‘…the world needs positive thinking…’

Explorers Encouraged

American Association of Petroleum Geologists (AAPG)

There’s no doubt that an array of technology innovations have played a key role in advancing exploration activity and successes.

But often, the most essential element here escapes attention.

David Lawrence
David Lawrence

“Fundamentally, the human brain is the most powerful tool in exploration,” said David Lawrence, vice president of Shell Upstream Americas Exploration and Commercial.

Lawrence, an AAPG member, Pratt Award winner and previous AAPG Distinguished Lecturer, made his remarks during his presentation as the designated Michel T. Halbouty speaker at the 2011 AAPG Annual Convention in Houston.

His topic was “The Next Era of Exploration,” and his talk was both a celebration and encouragement of what’s needed for success.

For example, if your self-esteem is a bit tattered by today’s highly charged anti-drilling climate, at least in the United States, Lawrence offered a boost when he emphasized “the exploration search is an honorable quest, second to none.

“Given the global energy challenge, the world needs positive thinking like explorers – the ability to see things as they can be,” he said.

“We need to set our sights on energy policies to enable rather than hurt,” Lawrence emphasized. “Right now, we’re mired in a regulatory abyss.

“Keeping operations safe is a key objective, and not stalling or cancelling any more development.”

One source of anticipated increased energy demand is population and economic growth in developing countries. China, Brazil and India have a GDP growth about 10 percent per annum, with China in the lead. Lawrence said China’s gas consumption is expected to triple in 10 years.

He noted that the needed energy mix for the future needs will include not only fossil fuel but biofuels, solar, wind and nuclear and others as well.

“There are one and a half billion people in the world who have no access to electricity, and more than one billion with no clean drinking water,” he said. “Energy is the key vital, essential ingredient to lift people out of a life of poverty.

“At the same time,” he commented, “we must tackle greenhouse gas emissions.”

Fossil Fuels: Still Needed

While noting that over time cleaner energy sources will meet a growing share of demand, he emphasized that fossil fuels will still carry the majority of global demand for decades.

“There are significant and insurmountable technical and financial constraints to deploy alternative sources quickly on a mass scale,” Lawrence emphasized. “The energy industry is very different from others, requiring decades and many billions of dollars to get to market.”

As an example, he noted the first commercial LNG plant came on stream in 1964 in Algeria. More than four decades later LNG’s share of the global energy mix is a mere 2 percent.

Lawrence predicted that by mid-century, under the most optimistic scenarios, fossil fuels will still supply over one-half of the world’s energy. Stating that he is experienced in working on alternatives and supports them, they present a challenge. It’s a matter of size, scale and choices.

“A single Mars platform delivers more energy than all the wind power currently in the United States,” he said. “It would take a wind farm covering one million acres to generate the energy from that one platform, so we need to keep things in perspective as we move forward.

“It will take all forms of energy to meet the energy needs.”

The Time Is Right

According to the IEA, the world will need to invest over $1 trillion every year to meet energy demand. Lawrence noted that Shell alone has spent $1 billion annually on R&D for the past five years.

He said that by 2020, the world will need 40 million bopd of new oil production on stream, most from fields not yet developed. The really sobering fact: this is equal to four times the current production of Saudi Arabia and twice the U.S. crude consumption.

The good news: It’s a good time to be an explorer. He emphasized that the industry is undergoing a tectonic shift, potentially as far reaching as the first moves into deep water, bright spot seismic technology, the discovery of major resources in the Middle East.

“The shift will create a host of new opportunities for the next generation of oil resource explorers and the rest of us too,” he said, outlining the three major elements in the shift:

  • New wave of unconventional oil and gas resources becoming accessible around the world.
  • Inevitable move into the Arctic, where as much as a quarter of the world’s oil and gas resources remain untapped.
  • Continued revolution that is the deepwater – the emergence of shallow plays in the deepwater and large scale stratigraphic plays besides the more traditional turbidite plays, further expanding this prolific area of exploration.

The critical risks going forward are increasingly non-technical, e.g., regulatory, legislative, legal and commercial at the local, regional, national and global levels, according to Lawrence.

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