The Society of Petroleum Engineers in the world we live in. Mr. Egbert U. Imomoh 2013 President In Dallas September 2013
Agenda The world we live in and future energy demand. World reserves. New Frontiers. SPE- yesterday, today and tomorrow.
The World We Live In World economy still on the mend. Future economic growth uncertain but demand for energy expected to increase. Addition to current reserves will become more complex (geology and geography) thus increasing the cost of bringing production to market. Production from Unconventionals making an impact.
Drivers for increase in demand for energy
Summary for energy demand More people More Wealth More Energy demand
Future demand for energy World energy consumption in expected to increase by about 50% between 2008 and 2035 with half of the increase attributed to China and India. Fossil fuels will continue to supply almost 80% of world energy use in 2035 Renewables are the world s fastest-growing energy source, at 2.8% per year; renewables share of world energy grows to roughly 15% in 2035
Agenda The world we live in and future energy demand. World reserves. Impact of unconventionals. SPE- yesterday, today and tomorrow.
Distribution of proved oil reserves BP Statistical Review of World Energy 2012 BP 2012
Distribution of proved gas reserves BP Statistical Review of World Energy 2012 BP 2012
Reserves growth over the years Year Oil (billion bbls) Gas (Tcm) 1991 1033 131 2001 1267 169 2011 1663 208
Major areas of change in reserves 1991 to 2011 Oil: Canada +136billon Orinoco+220 billion Russia +120 billion Libya + 17 billion Nigeria + 25 billion Gas: Russia + 68Tcm Qatar + 30Tcm Australia +3Tcm
Agenda World reserves. The world we live in and future energy demand. New Frontiers. SPE- yesterday, today and tomorrow.
World oil production 13
World gas consumption forecast
Agenda World reserves. The world we live in and future energy demand. New Frontiers. SPE- yesterday, today and tomorrow.
New Frontiers Arctic Deep-water Application of technology to extract more from what we already have Unconventionals
Arctic Frontier U.S. Geological Survey report estimates: Area north of Arctic Circle may contain 22% of the world s undiscovered, technically recoverable oil and gas resources. 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas exists
Arctic Frontier: Challenges Wide temperature variations (-50 to +30 C) Extreme cold requires special facilities and processes. Huge investment required necessitates partnerships Some projects put on hold.
Deep-water Reserves Deep-water holds 5-7% of world s hydrocarbon resources 40% yet to be discovered. In 2010, deep-water contributed 6% of global hydrocarbon production rising to 9% by 2020 as production doubles to nearly 16 million boe/day.
Deep-water Frontier Challenges: Safety/environment Deep-water wildcats drilled in 2007 to 2012 had 38% success rate. High exploration and drilling costs Small finds are too remote for standalone development.
Impact of Enhanced Oil Recovery (EOR) EOR techniques becoming central to meeting world s increasing needs. A 10% incremental recovery of OOIP by EOR and related technologies can add 600 billion barrels of recoverable oil. Over the next 25 to 30 years, EOR can add 25 million BOPD. 21
Basins with shale oil and gas
Unconventionals: America Sets the Pace Many countries have huge reserves of unconventional oil and gas but the U.S. has used technology at a very rapid pace to produce shale gas/oil. Many counties have noticed the development and wish to set sail as well. The Economist March 16th 2013
LTO contributes to rising US production 24
Unconventionals: Why the U.S. Has Succeeded? Private rights Alignment of producer and land owner interest Developed existing infrastructure/easy delivery to the market Large efficient rig fleet and support equipment Skilled labour staff 26
Impact in the US Increased disposable household income by $1,200 in 2012, rising to $3,500 in 2025; Generated $74 billion in government revenues in 2012, rising to $138 billion in 2025; Attracted U.S. capital investments totalling $121 billion in 2012, rising to $240 billion by 2025; Contributed $284 billion to the U.S. GDP in 2012, rising to $533 billion by 2025; and Supported $150 billion in earnings for U.S. workers in 2012, rising to $269 billion by 2025. :HIS global study
Obstacles in Other Regions Monopoly/Lack of competition Lack of alignment High-cost regime Insufficient equipment base Limited experienced workers Availability of water. 28
How Will We Measure Future Industry Success? Ability to meet the demand for oil and gas Operate safely in a cost effective/environmentally friendly manner Obtain respect and acceptability by society Ability to attract young talented professionals 29
Agenda World reserves. The world we live in and future energy demand. New Frontiers. SPE- yesterday, today and tomorrow.
SPE History 1871 AIME was founded in Pennsylvania, USA, to advance the production of metals, minerals, and energy resources through the application of engineering 1913 A standing committee on oil and gas was created within AIME and proved to be the genesis of SPE 1957 Founded as SPE, a constituent society of AIME Separate incorporation in 1985
One SPE SPE is a diverse community of professionals that provides valuable knowledge and services to those professionals and to the industry in varied forms Concept of One SPE reflects the goal that each function and activity of the Society should serve the broader membership while addressing local needs, supporting technical and professional excellence, and making wise use of Society resources. Voluntary donation of time and talent by SPE members is our most vital asset and the creative energy of volunteers must be encouraged and supported by the Society One SPE Guiding Principles adopted by the Board in September 2001
SPE over the last 10 years 10 Years Ago TODAY 55,000+ Membership professionals/students 110,000+ 150 Number of Sections 191 130 Number of Student Chapters 264 4 Number of SPE Offices 7 30+ Number Training Courses & Meetings 140+
SPE is unique It is a global not-for-profit organization. It exists mainly for the benefit of its members, who are the owners of the organization and its major customers. While it has a fairly large full time staff, the technical content for the programs of SPE is developed mainly by its members. Thus, we are operating an organization in which the owners, workers and customers are all the same people, SPE s members. Slide 34
SPE s most significant achievements over past decade Globalization of SPE membership, offices & services OnePetro multi-society online library Expansion of conferences, workshops and training Young Professionals initiatives Membership growth
SPE Global Offices Dallas (1946) London (1991) Houston (1995) Kuala Lumpur (1995) Dubai (2003) Moscow (2007) Calgary (2009)
Growth in SPE Membership 1960-2012
SPE Membership Growth Student Membership Professional Membership 81765 71,191 75,395 53,733 49,768 48,649 46,913 34,614 22,368 26,000 29,367 28799 14,112 14,504 16,781 694 392 901 1,740 4,185 2,776 1,818 3,224 5,005 1960 1965 1070 1975 1980 1985 1990 1995 2000 2010 2011 2012
Future growth in membership 52000 110000 2012???? 2020 38,800 1980 2000 39
World Reserves and SPE s Membership Membership: 48.84% Reserves: 9.80% Membership: 13.95% Reserves: 1.10% Membership: 15.63% Reserves: 50.00% Membership: 1.96% Reserves: 18.70% Membership: 11.35% Reserves: 5.40% Membership: 3.09% Reserves: 11.10% Membership: 4.05% Reserves: 3.80%
Professional Members by Region Year-end 2012 Unknown Russia and Caspian South America and Caribbean Africa 0.14% 1.96% 3.09% 4.05% Asia Pacific Middle East Europe 11.35% 15.63% 13.95% North America 48.84% 0% 10% 20% 30% 40% 50% 60% 41
Student Members by RegionYear-end 2012 42
Diverse Technical Disciplines Health, Safety, Security, Environment, and Social Responsibility 2.31% Projects, Facilities, and Construction 5.73% Unknown 10.63% Management and Information 10.27% Production and Operations 21.17% Reservoir Description and Dynamics 24.49% Drilling and Completions 25.38% 0% 10% 20% 30% 43
Diverse Job Classifications 44
Diverse Company Categories 45
Increased Number of Conferences, Workshops and Forums
SPE s most significant past achievements Maintaining membership value along with growth Success in bringing together industry societies for joint activities Sense of community for E&P industry Financial strength
How will we measure future success? Ability to meet the demand for oil and gas. Operate safely in a cost effective/environmentally friendly manner. Obtain respect and acceptability by society. Ability to attract young talented professionals. 48
There will be a scramble for talent Big crew change. Expansion of the industry. Deployment of new technology. Competition from other sectors. Not enough students studying science subjects. Deloitte s 2011 Talent Technology Survey Report, affirms that nearly two-thirds of executives surveyed identified talent retention as one of their top-two business challenges. 49
Policies for attracting talent Sow early seeds. E.g. SPE s programme of Energy4me and ambassador programme. Early contacts with potential recruits. Packages must be competitive. Jobs must be challenging. Mentoring should be in place. Training must receive topmost attention. 50
Oil and gas price volatility Threats to SPE Success Technical quality of SPE programs SPE must ensure that technical quality is not compromised by growth Volunteerism Growing membership in areas without tradition of volunteerism Pending retirement of many active volunteers SPE programming heavily dependent on volunteers
Even if you are on the right track, you ll get run over if you just sit there. So although SPE has been successful over the years we need to continue to position ourselves for a ever changing world. Will Rogers
The World We Live In: a recap Future economic growth uncertain but demand for energy expected to increase. Addition to current reserves will become more complex thus increasing the cost of bringing production to market. Unconventionals making an important impact. IT and telecoms world expanding daily. Image of our industry still needs to be improved and stakeholder expectations increasing.
