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The first-ever International Petroleum Technology Conference (IPTC) brought together a host of leading energy experts, government officials, and industry executives to discuss the significant technological and human resources challenges facing the industry. Set in Doha, Qatar—site of a burgeoning gas industry under development—the conference featured more than 250 technical papers on exploration, production, reservoir, midstream gas, and other areas, while bringing together the perspectives of the multiple disciplines of petroleum engineering, geology, and geophysics. Attendance totaled 2,677. IPTC was sponsored by four leading industry societies—the American Assn. of Petroleum Geologists, European Assn. of Geoscientists and Engineers, Soc. of Exploration Geophysicists, and SPE. A thread woven throughout this event was the critical need for partnership and collaboration—among operators and service providers, international oil companies and host nations, and different technical sectors of the industry.

“The success of the first IPTC demonstrates the vibrancy of the oil and gas industry,” said Abdul Jaleel Al-Khalifa, IPTC Management Committee Chairperson. “In addition to a thriving venue, the multidisciplinary technical program shows IPTC’s commitment to becoming one of the most significant and comprehensive gas and oil conferences in the eastern hemisphere.”

Under the heading “Sustaining World Growth—Technology and People,” the conference explored technological advances needed for innovative solutions to meet future global energy demand and reviewed the human resource challenges facing the industry. The conference featured seven panel sessions presented by key industry executives and experts discussing and debating such issues as global oil and gas strategies, supply and demand, sustainable development, human resources, exploration, reserves, and research and development.

Brinded spoke of how integration
is critical to meeting future
energy challenges.

“It is hard to overestimate the importance of this multidisciplinary conference,” said Malcolm Brinded, Executive Director of E&P, Royal Dutch Shell, who, along with Nasser Jaidah, Director of Oil and Gas Ventures of Qatar Petroleum, was conference Executive Committee Cochairperson. “The world is beginning to comprehend the real challenge of meeting expanding energy demand while tackling its impact on our climate. Both depend on our ability to develop new technologies and deploy them together effectively. And the Middle East is at the heart of meeting this challenge.”

Qatar a Fitting Backdrop

Brinded applauded the strides Qatar has taken in innovation and technology development, such as the creation of its Science and Technology Park. “It is fitting that this first-ever combined technology conference, organized by four of the industry’s leading professional societies, should be here in Qatar,” he said. Qatar is clearly a growth region for the industry, with great strides being made in liquefied-natural-gas (LNG) and gas-to-liquids (GTL) developments. Qatar is home to the world’s largest nonassociated gas field, is already a leading LNG exporter, and has taken a leadership role in the emerging GTL industry.

The conference’s opening address was given by H.H. Shaikh Abdullah Bin Khalifa Al-Thani, Prime Minister of Qatar, on behalf of Qatar’s Emir, Shaikh Hamad Bin Khalifa Al-Thani. He noted that Qatar has taken significant steps in industrial and economic development and its energy future looks bright. The first phase of its Gulf Gas Project—which will help provide gas for industries, power, and water desalination—was recently commissioned. In addition, the fourth LNG train at the RasGas II project has been launched, which will help make the country a top LNG supplier to the world. The commissioning of the Oryx GTL project in 2006 will launch another important phase in Qatar’s development. Technology has been critical in this growth because state-of-the-art processes are essential in the liquefaction and transport of the country’s enormous gas deposits as well as keeping costs under control. “In the course of our march to realize optimum use of our natural resources, we shall carry on with policies that are based on developing the infrastructure, supporting private investment, increasing openness, pursuing the course of reform, and providing the necessary legislation in support to realize the state’s interests and ensure the balance between the interests of producers and consumers,” he said.

