector. agreed Decio Oddone, director decade, writes Mark Hillier. These factors mean Iran can play “an general at the Brazilian National Deputy Minister of Petroleum for Trade & important role in the future energy market, Petroleum Agency (ANP). “In its International Affairs Amir Hossein Zamaninia particularly the global gas market”, he said. peak, there were 173 announced told a session at the World Petroleum Congress “In terms of oil, Iran is a heavyweight with 110 discoveries in Brazil in 2012. This in Istanbul that by 2021 Iran’s uncommitted years of experience, but in the gas market we year, there have been only six natural gas production capacity could climb as are the new kid on the block.” small discoveries,” Oddone said. high as 365 million cubic metres per day. Zamaninia added that Iran is also trying to He expects things to change Zamaninia said this production potential do as much as it can to make the best use of its in the coming years, with 10 bid — backed by Iran’s abundant reserves and its natural gas resources at home. rounds scheduled to take place between 2017 and 2019.

22nd WPC REVIEW 35 E&P SESSIONS Brazilian offshore can be ‘as profitable as shale’ Total chief executive Patrick Pouyanne says if operators keep a tight rein on breakeven costs then giant deep-water fields can be attractive investment options, writes Eoin O’Cinneide.

razil’s giant offshore although over longer cycles. oilfields “can be as “When you have giant fields profitable as shale” if like the ones in Brazil, these Boperators keep the focus giant deep-water fields can be as on breakeven costs, according profitable as shale,” Pouyanne to Total chief executive Patrick said. Pouyanne. “Maybe they are long-cycle, The French major is partnered and shale is short-cycle, but in with state giant Petrobras terms of profitability, in the at the huge Libra field in the giant deep-water fields, it is easy pre-salt Santos basin, where to make money” if you focus on a pilot development via a costs, Pouyanne said. “Your job is In terms of profitability, in floating production, storage and to control the breakeven.” the giant deep-water fields, offloading unit is under way. Of the Libra development in the Speaking at the World northern part of the field — it is easy to make money (if Petroleum Congress in Istanbul, where Shell, China National you focus on costs). Your job Pouyanne said Total has Petroleum Corporation (CNPC) switched its focus amid the oil and China National Offshore Oil is to control the breakeven. industry downturn from chasing Corporation are also partners production to driving down per- — Pouyanne said: “We will be Total chief executive barrel breakeven costs. able to deliver a project with a Patrick Pouyanne With offshore plays facing break-even of under $20 per barrel stiff competition from short- of oil.” cycle North American tight oil He added: “Everything is production, where breakevens possible. It is just a matter of have dropped dramatically, focus (and) of innovation.” Pouyanne said the focus on The Frenchman also said he per-barrel costs can make the sees a definite shortage of global larger offshore projects attractive, energy supply by 2020, even with

36 22nd WPC REVIEW E&P SESSIONS Brazil set to keep on track with bid rounds Photo: Sezgin Tolga Decio Oddone, director general at Brazil’s market regulator ANP, said that even though the country is going through extremely challenging times in the political spectrum, its Photo: Sezgin Tolga planned licensing rounds would proceed as scheduled, writes Fabio Palmigiani. “We don’t need any additional political decision to go ahead to conduct AIMS: Decio Oddone the 2017 bid rounds. We are opening up a new era pre-salt province topped 1.5 in exploration activities million barrels per day of in Brazil,” Oddone said oil equivalent from 75 wells in a speech at the World in May 2017, less than seven Petroleum Congress in years after first production Istanbul. from the Lula field. With Brazilian President Nevertheless, Brazil Michel Temer fighting for remains an underexplored his political survival in country when it comes the midst of corruption to upstream activities, investigations, Oddone something that Oddone remained focussed on forging hopes to change in the ahead with the bid rounds. future. The ANP was determined “We have a new to offer concession contracts exploration and production for 287 offshore and onshore policy which features a exploration blocks, estimated calendar with 10 bid rounds to hold unrisked volumes scheduled from 2017 to 2019. of 50 billion barrels of oil in We have less than 30,000 place, in the 14th licensing wells drilled in Brazil. We round, scheduled for still have two virgin basins,” September 2017. he said of the Madre de Dios A month later, Brazil aimed and Pernambuco-Paraiba to host two coveted pre-salt basins. rounds simultaneously, On a more global featuring eight large areas perspective, Oddone said under production sharing that even though natural agreements. gas is gaining momentum, a rise in US shale production, as led Yamal liquefied natural gas In order to make the the world will continue to final investment decisions have project. rounds more appealing, need oil as the main source in the main been lacking since Poyanne said oil companies the ANP introduced a sharp of energy for many years to the oil price downturn at the end can either “adopt a wait and see reduction to local content come. of 2014. attitude and freeze any important requirements and sweetened “The energy mix will Dealing with such market decisions” while waiting for any terms to try to attract as eventually change, and volatility is one of the biggest clarification that may never arrive, many players as possible. “We the industry will change challenges facing oil players “or you can be bolder, like Total need to create a very dynamic too. Many are saying large today and in the years ahead, has decided to be by continuing to market, and we want to create amounts of oil will be left along with geopolitical invest in Russia, despite sanctions, opportunities for small and unexplored, so these reserves instability and the threat of or by deciding to be the first mid-sized companies,” Oddone need to be produced sooner climate change, he said. international oil company to come told the audience. rather than later,” Oddone On geopolitical risk, Total back to Iran”. The ANP expected to raise argued. took a contrarian view by Total recently became the first billions of US dollars in “We no longer discuss continuing to invest in Russia Western player to re-enter Iran’s signature bonuses with the peak oil. Ours is a time of despite sanctions on the Kremlin upstream sector by committing three offerings, especially in big changes and the administration over the 2014 to the South Pars Phase 11 gas the pre-salt polygon. challenges ahead of us are annexation of Crimea. Total is field development, along with Output in the prolific huge.” a major partner in the Novatek- CNPC and state player Petropars.

