Session Chairs: Jeroen Regtien, Shell; Nabil Gaber, Gupco
Recent IEA reports show that the global recoverable gas resource base has doubled from 400 tcm to 850 tcm (30,000 Tcf). However, the era of ‘easy’ gas is largely over, as the increase is the result of the unconventional gas developments in the last decade, mainly those of shale gas and Coalbed Methane (CBM). Despite the increase in size of the resource base, finding and extraction costs are higher than before, as the extraction requires, for example, in the case of shale gas, many horizontal wells with multiple fracture treatments. Low gas prices in relation to the development costs are a blocker to development of several unconventional gas resources in the region. Liquid rich shales, light tight oil, and heavy oil deposits suffer from similar challenges, despite the relatively high oil price because development costs are even higher.
Innovation is key in many areas, ranging from operating models, commercial (PSC) terms to technology. New and different technologies and development concepts are needed across the full range of upstream activities, including exploration, evaluation, development, and operations with due attention to the physical footprint, emissions, and responsible use of water resources.
Several of these technologies have already been successfully applied elsewhere, and for the unconventional developments to take off in the region, transfer of knowledge, capability, and technology are required. Given the size of the developments, it can be argued that global adoption and replication of environmental standards and best practices are the best way forward. IOCs and global service industries play an important role, but the success stories from outside the region also show that development of local and regional capability is required for sustainable success as well as close cooperation with and consultation of local stakeholders. Governments play a key role in providing the commercial framework for unconventional developments but equally setting responsible (technical) standards for development and operation.
This panel will discuss the main challenges and opportunities to successfully unlock unconventional resources in the Eastern Mediterranean, covering shale gas, liquid rich shales, ultra tight reservoirs, coalbed methane as well as oil shales and heavy oil.
Session Chairs: Samir Abdelmoaty, BP Egypt; Nick Beeson, Baker Hughes
Oil & Gas reserves in the Eastern Mediterranean provinces are significant and may have a global impact. The US Geological Survey estimates that the combined undiscovered technically recoverable reserves of the Levant and the Nile Delta provinces average 3.5 BMBO oil and 345 BCF gas. These reserves are strategically located close to European markets eager to diversify their supply lines, but the challenges of developing these are significant. Geopolitical change is one, however, these developments will also be technically difficult, with deep water environment and HPHT reservoir challenges to be overcome. New technologies will need to be developed and introduced to reduce risk and speed up development. Facilities and pipeline infrastructure will need to be built up, as will local expertise in countries that are new to oil and gas production.
The Eastern Mediterranean Business Challenges Plenary Session will be an opportunity for national governments, oil & gas companies, both prospective and currently operating in the region, to come together to share their challenges, needs and opportunities with potential customers, partners and service providers.
Session Chairs: Heba Megahed, Shell; Ahmed El-Banbi, Cairo University
Corporate Social Responsibility (CSR) continues to be an emerging topic globally. There are many components to CSR, these include:
Understanding these elements and having the ability to minimize adverse CSR impacts while maximizing positive ones (e.g. local content/social investment opportunities) will result in a successful CSR program.
This panel session will touch on a number of the CSR elements and how it pertains to the Middle East/North Africa region. The linkage between managing CSR and efficient project delivery will also be discussed.
Session Chairs: Anil Mathur, Schlumberger; Mohamed Farghaly, Oil and Gas Consultant
The deep waters of the Gulf of Mexico, the frigid regions of Russia, and the hot, dusty, undeveloped deserts of the Middle East are merely the geographic challenges facing today’s gas exploration and production industry. But other challenges—just as serious and as threatening—face the industry as well. Global geopolitical forces are creating a highly volatile, rapidly fluctuating crude oil and gas market. Global competition for depleting resources continues to drive the need to lower operating costs and increase finding and recovery rates in the midst of evolving regulatory and environmental challenges. The industry is moving to more and more challenging unconventional reservoirs, as the days of easy oil are disappearing. And, the number of skilled human resources continues to decline just as the technical demands of the industry increase.
On the other hand, MENA region is going through major changes increasing the geopolitical challenges and the energy supply/demand structure. Investors are, in the mode of wait and see, leading to the widening of supply/demand gap in some countries, new developments delay and significant default in few supply contracts. On the opposite side, there are new emerging gas suppliers such as Cyprus, East Africa, and Israel. Additionally, Arab Spring along with new regimes is leading to new challenges but to new opportunities as well.
In recent years, the entire gas infrastructure and its sources of supply have been repeatedly turned upside down. The dramatic drop in gas demand in 2009 left the market believing in a supply overhang that would take several years to work off. Demand increases and supply security issues following Fukushima, the reaction to the safety of nuclear power, and the colder northern hemisphere winter in 2011 has already absorbed that excess. If we look forward, the IEA estimates that gas is the only fossil fuel for which demand will show an annual growth rate higher than 1% between 2008 and 2035 with demand growth being led by China and the Middle East.
The ability to meet the demand growth is complicated by the lack of detailed understanding of reservoirs with unconventional resources, pipeline infrastructure and capacity constraints, the limited supplier base and the immature regulatory regime (e.g., CBM output has fallen short of government targets largely due to unclear mining rights, limited access to downstream markets and relatively poor economics). And while it’s true that today’s hydraulically fractured horizontal wells have made some shale formations economic to produce, new technologies will be required overcome the waste and expense of current techniques and allow the industry to systematically extract the full value from unconventional reservoirs.
We would, therefore, like the esteemed panel to address the following issues in their discussion: