People of Oil and Gas Industry

THE OFFICIAL DAILY NEWS

MONDAY 10 JULY 2017 DAILY NEWS www.upstreamonline.com At the show • Welcome letter from the WPC President Page 2 • Setting out the goals for the 22nd WPC Page 3 • Conference programme Page 4 • WPC Social Responsibility Page 9 • Mentoring youth for the energy industry Page 14

Turkish investment Moves to reduce energy imports dependency. Tillerson hails Page 5 ‘remarkable’ US permit review Interior Secretary aims people of oil to ease backlog for drilling applications. Page 6 and gas Upstream survey Woodside, KBR and Barra Energia executives give their industry views. industry Pages 8, 13&17 Seismic ripples Geoscientists Without US SECRETARY of State Rex Tillerson Borders spread oil and said at the opening of the 22nd World gas expertise through Petroleum Congress in Istanbul on humanitarian work. Sunday that oil and gas players will Page 15 continue to “make the massive Petrobras sell-off investments, they’ll take the risks and Brazilian giant offers they’ll persevere” to keep the world Campos basin field US Secretary of State Rex supplied with the energy it needs. for sale. Page 16 Tillerson Photo: TOLGA Page 5 SEZGIN

Get up to speed with the latest news from the world of oil and Saudi Aramco keeps Brazil turns to face future gas. Visit us at Stand B140 or log on to output at record levels Page 6 with ambitious plans Pages 18&19 www.upstreamonline.com

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A welcome letter from WPC President Jozsef Toth

Dear friends and industry colleagues, stakeholders is something we all must of petrochemicals in downstream, gas and the sustainable management do. the rise of natural gas, climate change of the industry. It seems only yesterday when we left As part of the expected 5000 strategies, engaging and retaining With beautiful Istanbul as the Moscow and the 21st WPC in 2014. Here participants, we look forward to talent in our industry and how to background, the social events, including we are three years later and much has welcoming more than 600 speakers manage all these issues through better the Opening Ceremony and Turkish changed. to the Congress, including heads of governance. Night will be another highlight at the We are here in Istanbul for the state, ministers and chief executives The Congress will be accompanied “Olympics of the Oil and Gas Industry”. largest gathering of senior oil and of national and international oil by one of the largest strategic oil and We are grateful to hold the Congress gas representatives from around companies, the leaders of international gas exhibitions, the World Petroleum under the auspices of the Presidency the world for the 22nd World organisations and top-level experts Exhibition, featuring our 65 member of the Republic of Turkey and are Petroleum Congress. Our Turkish from around the globe. countries. It will also include special reassured by their dedication to hosting Committee and the WPC Congress During over 100 sessions they will stands showcasing the industry’s a safe and secure event for all. Programme Committee have share their knowledge and expectations involvement in social responsibility with I am delighted to welcome you to prepared another world-class Congress for the future of the oil and gas industry young leaders to the 20,000 visitors we Istanbul for the World Petroleum for you. with you. The Plenaries, Chief Executive anticipate. Congress and hope that your visit, your The theme ‘Bridges to our Energy Panels, Strategic Sessions, Forums This is where you will also networking and the reacquaintance Future’ is perfect for the challenges we and more will address a wide spectrum find the Poster Plaza with up with old friends will give you lasting are seeing in the petroleum industry. of issues across the sector, such as to 200 presentations from 20 memories. Building bridges between the oil and upstream challenges in a low oil price different technical Forums on E&P, gas industry, its customers and all environment, the increasing importance petrochemicals and refining, natural Jozsef Toth, WPC President

The official WPC 2017 show daily is published by Upstream, an NHST Media Group company, Christian Krohgs gate 16, PO Box 1182, Sentrum, Oslo, Norway and printed by Paperbox, PB Advertising & Printing Industry, Istanbul, Turkey. This edition was printed on 9 July 2017. © All articles appearing in the Upstream WPC 2017 show daily are protected by copyright. Any unauthorised reprodcution is strictly prohibited. Editor-in-chief: Erik Means Monday 10 July 2017 WPC Daily News 3 Setting out the goals and ideas for WPC

SINCE our last congress in can leverage the expertise and Moscow the global economy capabilities of our industry has slowly recovered, together as a key part of the energy with the oil price and all sector to enhance the lives of projections indicate a robust the billions of people without growth in energy demand, with access to modern energy oil and natural gas as the key options. With energy access components of the world’s now strongly embedded in energy matrix up to 2050. the Sustainable Development The United Nations has Goals as SDG 7, energy poverty recently increased its global alleviation becomes a global population projections from priority. As we are all aware, 9 billion to 10 billion people this is particularly important for 2050 and it could get in developing countries, higher. All these people need as access to affordable clean energy and that is our modern energy is essential to primary aim. Our industry developing local economies will be prepared to meet the and helping them rise out of challenges. poverty. We are working with the The IEA will be launching OPEC Fund for International their World Investment report Development (OFID) to focus this week so we will see the on the issue of energy poverty scale of the challenges ahead. and highlight all the good We will need the allocation things that the industry is doing of huge amounts of capital, around the world to combat innovative thinking and new this. During the Congress, we technologies. As an industry will be launching our online we will ensure, as we have Energy Access Platform, which over the past 150 years, the sets out these goals and there sustainable, reliable and will also be special sessions affordable delivery of the demonstrating the work in this energy resources necessary for Photo: BLOOMBERG area. economic development. This joint industry initiative One main outcome for the industry must pursue to ensure will provide a platform to Congress is to encourage the delivery of our mission — promote initiatives of the oil everyone involved in the the sustainable exploration, and gas sector to facilitate petroleum industry to share production, and consumption access to safe, affordable and their experience, ideas and of oil and natural gas and their KINGDOM OF MOROCCO reliable energy wherever it is best practice, to promote products for the benefit of all. needed. By sharing practical dialogue between the key knowledge, projects and stakeholders and to identify Pierce Riemer, solutions with each other, we the long-term goals that our WPC Director General WPC YP Oilympics