22nd WPC REVIEW 37 E&P SESSIONS Shale drive fuels surge in capital

US sector boom adds to changing landscape as different industry cycles come into play, finds Eoin O’Cinneide.

apital markets are US liquids-rich unconventionals production costs through driving a surge in shale market — such as in the Permian technological advancements in production, which is basin and Delaware sub-basin — drilling and completions. This Cset to see the US record has been virtually the only sector has seen US production rise, and its highest ever daily output in the oil industry attracting Yergin predicted it would soon level, according to analyst significant new investment, and reach a peak. stalwart Daniel Yergin. it has attracted a new class of “The numbers are quite “The US shale really is a big part player. striking. Just looking at the of the new oil and gas industry,” “What is different is that it has state of Texas, 10 years ago Texas the vice chairman of IHS Markit a different cash machine — there produced 1 million barrels per said at the World Petroleum is a very high impact from private day; today Texas produces more Congress in Istanbul, as he equity financing it, and we are than 3 million bpd — and that is contemplated the major talking about tens and tens of just one state.” changes to the market in recent billions of dollars. To give you an Yergin predicted that US years. example of the impact, when oil production would climb in 2017 by “I think what has been harder prices had reached their bottom about 1 million barrels a day and to come to terms with is that this and the drilling rig numbers went that its output total would soon is a different oil industry — it has to their lowest level of around grow to historic levels. a different dynamic, a different 300 and then increased by 300 “The US will reach the highest rhythm, a different metric to it,” rigs, 290 of the new rigs that level of production it has ever he said. “What we have is a multi- came back into operation were reached in history, exceeding its cycle oil industry. The short cycle financed by private equity, not by highest level in the early 1970s.” is dominated by different players, traditional oil companies.” However, he cautioned: “We such as the independents, and has Capital markets players have do think that growth in the US remarkable resilience — it is not been drawn into the shale plays will actually be lower — we are a $70 (per barrel) business, it is a due to their short-term cyclicality outside the consensus in that $40 to $50 business,” he said. The as well as significantly reduced view for a number of reasons.” PDVSA has key vision to become low-cost supplier of heavy oil Venezuelan state oil company director of corporate planning share of economic and political PDVSA was about $10 per barrel, PDVSA sees itself as a key at the oil giant. struggles lately, with economic given the upgrade process for low-cost supplier of heavy oil “We have the largest crude stagnation and high levels heavy oil. to the eastern hemisphere, oil reserves on the planet. of state control by President However, when heavy oil and an executive said at the The oversupply right now Nicolas Maduro, successor to light oil are mixed, the cost of World Petroleum Congress in is mainly related to light Hugo Chavez. production stands at below $5, Istanbul. oil,” Andrade said during a However, it still possesses he explained. The country aims to session in which the company the world’s top oil reserves “We have other things to position itself as a key showcased its business plan. at more than 300 billion solve, but the cost of production provider of heavier crudes He added: “Our vision is to barrels, and some of the lowest and the low oil price is not an to growing markets such as be the primary provider of production costs, Andrade issue for us,” Andrade added. China, India and the Russian low-cost heavy oil around the highlighted. PDVSA has teamed up with Federation, according to world.” Using numbers from 2015, partners in a range of joint Hector Andrade, executive Venezuela has faced its the average production cost for ventures, which include 23

38 22nd WPC REVIEW E&P SESSIONS Iran is targeting

Photo: Sezgin Tolga output investment Iran is aiming to attract billions of dollars of investment to its upstream oil and gas sector as it looks to boost oil and gas production over the next five years to 4.8 million barrels Photo: Sezgin Tolga per day and 1.3 billion cubic metres per day, respectively, writes Mark Hillier. The Middle East producer’s output capacity stood at 4 million bpd of oil and about CAPACITY: Reza Dehghan 850 MMcmd of gas, said Reza Dehghan, manager of oil with oil companies that are and gas upstream contracts non-binding and usually run co-ordination for National for about six months. Iranian Oil Company. Twenty-two such MoUs On top of the oil had been signed with foreign production, condensate oil companies and another production is targeted to eight with domestic players, reach 1 million bpd. he added. Dehghan was speaking After those are completed, as part of a high-ranking NIOC can decide whether delegation, led by Deputy to pursue negotiations for a Minister of Petroleum for specific field on the basis of Trade & International Affairs direct negotiations or hold a Amir Hossein Zamaninia, tender for the asset. that was outlining upstream Those efforts yielded their investment opportunities first tangible result mid-2017 at the World Petroleum when French oil giant Total, Congress in Istanbul. China National Petroleum To reach its capacity Corporation and domestic targets, Iran is likely to need player Petropars signed a $2 as much as $150 billion of billion agreement covering investment, of which about the South Pars Phase 11 two thirds could come from development — a project that ANALYSIS: Daniel Yergin, IHS Markit foreign companies, said will eventually be expanded vice chairman. Dehghan. to a $5 billion investment NIOC is involved in over its 20-year contract as many as 26 parallel period. negotiations about upstream Separate to the projects and Dehghan opportunities for oil reiterated that the state oil operators, Iran is also PDVSA has key vision to become low-cost supplier of heavy oil company is prioritising fields offering foreign engineering, foreign companies and production that either have common procurement and of 1.3 million barrels per day. reservoirs with neighbouring construction contractors PDVSA said its “most countries or are in the second the opportunity to bid conservative” aspiration is to add stage of their lives and will for a series of upstream production of 1 million bpd over benefit from enhanced infrastructure projects the next seven years. For that recovery techniques. A total covering, for example, goal, it is also seeking additional of 30 oil and gas fields have pipelines, compressors, partnerships, Andrade said. “We been defined as falling into offshore platforms and well offer to an investment portfolio these categories. workovers. with 71 major projects,” he said, Dehghan explained About $5 billion of work an “opportunity” that could that NIOC has pursued a was thought likely to be reach tens of billions of dollars. strategy whereby it has made available through this signed a sizeable number of series of 27 tenders, according AIMS: Hector Andrade memoranda of understanding to Iranian officials. Photo: Sezgin Tolga

22nd WPC REVIEW 39 DOWNSTREAM

SUPPLY: John Abbott, downstream Sector is director at Shell. facing a new era Photo: Sezgin Tolga Downstream players confident of healthy growth rates for business but they also see challenges, such as from carbon emission constraints, finds Mark Hillier.