Retreat Objectives To revisit the SPE mission; create a 10-yr vision for SPE To discuss the future direction of SPE To develop 3-6 key high level strategic intents/priority goals to guide the institution over the next five years
Why strategic leadership? In a world that is changing faster than ever we should pursue sustained superior performance by: Understanding the external and shaping the internal. It attempts to anticipate and solve future problems Embracing the new, modifying the old and jettisoning the no longer relevant
Confirmed SPE s Mission To collect, disseminate, and exchange technical knowledge concerning the exploration, development and production of oil and gas resources, and related technologies for the public benefit; and to provide opportunities for professionals to enhance their technical and professional competence
Revised SPE s Vision Statement Enable the global oil and gas E&P industry to share technical knowledge needed to meet the world s energy needs in a safe and environmentally responsible manner
Key Strategic Priorities Capability development (to support industry in dealing with the big crew change) Knowledge transfer Promoting professionalism and social responsibility Public education about petroleum engineering profession and industry issues
SPE Strategic Framework 2013-2017 Mission Vision Strategic Priorities Collect, disseminate, and exchange technical knowledge concerning the exploration, development and production of ; and to provide opportunities for professionals to enhance their technical and professional competence. Enable the global oil and gas E&P industry to share technical knowledge needed to meet the world s energy needs in a safe and environmentally responsible manner Capability development; Knowledge transfer Promoting professionalism and social responsibility; SPE as a technical authority/resource Image of petroleum engineering profession and industry
Capability Development Accelerate competency development Support faculty development and retention Fill faculty gap with experienced professionals Facilitate lifecycle learning strategies (for any career stage) Assess competency
Knowledge Transfer Maintain and enhance technical quality within SPE programs Address volunteerism issues Make knowledge available on-demand and in user friendly ways Address language issues Take full advantage of communications technologies Enable identification and closure of technology gaps Complete and promote use of PetroWiki Serve as a curator of content Determine future of peer reviewed journals Facilitate mentoring
Promoting Professionalism and Social Responsibility Emphasize SPE professional code of conduct Incorporate ethics and ethics education in SPE programming Provide certification general as well as discipline specific Promote safety and environmental protection as high priorities with our membership Maintain integrity and independence of SPE
Public Education about Petroleum Engineering Profession and Industry Issues Attract young people to the industry Develop public awareness programs based on technology Serve as a technical authority/trusted source of unbiased information Leverage membership to provide expertise on technical issues
Implementation Board members identified Top 10 issues for initial implementation efforts Board Committees and special work groups will be developing initiatives to allow SPE to make progress in each of these areas Board will track progress in these areas and re-evaluate priorities and opportunities periodically
Communications JPT column by 2013 SPE President, Egbert Imomoh, in June 2013 discussing new strategic plan Strategic plan is posted on the website English available March 28 Spanish, Russian, and Chinese translations will be posted by April 30
SPE to Continue to Meet Member Needs Target Areas Where Membership is Low Contain Costs and Ensure Profitable Programs Globalize SPE s Education Program Improve Technology Innovation
World oil production 67
Revised SPE s Vision Statement Enable the global oil and gas E&P industry to share technical knowledge needed to meet the world s energy needs in a safe and environmentally responsible manner
Congratulations! Your 60 years anniversary. Outstanding student chapter.
SPE IS YOU AND YOU ARE SPE