OTC ’15: Deepwater offers opportunities to fill supply gap of 20 MMbopd by 2040
PRAMOD KULKARNI, Editor
HOUSTON – At a time when crude oil prices have declined drastically and rig counts are dropping, the chief upstream strategist for IHS offered a hopeful vision for deepwater exploration to delegates at the Offshore Technology Conference (OTC).
Bob Fryklund was the keynote speaker at a “sold out” OTC luncheon session on Monday, May 4, titled “Deepwater exploration: A view forward”. Prior to joining IHS, Freylund was country for ConocoPhillips in Brazil.
“Deepwater exploration has an important role to play as we go forward,” Fryklund suggested. “Even though we’ve had shale fever for the last few years.”
Fryklund expects the Gulf of Mexico “continuing to be the pipeline through new plays. The Miocene play has flattened a bit, but there are opportunities for discoveries in the Lower Tertiary and the Jurassic.” He also mentioned Brazil’s pre-salt and East Africa as some of the regions that could be expected to contribute new production in the coming decades.
Addressing the recent crude oil price decline, Fryklund said that deepwater operators are thinking long term and there exists a broad portfolio of unsanctioned projects that have a break-even point less than $65/bbl. According to Fryklund, IHS expects crude oil prices to rise to about $90/bbl by 2020.
Fryklund did express concern that discoveries are getting smaller. “It seems that there’s emerging a seven-year cycle between mega plays. What we’re seeing is the rise of mini basins such as the Angola pre-salt and the Tahiti sub-basin in the Gulf of Mexico.”
There needs to be new thinking in exploration, Fryklund urged. “It is the carbonates that have produced the recent mega plays. Explorationists had been ignoring carbonates as they had the shales."
Fryklund also urged greater attention to research and development. “There has been a direct correlation between R&D and oil prices. We needs more R&D investments for the deepwater sector to improve the recovery factor and overcome challenges such as flow assurance and metocean conditions.”
Fryklund looks positively at service company alliances that have taken place in the subsea space and expects similar collaborative efforts to take place in subsea intervention and decommissioning.
OTC is continuing at the NRG park in Houston until Thursday, May 7 with both technical presentations and exhibits.