ownstream executives energy transition by supplying, their operations and embrace competition from other regions, are confident about for example, materials that can digital technology as they meaning they must pursue growth prospects both be used to make lighter and more navigate the energy transition. rationalisation and make the Dfor petrochemicals efficient vehicles. Bernard Pinatel, president of best use of technology and and for refining and marketing, Abbott argued there is also refining and chemicals at French innovation, Miro said. but they acknowledge the a bright future for refining, giant Total, pointed out that his Bakheet al Rashidi, sector faces challenges from in which competition from company had already merged president of Kuwait Petroleum factors such as carbon emission new environmentally friendly refining and petrochemicals. He International, predicted the constraints and industry innovations such as electrical said Total was targeting value by Middle East will be a net competition. vehicles is only one part of the leveraging integration, focusing exporter of almost every kind John Abbott, downstream picture. on its chemical product line and of refined product in the short director of Anglo-Dutch He said the number of electrical pursuing partnerships with and long term, while Tufan supermajor Shell, who chaired a vehicles may reach 7.5% of the other players. Erginbilgic, downstream chief session on Strategies for Refining global fleet by 2040 versus less Pedro Miro, vice chairman and executive for BP, predicted & Petrochemicals at the World than 0.2% now, but that will still chief executive of Spain’s Cepsa, growth for both refining and Petroleum Congress in Istanbul, leave 92% of a total of 2 billion on the other hand, acknowledged petrochemicals between now said petrochemicals are poised vehicles for other fuels. the challenges faced by refiners and 2035. for healthy growth rates of as However, “this is not a reason in European markets such as However, Erginbilgic noted: much as 3.7% per annum. to be complacent”, he said, Spain, Italy and France, where “The fundamentals of the “People need petrochemicals,” arguing downstream players “there is no doubt we are facing downstream sector are changing he said, arguing that the sector should pursue full integration, falling demand”. faster than at any time I can should be seen as part of the reduce the carbon intensity of On top of that, refiners face recall.”

40 22nd WPC REVIEW AT THE SHOW Turkey Night...

Photos: Tolga Sezgin

22nd WPC REVIEW 41 INVESTMENT

Upstream spend down by 25%

he International IEA report shows fall in sector for 2017 were projected to be Energy Agency (IEA) “more or less flat”, Birol said. recognised that the investment in 2016, with no “Unfortunately, we do not expect TWorld Petroleum a major rebound in expected Congress in Istanbul — where significant turnaround expected investments in 2017.” thousands of executives and Upstream oil and gas government officials from the in 2017, but notes 53% increase in investment fell by more than global energy industry were US shale spending, write Amanda a quarter in 2016, while there gathered — was an ideal setting was a 9% increase in spending to unveil its much-anticipated Battersby and Kathrine Schmidt. on energy efficiency and a 6% World Energy Investment 2017 hike in electricity networks, report. IEA executive director Fatih Birol 12% down on the previous year according to the IEA report. Many in the oil and gas told an audience at WPC that in real terms and accounting “Falling unit capital costs, industry had hoped to see a they needed to remain patient. for 2.2% of global gross domestic especially in upstream oil and resurgence of spending in 2017 Total global energy investment product, according to IEA report. gas, and solar photovoltaics, after two years of declines, but in 2016 was about $1.7 trillion, The investment numbers was a key reason for lower

42 22nd WPC REVIEW INVESTMENT

NUMBERS MAN: IEA chief executive Fatih Birol. IEA says demand Photo: APF/Scanpix Photo:

Photo: Eoin O’Cinneide Eoin Photo: will grow

The International Energy Agency (IEA) said it expects demand for oil to continue increasing in coming years, a forecast said to be contrary to the views of some other consultants, writes Amanda Battersby. “We think oil demand will continue to grow in years to come, unlike some others who think oil demand will peak and [then] go down,” said IEA executive director Fatih Birol. He told delegates at the 22 nd World Petroleum There is strong financial pressure Congress in Istanbul that on upstream companies. others cite the increase in the number of electric cars as the reason for oil IEA chief economist demand being set to wane. Laszlo Varro “Some people say that because of… electric cars, we are going to see the end investment, though reduced in Mexico following a very foreseeable future,” the report of oil sometime soon and drilling and less fossil fuel- successful offshore bid round in stated. the demand will go down.” based power capacity also 2017,” the agency added. IEA chief economist Laszlo The Paris- contributed,” the IEA said. However, the report pointed Varro added that industry was headquartered agency Oil and gas represented to diverging trends for upstream focusing on projects with smaller disagreed, Birol said, two fifths of global energy capital costs. On a global level, reserves and three to four-year “because oil demand investment, despite a fall of 38% costs were expected to fall lead time. “There is strong growth is not coming in capital spending in that sector again in 2017, driven mainly by financial pressure on upstream from cars, it is coming between 2014 and 2016. deflation in the offshore sector, companies,” Varro said. from trucks, then China attracted 21% of although with only a 3% decline. The IEA questioned whether ships, jets and (the) worldwide energy investment, The rate of decline was projected the industry was investing petrochemical industry”. while energy investment in to slow down significantly sufficiently in exploration In 2016, electric cars India was up 7% — cementing compared to 2015 and 2016. to meet future supply needs. accounted for 1% of total its position as the third-largest Meanwhile, the rapid ramp- Exploration spending had car sales worldwide. country behind the US. up of US shale activities had already halved in 2016 to around However, Birol noted Despite a sharp decline in oil triggered an increase of US shale $60 billion compared with its that looking over the next and gas investment, the US share costs of 16% in 2017, after having historic peak in 2014. 20 years, even if electric of global energy investment almost halved from 2014 to 2016. “A further contraction of 7% cars were to account for increased to 16% — still higher “The oil and gas industry is expected in 2017, bucking the one out of every two cars than that of Europe, where is undertaking a major overall trend in the upstream sold, global oil demand investment declined 10% — transformation in the way it sector,” said the report. would still continue to mainly as a result of renewables. operates, with an increased focus The share of exploration in total grow. The report noted a 53% on activities delivering paybacks upstream spending was expected “It will grow maybe upswing in US shale investment in a shorter period of time and to reach around 12% in 2017 — the a bit slower than in the and resilient spending in large the sanctioning of simplified and lowest level for more than a decade. past but it will continue producing regions such as the streamlined projects. Total discoveries of conventional to grow. Therefore we still Middle East and Russia, driving “The global cost curve has oil in 2016 fell by half to 2.4 billion need investment, we still nominal upstream investment rebased, and a significant barrels — a decline said to be “all need supply, we still need to bounce back by 6% in 2017 — a component of the cost reduction the more dramatic” considering the oil of Opec and non- 3% increase in real terms. experienced over the last two that 2015 saw the lowest level of Opec countries.” “Spending is also rising years is likely to persist in the discoveries for more than 60 years.

22nd WPC REVIEW 43 CEO SESSIONS Sonatrach looks to bring back foreign investment

Algerian state company keen to attract fresh business again after suffering during downturn, writes Mark Hillier. Photo: Sezgin Tolga

lgerian state oil chief executive Abdelmoumen towards the Algerian oil and gas after the downturn amid company Sonatrach Ould Kaddour, speaking in an sector. concerns about the terms under is targeting a new interview with Upstream during Algeria has plans for capital which they have been operating. Arelationship with the World Petroleum Congress investment of as much as $53 Ould Kaddour said this meant oil companies as it looks to in Istanbul, said that in the billion in the period from 2017 that Sonatrach and its partners reinvigorate its oil and gas sector first three months after he was through 2021, but knows that needed to develop a “new vision” after the downturn caused by the appointed to the job he focussed it has had difficulty attracting for the sector. oil price crash. Recently installed on improving sentiment investment from foreign players “Definitely there is a need for

Total repositions to weather downturn Total has reshaped its portfolio Breuillac told delegates at the World targeted in 2017 and another $4 and embarked on a new Petroleum Congress in Istanbul. billion in 2018. Breuillac claimed exploration strategy as the French The operator has made a Total has the lowest operating major positions itself to weather conscious decision to target oil costs among the majors — $5.50 the latest industry downturn, assets with a low break-even price per barrel of oil equivalent in 2017 writes Amanda Battersby. while reducing its exposure to and a target of $5 per boe in 2018. “This is the worst high-cost assets via some Meanwhile, the French giant has downturn since key divestments, Breuillac said. reduced capex (including resource the 1970s… we have “We have also implemented a new renewal) from $23 billion in 2015 drastically improved exploration strategy.” to $18 billion in 2016. The capex for our business model He noted that the company has no 2017 was forecast to be between $16 with cost reductions control over oil prices, and has thus billion and $17 billion, and then in and efficiency had to focus on what it can control the $15 billion to $17 billion range improvements,” — not least capital and operating from 2018 through 2020. Total E&P costs. The company reduced opex As part of this cost-cutting president at the group level by $2.3 billion in drive, Total has been streamlining Arnaud 2016, with a reduction of $3.5 billion all its interfaces with contractors. Photo: Total Photo:

44 22nd WPC REVIEW CEO SESSIONS

FOCUS: Sonatrach chief executive Abdelmoumen Ould Kaddour. Photo: Sezgin Tolga

VIEW: ONGC managing director Dinesh Kumar Sarraf. Recovery boost for projects The outlook for global oil and gas projects and capital investment has improved on the back of the oil price recovery and an upturn in activity, according to Oil & Natural Gas Corporation managing director Dinesh Kumar Sarraf. However, only the best projects are passing the final investment decision test, Sarraf told the World Petroleum Congress in Istanbul. This will translate to an expected continuing fall developing a new relationship,” new opportunities with Total, already starting to see the steps in global upstream capital he said, adding that “the such as introducing solar energy it has taken being reflected in investment, which is forecast first step is that we need to to power Sonatrach’s oil and gas a more positive attitude from to slide annually from around talk to each other”. Since his operations. operators. $430 billion in 2017 to some appointment, Ould Kaddour Ould Kaddour also That was shown, he suggested, $360 billion in 2021, according said, Sonatrach has been putting acknowledged the concerns in meetings he held at WPC with to Global Data. a lot of effort into trying to oil companies have had over the likes of BP, Statoil, Total and ONGC itself is “defying resolve issues with operators. the Algerian taxation system Cepsa. industry trends” and has Sonatrach was involved in and said that these were being One specific area of interest embarked on the $5 billion- more than 10 arbitration cases addressed along with the highlighted by Ould Kaddour is plus KG-DW-98/2 Cluster 2 with its partners when he took challenges of bureaucracy and Algeria’s underexplored offshore project, which it is hoped on the job, most of which an oil law that has widely been sector, where the company is will contribute to Prime related to upstream ventures. seen as unattractive by oil hunting partners with deep- Minister Narendra Modi’s Already, five of these have been companies in a lower oil price water experience. ambitious aim of reducing resolved, the chief executive environment. “The Mediterranean is India’s hydrocarbon imports said. “We want to make sure that very deep, so we need a lot of by 10% by 2022. He noted as an example the the profit is shared by both technology and know-how, The Cluster 2 project is agreement with French major sides,” he said. Improving the and that is why we are looking aiming for peak production Total that was signed in April taxation system and reviewing for good partnerships for this of 78,000 barrels per day of 2017 to amicably resolve earlier the hydrocarbon law are key part of offshore exploration. We oil and 15.7 million cubic disputes between the two sides priorities for Algeria, whereas have already developed high- metres per day of gas after and set the stage for the pair fresh licence rounds will come quality 2D and 3D seismic coming on stream in 2019. to develop a new contractual later. data.” ONGC is also drawing framework for the delayed “In parallel (to the proposed In the downstream sector, up plans for the $3.2 billion Timimoun gas project along taxation law changes), we are Sonatrach has plans to build ultra-deepwater Cluster 3 with Spain’s Cepsa. also working on improving three more refineries — each development, which would “We are looking at resolving existing clauses,” he said, adding with capacity of 5 million tonnes add a further 19.5 MMcmd outstanding issues and also that a new hydrocarbon law per annum — with hopes that a of gas production from the looking at the future,” he said of should be in place in 2018. final investment decision can be offshore Krishna Godavari the Sonatrach approach, adding In the meantime, however, made on two by the end of 2017 basin block. he is already looking at other Ould Kaddour said Sonatrach is or early in 2018.