The World Petroleum Congress is widely recognised as the Oilympics of the oil and gas industry. Last Saturday, from 7am to 4pm, the ONHYM, promoter of National Mining Oilympics bridged the generations and and Oil Resources since 1928. brought together the young generation and industry experts in inspiring oil games. An established expertise Volunteers from all around the world, representing the diversity of our industry, for the future... . participated in an orienteering race and explored the city of Istanbul and the industry value chain through mini puzzles, industrial questions and quizzes, while visiting the Come and join us at the YP Lounge to major attractions of the city and discovering congratulate the winners and meet with the fascinating Istanbul highlights. the participants, and why not broaden your While competing to finish the planned knowledge while discovering the questions racetrack in the shortest time with most and answers of this new edition of the correct answers, the participants developed Oilympics. their industrial knowledge, built an Ummugulsum Güneyligil international network and met with oil and WPC Turkish YP gas leaders. Representative The WPC Young Professionals Committee will award today the best team of Stephane Rousselet 5, Avenue Moulay Hassan B.P. 99, 10000, Rabat - Morocco participants, recognising their passion for our WPC YP Committee Vice Tel: +212 (0) 5 37 23 98 98 • Fax: +212 (0) 5 37 70 94 11 industry. Chair www.onhym.com • [email protected] 4 WPC Daily News Monday10 July 2017 Congress programme

Monday 10 July

08:30 – 09:30 Plenary 1: Building Bridges to our Energy Future Plenary Hall Session Chair: Besim Sisman, CEO, TP, Turkey Keynote Speakers: H.E. Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy & Industry and Chairman of the Board, Qatar Petroleum, Qatar Rovnag Abdullayev, CEO, SOCAR, Azerbaijan Wang Yilin, Chairman, CNPC, China

09:30 – 10:30 Plenary 2: Shaping the Future of Energy Plenary Hall Session Chair: Alexander Novak, Minister of Energy, Russia Keynote Speakers: Darren W Woods, Chairman & CEO, ExxonMobil, USA Amin H. Nasser, President and CEO, Saudi Aramco, Saudi Arabia Ben van Beurden, CEO, Shell, Netherlands

10:30 – 11:00 Coffee Break

11:00 – 13:00 PRESIDENTIAL CEREMONY

13:00 – 14:30 Lunch Buffet 13:00 – 13:30 Break

13:30 – 15:00 CEO Panels CEO 1 The industry’s response to the Paris Declaration Hall 5 Chair: Dev Sanyal, Chief Executive, Alternative Energy and Executive VP Regions, BP, UK Speakers: Bjorn Otto Sverdrup, Senior Vice President Sustainability, Statoil, Norway Marc Hauchecorne, SVP Strategy and Business Development, Engie E&P, France Decio Oddone, General Director, ANP, Brazil Alparslan Bayraktar, Deputy Undersecretary, Ministry of Energy & Natural Resources, Turkey

CEO 2 How to be competitive in a cyclical environment Hall 6 Chair: Mark McCollum, President and CEO, Weatherford, USA Speakers: Steven M Greenlee, President, ExxonMobil Exploration Company, USA Arnaud Breuillac, President Exploration & Production, Total, France Torger Rød, Senior Vice President Project Development, Statoil, Norway Lorenzo Simonelli, President and CEO, GE Oil & Gas, Italy

13:30 – 15:00 Technical Programme Block 1: F1 Exploration challenges – how to reduce risk? Hall 1 Block 2: F7 Competitive refining technologies Hall 2 Block 3: F12 Opening up new uses and applications for gas Hall 3 Block 4: F16 Knowledge management Hall 4 Block 3: RT9 Role of gas in the energy mix in a volatile World Hall 7

14:30 – 16:30 WPC Excellence Awards Technological Innovation Interactive Poster Plaza 14:30 – 16:30 WPC Excellence Awards SR Presentations

Bridge Auditorium 15:00 – 15:15 Coffee Break

15:15-16:15 CEO Panels CEO 3 Diplomacy and dispute resolution in the oil and gas industry Hall 7 Chair: Sir Robert Fulton, Global Leadership Foundation, UK Speakers: F W de Klerk, former President of South Africa and Nobel Peace Prize Laureate 1993 Lakhdar Brahimi, former Foreign Minister, Algeria and UN Special Adviser to the Secretary-General 2004-05

15:15 – 16:15 Expert Workshops EW01 Carbon Emission Management: Upstream and Downstream Best Practices & Opportunities Hall 5 EW02 Masterclass in Strategies & Techniques for Raising Capital for the Global Oil & Gas Industry Hall 6

15:15 – 16:15 Technical Programme Block 1: RT1 Exploration and production cost efficiency – building resilience Hall 1 Block 2: RT5 Delivering successful downstream projects Hall 2 Block 3: RT8 Role of LNG in security of global energy supply Hall 3 Block 4: RT11 Geopolitics and global trends Hall 4

16:15 – 17:45 Strategic Sessions ST 1 Risk management, resilience & adaptation in a volatile world Hall 5 Chair: Maria Moraeus-Hanssen, CEO, E&P, ENGIE, France Speakers: Ahmed Kenawi, Senior Vice President, Middle East and North Africa, Halliburton, USA Orlando Velandia, CEO, ANH, Colombia Emeliana Rice-Oxley, Vice President Exploration, Upstream, Petronas, Malaysia Abdulmunim Saif Al Kindy, Director, Upstream Directorate, ADNOC, UAE Raad Alkadiri, Senior Director, Boston Consulting Group’s Center for Energy Impact

16:15 – 17:45 Technical Programme Block 1: F2 Unconventional hydrocarbon resource development – North American phenomena or global opportunity? Hall 1 Block 2: F8 Integration of the refining and petrochemical industry Hall 2 Block 4: F17 Cyber security and new technology risks Hall 4 Monday 10 July 2017 WPC Daily News 5

OPENING CEREMONY Tillerson talks Aims: Turkish Minister of Energy & Natural Resources Berat Albayrak up industry Turkey in personal ploughs in cash speech UPSTREAM INVESTMENT at WPC Country aims to cut energy import dependency

