Agenda

In recent years, investment in conventional energy has been geared towards stagnant or falling demand, with record low investment seen in 2020. In their World Outlook 2021, the International Energy Agency (IEA) warned that the level of investment in the global energy sector is inadequate to meet near term energy needs and long-term transition goals. The consequences became apparent in 2021: as the economies of the world reopened, demand for oil and gas rebounded sharply and pushed up prices.

World population is forecasted to grow by 2 billion people, with Asia Pacific accounting for one third of that growth. This trend, together with the targeted poverty reduction and near-term environmental objectives, is expected to lead to an increase in regional gas demand by 35% by 2030.

In this session, we will hear how, in the light of recent subdued investment, our industry can meet the increasing Asia Pacific energy demand. We will discuss the role of liquefied natural gas (LNG), hydrogen-based fuels and carbon capture utilisation and storage (CCUS), as well as other technologies, in the region’s near-term energy mix. Finally, we will explore how an orderly transition can be achieved to make the future energy supply sustainable, accessible and responsible as well as affordable and fair for all citizens, which will require strong collaboration and coordination between governments, various industries and financiers.

The world is moving to a net zero carbon future with a strong drive to reduce dependence on oil and gas. In this reality, the quest for new oil and gas discoveries needs to adapt; changing the frontier exploration paradigm. Furthermore, many frontier plays require new technologies and multi-disciplined approaches to achieve success; challenging conventional roles and skills. In this panel session, we will hear from some of the region’s most active explorers on the challenges they face, and the opportunities that the new frontier exploration paradigm creates.

Sharing their experiences from active exploration campaigns in Australia and the wider Asia Pacific region, the panellists will focus on the value proposition of frontier exploration, including risk evaluation in the current climate of energy transition and investor activism. 

The panel will address:
•    What is the preferred hydrocarbon type, do we prefer gas over oil?
•    What does the new reality of a net zero carbon world mean for cycle times? What do we anticipate the value of future discoveries to be in the second half of this century?
•    How much room is there for developments with high greenhouse gas (GHG) impacts due to the reservoir fluid composition?
•    How important is minimising future GHG footprint; for example, do we explore for Carbon Capture, Utilisation and Storage (CCUS) in parallel?
•    What new technologies or multi-disciplined approaches are required to achieve success?

Our profession is facing challenges as the world moves to reduce reliance on hydrocarbons in favour of other energy sources.  Development and production of oil and gas will need to be more sustainable as countries move to meet carbon targets.  This panel session will consider some of the issues our profession will be facing, and not the least is attracting people to work in a profession which is not viewed favourably by the public and is likely thought to have a limited future.  

Topics to be considered include:

•    What is the future for petroleum engineers? Could there to be a shortage in 10+ years or will the discipline disappear? 
•    What new/emerging skills will petroleum engineers need? Do they need safety net skills?
•    Re-skilling: What are the relative merits of hiring people from other engineering disciplines and giving them narrow, job-specific training, versus those that have a broader, full petroleum engineering education?
•    Who will be the dominant employers of petroleum engineers?
•    How do we get the positive benefits of the industry understood by the public, and attract people to the profession? 
•    What is in a petroleum engineers “way of thinking” that is valuable in the new energy environment, not just the “tools”, what do they bring to the table?
•    Are there current and emerging areas of petroleum engineering research that “will make a real difference”?

There has been increasing public and government pressure regarding the impact of the oil and gas industry on climate. Sustainable investment is gaining traction. Investors are prioritising or restricting investments in favour of sustainable energy. Upstream companies are under pressure to decarbonise, and this is likely to intensify. A growing number of companies are establishing emission-reduction and net-zero targets and increasing the transparency of the environmental effects of their operations. Decarbonisation of the oil and gas industry, with energy transition to low-carbon energy including renewables, will continue. Gas, including liquefied natural gas (LNG), will continue to have demand in the near future; driven by the energy transition, such as, shifting away from coal and as back-up to renewables. However, blue hydrogen from gas, with carbon capture and storage (CCS), along with green hydrogen, will gain momentum. Hydrogen, ammonia, methanol and CCS/carbon capture, utilisation and storage (CCUS) will all be interesting areas for the oil and gas industry going forward. 

Research and development, and innovations will be crucial for technical solutions and lowering the cost of decarbonisation. Many hurdles remain for widespread use of CCS/CCUS and hydrogen, both technical and economical. Government incentives and policies, including carbon pricing, will also play a role.

This panel will focus on the transition and diversification strategies of the oil and gas industry, and the pace of energy transition and its impact on the industry. It will also discuss the roles of, and collaboration, amongst governments, financial institutions/investors, big international oil companies (IOC), national oil companies (NOC), smaller producers, service companies and research organisations in the decarbonisation of our industry.

“Sustainable Decommissioning”: It is estimated that in Australia alone, cost of decommissioning existing assets is in the region of USD40.5 billion, with the majority of that cost coming from well abandonment and pipeline removal. 

The cost of removal is one thing and in addition, removal generates a massive volume of waste to manage.  It is estimated, again in Australia, that there are 237,000 tonnes of topsides and 518,000 tonnes of substructure alone that must be processed, and these figures do not include floating facilities, pipelines, flexibles and others.

What does “sustainable decommissioning” mean in this context?  It may possibly signify that the process considers potential to repurpose or reuse in-situ equipment.  Could this mean looking for the lowest environmental impact during the “act” of decommissioning and then find ways to reuse, repurpose or recycle removed equipment with storage or land fill as a point of last resort for everything?

At present there are more questions than answers. This session will explore these questions and possibly show what is already in process, and what needs further developing.

•    What is feasible for repurposing wells? Could they be used for carbon dioxide (CO2) injection or other ‘waste fluids’? Various waste products can be ‘transported’ to be selected/repurposed for offshore facilities for reinjection.
•    Can offshore structures be converted to generate hydrogen from renewable energy resources?
•    Is it possible to use existing pipeline infrastructure to transport hydrogen?
•    What materials require disposal and how should it be done?
•    What could be recycled? For example, concrete can be broken down and used as road-base or metal melted and reused.
•    What are the capability and capacity gaps?
•    Could this become a new and growing industry, and would it be only limited to oil and gas decommissioning?
•    When abandoning wells, what does “the eternal perspective” require?

The energy transition is occurring at a rapid rate and is bringing change to the mainstream oil and gas industry that has the potential to reshape the way the industry approaches some key elements of its business model.

Some of these elements are at the core of what we do as an industry:

•    As a result of the energy transition, what are the changes we might expect to the way we operate oil and gas projects and what impact will this have on their economics?
•    What are the implications for reserves certainty, and will there need to be new rules around the booking of reserves given the new constraints that may arise?
•    What are the implications for oil and gas project financing?  Will it be more difficult to raise funds for projects and will it become more expensive as a result?  A recent example is the public announcement made by the National Australia Bank, that it will cap lending to the oil and gas sector, but it will directly finance “greenfield gas extraction” where it “plays a role in underpinning national security”.
•    What will be the government’s future approach to new (and existing) oil and gas projects?  Will they continue to support these projects, or will they come under increasing political pressure to limit the number of approvals?  An example is New Zealand banning all new offshore oil exploration in 2018.
•    What are the economics of emerging energy projects such as the Singapore Sun Cable or the Western Green Energy Hub? Do they represent truly viable projects that have the potential to economically compete with other energy funding?  Should oil and gas companies in Australia and the region consider taking part in these projects as part of their energy transition strategy?
•    And finally, what part will Carbon Capture, Utilisation, and Sequestration (CCUS) take in oil and gas companies’ strategy? Will this simply be something oil and gas companies will need to do to maintain their ability to operate, or does it represent a new and potentially material economic opportunity for the industry to pursue?

These are all key questions that will help to better outline what the future looks like for the economics, financing, and reserves of the oil and gas industry going forward.  Our panel members will address each of these questions from the perspectives of their individual expertise and paint a picture of what the future holds.