22nd WPC REVIEW 45 EQUALITY

ON THE LEVEL: (From left) WPC communications director Ulrike Von Lonski, Boston Consulting Group managing director Ivan Marten, Saudi Aramco head of women development and diversity Reem al-Ghanim, Woodside chief executive Peter Coleman, Engineers India technical executive director Vartika Shukla, CORES chairman Pedro Miras Salamanca, and Boston Consulting Group managing director Katharina Rick. Photo: Sezgin Tolga Spotlight on gender imbalance in industry Leading executive Peter Coleman says more needs to be done across the sector and workforce targets are one option, writes Anamaria Deduleasa.

op executives in the company without these “This is an issue that needs a levels. Coleman said that in oil and gas industry targets, but it simply did not top-down approach. If you care, order to change the balance, need to be held work. Therefore we had to so will everyone else,” Coleman companies need to set Taccountable for gender introduce them,” Coleman said said. gender targets and then keep balance and inclusiveness at the World Petroleum Coleman’s comments came replenishing the talent pool. within their own companies Congress in Istanbul. after the release of a study “Once people see there is a or the sector will risk its “Our workforce is now made on gender balance within competitive advantage in competitiveness. up of 30% women. However, as a the industry from the Boston having women in the Peter Coleman, chief executive chief executive, I have the joy Consulting Group (BCG) and workplace, they will start of Australian independent of being able to take this the World Petroleum Council pushing for a more balanced Woodside Petroleum, said the discussion beyond the gender (WPC) revealed that women workplace,” Coleman said. company implements gender- one and into talking about account for only 22% of the “However, I strongly specific targets into executives’ inclusion.” industry’s workforce, one of encourage women to make a contracts. Almost 80% of the human the lowest among major personal choice and leave if “We tried to balance the resources department of industries, and the percentage this does not happen. Come gender issues within the Woodside is made up of women. drops significantly at higher work for us. The best way to

46 22nd WPC REVIEW EQUALITY

CHANGES: Engineers India technical executive director Vartika Shukla. Sector needs action to make progress Photo: Sezgin Tolga Women are being “overlooked” workforce drops over time in the oil and gas industry, and falls particularly sharply creating a massive gender — from 22% to 17% — between imbalance worldwide and middle management and senior risking the future workforce of leadership career stages. the sector, according to a report “This trend will not change from the Boston Consulting unless chief executives make Group (BCG) and the World gender diversity a higher Petroleum Council, writes strategic priority, as men Anamaria Deduleasa. working in the industry care The study, released at the about gender balance more World Petroleum Congress in if they perceive their chief Istanbul, revealed that women executive to do so,” it said. account for only 22% of the BCG’s Katharina Rick, one of industry’s workforce, one of the the authors of the report, lowest among major industries. said: “Despite in-depth “Although men and women analysis, we could not find start out on an equal footing, any statistically significant women rarely reach the top of difference among companies in the organisation. This is not different countries and due to a lack of ambition, but regions. because there is a shortage of “This consistency reflects qualified female candidates,” the powerful influence of the according to the report. industry’s current culture. Women also rarely reach This culture needs to change the top ranks in oil and gas materially if the industry hopes companies. Among women who to make meaningful strides are still working in the industry towards gender balance.” after 15 to 20 years, most have a “Unless companies develop a make sure things change is by diversity at the Saudi state giant, less than 20% chance of landing critical mass of women across not putting up with it,” he said. a senior executive job, the all roles, meaningful progress added. Vartika Shukla, executive research revealed. towards gender balance in the During the same session, Ivan director of Engineers India, Additionally, the study industry will not occur,” Rick Martin, head of energy at BCG, added: “Around 12% of our showed that the percentage said. and one of the authors of the workforce is women, of our 3200 of women in the industry’s Research was based on report, also had strong staff. But this compares to a 6% detailed interviews of more warnings about the gender average across India.” than 60 male and female senior imbalance. According to Shukla, to industry executives worldwide “We need talent to compensate bridge the gender gap, women and a survey of around 2000 for the declining workforce, and have to “turn challenges into male and female industry we have to attract women by opportunities”. professionals. creating a positive environment “All women in our organisation for them. We have to be able to are included in most discussions. CULTURE SHIFT: Boston then retain these women at mid- But it’s important that women Consulting Group managing management level and senior participate, and even go beyond director Katharina Rick. level,” Martin said. that and volunteer for different Photo: Tolga Sezgin “We have some data now, so assignments that their superiors we know where to focus our do not think of giving them,” research. But we want to see she said. “In India, the bigger changes. That’s why we government offers support created the ‘Women in Energy for women to be able to Initiative’,” he added. take two years’ break Saudi Aramco has started to and then come back in sponsor women to come into the the company at the industry, beginning scholarship same level. However, programmes around a decade this is mostly in ago. public companies, “With this support, women we’re trying on the are able to push boundaries,” private ones, as Reem Al-Ghanim, division head well,” Shukla of women development and added.