TURKEY is investing in the upstream sector in an attempt to reduce its energy import opening 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 Con- gress (WPC) in Istanbul on Sunday evening, Turkey’s Min- ister of Energy & Natural Resources Berat Albayrak said: “Oil and gas alone will consti- tute 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 Photo: TOLGA SEZGIN oil and gas exploration studies in the Mediterranean and US Secretary of State and former ExxonMobil chief Black Sea regions,” Albayrak said. executive accepts award and delivers speech on the “We have intense studies already under way to conduct industry in general and his own experiences seismic research in the Medi- terranean basin, and we intend KATHRINE SCHMIDT to do the same for the Black Sea and ERIK MEANS as well. These studies will (be Istanbul followed by) further exploration and drilling activities and will push forward the potential US SECRETARY of State Rex across the globe. The usually breakthroughs that were Mediterranean gas. These projects in both seas as well as the secu- Tillerson said at the opening of reserved Tillerson further used achieved.” will enable Europe to diversify its rity contribution of supply in the 22nd World Petroleum Con- his brief remarks to pay heartfelt Tillerson, who was notified of energy sources thereby improving Turkey and our region.” gress in Istanbul on Sunday that tribute to the “remarkable” people his selection for the award last its energy security.” Albayrak name-checked the oil and gas players will continue of the oil and gas industry, who he year, joked that he expected to Tillerson also took a moment to Tanap and TurkStream mid- to “make the massive invest- said worked with great risk and make the visit to Istanbul as a remember those killed or injured stream projects as significant ments, they’ll take the risks and little public notice to deliver the leisurely and relaxing trip after last July, when a coup was investments from Turkey in they’ll persevere” to keep the energy crucial to economic his expected retirement from the attempted against the Turkish wider regional energy security. world supplied with the energy it growth and poverty alleviation. US oil giant. government. “Our energy diplomacy, how- needs. Fundamental ingredients are But, he said wryly, “it didn’t “Nearly a year ago the Turkish ever, is driven neither by pure A moved Tillerson was in required to keep investors active, quite work out that way”, with people, brave men and women, commercial interests nor by Turkey to accept the prestigious he said, citing “a strong rule of Donald Trump winning the US stood up against coup plotters and security of supply alone. We Dewhurst Award at WPC on law, international order, a respect presidential election and asking defended their democracy,” he emphasise the role of energy as Sunday night. for contract sanctity, and a level of Tillerson to take the job as the said. a peacemaker and the sup- The former ExxonMobil chief, integrity between partners and nation’s top diplomat, a role he With the next WPC taking place porter of prosperity, rather who spent more than 41 years in counterparts”. also filled on Sunday night. in Houston in 2020, Tillerson than as causing conflicts, as we the industry, credited his profes- Tillerson added that the indus- “Turkey is also an important assured listeners he would show have seen in the past. sional success to the people of the try “must continue to invest in partner in our efforts to promote his gratitude by being present at “We will continue to support US supermajor. human talent” moving forward. greater energy security,” he said. that event. regional infrastructure pro- “I’m here because of what they “What I miss most, I miss all of “The United States looks for- “We look forward to hosting you jects as long as they contribute did, not because of what I did,” he you. I miss you as colleagues, I ward to engaging with Turkey on as well.” to regional peace and stability, told a packed auditorium. The miss you as partners, I miss you projects that will increase global He said wryly: “I will be there, multilateral welfare and secu- audience included myriad energy as competitors, I miss the healthy energy security, such as the in some capacity, one way or the rity of supply,” the minister ministers and executives from debates, the collaboration, the southern gas corridor and eastern other.” said. 6 WPC Daily News Monday10 July 2017

MIDDLE EAST

Focus: Saudi Aramco chairman Khalid al-Falih Saudi Aramco Photo: AFP/SCANPIX keeps pumping at record rates

Oil giant completes expansion work and continues with mega-projects

NASSIR SHIRKHANI London

SAUDI Aramco has managed to Aramco and the the global oil and production, along with stronger oil facility and commissioned the supply chain and improve busi- sustain record crude oil and gas gas industry. integration within the entire giant Wasit gas plant, increasing ness reliability through a local production despite low oil prices “Saudi Aramco leveraged its petroleum value chain,” he said. its overall crude oil production network of suppliers and manu- in the past year, the company said capabilities, talent, innovation, The achievements came against and gas processing capabilities. facturers while increasing the in its 2016 annual review. and fiscal discipline to ensure the backdrop of persistently low “These mega-projects, and oth- competitiveness of Saudi Arabia’s Aramco Chairman Khalid al- resilience and realise landmark oil prices and a weak global econ- ers currently under construction, energy sector — and in the pro- Falih, who is also Saudi oil minis- achievements, including record omy. will help meet growing domestic cess, generate sustainable growth ter, said 2016 will go down as a high rates of crude oil production, Aramco completed its second demand for energy, substantially and quality jobs for Saudis,” Falih turning point for both Saudi raw gas processing, and sales gas expansion of the Shaybah crude increase production of gas as an added. efficient, cleaner energy for utili- Chief executive Amin Nasser ties and industry, and supply feed- said Aramco’s vision is to become stocks to the manufacturing the world’s leading integrated Crude output hits a new high point base,” Falih said. energy company. SAUDI Aramco says its daily crude production hit oilfields, Jubah and Sahaban, and one new gas Aramco is determined to He said the oil market remained a new high of 10.5 million barrels per day in 2016, field, Hadidah. All are located in the Eastern expand its global presence once a challenging in 2016, causing pro- up from 10.2 million bpd in 2015. Province, the kingdom’s main oil producing minority stake in the company is ject deferments or cancellations Easily recoverable crude oil and condensate region. offered to investors as part of across the industry. reserves held steady at 261 billion barrels at the Raw natural gas processing capacity rose to 12 Saudi Arabia’s economic reforms. “We responded to this chal- end of 2016, the company said in its annual billion standard cubic feet per day. Aramco plans “During the year, the Kingdom lenge by intensifying our focus on review. to nearly double gas output to 23 Bcfd in a decade of Saudi Arabia launched its land- excellence and on lowering costs, An internationally recognised reserves audit is by including “unconventional gas” in the mix and mark Vision 2030, an ambitious addressing every aspect of our a key task for the company as it seeks to become by continuing to develop gas not associated with economic and social transforma- business. Since its earliest begin- the world’s most valuable company when it lists a oil production. tion programme. nings, Saudi Aramco has sought 5% stake in an initial public offering. The company said 40% of its non-associated gas “The Vision, which aims to to be the world’s most reliable pro- The review did not give an update on the IPO came from the Hasbah and Arabiyah offshore diversify the national economy ducer of petroleum energy. process, which is at the heart of Saudi Arabia’s fields. beyond oil and build a thriving “Our long-term approach to economic reforms. The Midyan gas project in northwest Saudi private sector, will enable Saudi managing the Kingdom’s hydro- Aramco’s gas reserves rose slightly to 298.7 tril- Arabia is nearly complete while on the oil side — Aramco to expand its global pres- carbon resources has consistently lion standard cubic feet in 2016 from 297.6 Tcf the the expansion of the Arab Light Khurais oilfield to ence. delivered superior performance year before. The company discovered two new 1.5 million bpd — will be on stream by mid-2018. “The company will enlarge its and growth.” Monday 10 July 2017 WPC Daily News 7

NORTH AMERICA Plan for Review: US Interior Secretary Ryan Zinke Photo: AFP/SCANPIX royalty US eyes rate cut THE US Bureau of Ocean Energy Management (BOEM) plans to lower the royalty rate for oil and gas produced in the shallow waters of the US Gulf onshore of Mexico as a response to “market conditions”. The proposed change would cut the royalties owed to the federal government to 12.5%, which is in line with what onshore pro- permit ducers pay on federal land. That rate would apply to leases located in water depths of less than 200 metres. The change would not affect deeper leases. Current offshore royalties for reform both shallow and deep water stand at 18.75%. The change would take effect for the upcoming offshore lease sale 249, planned for 16 August 2017. “The purpose of this change is to adjust the royalty rate to reflect recent market conditions, thereby encouraging competition and continuing to receive a fair and equitable return on oil and gas resources,” BOEM said. The decision comes after “careful consideration of market conditions, available resources, leasing, drilling, and production trends, along with comparable international fiscal systems”, the agency added. Interior Secretary Zinke aims to ease backlogs and delays in applications and permitting process

CAROLINE EVANS Houston

US INTERIOR Secretary Ryan ately respond to a request for Zinke is pushing for reforms he comment on this point. says could ease the backlog of Making the permitting process nearly 3000 pending onshore easier has been a priority of the US Headline in drilling permits. oil and gas industry for years and Growing with Zinke signed a secretarial order it often blamed the previous here ffg last week directing the US Bureau Obama administration for the of Land Management (BLM), a delays. But one administration ERIO etum num explitaquas division of the Interior Depart- official defended the bureau last ene repe nonserum ipsam face- ment, to take an in-depth look at year, saying it had approved far Responsibilitypedi offictae. Rector re eribea the backlogs and delays and “iden- more permits than operators were volupti atione etur, suscili tify areas where improvements using. ciduntio. Ut officim quaes quis can be made in the permitting “In the last year, the BLM veri idebitas es ium fuga. Itas- process to ensure the safe and approved 4228 drilling permits, sim agnitia coreic to quam exp- timely exploration and develop- yet industry only drilled 1620 land elicatiis volore, qui niet ment of our nation’s federal wells,” then-BLM director Neil fuga. Itatempor molupicias energy resources”. Kornze told lawmakers in March aborum quo in est ommolor The BLM had 2802 applications of last year. esequate prorerrum eic totatio for a permit to drill (APD) pending “As result of the agency’s robust rerferu ptatiume dolupta tec- as of 31 January, according to the permitting effort in recent years, Embracing responsibility, increasing e iciency, and sustainable growthusam, quis comnis saepuda Interior Department. In addition, there are currently over 500 – these are the ingredients of DEA’s success story. The Mittelplatecomnimus. the average time to process an approved drilling permits in Drilling and Production Island at the edge of the Wadden Sea National Odigention eum ut autent APD in the fiscal year 2016 was 257 industry’s hands that are available aut latur aut a si adionsentius days, although a review is for use today with no additional Park in Germany is a good example of DEA’s approach towards thesimpeliqui reriore lantur, required to be carried out within action or review from the Bureau. environment. DEA is currently producing more than 50% of Germany’squunt, veni nobis volorpo repu- 30 days. “In other words, at current domestic crude oil from Mittelplate and has been operating the ﬁ elddandanda iminven iscitati ad “Oil and gas production on fed- activity levels, industry has more mo quam imus il magnati dus eral lands is an important source than four years’ worth of drilling without any harmful inﬂ uence on the nature reserve for 29 yearseius delesenis eum est volorro of revenue and job growth in rural permits approved and ready to now. DEA takes responsibility towards humankind and the environ-videlenectis rem et ut et America, but it is hard to envision go.” ment in all its upstream activities – in countries like Germany, Norway,ullatem. Nem. Ut que non prem increased investment on federal However, industry groups que arum reptam et diciende lands when a federal permit can cheered Zinke’s move to stream- Denmark, Egypt and Algeria – every day. dempore rferia pres mos dis take the better part of a year or line the permitting process. autectorent mi, illuptae voloris more in some cases,” Zinke said. “A key component of a success- remporepta sit enisquos sum Zinke also called on the BLM to ful policy is repairing the federal rem. Hit id modios dolestia hold quarterly lease sales, permitting process so that compa- sitat ullabore, quatem. Ut quid although the bureau is already nies have the confidence to invest Growing with Energyet doloreius, aces et quam required to do this under the and see their projects move entesti to etur? Elique ex est, Federal Onshore Oil & Gas Leasing forward,” American Petroleum secto dis aut utet volupic Reform Act of 1987. Institute Upstream & Industry aborerfera quae volupienimet A spokesman for the Depart- Operations Group director Erik DEA Deutsche Erdoel AG, Überseering 40, 22297 Hamburg, Germanyporae. Utdea-group.com de volut laborer ment of Interior did not immedi- Milito said. eptatum lanimolore soluptis

DEA16011_AZ_Upstream_146x181_EN_161018.indd 1 18.10.16 11:49 8 WPC Daily News Monday10 July 2017

INTERVIEW Photo: REUTERS/SCANPIX

Gas has always made up the biggest share of Woodside’s portfolio, but we still see near-term opportunities for oil developments.

On the eve of WPC 2017, Upstream surveyed many of the leading figures in the international oil & gas industry on topical issues shaping the sector. Woodside chief executive Peter Coleman responds

AS the industry adjusted to should also be exploring opportunities for UPSTREAM: What financing challenges the extent that companies complementarities with renewables, with does the industry face, and will can operate profitably in the gas poised to play an increasingly addressing such challenges involve current lower price important role, offering reliability that more mergers and acquisitions? environmentH for oil and gas? If not, what renewables cannot. more needs to be done and by whom? Regardless of the US’ position on the COLEMAN: The move to a more open Paris Agreement, there has been a major and fluid LNG market is a welcome COLEMAN: The industry has responded to shift in the energy mix in the US as cheap Q long-term development but presents a lower prices by reducing costs and gas has increasingly displaced coal, transitional challenge — how to justify reaching out to new customers and allowing reindustrialisation at the same the capital-intensive construction of new markets. We have had two to three years time as emissions reductions. A supply that will be needed. As always, of greatly reduced investment in the industry needs solid relationships with industry, which will create a gap in the credible customers before taking a final supply pipeline that will become a factor UPSTREAM: Is gas becoming more investment decision on new projects, in the next few years. We are now attractive than oil for companies and, if which involves convincing them we have positioning for the rebalancing we so, what implications does that have for good low-cost developments that will expect in the years ahead. the business? gas developments, including in deep meet their needs. waters, compete for capital against COLEMAN: Gas has always made up the short-cycle shale and unconventional UPSTREAM: What impact will climate biggest share of Woodside’s portfolio but developments in the US and beyond? UPSTREAM: Where do you expect the oil concerns have on the operations of oil we still see near-term opportunities for price to be by the end of this year? And and gas companies over the next five oil developments, like the one we are part COLEMAN: Both conventional and by 2020? years and beyond? Does the US decision of in Senegal. The big opportunities for unconventional developments are to pull out of the Paris accords actually gas are in power and, increasingly, shifting to models that offer a faster COLEMAN: We expect the oil price to be change that outlook? transportation. The reason we believe time to market and earlier revenue with a range-bound between US$45 and $60 over there will be an ongoing need for oil is lower quantum of capital at risk. This is the next year. History has shown that COLEMAN: Heightened climate concerns that it is particularly useful in transport partly in response to competition from forecasting much beyond that is a reinforce the need for companies to be and petrochemicals, which developing other low-cost suppliers but also reflects courageous endeavour. For the purposes aware of their emissions and make efforts countries want and need. investors’ expectations of quicker of budgeting, it pays to take a to reduce them. We need to acknowledge returns. However, the market will need conservative approach. A number of we are competing with renewables and some larger scale developments to factors will influence pricing by 2020, stake our claim for gas to play a major and UPSTREAM: Can large-scale, deliver the volumes required in the next including demand growth, field decline ongoing role in the energy mix. But we multi-billion-dollar conventional oil and decade. and the cost of supply. Monday 10 July 2017 WPC Daily News 9 WPC Social Responsibility Programme 10th July, 2017