The opening keynote panel session brought together a distinguished global panel, moderated by Jaidah and featuring H.E. Abdullah Bin Hamad Al-Attiyah, Second Deputy Prime Minister and Minister of Energy and Industry of Qatar; H.E. Shri Mani Shankar Aiyar, Minister of Petroleum and Natural Gas of the Government of India; H.E. Yousef Omair Bin Yousef, Chief Executive Officer (CEO) of Abu Dhabi Natl. Oil Co. and Secretary General of Supreme Petroleum Council; Brinded; and Andrew Gould, Chairman and CEO, Schlumberger. The panelists addressed the industry’s impact on world economic growth, the significance of technological advancement for optimal use of natural resources, and the importance of personal and professional development for the future of the industry.

Al-Attiyah addresses the crowd during the opening keynote session.

In his address, Al-Attiyah noted that Qatar, in spite of relatively modest crude oil reserves compared to other Gulf countries, is continuing to develop its fields using state-of-the-art technology to increase oil output. Qatar Petroleum has employed drilling techniques that have decreased the number of offshore platforms in use to reduce production costs and is also using the latest systems and computer modeling software to increase recovery, he said.

Qatar’s gas industry “has indeed reached global precedence” demonstrated by gasfield investments that top U.S. $60 billion, Al-Attiyah said. Contracts with international oil companies to develop LNG will allow Qatari gas to be delivered to all major markets in the U.S., Europe, and Asia by 2012, he said, as its capacity hits 77 million tonnes and its share of world LNG trade reaches 30%. He called Qatar’s GTL program its “most ambitious” project because of the sophisticated technology involved.

Prices and Personnel

Aiyar said that there has been an “irrational spiraling” of oil prices in the past 18 months in part because the growth in India’s and China’s oil demand was not anticipated. He made a plea for investment to help India develop its oil and gas reserves. There are 30 billion bbl of oil reserves in India, he said, and if only part of that was recovered, it would go a long way toward meeting the country’s demand. One of the difficulties of development in India is a huge volcanic layer that poses a problem for seismic surveys, drilling, and production. “This is absolutely a fundamental problem for us,” Aiyar said. “It is as much of interest to the oil industry as to India to help develop this production.”

Yousef encouraged the industry to
work more closely with educators
to boost the skilled work force.

Yousef focused on the industry’s human resources needs. There is a shortage of skilled technical workers for projects the industry is planning for and needs, he said, so the industry must encourage students to pursue technical and scientific careers. One way the industry could help is by working with teachers to bring those subjects alive for students. And the industry should fund scholarships and after-school programs that promote science, math, and technology, Yousef said. A better system is also needed to jump-start learning for new employees in the industry, such as pairing young workers with experienced employees. He also encouraged more sharing of technology and other collaborative efforts that will speed the development of resources required for growing global demand.

Brinded put the world’s rising hydrocarbons thirst in perspective by reminding the audience that global energy demand could increase by more than half in the next 25 years, with oil and gas expected to meet 60% of demand in 2030. The Intl. Energy Agency estimates that oil exports from the Middle East could rise 75% and gas exports 350% during that period. The challenges facing the Middle East, which has been characterized by giant fields with few wells, are increasing recovery from existing fields, developing more difficult resources, finding new resources, delivering gas to distant markets, and reducing environmental impact, he said. Hydrocarbon recovery can be improved by applying new technologies that allow better understanding and monitoring of the subsurface, drilling faster and more productive wells, managing reservoirs more efficiently, and realizing the potential of enhanced oil recovery, Brinded said. “Raising average conventional oil recovery from 35 to 45% could add some 20 years of current production,” he said.

Oil price stability would help the industry in the long run, Brinded said. “A downturn of the global economy caused by very high prices is clearly not in anyone’s interest. Great volatility in oil and gas prices would inhibit the growth of the new supplies necessary to underpin global economic development,” he said.

Integration is a key to the future success of the industry, the Shell executive added, including integrating knowledge, tools, and data, as well as appraisal, development, and operations; integrating over life-of-field cycles; combining new skills with practical experience; and integrating along the value chain from reservoir to customer. In terms of technology, that integration should include applications beyond conventional seismic, such as the use of satellite imaging, airborne sniffing, electromagnetic methods, and enhanced seismic imaging, he said. Shell employs what it calls a “3D All the Way” approach that integrates seismic, geological, petrophysical, and production information to produce “a dynamic 3D model from the outset, adding more understanding at each phase.” This helps in early business decisions, Brinded said.