22nd WPC REVIEW 47 YOUNG PROFESSIONALS Warning over gap Photo: Sezgin Tolga in young talent Looking to recruit Human resources specialists fear fresh faces The Young Professionals oil industry will Lounge at WPC, targeting students and young see shortfall Photo: Sezgin Tolga professionals attending in number of the congress, was again a busy and popular hub on petro-technical the exhibition floor, where networking, mentoring and professionals by dialogue were at the top of the agenda all week. end of the decade, Stephane Rousselet, chair of the WPC Young reports Anamaria Professionals Committee, Deduleasa. said the ‘Fine Tune CV’ proposition was extremely well received. he oil and gas industry “Students and young is increasingly losing professionals met with HR the fight for young managers and industry Ttalent, prompting experienced professionals human resources analysts to CHALLENGING to fine tune their CVs and to warn of shortages by the end of MARKETPLACE: learn how to stand out from the decade. Accenture Strategy the crowd as they enter Aleek Datta, managing managing director their journey into the oil director of consultancy Aleek Datta. and gas industry,” Rousselet Accenture Strategy, warned said. during the World Petroleum Furthermore, many Congress in Istanbul that price fell, are now “unlikely to from Russia, said during the talented young individuals analysts believe there will be come back to oil and gas jobs”. same session that “the industry from top tier companies a shortage of petro-technical “If we assume demand will is trying to balance cost cutting were invited to the lounge professionals (PTP) in the near increase, and we keep the hiring with retaining and recruiting best to present their area of future. levels at current levels, we will talent”. expertise. Datta said that while the have a 30% deficit of PTPs in According to Illarionova, 75% Students and young industry tried to protect PTPs in early 2020,” Datta warned. of companies in the industry professionals had a the early days of the downturn, “The oil and gas industry is “may add programmes in the technical tour to company companies capitulated in 2016. losing the fight for top millennial future”. stands, including those of “From 2011 to 2016 there talent. Top talent prefer other Zdravka Demeter Bubalo, vice Saudi Aramco, Halliburton was a drop in PTP capital industries, mostly technologically- president HR at MOL Group, said and Total, where they expenditures,” Datta said. orientated ones like Facebook, that the Hungarian operator had had the opportunity “In 2011 around $590 billion Amazon and other such tech already set in motion three such to exchange ideas and was spent on workforce, which companies. Only 2% of US programmes aimed at recruiting knowledge on the entire then increased to $760 billion graduates consider oil and gas as a young talent and growing petroleum value chain and in 2014. However, by 2015, primary career choice,” he said. interest in the industry. job perspectives. capex dropped by 25% to $570 “It might seem counter- She said MOL had initiated a Key questions pertaining billion, and is declining ever intuitive to train and invest programme targeting middle- to the technological since.” in people when the oil price is school students, aged up to 15, revolution, digitalisation Research showed that down, but if we do not, we are at a separate programme aimed and disruptive trends were recruiting graduates is risk of not having a workforce.” at university students, and a discussed extensively increasingly a “challenge”, However, there are those trying female engineers programme during the Young as more than half of the 2015 to bridge the gap. Anna Illarionova, that is “trying to work on Professionals Session at graduates, who came onto the a WPC young professional and maintaining a gender balance in WPC. workforce market just as the oil student committee representative the industry”.

48 22nd WPC REVIEW AT THE SHOW Closing ceremony...

Photos: Tolga Sezgin

22nd WPC REVIEW 49 Photo: World Petroleum Council

50 23rd WPC PREVIEW Houston energy capital of the world

The United States has among the highest concentration of energy technologies and infrastructure in the world — and one city in Texas is at the hub of it all.

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23rd WPC PREVIEW 51 Photos: World Petroleum CouncilPhotos: World

» ouston is core to the development of energy technologies as a hub for industry innovation, with world-class facilities and research in areas such as production optimisation, WPC 2020 in Houston – what to expect Hwater conservation, hydraulic fracturing and others. Houston is home to 4800 energy-related companies, including High Attendance & Large Exhibition leading US exploration and production, oilfield services, and pipeline Supported by the robust energy industry in Houston, the 23rd World transportation firms. Several international companies such as Petroleum Congress is anticipated to be among the best attended and BP, Petrobras, Pemex, Aramco Services and others also maintain largest in WPC history, with 10,000 delegates and 50,000 square metres operations in Houston. of exhibition space. A large percentage of US oil and gas production, refining, Networking opportunities will include specially organised Business transportation and base petrochemical capacity is generated in Forums and a VIP Match-Making for ministers of energy, heads of Houston. In alternative energy from renewable sources, Houston state and chief executives. Events designated specifically for young leads the nation in wind power purchases, represents 29% of US professionals and women in the industry will also be arranged. biodiesel capacity and produces five mega-watts of solar power per year. Technical Agenda The theme for WPC 2020 and programme details are not finalised, but HOUSTON ENERGY COMPANIES expect high-quality technical content, enriched by the innovative, leading-edge infrastructure in Houston. To maximise access, all • 4800 energy-related companies technical sessions will be available online via recorded archives. • 750 in exploration & production • 800 in oilfield services Technical Tours • 80 in pipeline transportation • 16 of the top 25 US publicly traded E&P companies Subject to Change • 14 of the 20 largest US interstate pipeline companies Houston is well located for technical tours to offshore Gulf of Mexico and US unconventional shale plays, and technical tours within one hour of Houston will be organized to facilities such as: US OIL & GAS CAPACITY IN HOUSTON • ExxonMobil Baytown Petroleum & Petro-Chemical Complex • Halliburton Real Time Centers TM for Virtual Well Management • 39% of US oil pipeline capacity • OneSubsea TM Cameron & Schlumberger Subsea Reservoir Recovery • 45.2% of US natural gas pipeline capacity • Baker Hughes Engineering, Science, R&D and manufacturing facility • 42% of US base petrochemical capacity1 • Space Technologies NASA Johnson Space Center and Space Port Project • 25.6% of US jobs in oil & gas extraction (45,900 of 179,400)2 • 12.5% of US refining capacity • Texas Medical Center, the world’s largest medical center - energy & 10 refineries, 2.2 million barrels per day medical collaborate

52 23rd WPC PREVIEW ENERGY EVENTS IN HOUSTON

Houston has a history of hosting major energy industry conferences, including:

• .SPE Offshore Technology Conference (Annual) 1969 - Present | Attendance: 100,000

• NAPE EXPO 1999 - Present | Attendance: 16,000

• American Association of Petroleum Geologists 1995, 2002, 2006 | Attendance: 8900

• SPE Annual Technical Conference & Exhibition 1999, 2004, 2015 | Attendance: 10,000

• Wind Power Conference 2008, 2019 | Attendance: 2500

• LNG 17 2013 | Attendance: 13,000

• Solar Power 2013 | Attendance: 5000

• CERAWEEK (Annual) 2005 - Present | Attendance: 2700 Global Legacy Programme Funds Legacy Projects in WPC Member Nations Around the Globe WPC 2020 in Houston – what to expect The World Petroleum Congress brings together energy industry leaders from around the globe, and proceeds from the 23 rd World Petroleum Congress will be shared globally to benefit the next generation of energy industry young professionals. The Global Legacy Programme, an initiative proposed by the US National Committee to WPC and host for WPC 2020, will establish multiple Legacy Projects around the globe. A first in WPC history, 100% of the congress net profits will be donated back to the World Petroleum Council to fund the Global Legacy Programme. Each Legacy Project will align with WPC Legacy Committee initiatives, including educating and developing future generations. All WPC member nations will be eligible to submit a Legacy Project for funding consideration in the normal manner. The Legacy Project selection process and funds allocation will be administered by the World Petroleum Council Legacy Committee. This committee will make sure there is balance in the geographic distribution of Global Legacy Project funds. WPC 2020 is projected to be well attended with healthy profits. Through the Global Legacy Programme, congress proceeds will establish Legacy Projects that positively impact the energy industry well beyond the scope of WPC 2020.

