From the Editor- November 2010

The Past Three Decades
Every so often one begins to feel somewhat nostalgic. As I put my pen to paper, that is the mood that I find myself in. I have been working as a petroleum geologist for more than three decades. When I look around the office there are very few faces that were here when I began. No, this is not going to be a melancholy essay, rather it will be one of surprise and change, a quick review of a journey of learning for myself and the industry.Much changed in the oil and gas industry over these three decades, so much so that it is difficult to find a starting a point. Perhaps we should begin with one of the more dramatic changes. The industry has contracted during the past 30 years. Just think of the “Seven Sisters”.There are only four surviving sisters – ExxonMobil, Chevron, Royal Dutch Shell, and BP. This consolidation and reorganization continues today, with mergers and acquisition of service companies and the sale and purchase of major assets. Consolidation has also resulted in a contraction in the industry’s employment. I remembering hearing that the number of jobs lost in the US petroleum industry exceeded the losses of the US steel and auto industries combined. Furthermore, the relative roles of the national oil companies have grown, with several now becoming leaders in technology development. This too has changed the playing field.
Not only have there been changes to the business-side of the industry but the nature of our work has changed quite a bit. Some of these changes have resulted in significant improvements in our productivity. When I began, maps were drawn and colored by hand, seismic data were interpreted on paper records, and thousands of punch cards were used if we were actually using a computer. Today, maps are prepared by computer, seismic data are interactively interpreted at a workstation, and we interact with our computer through a keyboard and in some cases orally. But more importantly we view the technical-side of our business very differently. For example, I am a geochemist. I began my career looking at source rock attributes of shales and micrites. Very often members of my team were brought in after a well failed to help explain the lack of hydrocarbons or the presence of gas rather than oil in what everyone hoped was going to be an impact well. The exploration program tended to rely on the geophysicist to define the target and the stratigrapher to help identify potential reservoir bodies. As the industry became more knowledgeable about exploration risks, hydrocarbon charge took its seat at the table along with trap, seal, and reservoir. Now, with the growth of unconventional resources, and shale gas specifically, geochemistry actually helps define the play. Organic carbon and thermal maturity are often considered key elements.
 
An early project of mine was a regional assessment of the Gulf of Mexico. One of the more significant conclusions of the study was that there were multiple viable petroleum systems in the deepwater portion of the Gulf of Mexico. I was advised that although I could effectively document the presence of thermally mature oil-prone source rocks (oil was recovered from caprock at DSDP Site2 a decade earlier) there was little exploratory potential because of the lack of a viable reservoir. Similar arguments could have been made for many continental margins around the globe, with the recovery of Jurassic, Cretaceous, and Tertiary organic-rich black shales, many of which were also oil-prone, by the Deep Sea Drilling Project and the Ocean Drilling Program. In general, industry was working with the old paradigm that course clastics were not transferred to the deepwater portions of the basin but trapped in the rivers, estuaries, deltas, and on continental shelves. Sound science and brave management at a number of companies has changed that paradigm. Deepwater targets dominate the portfolios of many companies, with exploration targets extending into waters exceeding 10,000 feet and production occurring at depths greater than 5,000 feet.
 
Another change over these past three decades has been in the nature of the “prize”. When I began in the industry, natural gas was something to avoid, particularly internationally. Oil was the sole prize. Domestically, there was a market but internationally the term “stranded gas” was part of our lexicon as a result of lack of viable local markets and the inability to transport gas globally Today, gas has become a fungible commodity just as oil. Local markets are expanding, gas-to-liquids technology has developed, and LNG (liquefied natural gas) trade routes are developing across the different oceans. Our tools previously focused on oil exploration and development. With this broadening of the target, a new set of tools are being developed to aid in gas exploration and development. For example, the prediction and treatment of nonhydrocarbons gases is of growing importance, with many accumulations containing significant amounts of carbon dioxide, hydrogen sulfide, and nitrogen. These nonhydrocarbons not only reduce BTU content, and hence value of the gas, the acid gases add costs associated with production and development and challenge technologies. Chevron’s Chuandongbei project in Sichuan Province, China, will deal with elevated hydrogen sulfide and their Gorgon project, Northwest Shelf, Australia, will become the largest CO2 sequestration project when completed.
 
If I have learned anything in the past three decades, and I hope that I have, it is that this “stodgy” industry of ours undergoes continuous transformation and is, in fact, a high tech industry. What I was doing thirty years ago is quite different from what I am I doing today. I have been forced to learn and evolve. When an applicant arrives for a job interview, I do my best to explain that successful employees have learned to adapt to the changing landscape and what they do today will not be what they will be doing when they are ready to retire. I also tell them that the only thing about the future that I can predict is that there will be change and that predictions are difficult. How do I feel about the past three decades? Like most of my generation in the industry there were several challenges. We had to survive through the uncertainties of multiple mergers and numerous downsizings. Overall, I have really enjoyed the technical challenges and associated rewards. Let’s see how long this ride can continue.
Until next month…