Leaders focus on people, pricing

This year's Editorial Advisory Board paints a sobering picture of the industry's future. While there were no doomsayers among the group, the overall message is clear.

This year's Editorial Advisory Board paints a sobering picture of the industry's future. While there were no doomsayers among the group, the overall message is clear. Conditions are tight and they are going to stay that way. Operators talk about management in the midst of uncertainty, while contractors discuss everything from pricing to people to contract terms.

Several long-running themes seem present each year. The industry has an acute need to recruit fresh blood into a graying workforce. There will be a continuing focus on deepwater and frontier markets, where the potential still exists to find massive fields. Along with this bold push comes a fiscal conservatism. Margins will continue to be tight; operators will negotiate hard with contractors pushing for EPIC contracts to control costs while they are looking for the next big field. The brightest star out there may be gas. New methods of transporting natural gas from remote areas and new incentives to explore for on-shelf gas with deeper wells may result in a cheaper, cleaner fuel source for many markets, as well as increased revenue from what in many cases has seemed a by-product of deep-water exploration. As the technology continues to move rapidly, it may take an unusually cold winter to drive prices up and justify the move into novel gas solutions.

On a more positive note, it appears that several game-changing technologies are on the brink on extending the industry's ability to produce economically in ultra-deepwater. Expandable tubulars, dual-gradient drilling, and subsea processing would each make a major difference in the time and cost of drilling and producing in ultra-deepwater. Together these innovations may be the answer the offshore industry is searching for.

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