Sources: Greater Houston Partnership, May 2017 1 Greater Houston Partnership / IHS, Oct 2015 2 US Bureau of Labor Statistics, April 2017

23rd WPC PREVIEW 53 Destination Houston WPC 2020 delegates are likely familiar with Houston as a global energy industry hub, but they may not be aware of the cultural and leisure aspects that make Houston, the fourth largest US city, a vibrant and attractive destination.

ouston is home to a 74 international destinations, respected and energetic and flights from every inhabited arts scene, celebrated continent. Hrestaurants featuring All qualified WPC 2020 delegates flavours from 35 countries, world- will be extended a visa to attend renowned theater groups, and the WPC in Houston. Upon arrival, brains behind US space exploration experience expedited US Customs — Houston is a diverse metropolis & Immigration processing with brimming with personality. In a queue dedicated exclusively for fact, in 2017 Forbes named Houston WPC 2020. among the top 12 destinations in the world to visit. Welcoming & Diverse Houston is the Number 1 most Travel to Houston ethnically diverse US city. More Before you can enjoy Houston, than 140 languages are spoken in you need to get there. Houston’s Houston, and nearly 25% of the two international airports offer population is foreign born. More convenient air access with direct than 91 foreign consulates are also flights from 195 cities, including located in Houston.

54 23rd WPC PREVIEW Photos: World Petroleum Council/AFP/Scanpix

Convention & enjoying the area, which recently Leisure Science are clustered in this area, Entertainment District – received $1.5 billion worth of Ample leisure options, from drawing a reported seven million Avenida Houston improvements. As a bonus, cultural arts to professional sports visitors to the district each year. The smart layout of Avenida complementary Wi-Fi is available to shopping, are located near the For sports enthusiasts, Houston Houston, the Convention & throughout Avenida Houston. Convention District. is home to professional teams, Entertainment District located If you wish to explore, On any given night, there is including American football (NFL in the heart of downtown METRORail transit connects likely to be a show presenting Texans), basketball (NBA Rockets), Houston, is designed to Downtown with Midtown, the in the Houston Theater District. baseball (MLB Astros), and soccer enhance convenience and Museum District, and the Texas The 17-block area in downtown (MLS Dynamo). walkability. Medical Center, making it easy Houston is home to the Houston Space Center Houston, The convention facility, WPC to travel within the city. symphony, opera, drama and the Official Visitor Center of 2020 event venues, hotels, dining ballet. Tucked between the NASA Johnson Space Center, is options, and even 48,562 square Green Downtown and Medical Center Houston’s Number 1 attraction for metres of green space are all Reduced transit is not the areas rests Houston’s leafy, park- international visitors. located within the compact, only environmentally friendly like Museum District. Nineteen Shopping is also a major draw, Avenida Houston campus. The feature. WPC 2020 in Houston world-class institutions, including with options to suit every taste, configuration allows you to spend will aim to be a paperless the Menil Collection, Museum from designer labels to unique less time in transit and more time congress, held in a LEED of Fine Arts, Houston and the boutiques to discount outlets, interacting with colleagues and Certified convention facility. Houston Museum of Natural shopping in Houston is world-class.

23rd WPC PREVIEW 55 Houston pitches in Third time lucky for the the world’s energy capital as the city’s mayor shares his own experiences and highlights the diverse nature of the city waiting to welcome the 23rd WPC in 2020, writes Kathrine Schmidt. Photos: Tolga Sezgin/AFP/Scanpix Tolga Photos:

ouston Mayor as he recounted to the WPC just that diverse Sylvester Turner delegates in his presentation. — we remind assumed his office He himself ran for mayor three people that one in Hin January 2016, and times, but lost the first two. four Houstonians is since then has played an active “I wanted to come personally foreign born.” role in helping recruit the because I knew what it meant That diversity — World Petroleum Congress to go for something twice, and whether of ethnicity, to Houston, making not get it, but not give up and go language or ideas — is after it a third time,” he said. a point of pride, the “As the third time was the mayor added. “We don’t charm for me, I hoped that the build walls, we build third time would be the charm relationships,” Turner multiple international trips to for the city of Houston.” emphasised during a destinations, including Bahrain, Turner said he sees Houston session at the 2017 WPC. to pitch the city’s bid. bringing multiple unique That global perspective is He also was present at the advantages to the table. in addition to the city’s 2017 WPC in Istanbul to cement While folks know the “Bayou huge medical centre and Houston’s role as the next host City” as the energy capital of Johnson Space Centre, of for WPC 2020. the world, there are many other the famed US spaceflight Persistence was key in helping selling points that visitors might programme. ultimately land the successful not be aware of. “We’re very, very “We are a bit country and bid, Turner said. “We tried two diverse. We would argue that at the same time we are urban times before, unsuccessfully. we’re the most diverse city in the chic,” Turner added, noting We lost out to Russia, then we US,” Turner said. that Houston is a city that also lost out to Istanbul. So this “We talked about the focus we possesses a “lot of personality was the third attempt,” he place on parks and green space, and a lot of southern charm”. told Upstream in an our cultural attractions that exist The city boasts a raft of recent interview. But sticking to here, the people, the restaurants. improvements downtown, that perseverance was And any given date you can including a new hotel and something Turner knew travel around the globe in the updates to the George R Brown about personally, city of Houston because we are Convention Center, set to host

56 23rd WPC PREVIEW We want to make this one of the best WPC conferences that they’ve had.