Special ‑ Today in the SR Global Village Opening of Social Responsibility Global Village Art Gallery Come and see what young people made from old material. Opening starts at 14.00. Gallery is placed across the Bridge Auditorium

SR Excellence Awards: Presentation of finalists today in the Bridge Auditorium between 15.00 to 16.30

The WPC Excellence Awards (WPCEA) recognises oil and gas companies wıth outstanding initiatives on Social Responsibility. More than 120 nominated projects were reviewed by the independent judging panel in this cycle’s awards nominations. To recognise the efforts of both national oil companies and large organisations, as well as small to medium‑sized organisations, there are two winners.

Finalists from small to medium‑sized companies: • OMV: Women’s Empowerment Programme in Pakistan (Making history and changing the future) • Salym Petroleum Development: Go Local: programme to enhance local content, develop local resources and increase local capacity • Woodside Energy Ltd: Woodside Science & Technology Collaboration‑community education and outreach

Finalists from large companies & national oil companies: • BP: Enterprise Development Programme • HPCL: Empowering women from poorer households‑improving access to efficient sources of energy: HPCL Social Initiative • Indian Oil Corporation Ltd: Smokeless Village Initiative and ‘Pradhan Mantri Ujjwala Yojana’ Implementation • Saudi Aramco: Saudi Aramco’s Initiatives Support Productive Families

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Scenes from the opening day at the show Photos: TOLGA SEZGIN Monday 10 July 2017 WPC Daily News 11 12 WPC Daily News Monday10 July 2017

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INTERVIEW Photo: KBR

On the eve of WPC 2017, Upstream surveyed many of the leading figures in the international oil & gas Q industry on topical issues shaping the sector. Sounding in here is Graham Hill, KBR executive vice A president, global business development & strategy

AS the industry adjusted to HILL: Gas is the “future fuel” of the world, HILL: The short answer is no. The longer labour, sensible environmental the extent that companies according to both the market makers (oil answer is they will have to push all the regulations, and sound legal and fiscal can operate profitably in & gas companies) and the market constraints in order to become viable — policies. Difficult and expensive oil will the current lower price commentators. KBR is a gas-facing E&C including technology, contracting plans, not be acquired. We are seeing many environmentH for oil and gas? If not, company, so we feel good about where we delivery methodologies, supply sourcing, moves across the contractor world where what more needs to be done and by are placed. etc. companies are consolidating due to a whom? Low and abundant gas means that the These opportunities will include niche combination of factors — moves to LNG export and downstream/derivatives areas where the combination of infrastructure, downstream, and HILL: Companies can profit in the current businesses will prosper in places where infrastructure, government policy, access distressed balance sheets. There will market if they embrace the idea that there are unique combinations of to skilled labour, sensible government likely be more to come, especially those traditional cost reduction approaches no advantaged feedstocks, support business environment, and legal and with balance sheet issues. longer lead to the economic viability of infrastructure, government incentives fiscal policies create an environment for projects. KBR has adopted the motto that and support for business, and ready access such projects to thrive. We have seen there’s a new market and the industry to global markets. recently many offshore oil and gas basins UPSTREAM: Where do you expect the oil needs new solutions. That’s why we Such territories will be the US, based on fade into the margins due to some price to be by the end of this year? And developed our SmartSPEND work process low gas prices from shale oil/gas, Russia, combination of circumstances embraced by 2020? to help clients weigh the economic impact and the Middle East — based on low liquid by these criteria above. of the decisions they make over the entire feedstock prices. HILL: We believe that oil will continue to life-cycle of a project — from design to Expensive oil will remain in the ground hover between $45 and $65 per barrel for construction to operations and (somewhat a repeat of what we have UPSTREAM: What financing challenges the foreseeable future. Shale oil in the US maintenance — to ensure they get the witnessed in the coal industry), which does the industry face, and will is acting as a governor on oil prices for the highest economic return on their capital. includes arctic, remote, deep, hostile, and addressing such challenges involve time being. With abundant feedstocks in We’ve also designed the GVA 10,000 difficult flow properties. Prices will more mergers and acquisitions? the US, access to the best technology, semi-submersible, which is designed to remain lower for longer, and the current unique pipeline and fiscal infrastructure, develop the smaller oilfields that reality is the new norm. Customers and HILL: Inevitably, in a falling market, land ownership rules, and government producers are beginning to look at and to contractors will have to adapt to this new those with cash will seek to consolidate support, the American shale industry is be economic at $40 a barrel. So we have normal. their interests and positions. This will be set to dominate world energy prices for found ways to help companies profit on both the owner and contractor side. the foreseeable future. With abundant oil through innovation and non-traditional Small owner organisations will simply in the Middle East, there is no scenario approaches, both in technology and cost. UPSTREAM: Can large-scale, run out of cash, and leave themselves that we have learnt that shows demand multi-billion-dollar conventional oil exposed to asset sell-off or face outstripping supply any time soon. and gas developments, including in acquisition. The concept of peak demand is upon us, UPSTREAM: Is gas becoming more deep waters, compete for capital Those liable for acquisition will have with alternative transport energy sources attractive than oil for companies and, if against short-cycle shale and advantaged assets characterised by good and emerging technology, we are not so, what implications does that have for unconventional developments in the infrastructure, sensible pro-business likely to see the heyday of the oil & gas the business? US and beyond? government policy, access to skilled industry return. 14 WPC Daily News Monday10 July 2017 Mentoring youth for the energy industry WANT to be a WPC mentee? Come meet the Team at the YP Professionals Lounge

AT THE 22nd World young professionals. Petroleum Council Young Through its Mentoring Professionals Lounge Programme the WPC Bridge Auditorium you will creates a global network of witness the closing of the industry experts with young generation gap between professionals and students. industry leaders and today’s They share ideas and experiences through periodic calls. The WPC Mentoring Programme will be coming to you live at the 22nd WPC for its face-to-face meeting between mentors and mentees. The current WPC Mentoring Programme includes participation from 14 mentors representing 10 countries who guide 56 mentees from 21 countries. The Mentoring Programme Lead is Varsha More, the YP Representative for the Indian National Committee, along with Anna Illarionova, the YP Representative from Russia, and they will present the highlights of the WPC Mentoring Programme for the 2015-17 cycle on 12 July in the YP & SR Auditorium located on the Bridge within the 22nd WPC Exhibition. Details of achievements, challenges and experiences gained during the Mentoring Programme will be shared with live interactive participation from current mentees present at the Congress. The WPC is open to applications for its 3rd Mentoring Programme (2017-2020). This is a programme that offers you the chance for further development and I see it as an opportunity to expand one’s horizons. To learn more about how to connect directly with the WPC join us at our open session in the Bridge Auditorium on 12 July from 15:00 to 16:30. I have found my involvement in this WPC initiative has enhanced significantly my skills and I would encourage other young professionals to be part of these WPC projects, which give you a unique chance to develop global networks and get recognised for your participation.

By Varsha More, Mentoring Programme Lead, YP Member Indian National Committee Monday 10 July 2017 WPC Daily News 15

HUMANITARIAN WORK Field goals Geoscientists Without Borders work to make a better global landscape

Photos: GEOSCIENTISTS WITHOUT BORDERS BLAKE WRIGHT Houston

MAGINE if you could use think they were on the ground for scratched the surface about this earth sciences to better two weeks. They did some data money being available. For the predict the timing and analysis and interpretation… most part, we’re getting enough ferocity of an earthquake. made some recommendations for applications, and we’re turning IWhat if geoscience could be two to three months afterwards. away some that if we had the applied to solve water supply prob- Work was done on where to drill money we would probably fund. lems in places like Kenya or wells for a refugee camp. “Some get turned away because account for better fisheries “Prior to the geophysical survey they’re just not solid projects. We mapping for habitat sustainability work, the long-term success rate are continuing to work to fill our in Tanzania? for the drilling was one in four. endowments for the future. Get- It was questions like these that Post project, they drilled three ting the word out has been a chal- brought about the Geoscientists wells that were successful right lenge… of time more than any- Without Borders initiative — a off the bat… within six months of thing else.” donation-driven (both corporate the survey. Geoscientists have the tools and individual) organisation “They trained locals to carry on needed to effect positive change in steered by the Society of Explora- the work, if new wells are needed communities facing environmental tion Geophysicists (SEG) offering elsewhere. It’s an effort to make hardship and natural hazards like grant money for global projects sure that these are truly resulting severe water shortages and threats that could both receive benefit in humanitarian impact.” of earthquakes and tsunamis. and find solutions through geosci- Geoscientists Without Borders ence. Support Geoscientists Without put geoscientists to work around The programme hosts two Borders is the brainchild of chief the world, where they apply their application periods per year in geophysicist and Schlumberger specialised knowledge and tech- support of projects around the fellow Craig Beasley. nical skills to the mitigation of world. While some of the most Not long after Beasley took on natural hazards in some of the recent ones, selected at a commit- the role of SEG president in 2004, world’s neediest communities. tee meeting in June, have yet to a massive tsunami triggered by an However, when the individual execute grant agreements, a pair underwater earthquake near projects are done, it is important from the previous period — earth- Sumatra would devastate the to have the pieces in place to carry quake preparedness in Haiti and a area, killing more than 250,000 on the work. water project related to sustaina- people. “One of the requirements of the ble agricultural methods in Laos Beasley, familiar with the Engi- programme is that the project — are two of the new projects neers Without Borders initiative, lead has to include students in under the programme. looked at his own discipline and some way and we prefer they “We’re not just sending some- started thinking what roles include students that are local to body in to do research, produce a geoscience could take to actively the actual project,” says Ford. lot of data and some interesting support global humanitarian “We’re doing the best that we results and then nothing happen efforts. can to build up geoscience pro- with it,” explains Linda Ford, who As with any project reliant on grammes at universities around runs the programme for SEG. “We corporate/individual endow- the world as well as putting some want to make sure that the extra ments, having enough money to pieces in place to make the project steps are made to ensure some- go around is a constant issue. more sustainable. If someone thing is done with it. A great “There is no shortage of pro- local is involved in the project, example of this is the project done jects,” says Ford. “Each round of then it can help continue to the in Kenya. applications we get a good 16 to 20, work, or planning based on the “It was a short-term brown and there are two rounds each work done beyond the scope of the water management project. I year. And I feel like we’ve barely project itself.” 16 WPC Daily News Monday10 July 2017

BRAZIL

Direction: Petrobras chief executive Pedro Parente Photo: BLOOMBERG

Tapping in: more rigs in the US Photo: BLOOMBERG Rig count positivity continues US SECTOR ON THE RISE

US ENERGY companys added oil rigs last week for the 24th time out of the last 25 as the year-long drilling recovery resumed after a modest decline was reported in the previous report by energy services company Baker Hughes, writes Caroline Evans. Drillers added seven oil units in the week to 7 July, bringing the total oil rig count to 763, the most since April 2015, according to the Baker Hughes report released on Friday. That tally is more than double the 351 active oil rigs that were reported in the same Petrobras tables assets week a year ago after a lengthy period in which the pace of gains has slowed but not been halted by the softness of crude oil prices. including Maromba field The number of rigs chasing natural gas in the US also climbed by five to 189, a total Brazilian giant to sell Campos basin heavy oil field that is 101 higher than in the same period a year ago. and distribution business in Paraguay as part of effort Alaska and Oklahoma saw the most growth, adding four to raise up to $21 billion rigs each for respective totals of eight and 136. FABIO PALMIGIANI In Oklahoma, most of its Rio de Janeiro growth was concentrated in the Woodford play. The Cana Woodford added four rigs while BRAZILIAN oil giant Petrobras egrino and Papa-Terra. “The participate in the process, and the Arkoma Woodford added has unveiled two new divestment potential transaction represents The potential until 7 August to sign a non- one. However, the state’s opportunities for upstream and an opportunity to develop and transaction disclosure agreement. gains were offset by a one-rig downstream assets, as part of the monetise a heavy oil discovery in In the past, Petrobras decline in the Mississippi Lime company’s ambitious strategy to shallow waters,” said Petrobras. represents an announced plans to deploy an play. raise up to $21 billion by the end of According to the state- FPSO at Maromba — first in 2015 The Granite Wash, which 2018. controlled company, the Maas- opportunity and then in 2019 — but both initi- stretches across the Tex- Petrobras has gone public with trichtian reservoir in Maromba atives were scrapped once the as-Oklahoma border, also its intention to sell a 70% stake in is considered economically to develop company realised it made more added two rigs. the Maromba heavy oil field in the attractive and fully appraised by and monetise sense to channel resources to the Meanwhile, the prolific Campos basin in Brazil and also nine wells, with first oil feasible development of the Santos basin Permian basin, which Texas its operations in Paraguay. for 2019 based on a development a heavy oil pre-salt province. shares with New Mexico, The teaser announcements to scenario using a floating Separately, Petrobras is looking dropped a rig. The decline was the market are part of the compa- production, storage and offloading discovery in to sell its fuel distribution busi- mirrored in New Mexico, ny’s new policy to give more vessel. shallow ness in Paraguay, including 197 which also shed one rig for a transparency and competitive- Four identified prospects — service stations, representing a total of 59. ness to its sale processes, follow- Lobo, Castor, Dingo and Chinchila waters. market share of 18%, and 113 con- The Haynesville shale, ing guidelines suggested earlier — with multiple targets in Eocene, venience stores spread across the which Texas shares with this year by Brazil’s federal audit Maastrichtian, Albian and Aptian country. Louisiana, added two rigs. tribunal TCU. horizons are located across the The company is also aiming to Texas added two rigs overall Petrobras and US supermajor concession, with sizeable explora- sell its entire equity stakes in its for a total of 463, while Louisi- Chevron, which owns the remain- tion upside. gas and logistics businesses in ana also saw a two-rig increase ing 30% in Maromba, are jointly In order to participate in the Paraguay. Itau BBA bank will for a total of 69. working to offload their stakes in bidding for Maromba, any invited coordinate the sale. Utah dropped a rig for a total the field. player must be an offshore opera- The Maromba and Paraguay of seven. Located in the southern portion tor in Brazil and classified as a divestments follow plans for the The offshore rig count stayed of the Campos basin, Maromba company able to perform activi- sale of the Azulao and Jurua nat- flat at 21. was declared commercial in ties in shallow waters. ural gas fields, which are at a more Canada dropped 14 rigs for December 2006 and is close to Invited companies will have advanced stage with bids due to be 175. other producing fields such as Per- until 21 July to express interest to submitted soon. Monday 10 July 2017 WPC Daily News 17

INTERVIEW On the eve of WPC 2017, Upstream surveyed many of the leading figures in the international Photo: AFP/SCANPIX oil & gas industry on topical issues shaping the sector. Barra Energia chief executive Renato Bertani gives his view

AS the industry adjusted to the extent that companies can operate profitably in the current lower price environmentH for oil and gas? If not, what more needs to be done and by whom?

BERTANI: Yes, the oil industry went through big adjustments and this process is still ongoing. Of course not all plays continue to be viable in the current price environment, but there continues to be plenty of investment opportunities, in both conventional and non-conventional plays, that are profitable in the current price environment. Looking into the next decades it is obvious that, in order to continue to remain sustainable, profitable and to be an agent for economic and social development, the industry will need to continue removing onerous burdens that come in various ways (inefficiencies, lack of capital discipline, project delays, disproportionally onerous tax and regulatory burdens, etc). This will require close co-operation between oil companies, service providers and governments.

UPSTREAM: What impact will climate concerns have on the operations of oil and gas companies over the next five years and beyond? Does the US decision to pull out of the Paris accords actually change that outlook?

BERTANI: The oil industry recognised long ago that the world’s energy matrix will change over the next decades, moving towards low carbon and renewable sources of energy. This change has been and will continue to be driven by environmental concerns and, most importantly, by a combination of markets and technology, which are making renewable energy more affordable and available to consumers. This trend will continue regardless of the US decision to withdraw from the Paris Agreement, dictated by economics and consumer choice. Having said that, oil and natural gas will continue as UPSTREAM: Can large-scale, opportunities for offshore investments to important sources of energy and multi-billion-dollar conventional oil and come back. There will be plenty of capital feedstock for products for several decades. gas developments, including in deep available for projects, even if in deep water, Therefore, while companies prepare for waters, compete for capital against as long as lessons learned during the low an orderly transition, the business model short-cycle shale and unconventional price cycle are not ignored and new project of the industry will continue to be centred developments in the US and beyond? implementations adhere to strict on finding, developing and delivering oil operational and capital discipline. and natural gas while delivering value to BERTANI: The development of non- shareholders. conventional resources has shown resilience because the pace of investments UPSTREAM: Where do you expect the oil and completion of new wells may be Q price to be by the end of this year? And by UPSTREAM: Is gas becoming more quickly adjusted to price cycles, creating 2020? attractive than oil for companies and, if an opportunity to maximise returns out so, what implications does that have for of market volatility. A BERTANI: No one has a crystal ball and the business? However, in the medium and long term, any price prediction is ultimately going to it is inevitable that the huge investment be wrong. Nevertheless, if I have to guess, BERTANI: Yes, natural gas is becoming reduction, particularly in offshore I would say that directionally prices will increasingly important. Not only because developments, will have an impact on the be at the current level, with some of its lower carbon footprint but because it world supply. volatility, until the end of the year and makes economic sense as an abundant, As the current reservoirs deplete I have will tend to grow moderately but reliable and low-cost source of energy. no doubt that there will be plenty of steadily from 2018 onwards. 18 WPC Daily News Monday10 July 2017

SOUTH AMERICA Brazil turns to face the future as it lines up ambitious licensing plans

Door opens for international oil companies but whether they have confidence in country’s political stability remains to be seen

