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Integration is key to increasing global production, says Shell
21/11/2005
Meeting the challenge of the increasing global demand for energy, whilst tackling the impact on our climate, will depend upon the industrys ability to develop new technologies and deploy them together effectively. Integration is key, said Shell Executive Director Exploration and Production Malcolm Brinded.
Speaking at the inaugural International Petroleum Technology Conference in Doha, Qatar today, Mr Brinded said that raising the industry’s average conventional global oil recovery from 35 to 45 per cent could add some 20 years to current global production. “Subsurface integration is the essential enabler for all our efforts to improve recovery. It doesn’t just happen by telling people to talk to each other.”
As existing basins mature we need to explore in new plays, over large areas in harsher conditions with more complex geology. This means applying a range of technologies beyond conventional seismic, including satellite imaging, airborne sniffing, electromagnetic methods including seabed logging and enhanced seismic imaging. “We need new tools to integrate diverse data quickly. And we also need people with wide geological and geophysical understanding who are able to apply global knowledge locally,” said Mr Brinded.
The world depends on the industry's ability to sustain high levels of investment as the search for energy leads us to increasingly challenging and technically demanding environments. “The global economy coped relatively well with prices in the $40 or so range during 2004. But at $60 and above there is clearly an increasing risk that oil and gas demand would be hit by economic downturn and by costly substitution measures driven by both consuming government policy changes and consumer choice.
“If that happens, we could see significant downward pressure on prices emerge, just as the world needs increasing investment to meet the expanding demand for energy. And, as we saw after 1998, even when such an economic downturn is short-lived, the impact on investor confidence and future upstream investments can be prolonged.
“A downturn of the global economy caused by very high prices is clearly not in anyone’s interests. Great volatility in oil and gas prices would inhibit the growth of the new supplies necessary to underpin global economic growth.”
Mr Brinded concluded that the industry needs to harness all its capabilities to succeed in the face of great challenges. “This starts with those working in the industry across the Middle East, as well as the young people studying to join them. The contributions to this conference from the region demonstrate the real professionalism that exists here. Building on those capabilities is a priority.”
Royal Dutch Shell plc
Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 145 countries with businesses including oil and gas exploration and production; production and marketing of Liquefied Natural Gas and Gas to Liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects including wind and solar power. For further information, visit www.shell.com
Disclaimer statement
This announcement contains forward-looking statements that are subject to risk factors associated with the oil, gas, power, chemicals and renewables business. It is believed that the expectations reflected in these statements are reasonable, but may be affected by a variety of variables which could cause actual results, trends or reserves replacement to differ materially, including, but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, risks associated with the identification of suitable potential acquisition properties and targets and the successful negotiation and consummation of transactions, the risk of doing business in developing countries, legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.
Please refer to the Annual Report on Form 20-F for the year ended December 31, 2004 (as amended) for a description of certain important factors, risks and uncertainties that may affect the Shell Group’s businesses. Neither Royal Dutch Shell plc nor any member of the Shell Group undertakes any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or other information.
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The United States Securities and Exchange Commission (‘SEC’) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as “expected producible resources” and “amount of reserves we expect to produce”, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC.