President’s Message
Dear Readers,
The spring first half of the year has brought the petroleum industry again on the front pages of the media, thanks to the skyrocketing energy prices in general, and oil prices in particular. Pretending to be innocent of the high prices and reluctant to confess that such a situation provides unexpected extra income through the (over) taxation of the energy and fuel for the state budgets, governments in Europe join the media’s approach to blame the oil companies in excessively profiting from the situation. The industry responded professionally and calmly to this challenge with a populist tune. This professional and calm atmosphere characterized the annual convention of AAPG in San Antonio (April) and the 19th World Petroleum Congress in Madrid (June).
But what should a professional organization do to assist the industry to defend itself and it’s consumers from the unjust campaign of introducing new taxes to tap their resources through the “Robin Hood Tax”? Yes, this story is talking not about the turnover and revenue of oil companies but about the security of supply and sustainable development of the world in general and the petroleum industry in particular. The higher profit of the companies serves the security and sustainability on the supply only if it is to re-invest in grass – root exploration projects. In the media and in the public, the issue of the “Peak Oil” story is frequently and shockingly treated without mentioning that this is an issue, mainly because the exploration has been consistently underfinanced in the global petroleum industry since the ’80s. It is obvious, that a scenario in which the annual reserves’ growth from field extensions are three times higher than the new reserves booked from new discoveries (as exposed by Dr. Donald GAUTIER (USGS) in one of his excellent presentations in the 19th WPC) that growth can not be maintained without risking security and sustainability. We have to find the ways and means of enhancing the global exploration activity.
The ways are clearly defined – among others – in the strategy of the AAPG ER, answering what to do, where to do, how to do and who does? Our programs regularly focus on frontier areas and well known regions with neglected upside potentials. Our programs comprise lessons learned from successful grass root exploration projects, both appraisal and field development projects. Our programs – jointly with sister organizations – respond to the challenges of frontier and difficult to development areas, and highlight on the respective technologies to be applied. Who will do it? It is what is addressed in our special programs and care for the next generation of professionals, (including but not limited to the mentoring of students and professionals with specific youth programs (IBA)), in our youth sessions in national and international conferences, and establishing and coaching student-chapters in universities and colleges.
The means are from the profits earned by the companies. When the profit was low at the turn of the Millennium with oil prices around 10 USD/b, no assistance for the companies was expected, since it was not market conformable. We agreed, but to take away the financial basis of the security and sustainability is not market-conformable either. Moreover, ambitions to introduce new taxes indicate lack of strategic vision. And (improvised) actions without vision lead to chaos. The global petroleum industry will invest 22 trillion USD from now to 2030 to meet future energy demand (as Tony HAYWARD, GCEO of BP stated in his plenary session speech at the 19th WPC). With this obligation in the background, we cannot afford chaos.
Thus, the challenge is clear: Robin Hood or Sustainability. No doubt here as to what should be the answer. Professional Associations – like AAPG ER – are open to assist in bringing the interested parties together to find solutions.
- István BÉRCZI
- President 2007-2009
- AAPG European Region