Abstract: Future of Exploration and Production Business

James W. Simpson

During the course of the past decade a profound change has taken place in the upstream portion of our business. Along with mergers, reorganization, and reengineering, the 1980's ushered in an era of large scale production projects, deep gas plays, and widespread use of 3D seismic, geochemistry, and structural modeling to better define exploration opportunities. With fewer exploration opportunities and even tighter economic constants defining the industry in the 1990's, an era of development evolved with reservoir characterization, opex reductions, horizontal drilling, multi-functional teams, and computerization coming to the forefront. This change in emphasis reflect the maturing of individual company's asset portfolios which, scaled up, also reflected the maturity of the global exploration and production portfolio.

Extrapolating this global maturity analogy into the 21st Century, the historic roles of exploration as the primary means of wealth creation will be replaced. As development opportunities become smaller and fields reach advanced states of decline, value will be added by reducing opex through staged development and minimal facilities. Improved technology will assist in resolving subsurface reservoir problems on an interwell scale, upgrading field and well performance. While the industry's traditional role of exploring for and developing new reserves will continue in once-closed nations, the efficient management of established fields will become the main vehicle of wealth creation. This structural change will cause realignment and consolidation among companies, redirection of employees s ills, and changing relationships with host governments.

AAPG Search and Discovery Article #90951©1996 AAPG International Conference and Exhibition, Caracas, Venezuela