Houston Mayor Sylvester Turner

FOCUS: US WPC committee member Galen Cobb. Conference to benefit from close community Houston is known as the event that will help attendees world’s energy capital, forge global partnerships synonymous with the oil, gas and deliver results for their and other energy industries business, with events like that have shaped it, Business Forums and VIP according to Mayor “matchmaking”. Sylvester Turner, writes The event also aims to offer Kathrine Schmidt. guests a window into the US Houston fended off stiff shale business, and tours are competition from Vancouver planned for technology centre to land the next WPC, the first sights around town, as well time in more than 30 years as trips outside the city to the that the US will have held the Permian basin for a first-hand multiple games of the action- triennial event, after Houston look at the crown jewel of US packed play-off series. itself played host in 1987. unconventionals production. Turner said collaboration Some 7000 hotel rooms are WPC 2020 will be held in WPC in 2020, and Discovery between the city and its energy within walking distance of the early December so as not Green, which will be the setting industry continues to blossom, George R Brown Convention to conflict with Houston’s for the “US Night” cultural event citing companies including Center, organisers said, and events calendar, which during the congress. Chevron, Shell, Halliburton museums and sporting venues also boasts events like the These improvements were and ExxonMobil. “All of the are just a quick ride away on North American Prospect aimed at promoting green companies here in the city have the city’s light rail line. Expo (NAPE), CeraWeek and space and walkability before played very pivotal roles to the “An important part of the the Offshore Technology the 2017 Super Bowl — a truly city and have been very strong bid is that it’ll be a walkable Conference. gargantuan sporting event corporate partners,” Turner said. congress,” explained The date is also designed — and the same features were “We look forward to the World Galen Cobb, of the US WPC to be during more pleasant showcased again when the Petroleum Congress coming committee and vice president weather to avoid Houston’s Houston Astros baseball team here. We are starting to make of industry relations at oppressively hot and humid made a championship preparations for them. We just Halliburton. climate in June and July, run through the playoffs to win want to make this one of the best In addition to the fun, when the Congress has been the 2017 World Series. Minute WPC conferences that they’ve officials are pitching the event held in its last couple of Maid Park stadium also hosted had.” as a productive and strategic iterations.

23rd WPC PREVIEW 57 Keeping it topical Norwegian Tor Fjaeran speaks to Erik Means about his priorities as he Photo: Sezgin Tolga takes over the role of WPC president.

s chairman of the conference committee for the 22nd World APetroleum Congress in Istanbul, Tor Fjaeran’s main priority was to ensure that the conference would be as topical and relevant as humanly possible. Now, having been chosen to succeed Jozsef Toth as president of the World Petroleum Council, he is taking a similar approach to the preparations that are under KEY LESSONS: Tor Fjaeran way to ensure that the next is looking to build on the WPC will be even more topical success of the 22nd WPC as he when it kicks off in Houston on 6 begins preparations for the December 2020. next WPC in Houston in 2020. Fjaeran, a Norwegian geologist who has spent his entire professional career with Statoil, at the modern George R Brown in Houston, so we build a said. “We have a very skilled US is very proud of how WPC in Convention Center in Houston in programme with relevance both national committee, and they Istanbul was conducted by the three years. for that site but also for the WPC are prepared. We have a mayor of organisers and received by the “We always have to be as a whole.” Houston (Sylvester Turner) who delegates, while at the same time relevant, we have to catch He added: “It’s important to is very much behind this, very being conscious of key lessons the topics of the day,” Fjaeran work closely with the young enthusiastic, and he supports learned from the event that can said, noting that this can be a people, because the future what we do.” be put to good use in Houston. challenging task given that the belongs to them, and I want Fjaeran predicted that “This has been a good congress foundation for the Houston event them to be involved in defining participants at WPC in Houston from my perspective,” Fjaeran must be made nearly three years that future.” will find that the event has said. “This event has been before the opening bell sounds to One thing that Fjaeran can grown in size. organised in challenging times, start the 23rd WPC. say about the next WPC is that “I believe you should expect to really, with a lot of things “Of course in that respect visitors will be able to expect a see more participants and more happening in the larger global we have to understand the very smooth ride. exhibitors because of it being context — geopolitically, volatile global context, and we have to “Houston is a lot easier arranged in a location where oil prices, the energy mix is be out there catching that in logistically. Everything is there most industry players across the changing — and it has been this period, and translate that in one location... everything entire oil and gas value chain are really important for us to include into a programme relevant for will be close, within walking represented. that into the programme. I think Houston,” Fjaeran noted. distance from hotels into the “Critical to its success is to that we have been able to do it. “What that will be, only congress centre and into the really capture the topics and the “We have had almost full time will show. But the world exhibition.” issues of the day and to build a rooms all the time. That’s good is different than it used to be. He noted that the exhibition programme that will attract the for us, it seems that there’s a Things change faster in some will be held in a modern, spacious ministers and chief executives lot of interest, and it’s also a areas than they used to. and user-friendly facility. “And the relevant for those topics. reflection of quality.” “We are dependent on working congress centre is very flexible so “We have been good at doing The trick now will be to closely with the national we can build what we need from that this time (in Istanbul), and translate lessons learned in committees, and it’s important scratch. So I think logistically I hope the same will be the case Istanbul into a successful event for us to work with the host things will be very easy,” he next time in Houston.”

58 23rd WPC PREVIEW XXXXXXXX An investment in knowledge always pays the best interest “ Benjamin Franklin ”

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The World Petroleum Council Guide to Careers in Oil and Gas is the latest in a special series of twice yearly publications being produced by WPC to act as a definitive source of reference on the most pressing matters affecting global energy markets. Building on the six previous titles looking at Unconventional Gas, Petrochemicals and Refining, Unconventional Oil, Arctic Oil and Gas, Water Management and Biofuels, the WPC is fulfilling its mission to raise awareness and enhance the understanding of the issues and challenges facing the industry in the years ahead. Published by award-winning International Systems and Communications in both print and digital formats, all titles in the series can be viewed online via the following link: www.world-petroleum.org/resources/education-guides