The theme of this year’s seminar, “OPEC in a New Energy Era”, speaks to the new challenges and opportunities in the years ahead, from expanding production capacity… to stabilizing markets…to meeting environmental expectations…to supporting development.
ExxonMobil is proud to participate in the energy sectors of many OPEC member nations, acting as a partner in meeting these challenges and advancing opportunities.
However, when it comes to the development of petroleum technologies, I would suggest that OPEC and the world energy community as a whole are not entering a new era.
With all due respect to many who have said otherwise, the era of “easy oil” is not over.
Why? Because there never has been an era of “easy oil”. Our Industry has constantly operated at the technological frontier. Oil only seems easy after it has been discovered, developed and produced.
Understanding this fundamental fact is essential to creating and sustaining the conditions for future technological progress.
As has been noted by other speakers, by 2030, the world’s energy needs will be 50 percent greater than they are today. Growing populations, especially in developing countries, will require more energy to attain higher standards of living, to address social pressures, and to achieve greater security.
OPEC is destined to play an important and growing role in meeting this future demand. Within the next decade, crude production from non-OPEC sources is expected to plateau, while world oil demand continues to increase.
The result will be a call on OPEC of nearly 50 million barrels a day by 2030 an increase of over 50 percent above OPEC’s current levels.
To reach the needed levels of production worldwide, we must continue to innovate. And fostering innovation will require free trade and investment open access, and international partnerships. Oil producers and need consumers, and oil consumers need producers.
Under these conditions of energy interdependence, industry can continue to develop, transfer and apply the energy technologies needed to support economic growth and social progress in OPEC’s member countries and beyond.
The history of our industry shows when these conditions are consistently met, energy technology advances, and it advances in some truly remarkable ways.
The question whether petroleum technologies in the future will be evolutionary or revolutionary can be answered “yes”.
Technological progress in our industry is never an overnight phenomenon, however, and it rarely makes headlines. It results from an incremental process involving consistent investment and the application of scientific, engineering and managerial expertise over sustained periods of time. And in the end, the evolutionary process can have revolutionary results that dramatically improve our energy future.
ExxonMobil is proud to be a technology leader. It is reflected in our consistent R & D investment, over $700million in 2005 alone…our ongoing technical training, representing 25,000 employee training days last year…our integrated functional organizations and associated research departments that enable us to rapidly and globally apply technology…and our many Technology Assistance Agreements with host governments, including several OPEC countries.
To make my point, I would like to highlight several revolutionary technologies spanning the supply chain that have evolved over time, before turning to the conditions required to sustain such innovation in the future. Let me begin with advances in the area of reservoir simulation, which have been instrumental in improving reservoir management and recovery worldwide.
Nearly fifty years ago, Exxon engineers applied a new mathematical technique for solving multiphase flow equations using the latest computer technology to simulate reservoir behaviour.
Working with our Saudi and other venture partners, we first applied this technology on a full-field scale to the Abqaiq field in Saudi Arabia with success. That revolutionary technology has been built upon, capitalizing on new modeling techniques and computing advances to better understand the full physics of multiphase fluid flow. It has been an evolutionary process in which ExxonMobil has dedicated more than 900 work years over the past 30 years. And it has had revolutionary results. Our latest generation and industry leading reservoir simulator Empower – is currently being applied to over 150 reservoirs in 20 countries worldwide, including 8 OPEC partner countries.
Application of Empower to two major developments in Nigeria underpinned $5billion of investments resulting in new production supply this year that will reach 350,000 barrels per day.
Advances in deepwater production provide other examples of evolutionary technologies. Since building our first steel pile platform in the Gulf of Mexico 50 years ago, we have upgraded our capabilities through the application of a succession of new technologies.
From fixed platforms we have graduated to tension leg platforms, subsea completions and most recently to floating production, storage and offloading vessels, enabling us to reach water depths of over 1,800 meters.
We recently deployed these deepwater technologies in the Erha fields, where we are partnering with the Nigerian National Petroleum Corporation to produce at water depths of over 1,200 meters.
*Excerpts of paper presented by the Chairman and CEO, ExxonMobil Corporation, Rex Tillerson, during OPEC International Seminar, Vienna, Austria.