A recent report from Rystad Energy suggests that Venezuela’s oil industry could be on the verge of a significant revival, with international oil majors expanding their interests in the country and new operators entering the market.1 Chevron, Eni, Repsol and Shell are among those looking to capitalise on the country’s vast oil resources, with Rystad forecasting that production could reach 1.8 million bpd by 2030.
There’s a considerable amount of work to be done before that potential can be realised: despite renewed investment interest, Venezuela reportedly had just two active drilling rigs in August, compared with the 50 or so that Rystad estimates will be needed by 2028 to support its production forecasts. Rebuilding drilling capacity, oilfield services, and infrastructure will be critical to the country’s recovery.
While Venezuela’s challenge is largely one of making better use of its existing resources, there is a wider question about where the industry’s future barrels will come from. In this issue of Oilfield Technology, McKinsey & Company examines the growing gap between oil and gas production and investment in exploration (p.13). The authors point out that, while production has continued to rise, exploration spending has fallen considerably over the past decade, with companies increasingly favouring shorter-cycle projects and more immediate returns. This has resulted in declining reserve replacement, fewer major discoveries, and a potential supply shortfall of some 25 million boe/d by 2040 according to one of McKinsey’s energy scenarios. Closing that gap will require greater investment in exploration, coupled with a concerted effort to rebuild expertise, embrace new technologies, and take a longer-term view of investment.
Digital technologies will have an important role to play here, particularly when it comes to improving exploration efficiency and making better use of the industry’s existing resources. In a separate report, McKinsey estimates that AI could unlock about US$65 billion of annual recurring value today, rising to as much as US$230 billion annually at full potential.2 It’s an extraordinary figure, although the authors also make the point that the opportunity is concentrated in a relatively small number of high-value applications. The challenge, then, is identifying where AI can make a meaningful difference and turning that potential into results.
Several articles in this issue of Oilfield Technology explore how these challenges are being addressed on the ground. Halliburton explores how multilateral technology can unlock bypassed reserves and improve recovery from existing fields (p.21). OLEUM Technology examines the use of AI-driven pressure control to optimise well performance (p.43). And KBR considers how physics-informed AI can help engineers interpret asset data and make more informed operational decisions (p.46). Each offers a practical perspective on how technology and innovation can help the industry make better use of its resources and improve performance. As the industry gathers in Abu Dhabi for ADIPEC, there will undoubtedly be plenty of ambitious forecasts, new technologies and investment opportunities to discuss. But perhaps the more interesting question is not what the upstream sector could achieve, but what it will take to deliver on that potential. At Oilfield Technology, we’ll continue to focus on both: the opportunities ahead, and the technologies, expertise and innovation needed to turn them into reality.