GARETH CHETWYND and FABIO PALMIGIANI Rio de Janeiro

RAZIL has invited the capacity of 2 million barrels of oil world’s oil and gas indus- This is a historic opportunity for the oil and gas equivalent per day by 2025. try to a licensing bonan- industry. Brazil’s own sector is going through the “This is geologically certainly za rare in scale and qual- possible but perhaps questionable Bity later this year, but participants [biggest] transformation since the founding of on timing, even with a bigger may need to overcome fears about group of companies developing the possible impacts of the coun- Petrobras. When the bid rounds are over we will these resources,” according to try’s political instability. have a number of private operators in the pre-salt... Thomas Adolff, an oil sector ana- The country will hold its 14th lyst with Credit Suisse bank. exploration and production con- and a variety of players in the gas sector. Brazil’s production from the cession round on 27 September, pre-salt province reached 1 mil- offering 287 blocks in 11 sedimen- lion boepd in May 2016, just 10 tary basins, boasting unrisked ANP director general years after first discovery, and has in-place volumes of 50 billion bar- Decio Oddone now reached an impressive 1.5 rels of oil equivalent, according to million boepd. the National Petroleum Agency Decio Oddone, director general (ANP). on all pre-salt PSCs, with at least was piling up debt without meet- mum requirements have been cal- of the ANP, is urging investors to Then, on 27 October, there will 30% of the equity. ing production targets. ibrated to match what Brazilian take heed of the game-changing be pre-salt bid rounds in one day, The new law was passed at the Petrobras, with a focus on debt suppliers are capable of offering element in Brazil’s licensing push. offering production sharing con- same time as then-president de-leveraging, can now decide if it competitively. Petrobras is looking to sell off tracts in two categories. Dilma Rousseff was suspended wants to participate in pre-salt The Temer administration non-core assets and is partnering Brazil’s second-ever pre-salt PSC from office, later to be impeached. contracts, but still enjoys prefer- addressed another long-standing international oil companies round will offer four areas requir- Former vice president Michel ential bidding rights. industry concern by providing a whenever possible. ing unitisation with contiguous Temer took the helm, and wasted firm licensing calendar to facili- The former monopoly company discoveries on older concessions. no time in making oil sector Lifting impediments tate the long-term planning of is today vacating much of the The third PSC round will offer investment a plank of his admin- The Temer administration also investment portfolios. midstream sector, meaning that two well-mapped prospects – istration’s economic policies. wasted no time easing onerous The ANP has mapped out its it, too, has an interest in open Peroba and Pau Brasil – with an As president, Temer put a strong local content requirements, seen plans to hold 10 rounds in the 2017- access and fair competition. estimated 9.4 billion barrels of oil technical team in place in both as another key impediment to 19 period, including annual offers “This is a historic opportunity in place between them. the Energy Ministry and at regu- new oil sector investments. in each of the three main catego- for the oil and gas industry,” says Also on the menu are two areas lator ANP, and listened carefully In the new rounds, local con- ries – the pre-salt polygon, E&P Oddone. “Brazil’s own sector is in a riskier pre-salt play, but with to what the industry had to say tent will be set at a simplified 18% concessions and mature areas. going through the [biggest] trans- great potential. about what might be holding back for exploration activities, 25% for One experienced oil company formation since the founding of The fact that these events are investment. well construction and production executive says the areas Brazil Petrobras.” taking place in their current form The single operator rule was units and 40% for subsea equip- will offer in pre-salt rounds “When the bid rounds are over is an indirect consequence of the seen as the single biggest bar to ment. mapped out over the next two we will have a number of private political earthquake that shook such investment. This puts the overall require- years could represent a risked operators in the pre-salt, a variety Brazil last year. Enacted in 2010 and intended to ment at about half of what was recoverable resource bordering on of players in the gas sector and a The key change was the deci- consolidate Petrobras’ domi- demanded previously. 50 billion barrels of oil equivalent. downstream market that no sion to repeal a law that made nance, the rule could just as eas- With local content also removed The ANP believes these offer- longer has Petrobras as the only Petrobras the mandatory operator ily have broken a company that as a bidding criteria, the mini- ings could add new production player,” he adds. Monday 10 July 2017 WPC Daily News 19

Shaky political ground upsets

Priorities: Brazilian strength of resource foundation President Michel Temer has made improving oil and gas investment in Brazil a key IF the planned Brazilian licensing versation appeared to support alle- government aim bonanza had taken place four or INVESTIGATION gations that Temer was complicit in Photo: REUTERS/SCANPIX five years ago, when oil prices the network of bribery and obstruc- were high and nobody had heard UNCERTAINTY tion of justice that Car Wash inves- of the Car Wash corruption inves- tigators have been trying to expose. tigation, there would probably The political fall-out from this have been a frenzy of bidding, But production data in the affair is still unclear, but alarm writes Gareth Chetwynd. field is a major draw bells rang in the oil sector. A 2015 study by the National “I think the political situation Institute of Oil & Gas (INOG) at Rio in Brazil could delay some of the de Janeiro State University (UERJ) is one of the few remaining places reforms proposed by the current suggested in 2015 that the pre-salt in the world where the elusive administration for the oil and gas fairway contains more than 176 giant field is not only present but industry, and even delay the bid billion barrels oil of undiscovered expected,” according to Scott rounds,” says Kjetil Solbraekke, recoverable resources, dwarfing Stewart, a Latin America special- senior vice president for South the 30 billion to 40 billion barrels ist with consultancy Drilling Info. America with oil and gas consul- of oil equivalent already discov- As it is, Brazil is laying down tancy Rystad Energy. “There is a ered in the area. the welcome mat at a time when risk.” The same study, using indus- oil prices remain stubbornly low Temer’s own future remains try-accepted methods, also deter- and a long-running corruption uncertain, but the early decision mined that the average field size scandal keeps churning in the of Brazil’s Energy Minister Fer- in the pre-salt polygon was 246 political arena. nando Coelho Filho to remain at million boe. The terms on offer are seen as his post after his own party left The production data is as broadly attractive but there are a the governing coalition set the impressive as the potential. Bra- number of regulatory issues that tone for a relatively calm market zil’s May data showed that 22 of worry the industry. response to the crisis. the pioneering pre-salt wells are There are also grumblings about The “business as usual” motif each producing more than 30,000 the signature bonuses being could be heard recently when the boe per day, with one or two of demanded, and concerns about Energy Ministry’s policy panel them nudging 40,000 boepd. the government’s ability to deliver approved a clutch of measures and By closing in wells before any on policy promises in the current the ANP’s director general Decio real drop in pressure, Petrobras fraught environment. Oddone reaffirmed Brazil’s com- has avoided any discernible drop The latest in political quagmire mitment to holding the rounds on on the pioneering Lula field, occurred when a meat-packing the scheduled dates. where there is no sign of the industry mogul secretly recorded a oil-water contact yet. conversation between himself and “With numbers like these, it is Brazilian President Michel Temer as easy to see why the pre-salt has part of his strategy to obtain sen- Search the archive: attracted the attention of the tencing leniency following charges Brazilian pre-salt majors, and the Brazilian pre-salt for fraud and corruption. The con-