OEEC 2018: Oil age to end sooner than anticipated

Global Oil Event, the third of the four keynote sessions at the Offshore Energy Exhibition and Conference (OEEC), was held on Wednesday, October 24.

The Global Oil Event is a new feature at Offshore Energy, and it builds on the Offshore Energy Industry Panel.

Delegates learned about supply and demand forecasts, hot regions for business, and the current place of oil in the overall energy mix.

Conference Manager and Navingo’s own Femke Perlot-Hoogeveen took on the role of moderator during the session.

The six keynote speakers from DNV GL, Crystol Energy, Staatsolie Maatschappij Suriname, OGUK, Schlumberger, and GoodFuels addressed the most important strategic and commercial challenges associated with the current and future oil industry.

Gas to overtake oil in 2026

Sverre Alvik, the project director for DNV GL’s Energy Transition Outlook, was the first to address all those present.

Alvik discussed DNV GL’s Energy Transition Outlook 2018 published in September. Namely, according to the data from the Outlook, global spending on energy is set to slow sharply because the world’s energy demand will decline from 2035 onwards.

In its publication, DNV GL also said that the decarbonization of the energy mix would be reflected in investment trends with money spent on renewables set to triple by 2050.

His first sentence was not what the oil enthusiasts wanted to hear. He claimed that the largest energy source by 2026 would be gas. He added that the energy demand would decline since the world is becoming more energy efficient.

“The oil age will not end due to a lack of oil. The ice age did. Oil will not,” said Alvik.

He predicted that there would be a cost-paring between electric vehicles and those running on combustion engines by 2024, and that transport was the focal point for oil.

Although he admitted that there was a need for new oil until 2040, he said: “Oil demand will grow slowly for five years and then go flat during the 2020s. A decrease will begin in ten years time.

“This is earlier than some estimate. Earlier than Shell which predicts oil will peak in 2030 and BP in 2040.”

Wild-cards to tip the oil price scales

Carole Nakhle, CEO of independent energy consultancy and advisory firm Crystol Energy, was up next via Skype to talk about the geopolitics and fundamentals of the oil sector.

Nakhle said she would focus more on the short and medium term, opposite of the previous speaker.

She discussed oil prices and the big effort by OPEC and non-OPEC countries to help stop the decrease in oil prices.

Nakhle also pointed out so-called “wild-cards” like Iran, Iraq, Libya, Nigeria, and Venezuela which due to certain instabilities in-country were not easy to predict regarding oil production. Venezuela, for example, has the lowest level of production since 1949 with a tendency to decline further, below one million barrels a day.

According to Nakhle, these wild-cards will be key in the following months and will tilt the oil price up or down.

Suriname the place to be?

Rudolf Elias, CEO of Staatsolie Maatschappij Suriname, followed with his topic of discussion – prospects for Suriname’s offshore industry.

Suriname is a new interesting location for oil majors following the massive discoveries made in nearby Guyana.

Elias spoke of the company’s plan for drilling the near offshore next year to analyze how the oil migrated to the huge Liza discovery off Guyana.

Seasoned offshore oil explorers such as Equinor, Kosmos, Apache, and Exxon, have acquired acreage for Suriname, hoping to replicate the exploration successes made in neighboring Guyana.

Regarding the company’s plans, Elias added: “In the coming two years, we know that we will drill at least five nice wells and we now expect to find oil in the reservoir.”

UKCS still able to compete

Ray Riddoch, managing director for the UK & SVP for Europe and Africa at Nexen Petroleum UK Limited,  was replaced by Oil & Gas UK’s Gareth Wynn who was next to take the stage.

He discussed how the mature UKCS basin adapted to compete with other commercial basins. He noted that the UKCS basin saw a steady rise in production in the next five years with this year producing 20% more than five years ago.

Adrian Cretoiu, managing director for Western Europe at Schlumberger, was the penultimate speaker of the session while the Global Oil event was capped off by Eric van der Meer, a board advisor at GoodFuels, a producer of 2nd generation biofuels.

Offshore Energy Today Staff