DOT panel looks at industry positions

The Deep Offshore Technology International Conference & Exhibition panel discussion today featured comments on current industry positions from a variety of experts

Gene Kliewer,
Technology Editor, Subsea & Seismic

NEW ORLEANS --The Deep Offshore Technology International Conference & Exhibition panel discussion today featured comments on current industry positions from a variety of experts.

Dr. Loren Scott of Loren C. Scott & Associates economic consultant emphasized that the United States is the only country in the world that knows where it has substantial petroleum reserves but does not seek to develop those reserves. He also said that hurricanes Katrina and Rita, which came through the middle of the Gulf of Mexico oil and gas production arena both a Category 5 storms damaged less than 3.5% of the platforms in the GoM, and that most of those were installed prior to 1988. To date there has been no spill from petroleum operations in the GoM classified as major by the MMS and that natural seeps accounted for 150 time more oil released into the Gulf than have oil operations.

Michael Lynch of Strategic Energy & Economic Research Inc. told the audience that industry cannot change the economy, but rather has to cope with the realities. He also said that while oil prices are cyclical, the associated costs are cyclical as well. Lynch addressed the questions of industry resources by saying that they are not the issue; it is possible to build more facilities and to train more people. Further, while industry cannot control product prices, it can control its costs and that is where the concentration needs to be now.

Will Rowley of Infield Systems Ltd. said one big concern he sees is with the age of the infrastructure on a worldwide basis. New developments tend to be linked to existing platforms, and most of those existing facilities are more than 25 years old now. No enough is being spent on maintaining these older facilities and in many cases the next wave of developments depends upon these older facilities to reach shore.

Mark Hurley, president of Shell Pipeline, agreed with Rowley about the infrastructure. Hurley said it is the core infrastructure that makes incremental spending on new development economically efficient. He said the cost of getting production to shore in the GoM is much smaller because of that infrastructure than will be the case, for instance, of any discoveries offshore of the US East Coast. He also noted the need for industry to continue to seek community acceptance by discussing the misconceptions common about the industry. On the plus side, he said he does not worry about technology because he has been constantly amazed at what the industry can do to overcome the technical challenges it faces.

02/05/2009

More in Regional Reports