Last month was a busy one for the Oilfield Technology team. In addition to having a significant presence at Gastech, which was held in London this year, the team also travelled to San Antonio, Texas, for the annual SPE ATCE event. This year’s conference and exhibition was one of the highest attended of all time, attracting more than 11 000 visitors and 473 exhibiting companies. Copies of Oilfield Technology were very quickly snapped up, and there certainly seemed to be a general air of optimism among the people we talked to at the heart of the E&P industry.
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I am writing this comment on 7 November, on the day that US President Barack Obama has won a second term in office. Some will be pleased, some disappointed by this news, and all for a variety of reasons that depend on individual priorities. Whatever your personal political views, it’s inevitable that a change (or in this case a continuation) of a country’s political make-up will have an impact on the general optimism or pessimism in all areas of industry. Energy companies will likely see more regulation and tougher restrictions in Obama’s second term, with less access to federal lands. OGCs around the world constantly have to adapt and work within shifting and changing governmental laws and regulations. But the global industry will still continue to grow and develop.
The UK government has recently made changes to a 2011 rise in tax rates for companies operating in the North Sea. It now protects income derived from mature sites from the full impact of the tax. The Financial Times recently quoted Mike Tholen, Economics Director at Oil and Gas UK as saying that the tax reforms had been “enough to push some big investments across the line that would otherwise not have happened.” An example of this is the news that Canadian-based Talisman Energy will now go ahead with a £1.6 billion oil project in the North Sea, unlocking billions of pounds of new investment, and purportedly creating more than 2000 jobs in the process. The UK Energy Minister John Hayes was quoted as saying that the move “marks the start of a new wave of interest in North Sea oil.”
One thing’s for sure; wherever there are reserves, whether new or mature, there will certainly always be interest in them from foreign investors. In our Regional Report on the USA and Canada this month, Oilfield Technology Contributor Mark Robinson highlights some interesting statistics. He points out that due to North America’s investor-friendly environment and large reserves, “total global acquisitions by Chinese NOCs jumped from less than US$ 2 billion between 2002 and 2003 to nearly US$ 48 billion in 2009 and 2010”. China will undoubtedly be moving towards employing the E&P technology it has acquired in its North American ventures to develop the country’s own reserves. Our Regional Report also points out that Canada’s recoverable reserves of oil sands “are estimated to be 175 billion bbls” and that they “are only third in size to Saudi Arabia and Venezuela.” Canada could be set to be one of the top oil producers in the world.
All industries are subject to periods of optimism and pessimism in terms of future economic outlook. But with the oil and gas sector being such a truly global industry, spanning every governmental regulatory system imaginable, it seems difficult to make predictions about the future. One thing we know for sure is that everyone will still need the industry to explore for, drill for, and produce ever increasing quantities of oil and natural gas, as global demand continues to escalate.