Offering a service provider’s perspective, Gould said that the E&P industry would be more successful and efficient if operators and service companies collaborated more closely. He recommends that operators involve service companies in early planning stages to ensure that service companies develop needed technologies more quickly. Operators would get the technology they need, and service providers would have a better idea of what operators want. Service companies are reliable providers of top technology, and operators should exploit this more. “The key to this model is greater openness,” Gould said. Other industries have found success in this approach, he added, such as the airline industry.

Aiyar, Gould, and Al-Attiyah toured the exhibit floor on the first day of the conference.

Uncertainty and Volatility

In a luncheon address, Ivo Bozon, a senior partner with McKinsey & Co., tempered the conference’s enthusiasm a bit with a sober analysis of the uncertainty facing the industry and its possible consequences. Price uncertainty and volatility are at unprecedented levels, he said, and the industry must create a more stable energy environment. It can do this only if it eliminates barriers to investment and bottlenecks in the global refining system and replenishes its talent base.

Scarce resources are not the problem. “It is hard to believe that resources are the constraint given the enormous potential still available. . . . According to the majority of the industry’s research, we have enough resources left for between 40 and 60 more years of oil production,” he said. The key challenge is not resources, but of putting reserves into production and then delivering energy to markets, Bozon added.

Several international operating and service companies unveiled new products or made important announcements at IPTC.

• Shell and Qatar Petroleum presented the first GTL-fueled car to run in Qatar. Shell’s synthetic gas-derived fuel was used in an unmodified 4.2-L Audi turbo-diesel car, “demonstrating that GTL fuel is a clean, practical alternative fuel that can be used in conventional diesel engines,” the companies said in a joint statement. Shell is working on the Pearl GTL project in Qatar, which, upon completion, will be the largest GTL plant in the world.

• ExxonMobil and Qatar Petroleum announced significant progress on a massive LNG project in the country. In a joint statement, the two companies announced the launch of Ras Laffan Liquefied Natural Gas Co. Ltd. (RL3), a further expansion of the existing LNG production facilities operated by RasGas Co. Ltd. (of which Qatar Petroleum owns 70% and ExxonMobil 30%) at Ras Laffan Industrial City in northeastern Qatar. This project will bring the total number of trains operated by RasGas to seven and is expected to increase RasGas LNG production capacity by more than 70%. Total investment in RL3 is estimated at U.S. $14 billion. This includes the design, construction, and operation of two 7.8 million ton/year LNG trains and other facilities associated with the development, production, transportation, processing, treatment, liquefaction, regasification, storage, delivery, and sales of approximately 15.6 million ton/year of LNG along with associated byproducts such as liquefied petroleum gas, condensates, helium, and sulfur. The new LNG project, one of the largest ever, will be developed in two consecutive phases, with Train 6 scheduled to begin production in the second half of 2008 and Train 7 anticipated to come on stream approximately a year later. Twenty-eight wells are planned to be drilled to supply the two trains with natural gas, sourced from Qatar’s giant North field, which is estimated to contain natural gas resources in excess of 900 Tcf. LNG from the project will be delivered to targeted markets, principally the United States.

• Schlumberger unveiled its new Scanner family of wireline measurements, designed to overcome some of the limitations of standard logging tools. The technology delivers more simultaneous radial measurements, in true 3D, and at multiple depths of investigation, to help users fully characterize the subsurface environment and better understand reservoirs, the company said. The three Scanner services introduced at the conference were the Sonic Scanner advanced acoustic scanning platform; the Rt Scanner multiarray triaxial induction tool; and the MR Scanner next-generation wireline nuclear-magnetic-resonance logging tool.

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